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.} Mr. Jim Lochhead Page 2 December 6, 1996 3371 the CSA identitY cooperative actions that could be taken individually or among themselves that do not involve Denver - something we believe is vital. I am pleased with how water suppliers serving the metropolitan area are forming regional groupings to work through the process of exploring potential cooperati ve actions. My desire is to work with these regions on cooperative action proposals instead of on fragmented individual proposals, An individual, piecemeal proposal consumes virtually the same amount of Denver Water staff time as a regional proposal. Denver Water staff cannot analyze numerous individual proposals and also complete its primary responsibility of implementing the Board's near-term strategy. As you know, the Board has made clear that implementation of its near-term water supply strategy is the staffs primary responsibility. As a secondary priority, the staff has been directed to look at potential cooperative actions. In most instances, proposed cooperative actions will compete for the same available infrastructure and the same water. Denver's near-term strategy will also use some of that same water and infrastructure. Thus, it is possible that these two priorities are mutually exclusive. However, to the extent cooperative action proposals complement our near-term strategy, there is a real opportunity for success in fulfilling both priorities. I can also envision a situation where one region's cooperative action benefits not only Denver, but also another region's cooperative action. This synergy can only be identified through a collective analysis of all the cooperative action proposals in conjunction with Denver's near-term strategy. Prior to this analysis, a complete understanding of each cooperative proposal and how that proposal interacts with Denver's near-term strategy is required. Therefore, my staff will use a two-phase analysis approach. Phase 1: By mid January, Denver will provide hydrology files to the different regions which show the flows available for cooperative action proposals. These hydrology tables would be used by the regions to develop the engineering of a cooperative action proposal for that region. Once the engineering feasibility is completed by the region for a cooperative proposal, Denver will analyze that proposal to determine how that action will interact with Denver's system. In all likelihood, this analytical effort will be iterative between the regional entity and Denver Water. Phase 2: Denver will collectively analyze all the cooperative proposals to determine what, if any, synergies might exist. Because regional entities may compete for the same water and infrastructure, a cooperative action's yield could significantly change between Phase I and Phase 2. On the other hand, one or more cooperative action proposals could complement the Board's near-term strategy and at the same time complement another region's cooperative action proposal. Based on the Phase 2