1 Contract No. 02- WC-40-8000

2

3

4 UNITED STATES

5 DEPARTMENT OF THE INTERIOR

6 BUREAU OF RECLAMATION

7

8 ANIMAS-LA PLATA PROJECT

9 COLORADO RIVER STORAGE PROJECT

10

11 FUNDING AGREEMENT AND REPAYMENT CONTRACT

12 BETWEEN THE UNrrED STATES AND THE

13 COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORUY

14

15 INDEX

16

17 Article

18 Number Article Page

19

20 Explanatory Recitals 1

21

22 1 General Definitions 2

23 '

24 2 Project Works 5

25

26 3 Conditions Precedent to Construction 6

27

28 4 Project Coordination Committees 6

29

30 5 Measurement and Responsibility for Distribution of Water 7

31

32 6 Allocation and Use of Project Water 8

33

34 7 Water Right Provisions 9

35

36 8 Method of Payment for Project Construction Costs 9

37

38 9 Method for Establishing Blocks for Project Delivery and Repayment 12

39

40 10 Payment of Operation, Maintenance, and Replacement Costs 13

41

42 11 Use and Disposal of Project Water During Construction 13

43

44 12 Water Shortages 14

45

46 13 Covenant Against Contingent Fees 14

47

48 14 Third Party Contracts. 14

49

50 15 Title to Project Works 15

51

52 16 Severability 15

53

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')
1

2 INDEX

3 

4 Article

5 Number Article Page 

6

7 STANDARD ARTICLES

8

9 17 Charges for Delinquent Payments 15 

10

11 18 General Obligation - Benefits Conditioned Upon Payment 16 

12

13 19 Notices 16 

14

15 20 Contingent on Appropriation or Allotment of Funds 16 

16

17 21 Officials Not to Benefit 16 

18

19 22 Changes in Authority's Organization 16 

20

21 23 Assignment Limited - Successors and Assigns Obligated 17 

22

23 24 Books, Records, and Reports 17

24

25 25 Rules, Regulations, and Determinations 17 

26

27 26 Quality of Water 17 

28

29 27 Water and Air Pollution Control 17

30

31 28 Water Conservation 17

32

33 29 Equal Opportunity 18

34

35 30 Compliance with Civil Rights Laws and Regulations 18

36

37 Signature Blocks 19

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53
1 Contract No. 02... 4/c. -'fO -ftJ()OO

2

3

4 UNITED S TATES

5 DEPARTMENT OF THE INTERIOR

6 BUREAU OF RECLAMATION

7

8 ANIMAS-LA PLATA PROJECT

9 COLORADO RNER STORAGE PROJECT

10

11 FUNDING AGREEMENT AND REPAYMENT CONTRACT

12 BETWEEN THE UNITED STATES AND THE

13 COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORITY

14 1t~

15 TillS CONTRACT, made this.:i:: day of iVc1/c../1-1.bl!f2001, pursuant to the Act of

16 Congress approved June 17, 1902 (32 Stat. 388), and acts amendatory thereof or supplementary

17 thereto, all of which acts are commonly known and referred to as the Federal Reclamation Laws,

'18 between the UNITED STATES OF AMERICA, hereinafter referred to as the United States,

19 represented by the officer executing this contract, and the COLORADO WATER RESOURCES

20 AND POWER DEVELOPMENT AUTHORITY, a political subdivision of the State of

21 Colorado, hereinafter called the Authority, located in Denver, Colorado.

22 WITNESSETH, That:

23 WHEREAS, the following statements are made in explanation:

24 (a) The Act of Congress approved April 11, 1956 (70 Stat. 105), authorized the

25 planning and investigation of the Animas-La Plata Project as a participating project of the

26 Colorado River Storage Project; subsequently, the construction, operation, and maintenance of

27 the Animas-La Plata Project was authorized by Title V of the Colorado River Basin Project Act

28 of September 30, 1968 (82 Stat. 896), and the United States has investigated, planned, and

29 proposes to construct said Animas-La Plata Project for the storage, diversion, salvage, and

30 distribution of the waters of the Animas River, which Project has among its authorized purposes

31 the furnishing of water for municipal, industrial, domestic, and other beneficial purposes. The

32 water rights settlement purposes of the Project were authorized by the Colorado Ute Indian Water

33 Rights Settlement Act of 1988 (Public Law 100-585) as amended by the Colorado Ute

34 Settlement Act Amendments of2000 (2000 Amendments), Public Law (P.L.) 106-554.

35 (b) The 2000 Amendments authorize the construction of a reservoir, pumping plant,

36 inlet conduit, and appurtenant facilities with sufficient capacity to divert and store water from the

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2

1 Animas River for an average annual depletion of 57,100 acre feet of water to be used for a

2 municipal and industrial water supply;

3 (c) Reclamation has completed the Animas-La Plata Final Supplemental Environmental

4 Impact Statement (FSEIS) dated July 2000 and subsequent Record of Decision dated September

5 25, 2000, for compliance with the National Environmental Policy Act.

6 (d) As provided by Public Law 100-585, the design and construction functions of the

7 Bureau of Reclamation with respect to the Animas-La Plata Project shall be subject to the

8 provisions of the Indian Self-Determination and Education Assistance Act (Public Law 93-638)

9 to the same extent as if such functions were performed by the Bureau of Indian Affairs.

10 (e) Adequate water rights for the Project have been obtained in Colorado and New

11 Mexico, and the United States is satisfied that any conflicts between private water rights and

12 Project water rights have been resolved.

13 (f) The Authority is interested in contracting for the water supply allocated to the

14 Animas-La Plata Water Conservancy District in Public Law 106-554. 

15 (g) The parties hereto desire to enter into this contract in order to secure this municipal

16 and industrial water supply pursuant to the terms and conditions of Public Law 106-554 for the

17 use of such water in Colorado as hereinafter provided. 

18 NOW, THEREFORE, in consideration of the mutual and dependent covenants herein

19 contained, the parties hereto agree as follows:

20

21 GENERAL DEFINITIONS 

22 1. Where used in this contract: 

23 (a) "United States" or "Contracting Officer" or “Secretary” or any of them means the

24 Secretary of the United States Department of the Interior or his/her duly authorized

25 representative. 

26 (b) "Authority" means the Colorado Water Resources and Power Development

27 Authority, a political subdivision of the State of Colorado, located in Denver, Colorado, or its

28 assignees.

29 (c) "Project" means the Animas-La Plata Project, a participating Project of the

30 Colorado River Storage Project, as modified by Public Law 106-554.
3

1

2 (d) "Project Operator" means either the United States or the entity operating the

3 Project Works.

4 (e) "Project Works" means all works or facilities as described in Public Law 106-

5 554, including a reservoir, a pumping plant, a reservoir inlet conduit, and appurtenant facilities

6 with sufficient capacity to divert and store water from the Animas River for an average annual

7 depletion of 57,100 acre-feet of water to be used for a municipal and industrial water supply, to

8 be constructed under the Project, together with lands and rights-of-way for such works, as

9 described in Article 2 herein.

10 (f) “Appurtenant Facilities” includes, but is not limited to, transmission lines, roads,

11 buildings, and other facilities related to the following Project Works to be constructed as a part of

12 the Project.

13 (g) “Project Water” means all water made available as a result of the Project, or from,

14 through, or by means of Project Works, and consists of water provided by direct diversion and

15 releases from project storage. 

16 (h) “Project Storage Water” means Project Water provided from storage in Ridges

17 Basin Reservoir, the storage component of the Project.

18 (i) "Cost Sharing Agreement" refers to the "Agreement in Principle Concerning the

19 Colorado Ute Indian Water Rights Settlement and Binding Agreement for Animas-La Plata

20 Project Cost Sharing" dated June 30, 1986, between the United States, the State of Colorado,

21 certain political subdivisions of the States of Colorado and New Mexico, the Ute Mountain Ute

22 Tribe, and the Southern Ute Indian Tribe, as amended contemporaneously herewith, which is

23 attached as Exhibit A.

24 (j) "Water Rights Settlement Agreement" refers to the "Colorado Ute Indian Water

25 Rights Final Settlement Agreement" dated December 10, 1986 among the United States, the

26 State of Colorado, the Ute Mountain Ute Tribe, the Southern Ute Indian Tribe, and the additional

27 governmental and private entities signatory thereto, as implemented by Public Law 100-585 as

28 amended by Public Law 106-554.

29 (k) "Consultation" means the United States shall notify and confer with the

30 Authority regarding significant decisions pertaining to this contract. In the event that consensus
4

1 cannot be reached and the United States makes a decision, appeals are available to the extent

2 allowed under applicable laws. 

3 (l) "Operation and Maintenance Facilities" means those facilities necessary to

4 support operations and maintenance work, for example operation and maintenance headquarters,

5 office space, shops for repair of equipment, storage places for supplies, and equipment yards.

6 (m) “Payment Obligation” means the total water capital payment obligation of the

7 Authority in order to receive the municipal and industrial water supply allocated to the Animas8 La Plata Water Conservancy District by Public Law 106-554. The Payment Obligation shall be

9 satisfied as set forth in Article 8 hereof. The Payment Obligation comprises:

10 (1) the Up-front Payment as described in Article 8(a) herein; and

11 (2) the Additional Repayment Obligation as described in Article 8(b) herein.

12 (n) “Interest During Construction” means the interest charged for the construction

13 period on the Additional Repayment Obligation, which shall be at the rate determined by the

14 Secretary of the Treasury, as of the beginning of the fiscal year in which construction is initiated,

15 on the basis of the computed average interest rate payable by the Treasury upon its outstanding

16 marketable public obligations, which are neither due nor callable for redemption for fifteen years

17 from the date of issue, as specified under Section 5(f) of the Colorado River Storage Act of April

18 11, 1956.

19 (o) “Amortization Interest” means the interest charged on the outstanding balance of

20 the Additional Repayment Obligation during the relevant repayment period, which shall be at the

21 rate determined by the Secretary of the Treasury, as of the beginning of the fiscal year in which

22 construction is initiated, on the basis of the computed average interest rate payable by the

23 Treasury upon its outstanding marketable public obligations, which are neither due nor callable

24 for redemption for fifteen years from the date of issue, as specified under Section 5(f) of the

25 Colorado River Storage Act of April 11, 1956.

26 (p) “Relinquished Water” means that portion of Project Storage Water, along with a

27 proportionate share of the project depletion allowance, available to the Secretary for allocation to

28 other Project purposes if the Authority elects not to enter into a new agreement or does not make

29 the Additional Repayment Obligation component of its Payment Obligation established in the

30 final cost allocation as provided in Section 302(a)(3)(B) of Public Law 106-554.
5

1 PROJECT WORKS

2 2. Subject to the terms and conditions of this and other applicable contracts related to this

3 Project, the United States will construct the following Project Works and Appurtenant Facilities,

4 acquire lands, and provide certain moveable property and equipment to the Project Operator

5 needed for Project operation and maintenance as, in the opinion of the United States in

6 consultation with the Project Operations Committee, are necessary for Project purposes, without

7 being limited by enumeration and within the limit of funds available by the Congress and the

8 contracting parties. 

9 (a) The Project Works are presently identified as the following:

10 (1) Ridges Basin Dam and Reservoir and Appurtenant Facilities, the main storage

11 facility for the Project, will be located on Basin Creek in Ridges Basin approximately 3 miles

12 southwest of Durango, Colorado. The reservoir will have a capacity of approximately 120,000 

13 acre-feet. 

14 (2) Durango Pumping Plant and Appurtenant Facilities will be located adjacent to

15 the Animas River and will pump Project Water from the Animas River for storage in Ridges

16 Basin Reservoir. 

17 (3) Ridges Basin Inlet Conduit and Appurtenant Facilities will extend from the

18 Durango Pumping Plant to Ridges Basin Reservoir. 

19 (4) Operation and Maintenance Facilities will be constructed as determined

20 necessary by the United States, after consultation with the Project Construction Coordinating

21 Committee and the Project Operations Committee, for the required operation and maintenance of 

22 Project Works.

23 (b) The United States, after consultation with the Authority, shall have the right at

24 any time to increase the capacity of the Project Works or any unit or feature thereof for other than

25 current Project purposes without additional capital or operation and maintenance cost to the

26 Authority; Provided, that the Authority's use of Project Water shall not be impaired thereby. The

27 right of use of such increased capacity is reserved to the United States.

28 (c) Any additions, changes to, or operation of Project Works or changes in use of

29 water from that stated in the Animas-La Plata Final Supplemental Environmental Impact 

30 Statement (FSEIS) dated July 2000 and subsequent Record of Decision dated September 25,
6

1 2000, will be subject to further compliance with applicable environmental statutes and must be

2 approved by the Secretary of the Interior.

3 (d) Construction and operation of the Project will be in accordance with the

4 Environmental Commitments in Chapters 4 and 5 of the FSEIS, which are attached as Exhibit B 

5 to this contract.

6

7 CONDITIONS PRECEDENT TO CONSTRUCTION

8 3. The United States shall be under no obligation to commence, or having commenced,

9 to continue construction of Project Works necessary for the delivery of Project Water under this

10 contract until:

11 (a) Any non-Tribal entity that desires to pay its capital obligations for its municipal

12 and industrial water prior to construction pursuant to Public Law 106-554 has had an opportunity

13 to enter into such an agreement with the United States prior to the initiation of construction.

14 (b) The United States, before initiation of construction of any Project Works, has

15 notified the Authority in writing of any other agreements or conditions precedent that must be

16 met prior to the construction of those Project Works; Provided, however, that no such conditions

17 precedent shall be imposed unless such conditions precedent are mandated or required by Federal

18 laws, State law, or policy promulgated pursuant thereto.

19

20 PROJECT COORDINATION COMMITTEES

21 4. Coordination of Project construction, operations, and Project Works maintenance

22 activities will be accomplished through the establishment of two committees: one to focus on

23 those activities associated with the construction of the Project Works, the other to oversee the 

24 operations and maintenance activities.

25 (a) The Project Construction Coordination Committee will be made up of

26 representatives of those entities that have been identified by the 2000 Amendments to receive

27 Project Water, the Bureau of Reclamation and a representative of the Authority. This committee

28 will provide coordination and consultation on the construction activities among all the project

29 beneficiaries, seeking common understanding and consensus on decisions associated with such

30 items as final plans for Project Works, project construction completion schedule, and Project
7

1 construction costs. Upon Project completion, this committee will be dissolved.

2 (b) The Project Operations Committee will initially consist of representatives from

3 those entities that have been identified by the 2000 Amendments to receive Project Water, the

4 Bureau of Reclamation, and a representative of the Authority. Initially, this committee will

5 determine the appropriate entity to contract with Reclamation for the operation and maintenance

6 of the Project Works and the development of a common understanding among the project

7 beneficiaries of the appropriate level of annual operation, maintenance, and replacement

8 (OM&R) activities to be performed on the Project Works to assure the Project’s long term

9 operational integrity and public safety. Ultimately, this committee will oversee the ongoing

10 operations, maintenance, and replacement activities of the Project Works, providing consultation

11 and coordination among the committee members on such items as annual OM&R funding,

12 maintenance schedules, and public safety issues.

13

14 MEASUREMENT AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

15 5. (a) Water delivered to the Authority pursuant to this contract shall be measured at the

16 outlet works of Ridges Basin Dam and/or in the Animas River at the Durango Pumping Plant

17 with measuring facilities installed by the United States as a part of the Project. Water delivered

18 to the Authority pursuant to this contract directly out of the reservoir shall be measured by

19 facilities provided by the Authority or its subcontractors. Water delivered to the Authority's

20 subcontractors pursuant to this contract shall be measured by the users at their points of

21 diversion. Sufficient water will be available for diversion at any approved points of diversion on

22 the Animas River, at the dam outlet, or in the reservoir in such proportions as the Authority

23 determines from time to time, subject to capacity limitations of the relevant facilities, to ensure

24 that the Authority annually receives a municipal and industrial water allocation with an average

25 annual depletion not to exceed 2,600 acre-feet.

26 (b) The United States will not be responsible for the control, carriage, handling, use,

27 disposal, or distribution of water furnished the Authority from the reservoir, the outlet works of

28 Ridges Basin Dam, or bypassed at the Durango Pumping Plant to the place of final use. The

29 Authority will hold the United States harmless on account of damage or claim of damage of any

30 nature whatsoever arising out of or connected with the control, carriage, handling, treatment, use,

31 disposal, or distribution of water by the Authority below the Project points of measurement. 
8

1 (c) All facilities required for taking water furnished under this contract from the

2 points of delivery and putting it to use by the Authority and its subcontractors will be acquired,

3 constructed or installed, and operated and maintained by the Authority at their sole expense.

4

5 ALLOCATION AND USE OF PROJECT WATER

6 6. (a) The Authority’s allocation of water provided by the Project consists of a municipal

7 and industrial water allocation with an average annual depletion not to exceed 2,600 acre-feet, 

8 except as otherwise provided under Subarticle 8(b)(2)(iii) herein. This allocation may be met by

9 a combination of direct diversion of the natural flows from the Animas River and water released

10 from Project storage and diverted from the Animas River.

11 (b) Except as provided in Subarticle 8(b)(2)(iii) herein, the Authority shall have the

12 right to utilize storage space in Ridges Basin Reservoir in the amount of 2,919 acre-feet to

13 supplement direct flow diversion amounts necessary to fulfill the Authority’s annual Project

14 Water allocation. Any unused water remaining in this Project storage space shall be retained in

15 Ridges Basin Reservoir and shall be available for the Authority’s use in succeeding years. The

16 Authority shall have the opportunity to purchase excess Project Water stored in Ridges Basin

17 Reservoir from other users.

18 (c) If required to ensure that the average annual depletion allocation of 2,600 acre19 feet is met, the water may be used and reused to the extent permitted by the Project decrees. In

20 addition, the water may be used at any location in the Project service area, and may be used by

21 exchange or augmentation to achieve the municipal and industrial uses permitted.

22 (d) The United States, after compliance with applicable environmental compliance

23 statutes, shall cooperate with the Authority, its subcontractors or assignees to provide appropriate

24 interests in land needed for delivery of Project Water through non-project facilities. 

25 (e) Any use of Project Water other than that contemplated in the July 2000 Final

26 Supplemental Environmental Impact Statement and subsequent Record of Decision dated

27 September 25, 2000 for the Animas-La Plata Project shall be subject to compliance with

28 applicable environmental statutes.

29

30
9

1 WATER RIGHT PROVISIONS

2 7. (a) Upon request of the United States, the Authority will assign the water rights, if any, 

3 that it holds associated with the Project water rights to the United States for the benefit of users of

4 Project Water. The Authority, or its assignee, will also protect its interest in the Project water

5 rights and in case a dispute arises as to the character, extent, priority or validity of the rights of the

6 United States or the Authority to use or permit use of Project Water, the Authority shall promptly

7 bring and diligently prosecute and/or defend judicial proceedings for the determination of such

8 dispute and shall take all other measures necessary toward the defense and protection of the

9 Project water supply. If the Authority does not defend Project water rights for the protection of

10 the Project water supply to the satisfaction of the United States, the United States, upon 30 days

11 prior written notice to the Authority, itself will enter into the proceedings to defend such rights.

12 (b) The construction of the Project Works, the allocation of the water supply from

13 those facilities to the Colorado Ute Tribes, and the provision of funds to the Colorado Ute Tribes

14 in accordance with section 16 of Public Law 106-554, and the issuance of an amended final

15 consent decree by the State of Colorado as contemplated in subsection 18(c) of Public Law 106-

16 554 shall constitute final settlement of the tribal claims to water rights on the Animas and La Plata

17 Rivers in the State of Colorado.

18

19 METHOD OF PAYMENT FOR PROJECT CONSTRUCTION COSTS

20 8. The Authority’s Payment Obligation consists of the Up-front Payment Obligation,

21 which may, pursuant to Section 302(a)(3)(A)of Public Law 106-554, be satisfied by payment in

22 full of the Authority’s water capital obligation prior to the initiation of construction, and of any

23 Additional Repayment Obligation, which may, pursuant to Section 302(a)(3)(B) be warranted

24 upon final cost allocation upon completion of construction for reasonable and unforeseen costs

25 associated with Project construction, as determined by the Secretary in consultation with the

26 relevant repayment entities.

27 (a) Up-front Payment Obligation. The Authority shall enter into the Amended and

28 Restated Escrow Agreement and the Amended and Restated Escrow Agreement and Instructions

29 attached hereto as Exhibits C and D contemporaneously herewith, and establish the Escrow

30 Account contemplated by those agreements. The initial sum escrowed, $7,256,750, is derived
10

1 from the May 2001 Interim Cost Allocation based on October 2001 price levels. The initial sum 

2 escrowed and the interest and investment income on that sum during the time of escrow, up to 3%

3 per year, shall be expended as set forth in the Amended and Restated Escrow Agreement and

4 Instructions attached hereto as Exhibit D to pay: (1) the Authority’s share of costs incurred on the

5 Project prior to October 1, 1999 (Sunk Costs) totaling $1,161,088; (2) the Authority’s 3.07%

6 share of Joint Project Costs; (3) the Authority’s share, up to $582,400, of items provided solely

7 for the benefit of the Authority and its subcontractors (Specific Costs); and (4) inflationary

8 increases in the cost of construction during the period of construction, currently estimated at 3%

9 per year, which inflationary increases are anticipated to be met by the interest and investment

10 income on the Escrow Account. Establishment of the Escrow Agreement as set forth above shall

11 constitute payment in full prior to initiation of construction of the Authority’s water capital

12 obligation as mandated by Section 302(a)(3)(A) of Public Law 106-554.

13 (b) Additional Repayment Obligation.

14 (1) Determination of Additional Repayment Obligation. Upon completion of

15 Project construction, the Secretary, in consultation with the Authority and other relevant

16 repayment entities, shall prepare a final cost allocation pursuant to Section 302(a)(3)(B) of Public

17 Law 106-554 and determine whether reasonable and unforeseen costs associated with Project

18 construction warrant additional repayment by the Authority. If additional repayment is so

19 warranted, then the Authority’s share of such additional repayment shall be determined based

20 upon its share of Project Storage Water and overall reimbursable costs, with such share not to

21 exceed 3.07% of the Joint Project Costs in excess of $217,287,950 that are reasonable and

22 unforeseen and 100% of the Specific Costs that exceed $582,400 that are reasonable and

23 unforeseen, and such share shall constitute the Authority’s Additional Repayment Obligation.

24 (2) Satisfaction of Additional Repayment Obligation.

25 (i) Lump Sum Payment. The Authority may, at its option, pay any

26 Additional Repayment Obligation, together with applicable Interest During Construction charges,

27 in a lump sum within 60 days of the determination of the Additional Repayment Obligation. Such

28 payment may be made from funds accrued in and not otherwise expended from the Escrow

29 Account or from other funds of the Authority.

30
11

1 (ii) Payment Over Time. If the Authority elects not to make a lump sum

2 payment of any Additional Repayment Obligation, then the United States will attribute and assign

3 the Additional Repayment Obligation to a pro-rata share of the Authority’s total Project Water,

4 and will include in the block notice for such pro-rata share of the water supply the information

5 regarding the Additional Repayment Obligation set forth in Article 9 below. Upon receipt of such

6 block notice, the Authority may:

7 1. Pursuant to Section 9(c)(1) of the Reclamation Projects Act of

8 1939, elect to enter into a new agreement for payment of the Additional Repayment Obligation

9 assigned to the block notice, which new agreement may provide for (a) payment of the Additional

10 Repayment Obligation assigned to the relevant block notice (together with Interest During

11 Construction charges and Amortization Interest charges) over a 25 year repayment period in

12 annual installments due on or before January 10 of each year; provided, however, that if the

13 Authority or its subcontractor for the relevant water supply commits to the measures in its water

14 conservation plan described in Article 28 below, then repayment may be completed over a 40 year

15 period;

16 2. Pursuant to the provisions of the Water Supply Act of 1958 (72

17 Stat. 297), as amended, elect to defer payment of the Additional Repayment Obligation and use of

18 the pro-rata water supply assigned to the Additional Repayment Obligation in which case (a) no

19 principal or interest payments need be made with respect to storage of water for future water

20 supply as provided by the Water Supply Act of 1958 until such supply is first used, but such

21 deferment of repayment shall not exceed ten (10) years; (b) no interest shall be charged on such

22 cost until such supply is first used, but in no case shall the interest-free period exceed ten (10)

23 years; and (c) once repayment is initiated, the Additional Repayment Obligation, together with

24 Interest During Construction and Amortization Interest shall be paid in annual installments over

25 the remainder of the repayment period, provided, however, that the repayment period, including

26 deferral, shall not exceed 50 years.

27 (iii) Relinquishment. Alternatively, the Authority may elect, at its option, 

28 not to pay the Additional Repayment Obligation, and thereby relinquish any use or contract right

29 to the Project Water assigned to the Additional Repayment Obligation. The resulting

30 Relinquished Water shall be available to the Secretary for allocation to other purposes as provided
12

1 by Section 302(a)(3)(B) of Public Law 106-554.

2 (c) Other Provisions.

3 (1) Consultation. Upon request, the United States will consult annually with the

4 Authority concerning the allocation of construction costs and of any Interest During Construction

5 Cost to be payable under this Contract. The Use-of-Facilities method of cost allocation is based

6 on the storage space required in Ridges Basin Reservoir necessary to meet water delivery 

7 requirements of the beneficiaries. This Use-of-Facilities method will be used to allocate costs for

8 the Project, and will not be changed during the administration of this Contract.

9 (2) Continuing Effect. In accordance with Section 9(c)(1) of the Reclamation

10 Projects Act of 1939, following payment of the Payment Obligation herein, the other contract

11 terms shall remain in full force and effect until mutually agreed by the Authority and the United

12 States.

13

14 METHOD FOR ESTABLISHING BLOCKS FOR PROJECT DELIVERY AND REPAYMENT

15 9. (a) When the Project Works defined in Article 2(a) are completed, tested, and the

16 Project Storage Water becomes available for use by the Authority, the United States shall, after

17 consultation, give the Authority written notice, referred to herein as the "block notice," at least 12

18 months prior to the date when water will be first delivered to the affected block. The block notice

19 shall contain:

20 (1) A description of the entities included in the block.

21 (2) The quantity of Project Water available to the Authority for the block.

22 (b) If an Additional Repayment Obligation has been assigned pro rata to a quantity of

23 the Authority’s Project Storage Water, pursuant to Article 8(b)(2)(ii) herein, then the block notice

24 establishing the availability of that water supply will also set forth:

25 (1) The Additional Repayment Obligation allocated to that block; and

26 (2) The payment schedule for the Additional Repayment Obligation allocated to

27 that block, as established by the new agreement for payment of the additional repayment

28 obligation entered into pursuant to Article 8(b)(2)(ii) including a breakdown of the amount and

29 due date of each payment.

30 (c) Each block notice and amendment thereto shall become a part of this contract.
13

1

2 PAYMENT OF OPERATION, MAINTENANCE, AND REPLACEMENT COSTS

3 10. (a) The operation, maintenance, and replacement (OM&R) costs allocated to the

4 Authority’s Project Water will comprise: (1) the Authority’s pro-rata share of OM&R costs 

5 actually incurred by the Project Operator in connection with Project facilities and/or operations that

6 benefit all users of Project Water (General OM&R Costs), based on the amount of Project Storage

7 Water actually purchased and paid for by the Authority in accordance with article 8 above; (2) the

8 Authority’s pro-rata share of OM&R costs actually incurred by the Project Operator in connection

9 with Project facilities and/or operations that benefit the Authority (and/or its subcontractors), but

10 do not benefit all other users of Project Water (Specific OM&R Costs), based on the Authority’s

11 pro-rata use of such facilities; and (3) the actual cost required to refill Project storage to replace

12 water released by request of the Authority. 

13 (b) Payment of the Authority’s, or its assignee’s, allocated OM&R costs shall be made

14 annually in advance, within 60 days of receipt of the annual charge notice issued by the Project

15 Operator based on the Project Operations Committee’s annual estimate of Project OM&R costs. If

16 the Authority’s allocated OM&R costs exceed the sum paid in advance, then a supplemental charge

17 notice will be issued and the Authority will pay the sum required within 60 days of receipt. If the

18 Authority’s allocated OM&R costs are less than the sum advanced, then the Authority shall receive

19 a credit for the overpayment upon its next charge notice. 

20

21 USE AND DISPOSAL OF PROJECT WATER DURING CONSTRUCTION 

22 11. During construction, Project Water that is not made available to the Authority under a

23 block notice as provided in Article 9 herein, may be disposed of by the United States at terms and

24 charges fixed by the United States. The charges shall be sufficient to at least cover the operation,

25 maintenance, and replacement costs appropriate for such water delivery. Payment for use of such

26 water shall be in advance and the proceeds shall be applied to operation and maintenance expense

27 and other appropriate accounts as determined by the United States, and shall accrue to the benefit

28 of the United States. The Authority shall, however, have the first opportunity to purchase said

29 Project Water at the price and terms offered.

30
14

1 WATER SHORTAGES

2 12. There may occur at times during any year a shortage in the quantity of water available

3 for furnishing to the Authority through and by means of the Project, but in no event shall any

4 liability accrue against the United States or any of its officers, agents, or employees for any

5 damage, direct or indirect, arising from a shortage, on account of errors in operation, drought, or

6 any other causes. In any year in which there may occur a shortage from any cause, the United

7 States reserves the right to apportion the available water supply, exclusive of carryover storage, 

8 among the Authority, Tribes, and others entitled to receive water from the Project in accordance

9 with conclusive determinations of the Contracting Officer, and in accordance with applicable law,

10 including the Animas-La Plata Compact.

11

12 COVENANT AGAINST CONTINGENT FEES

13 13. The Authority warrants that it has not employed or retained any person or selling

14 agency to solicit or secure this contract upon an agreement or understanding for a commission,

15 percentage, brokerage or contingent fee, excepting bona fide employees or bona fide established

16 commercial or selling agencies maintained by the Authority for the purpose of securing business. 

17 For breach or violation of this warranty, the United States shall have the right to annul this contract

18 without liability, or at its discretion, to add to the repayment obligation or consideration the full

19 amount of such commission, percentage, brokerage, or contingent fee.

20

21 THIRD PARTY CONTRACTS

22 14. (a) Any contract entered into between the Authority and any third-party for the use of

23 Project Water under this Contract shall be subject to written approval of the United States in order

24 to determine the effects on the operation of the Project Works. Any such subcontracts shall be

25 subject to the provisions of this Contract and must include, but not be limited to, terms of

26 measurement, operations, environmental compliance, and the impact of defaults on Project Works. 

27 Approval shall not be unreasonably withheld. The United States shall have 60 days after

28 environmental compliance, if required, or after receipt of the proposed third-party contract to

29 inform the Authority of its approval or denial of the contract. If the United States approves an

30 assignment of all of the Authority’s rights and obligations under this contract, then the Authority
15

1 shall be relieved of any further liability under this contract.

2 (b) The Authority shall not receive any valuable consideration for such subcontract 

3 in excess of the total cumulative cost of the water to the Authority (such cost of water includes

4 interest on Authority funds used to procure such water, administrative costs, and OM&R costs). 

5 The Authority shall not extract any brokerage, profits, commission or fee, from any person on the

6 water to be delivered under such subcontract. In connection with any such subcontract, the Chair

7 of the Authority, or designee, shall certify to the United States that the conveyance with respect to

8 water delivery was without consideration except as provided above, and that no brokerage, profits,

9 commission, fee, or other charge of any kind was charged to the subcontractor or any person acting

10 on behalf of the subcontractor. Any exceptions to this article will be covered under a separate

11 agreement.

12 TITLE TO PROJECT WORKS

13 15. Title to the Project Works shall be held by the United States, unless specifically

14 provided otherwise by Congress, notwithstanding transfer of the care, operation, and maintenance

15 of any said works to the Project Operator.

16

17 SEVERABILITY

18 16. (a) If any provisions of Articles 17 through 30 are in conflict with Article 1 through

19 16, then the provisions of Article 1 through 16 shall take precedence.

20 (b) If any provisions of the contract shall, for any reason be determined to be illegal or

21 unenforceable, the parties, nevertheless, intend that the remainder of the contract shall remain in

22 full force and effect. Furthermore, any adjustments or variations to this contract necessitated by

23 future negotiations with other Project beneficiaries can be accomplished by amending this contract.

24

25 CHARGES FOR DELINQUENT PAYMENTS

26

27 17. (a) The Authority shall be subject to interest, administrative and penalty charges on

28 delinquent installments or payments. When a payment is not received by the due date, the

29 Authority shall pay an interest charge for each day the payment is delinquent beyond the due date. 

30 When a payment becomes 60 days delinquent, the Authority shall pay an administrative charge to

31 cover additional costs of billing and processing the delinquent payment. When a payment is

32 delinquent 90 days or more, the Authority shall pay an additional penalty charge of 6 percent per

33 year for each day the payment is delinquent beyond the due date. Further, the Authority shall pay

34 any fees incurred for debt collection services associated with a delinquent payment. 

35
16

1 (b) The interest charge rate shall be the greater of the rate prescribed quarterly in the

2 Federal Register by the Department of the Treasury for application to overdue payments, or the

3 interest rate of 0.5 percent per month prescribed by section 6 of the Reclamation Project Act of

4 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due date and

5 remain fixed for the duration of the delinquent period.

6 (c) When a partial payment on a delinquent account is received, the amount received

7 shall be applied, first to the penalty, second to the administrative charges, third to the accrued

8 interest, and finally to the overdue payment. 

9

10 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

11

12 18. (a) The obligation of the Authority to pay the United States as provided in this contract

13 is a general obligation of the Authority notwithstanding the manner in which the obligation may be

14 distributed among the Authority’s subcontractors and notwithstanding the default of individual

15 subcontractors in their obligations to the Authority. 

16 (b) The payment of charges becoming due hereunder is a condition precedent to

17 receiving benefits under this contract. The United States shall not make water available to the

18 Authority through project facilities during any period in which the Authority may be in arrears in

19 the advance payment of any operation and maintenance charges due the United States or in arrears

20 for more than 12 months in the payment of any construction charges due the United States. The

21 Authority shall not furnish water made available pursuant to this contract for parties which are in

22 arrears in the advance payment of operation and maintenance charges or in arrears more than 12

23 months in the payment of construction charges as levied or established by the Authority. 

24

25 NOTICES

26

27 19. Any notice, demand, or request authorized or required by this contract shall be deemed

28 to have been given, on behalf of the Authority, when mailed, postage prepaid, or delivered to the

29 Regional Director, Upper Colorado Region, Bureau of Reclamation, 125 South State Street, Room

30 6107, Salt Lake City, Utah 84138-1102, and on behalf of the United States, when mailed, postage

31 prepaid, or delivered to the Colorado Water Resources and Power Development Authority, 1580

32 Logan Street - Suite 620, Denver, Colorado 80203. The designation of the addressee or the address

33 may be changed by notice given in the same manner as provided in this article for other notices. 

34

35 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

36

37 20. The expenditure or advance of any money or the performance of any obligation of the

38 United States under this contract shall be contingent upon appropriation or allotment of funds. 

39 Absence of appropriation or allotment of funds shall not relieve the Authority from any obligations

40 under this contract. No liability shall accrue to the United States in case funds are not appropriated

41 or allotted. 

42 OFFICIALS NOT TO BENEFIT

43

44 21. No Member of or Delegate to Congress, Resident Commissioner or official of the

45 Authority shall benefit from this contract other than as a water user or landowner in the same

46 manner as other water users or landowners. 

47

48 CHANGES IN AUTHORITY'S ORGANIZATION

49

50 22. While this contract is in effect, no change may be made in the Authority's organization, 

51 by dissolution, consolidation, merger or otherwise, except upon the Contracting Officer's written

52 consent, unless all obligations of the Authority under this contract have been satisfied, or provision

53 has been made for the satisfaction of all such obligations.
17

1 ASSIGNMENT LIMITED - SUCCESSORS AND ASSIGNS OBLIGATED

2

3 23. (a) The provisions of this contract shall apply to and bind the successors and assigns of

4 the parties hereto, but no assignment or transfer of this contract or any right or interest therein shall

5 be valid until approved in writing by the United States.

6

7 BOOKS, RECORDS AND REPORTS

8

9 24. The Authority, and/or its subcontractors, shall establish and maintain accounts and

10 other books and records pertaining to administration of the terms and conditions of this contract,

11 including: the Authority's and /or its subcontractors’ financial transactions, water supply data,

12 water-use data; and other matters that the Contracting Officer may reasonably require. Reports

13 thereon shall be furnished to the Contracting Officer in such form and on such date or dates as the

14 Contracting Officer may reasonably require. Subject to applicable Federal laws and regulations,

15 each party to this contract shall have the right during office hours to examine and make copies of

16 the other party's books and records relating to matters covered by this contract. 

17

18 RULES, REGULATIONS, AND DETERMINATIONS

19

20 25. (a) The parties agree that the delivery of water or the use of Federal facilities pursuant

21 to this contract is subject to Reclamation law, as amended and supplemented, and the rules and

22 regulations promulgated by the Secretary of the Interior under Reclamation law. 

23 (b) The Contracting Officer shall have the right to make determinations necessary to

24 administer this contract that are consistent with the expressed and implied provisions of this

25 contract, the laws of the United States and the State, and the rules and regulations promulgated by

26 the Secretary of the Interior. Such determinations shall be made in consultation with the Authority. 

27

28 QUALITY OF WATER

29

30 26. The operation and maintenance of project facilities shall be performed in such manner

31 as is practicable to maintain the quality of raw water made available through such facilities at the

32 highest level reasonably attainable, as determined by the Contracting Officer. The United States

33 does not warrant the quality of water and is under no obligation to construct or furnish water

34 treatment facilities to maintain or better the quality of water. 

35

36 WATER AND AIR POLLUTION CONTROL

37

38 27. The Authority, in carrying out this contract, shall comply with all applicable water and

39 air pollution laws and regulations of the United States and the State of Colorado, and shall obtain

40 all required permits or licenses from the appropriate Federal, State, or local authorities. 

41

42 WATER CONSERVATION

43

44 28. Prior to the delivery of water provided from or conveyed through Federally constructed

45 or Federally financed facilities pursuant to this contract, the Authority, and/or its subcontractors,

46 shall develop an effective water conservation program acceptable to the Contracting Officer. The

47 water conservation program shall contain definite water conservation objectives, appropriate

48 economically feasible water conservation measures, and time schedules for meeting those

49 objectives. At subsequent 5-year intervals, the Authority, and/or its subcontractors, shall submit a

50 report on the results of the program to the Contracting Officer for review. Based upon the

51 conclusions of the review, the Contracting Officer and the Authority, and/or its subcontractors,

52 shall consult and agree to continue or to revise the existing water conservation program. 

53
18

1 EQUAL OPPORTUNITY

2

3 29. During the performance of this contract, the Authority agrees as follows: 

4 (a) The Authority will not discriminate against any employee or applicant for

5 employment because of race, color, religion, sex, or national origin. The Authority will take

6 affirmative action to ensure that applicants are employed, and that employees are treated during

7 employment, without regard to their race, color, religion, sex, or national origin. Such action shall

8 include, but not be limited to, the following: Employment, upgrading, demotion, or transfer;

9 recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of

10 compensation; and selection for training, including apprenticeship. The Authority agrees to post in

11 conspicuous places, available to employees and applicants for employment, notices to be provided

12 by the Contracting Officer setting forth the provisions of this nondiscrimination clause. 

13 (b) The Authority will, in all solicitations or advertisements for employees placed by

14 or on behalf of the Authority, state that all qualified applicants will receive consideration for

15 employment without discrimination because of race, color, religion, sex, or national origin. 

16 (c) The Authority will send to each labor union or representative of workers with

17 which it has a collective bargaining agreement or other contract or understanding, a notice, to be

18 provided by the Contracting Officer, advising the said labor union or workers' representative of the

19 Authority's commitments under Section 202 of Executive Order 11246 of September 24, 1965, and

20 shall post copies of the notice in conspicuous places available to employees and applicants for

21 employment. 

22 (d) The Authority will comply with all provisions of Executive Order No. 11246 of

23 September 24, 1965, as amended, and of the rules, regulations, and relevant orders of the Secretary

24 of Labor. 

25 (e) The Authority will furnish all information and reports required by said amended

26 Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or pursuant

27 thereto, and will permit access to its books, records, and accounts by the Contracting Officer and

28 the Secretary of Labor for purposes of investigation to ascertain compliance with such rules,

29 regulations, and orders. 

30 (f) In the event of the Authority's noncompliance with the nondiscrimination clauses of

31 this contract or with any of the such rules, regulations, or orders, this contract may be canceled,

32 terminated, or suspended, in whole or in part, and the Authority may be declared ineligible for

33 further Government contracts in accordance with procedures authorized in said amended Executive

34 Order, and such other sanctions may be imposed and remedies invoked as provided in said

35 Executive Order, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided

36 by law.

37 (g) The Authority will include the provisions of paragraphs (a) through (g) in every

38 subcontract or purchase order unless exempted by the rules, regulations, or orders of the Secretary

39 of Labor issued pursuant to Section 204 of said amended Executive Order, so that such provisions

40 will be binding upon each subcontractor or vendor. The Authority will take such action with

41 respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a

42 means of enforcing such provisions, including sanctions for noncompliance: Provided, however,

43 That in the event the Authority becomes involved in, or is threatened with, litigation with a

44 subcontractor or vendor as a result of such direction, the Authority may request the United States to

45 enter into such litigation to protect the interests of the United States. 

46

47 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

48

49 30. (a) The Authority shall comply with Title VI of the Civil Rights Act of 1964 (42

50 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (Public Law 93-112, as amended),

51 the Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights

52 laws, as well as with their respective implementing regulations and guidelines imposed by the U. S.

53 Department of the Interior and/or Bureau of Reclamation. 
1 (b) These statutes require that no person in the United States shall, on the grounds of

2 race, color, national origin, handicap, or age, be excluded from participation in, be denied the

3 benefits of, or be otherwise subjected to discrimination under any program or activity receiving

4 financial assistance from the Bureau of Reclamation. By executing this contract, the Authority

5 agrees to immediately take any measures necessary to implement this obligation, including

6 permitting officials of the United States to inspect premises, programs and documents.

7 (c) The Authority makes this agreement in consideration of and for the purpose of

8 obtaining any and all Federal grants, loans, contracts, property discounts or other Federal financial

9 assistance extended after the date hereof to the Authority by the Bureau of Reclamation, including

10 installment payments after such date on account of arrangements for Federal financial assistance

11 which were approved before such date. The Authority recognizes and agrees that such Federal

12 assistance will be extended in reliance on the representations and agreements made in this article,

13 and that the United States reserves the right to seek judicial enforcement thereof.

14

15

16

17

18

19 IN WITNESS WHEREOF, the parties hereto have

20 caused this contract to be duly executed as of the day and year first above written.

21

22

23

24 Approved THE UNITED STATES OF AMERICA

25

2 6

287 B ~~~ '- ,;;;( :~~~~~~ A 

29 Regional Director

30 Upper Colorado Region

31 Bureau of Reclamation

32

33

34

35 ATTEST: COLORADO WATER RESOURCES AND

36 POWER DEVELOPMENT AUTHORITY

37

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42

43

44

45

46

47

48

49 List of Attachments: Exhibit A -Cost Sharing Agreement, as amended

50 Exhibit B -Environmental Commitments

51 Exhibit C -Amended and Restated Escrow Agreement

52 Exhibit D -Amended and Restated Escrow Agreement and Instructions.

53

19

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