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2 Contract No. 11-WC-40-436 

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5 UNITED STATES 

6 DEPARTMENT OF THE INTERIOR 

7 BUREAU OF RECLAMATION 

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9 NAVAJO-GALLUP WATER SUPPLY PROJECT 

10 COLORADO RIVER STORAGE PROJECT 

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12 REPAYMENT CONTRACT BETWEEN THE UNITED STATES AND 

13 THE JICARILLA APACHE NATION, NEW MEXICO 

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16 PREAMBLE ................................................................................................................................... 3 

17 EXPLANATORY RECITALS ....................................................................................................... 3 

18 1. GENERAL DEFINITIONS .................................................................................................... 4 

19 2. PROJECT FACILITIES ......................................................................................................... 6 

20 3. PROJECT COORDINATION COMMITTEES ..................................................................... 7 

21 4. MEASUREMENT AND RESPONSIBILITY FOR DISTRIBUTION OF 

22 DELIVERY CAPACITY ALLOCATION ..................................................................................... 8 

23 5. ALLOTMENT AND USE OF DELIVERY CAPACITY ALLOCATION ........................... 9 

24 6. METHOD OF PAYMENT FOR PROJECT CONSTRUCTION COSTS ............................. 9 

25 7. NOTIFICATION OF SUBSTANTIAL COMPLETION ..................................................... 15 

26 8. PAYMENT OF OPERATION, MAINTENANCE, AND REPLACEMENT COSTS ........ 16 

27 9. USE AND DISPOSAL OF WATER DURING CONSTRUCTION ................................... 18 

28 10. WATER SHORTAGES ........................................................................................................ 18 

29 11. LEVY OF ASSESSMENTS, TOLLS AND CHARGES ..................................................... 19 

30 12. COVENANT AGAINST CONTINGENT FEES ................................................................. 19 

31 13. TITLE TO PROJECT FACILITIES ..................................................................................... 19 

32 14. SEVERABILITY .................................................................................................................. 19 

33 15. CHARGES FOR DELINQUENT PAYMENTS .................................................................. 20 

34 16. GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT ................ 20 

35 17. NOTICES .............................................................................................................................. 21 

36 18. CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS ......................... 21 

37 19. OFFICIALS NOT TO BENEFIT ......................................................................................... 21 

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20. CHANGES IN JICARILLA APACHE NATION'S ORGANIZATION ............................. 21 

2 21. ASSIGNMENTS LIMITED- SUCCESSORS AND ASSIGNS OBLIGATED ................. 21 

3 22. BOOKS, RECORDS AND REPORTS ................................................................................ 21 

4 23. RULES, REGULATIONS, AND DETERMINATIONS ..................................................... 22 

5 24. PROTECTION OF WATER AND AIR QUALITY ............................................................ 22 

6 25. WATER CONSERVATION ................................................................................................ 22 

7 26. EQUAL EMPLOYMENT OPPORTUNITY ....................................................................... 23 

8 27. COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS ........................... 25 

9 28. MEDIUM FOR TRANSMITTING PAYMENTS ................................................................ 25 

10 29. CONTRACT DRAFTING CONSIDERATIONS ................................................................ 26 

11 30. CONSTRAINTS ON AVAILABILITY OF WATER ......................................................... 26 

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Contract No. 11-WC-40-436 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

NAVAJO-GALLUP WATER SUPPLY PROJECT 

COLORADO RIVER STORAGE PROJECT 

REPAYMENT CONTRACT BETWEEN THE UNITED STATES AND 

THE JICARILLA APACHE NATION, NEW MEXICO 

PREAMBLE -/J., • 

THIS REPAYMENT CONTRACT, made this f___1____ day of , 20 / L , 

pursuant to the Act of Congress approved June 17, 1902 (32 Stat. 388), and acts 

amendatory thereof or supplementary thereto, all of which acts are commonly known and 

referred to as the Federal Reclamation Laws, between the UNITED STATES OF 

AMERICA, hereinafter referred to as the United States, represented by the officer 

executing this contract, and THE JICARILLA APACHE NATION. 

22 EXPLANATORY RECITALS 

23 WITNESSETH, That: 

24 WHEREAS, the following statements are made in explanation: 

25 The Act of Congress approved December 15, 1971 (85 Stat. 664), authorized the 

26 planning and investigation of the Navajo-Gallup Water Supply Project (Project); 

27 subsequently, the construction, operation, and maintenance of the Project was authorized 

28 by the Northwestern New Mexico Rural Water Projects Act, Act of March 30, 2009 (123 

29 Stat. 1367), and the United States has investigated, planned, and is preparing to construct 

30 said Project for the diversion and distribution of the waters of the San Juan River, which 

31 Project has among its authorized purposes the furnishing of water for municipal, 

32 industrial, commercial, domestic, and stock watering purposes. The water rights 

33 settlement purposes of the Project were authorized by the Northwest New Mexico Rural 

34 Water Projects Act of2009 (the Navajo Settlement). 

3 
1 The Navajo Settlement Act authorizes the design and construction of the Project 

2 Facilities as described in Article 2. 

3 The Jicarilla Apache Nation is in need of a reliable supply of municipal and 

4 industrial water to the southwest portion of the Jicarilla Apache Nation's reservation. 

5 

6 NOW, THEREFORE, in consideration of the mutual and dependent covenants 

7 herein contained, the parties hereto agree as follows: 

8 

9 1 GENERAL DEFINITIONS 

1 0 Where used in this contract: 

11 (a) "Consultation" or "Consult" refers to an ongoing obligation of both parties to 

12 implement the provisions of this Contract with a full exchange of information so as to 

13 assure that each party is provided full participation in the decision making process. 

14 Consultation shall be required of each party with respect to each section of the Contract 

15 regardless of whether the section itself sets forth a consultation requirement. The 

16 Consultation required shall be reasonable under the circumstances, and except in exigent 

17 circumstances Consultation shall be undertaken in advance of decision making. In the 

18 event that agreement cannot be reached and the United States makes a decision appeals 

19 are available to the extent allowed under applicable laws. 

20 (b) "Delivery Capacity Allocation" means the portion of the Project capacity 

21 reserved for use by the Jicarilla Apache Nation to deliver the Jicarilla Apache Nation 

22 water supply, described in Article 5 below, pursuant to Sec. 10603(b)(1)(E) of the Navajo 

23 Settlement Act. 

24 (c) "Estimated Repayment Obligation" means the estimated reimbursable 

25 construction costs allocated to the Jicarilla Apache Nation 's Municipal& Industrial 

26 (M&I) uses associated with the construction of Project Facilities plus any appropriate 

27 Interest During Construction (IDC) as identified in the Construction Cost Estimate 

28 further defined in Article 6 below. 

29 (d) "Final Repayment Obligation" means the final reimbursable construction costs 

30 allocated to the Jicarii'la Apache Nation's M&I uses associated with the construction of 

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1 Project Facilities, plus any appropriate IDC, as determined through the Final Cost 

2 Allocation described in Article 6 below. 

3 (e) "Fixed Operation, Maintenance, and Replacement" (OM&R) costs" means costs 

4 of administration, overhead, labor, materials, and equipment required to maintain all 

5 pumps, storage tanks, pipelines, and diversion facilities. 

6 (f) "Jicarilla Apache Nation" means the Jicarilla Apache Nation, a body politic and 

7 federally-recognized Indian nation in the Federally Recognized Indian Tribe List of 1994. 

8 (g) "Jicarilla Apache Nation Water Supply" means the municipal and industrial 

9 water supply that is part of the water rights of the Jicarilla Apache Nation, held in trust by 

10 the Secretary and confirmed by the Jicarilla Apache Tribe Water Rights Settlement Act 

11 (Public Law 102-441; 106 Stat. 2237). 

12 (h) "Northwestern New Mexico Rural Water Projects Act", or "Navajo Settlement 

13 Act", means Subtitle B of Title X of the Act of March 30, 2009 (123 Stat. 1367). 

14 (i) "Navajo Nation" means the Navajo Nation, a body politic and federallyIS recognized Indian nation in the Federally Recognized Indian Tribe List of 1994. 

16 G) "Operation and Maintenance Facilities" means those facilities necessary to 

17 support operations and maintenance work, including, but not limited to operation and 

18 maintenance headquarters, office space, shop for repair of equipment, storage place for 

19 supplies, and equipment yard. 

20 (k) "Project" means the Navajo-Gallup Water Supply Project, a participating project 

21 of the Colorado River Storage Project, authorized by the Navajo Settlement Act. 

22 (1) "Project Construction Committee" means the committee made up of 

23 representatives of the Project Participants and the Bureau of Reclamation. 

24 Representatives of the State ofNew Mexico may also participate in the committee if the 

25 State so desires. 

26 (m) "Project Facilities" means for the purpose of this contract, the portions of the 

27 Project that are necessary to divert, treat, and deliver treated Project water to the Jicarilla 

28 Apache Nation turnout. 

29 (n) "Project Operator" means the entity operating the Project Facilities. 

30 (o) "Project Participants" means the Navajo Nation, the City of Gallup, and the 

31 Jicarilla Apache Nation. 

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(p) "Remaining Repayment Obligation" means the amount of the Final Repayment 

2 Obligation as determined through the Final Cost Allocation described in Articles 6 below 

3 that is in excess of any payments made by the Jicarilla Apache Nation toward its 

4 Estimated Repayment Obligation. 

5 (q) "San Juan River System" means the San Juan River and its tributaries. 

6 (r) "United States" or "Contracting Officer" or "Secretary" or any of them means 

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

8 representative. 

9 (s) "Variable OM&R costs" mean the costs of power including power consumption 

1 0 and a proportional percentage of power demand costs for the pumping of water and costs 

11 associated with the treatment of water. 

12 

13 2. PROJECT FACILITIES 

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

15 to this Project, the United States will construct the following Project Facilities and 

16 appurtenant facilities that, in the opinion ofthe United States in Consultation with the 

17 Project Coordination Committees, are necessary for Project purposes, without being 

18 limited by enumeration and within the limit of funds made available by the Congress and 

19 the contracting parties. The features of the Project are generally described in Section 

20 10602(b) of the Navajo Settlement Act, and are described in more detail in the Navajo21 Gallup Water Supply Project Planning Report and Final Environmental Impact Statement 

22 (PRIFEIS) dated July 2009, and the subsequent Record of Decision dated October 1, 

23 2009. 

24 (a) For the purposes of the terms and conditions of this Contract, Project Facilities 

25 are limited to the portions of the Cutter Lateral that are necessary to divert, treat and 

26 deliver water from Cutter Reservoir to the Jicarilla Apache Nation turnout. Project 

27 Facilities are shown on the map as Exhibit A, and are defined in the PRIFEIS as Reaches 

28 21 through 24 of the Cutter Lateral, excluding all turnout facilities to Navajo Nation 

29 communities which are solely constructed for the benefit of the Navajo Nation. 

6 
1 (b) Operation and Maintenance Facilities will be constructed as determined 

2 necessary by the United States, after Consultation with the Project Construction 

3 Committee, for the required operation and maintenance of Project Facilities. 

4 (c) The United States, after Consultation with the Jicarilla Apache Nation, shall 

5 have the right at any time to increase the capacity of the Project Facilities or any unit or 

6 feature thereof for other than currently authorized project purposes without additional 

7 capital or operation and maintenance cost to the Jicarilla Apache Nation; provided, that 

8 the Jicarilla Apache Nation use of the Delivery Capacity Allocation shall not be impaired 

9 thereby. The right of use of such increased capacity is reserved to the United States. 

10 (d) Any additions, changes to, or operation of Project Facilities or changes in use of 

11 the water allocations pursuant to Section 10603(b)(1)(E) of the Navajo Settlement Act 

12 from that stated in the Navajo-Gallup Water Supply Project Final Environmental Impact 

13 Statement (FEIS) dated July 2009 and subsequent Record of Decision dated October 1, 

14 2009, will, as required by law, be subject to further compliance with applicable 

15 environmental statutes, which shall include an analysis of potential impacts on other 

16 Project Participants. 

17 (e) Construction and operation of the Project will be in accordance with the 

18 Environmental Commitments in Chapter VI of the FEIS, which is attached as Exhibit B 

19 to this contract. 

20 

21 3. PROJECT COORDINATION COMMITTEES 

22 Consultation concerning, and coordination of, Project construction, operations, 

23 and maintenance activities will be accomplished through the establishment of two 

24 committees: one to focus on those activities associated with the construction of the 

25 Project Facilities, the other to oversee the operations and maintenance activities. The 

26 committees will be made up of representatives of the Project Participants and the Bureau 

27 of Reclamation. The State ofNew Mexico may also appoint a representative to the 

28 Project Construction Committee. 

29 (a) The Project Construction Committee will serve to review cost factors and 

30 budgets for construction; improve construction management through enhanced 

31 communication; and seek additional ways to reduce overall Project costs. 

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1 (b) The Project Operations Committee will determine the appropriate entity to 

2 contract with Reclamation for the operation and maintenance of the Project Facilities; 

3 will review cost factors and budgets for OM&R activities; and develop a common 

4 understanding among the Project Participants of the appropriate level of annual OM&R 

5 activities to be performed on the Project Facilities to assure the Project's long term 

6 operational integrity and public safety. 

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4. MEASUREMENT AND RESPONSIBILITY FOR DISTRIBUTION OF 

DELIVERY CAPACITY ALLOCATION 

(a) This is not a water supply contract between the United States and the Jicarilla 

Apache Nation. The terms and conditions of the delivery and conveyance of the Jicarilla 

Apache Nation Water Supply through Project Facilities (and NIIP facilities including the 

diversion from Navajo Reservoir, tunnels, canals, and siphons to and including Cutter 

Reservoir) to the Jicarilla Apache Nation turnout near the community of Counselor, New 

Mexico will be identified in a separate agreement(s) between the Jicarilla Apache Nation 

and the Project Participants, and/or the Project Operator. 

(b) The water diverted through Project Facilities for use by the Jicarilla Apache 

Nation shall be measured at the intake to the NIIP main canal at Navajo Reservoir with 

measuring facilities installed by the United States. 

(c) The Jicarilla Apache Nation will hold the United States harmless on account of 

damage or claim of damage of any nature whatsoever arising out of or connected with the 

control, carriage, handling, treatment, use, disposal, or distribution of the Jicarilla Apache 

Nation's Water Supply by the Jicarilla Apache Nation from the Jicarilla Apache Nation 

turnout. 

(d) All facilities required for taking the Jicarilla Apache Nation's Water Supply 

from Project Facilities and putting it to use by the Jicarilla Apache Nation and its users 

will be acquired, constructed or installed, and operated and maintained by the Jicarilla 

Apache Nation or its users is not a part of the Project and not authorized for funding 

through the Navajo Settlement Act. 

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1 5. DELIVERY CAPACITY ALLOCATION 

2 (a) The Jicarilla Apache Nation's Delivery Capacity Allocation is based on the 

3 Jicarilla Apache Nation's share of the design capacity of each project feature that is used 

4 to deliver water to the Jicarilla Apache Nation. Facilities are designed to meet the 7-day 

5 peak demand which is computed as 1.3 times the peak average monthly demand. The 

6 Jicarilla Apache Nation's share of the design capacity ofProject features changes as 

7 deliveries are made to Navajo communities from the Cutter Lateral. The Jicarilla Apache 

8 Nation's share of the capacity of each reach of the Cutter Lateral is shown in Volume II9 Technical Appendices for the Planning Report and Final Environmental Impact 

10 Statement, Appendix D, Part I, Allocation of Capital and OM&R Costs Among Project 

11 Participants, Table B2. 

12 (b) Any use of the Delivery Capacity Allocation other than that contemplated in the 

13 July 2009 Final Environmental Impact Statement and subsequent Record of Decision 

14 dated October 1, 2009 for the Project shall be subject to compliance with applicable 

15 environmental statutes. 

16 (c) The Jicarilla Apache Nation's Delivery Capacity Allocation shall be used for 

17 delivery of the Jicarilla Apache Nation Water Supply at the point of diversion of not 

18 more than 1200 acre-feet in any one year. 

19 

20 6. 

21 

METHOD OF PAYMENT FOR PROJECT CONSTRUCTION COSTS 

22 (a) Reclamation has published the July 2009, Navajo-Gallup Water Supply Project 

23 Planning Report and Final Environmental Impact Statement (July 2009 Planning Report). 

24 Part I of Appendix D of Volume II ofthe July 2009 Planning Report, using January 2007 

25 price levels which establishes the cost allocation that will be used to allocate Project 

26 construction costs, IDC costs, and OM&R costs among the Project Participants. The Use 

27 of Facilities Methodology employed in the July 2009 Planning Report to allocate Project 

28 costs will not be changed for the administration of this Contract. The July 2009 Planning 

29 Report allocation is based upon the proportionate share of Project Facilities used by the 

30 Project Participants for delivery of water. 

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(b) Using January 2007 price levels, the July 2009 Planning Report estimated the 

2 total Project construction costs to be $865,000,000 and estimated the construction costs 

3 allocable to the Jicarilla Apache Nation's Delivery Capacity Allocation to be 

4 $32,200,000. This amount included an estimated $1,500,000 of cultural resources and 

5 fish and wildlife mitigation costs allocated to the Jicarilla Apache Nation, which were 

6 later deemed non-reimbursable pursuant to Sections 10609(e) and (f) of the Act. 

7 Therefore, the July 2009 Planning Report estimated Project construction costs allocable 

8 to the Jicarilla Apache Nation's Delivery Capacity Allocation, at the January 2007 price 

9 level, to be $30,700,000. 

10 (c) As a refinement to the cost estimate used in the July 2009 Planning Report, the 

11 Secretary has prepared a detailed Construction Cost Estimate (CCE) based upon the 

12 summary Project cost estimates used in the July 2009 Planning Report at the same 

13 January 2007 price levels. The total Project construction costs estimated by the January 

14 2007 price level CCE is $865,000,000 and the construction costs allocable to the Jicarilla 

15 Apache Nation's Delivery Capacity Allocation are estimated from the CCE to be 

16 $30,568,000 rounded to the nearest thousand dollars. 

17 (d) As provided in Section 1 0602( d)(1 )(D) of the Navajo Settlement Act, the 

18 Secretary of the Interior and the State ofNew Mexico are required to enter into an 

19 agreement" ... under which the State ofNew Mexico will provide a share of the Project 

20 construction costs of not less than $50,000,000, except that the State of New Mexico 

21 shall receive credit for funds the State has contributed to construct water conveyance 

22 facilities to the Project Participants to the extent that the facilities reduce the cost of the 

23 Project as estimated in the Draft Impact Statement." The Jicarilla Apache Nation has 

24 agreed on the methodology to be implemented regarding how to apply the New Mexico 

25 cost-share funds to reduce the cost of the Project and how it subsequently affects their 

26 respective repayment obligations. The document, signed by both the Jicarilla Apache 

27 Nation and the City of Gallup, describing the methodology to be implemented is included 

28 attached as Exhibit C. Exhibit C provides an attachment entitled, "Cost and Repayment 

29 Summary", which presents the New Mexico cost-share methodology using October 2011 

30 price levels and using current estimations of the amount of credit received by the State 

31 toward its contribution to the construction of water conveyance facilities. 

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1 (e) The CCE was subsequently indexed for inflation to October 2011 price levels 

2 making the total Project construction costs $994,858,000. Based upon an estimate of the 

3 amount of credit received by the State toward its contribution to the construction of water 

4 conveyance facilities, as describe above in Article 6, and as presented in the Cost and 

5 Repayment Summary attachment to Exhibit C, the remaining Federal construction costs 

6 allocable to the Project Participants are estimated to be $922,097,000 with the portion of 

7 those costs allocable to the Jicarilla Apache Nation's Delivery Capacity Allocation 

8 estimated to be $29,990,000, rounded to the nearest thousand dollars. 

9 (f) As provided in Section 10604(c)(3)(B) of the Navajo Settlement Act, the 

10 Jicarilla Apache Nation may demonstrate, to the satisfaction of the Contracting Officer, 

11 that the Jicarilla Apache Nation has an ability-to-pay of a lesser amount than the 

12 maximum of 35 percent of allocated construction costs. The Contracting Officer may 

13 reduce the Jicarilla Apache Nation's share of allocated construction costs, but such 

14 reduction cannot be less than 25 percent of construction costs allocated to the Jicarilla 

15 Apache Nation, plus accrued IDC. Adjustments made to the ability-to-pay analysis, as 

16 provided in Article 7, will be included as a supplement to this Contract. 

17 (g) The construction costs allocated to the Jicarilla Apache Nation, and determined 

18 to be reimbursable, shall accrue IDC, and the unpaid balance of the Jicarilla Apache 

19 Nation's repayment obligation shall accrue amortization interest, at the interest rate for 

20 Federal water resource planning, pursuant to Section 10305 of the Navajo Settlement Act, 

21 to be established as of the beginning of the fiscal year in which construction is initiated, 

22 pursuant to the provision of Section 5(f) of the Act of April 11, 1956 (70 Stat. 1 05) as 

23 amended by the Act of June 27, 1960 (74 Stat.255). IDC shall start when the first 

24 disbursement is made to initiate construction on a reach/feature. IDC shall stop accruing 

25 on a reach/feature when that reach/feature has been declared substantially complete, as 

26 provided in Article 7 below. 

27 (h) Based upon the October 2011 price level CCE prepared by the Secretary, the 

28 construction costs allocated to the Jicarilla Apache Nation's Delivery Capacity Allocation 

29 are estimated to be $29,990,000. On March 15, 2012, the ability-to-pay analysis for the 

30 Jicarilla Apache Nation was approved by the United States, attached as Exhibit D, and is 

31 hereby incorporated as part of this Contract. Notwithstanding an appeal by the Jicarilla 

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Apache Nation, as described in Article 7(a) of this Contract, the ability-to-pay analysis 

2 determined that the Jicarilla Apache Nation has the ability to pay 35 percent of the 

3 allocable construction costs, taking into account the remaining balance of the New 

4 Mexico cost-share funds allocated to the Jicarilla Apache Nation, is estimated to be 

5 $219,000 Based upon the planning interest rate for fiscal year 2011 of 4.125 percent and 

6 an estimated construction completion by fiscal year 2025, the accrued IDC on the 

7 reimbursable construction costs of $10,278,000 is estimated to be $6,997,000 for a total 

8 Estimated Repayment Obligation of $17,275,000. This figure does not include increases 

9 to the cost as a result of inflation which the Jicarilla Apache Nation would be obligated to 

10 pay. The Jicarilla Apache Nation's Final Repayment Obligation will be based upon the 

11 final cost allocation described in Article 6. 

12 (i) Pursuant to Section 10604(c)(2) of the Navajo Settlement Act, the Jicarilla 

13 Apache Nation may elect to prepay all or a portion of their repayment obligation prior to 

14 the initiation of construction. The prepayment will be based upon the most recent 

15 reimbursable construction cost estimate available, currently estimated to be $10,278,000 

16 at October 2011 price levels. No IDC shall accrue on the construction costs that have 

17 been prepaid. 

18 U) After the initiation of construction, the Jicarilla Apache Nation may at any time 

19 elect to prepay their remaining repayment obligation on those features or reaches that 

20 have yet to be constructed. No IDC shall accrue on the construction costs that have been 

21 prepaid. However, IDC would accrue on any of the Jicarilla Apache Nation's allocable 

22 construction costs that had been expended to date but not paid by the Jicarilla Apache 

23 Nation, and IDC would continue to accrue on the principal until those costs were paid. 

24 Prepayment would be used to reduce the amount of annual Federal appropriations 

25 necessary to construct the Project. 

26 (k) If the Jicarilla Apache Nation does not elect to prepay under Article 6, then upon 

27 a Notification of Substantial Completion of each reach or feature, as provided in Article 8 

28 of this contract, the Jicarilla Apache Nation will pay the portion of the Estimated 

29 Repayment Obligation assigned to that Notification of Substantial Completion in not 

30 more than 50 annual installments at the interest rate described under Article 6 herein. 

31 The repayment schedule assigned to each Notification of Substantial Completion shall be 

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1 revised by the Contracting Officer at intervals of no longer than 5 years to conform to the 

2 current cost estimates at that time or other changes that have occurred which justify 

3 amendment to the notice. 

4 (I) At the end of the construction period of the Project Facilities, the Secretary will 

5 perform a final cost allocation, pursuant to Section 1 0604( d)(2) of the Navajo Settlement 

6 Act, and, after consultation with the Jicarilla Apache Nation, shall give the Jicarilla 

7 Apache Nation written notice of the Jicarilla Apache Nation's Final Repayment 

8 Obligation as established by the final cost allocation. Once the Jicarilla Apache Nation's 

9 Final Repayment Obligation has been established: 

10 (1) If the Jicarilla Apache Nation did not elect to prepay the total reimbursable 

11 construction cost estimate as provided in Article 6, then all Notice of Substantial 

12 Completion repayment schedules will be amended to conform to the Final 

13 Repayment Obligation, or; 

14 (2) If the Jicarilla Apache Nation elected to prepay as provided in Article 6, then 

15 it will have the option to prepay the reimbursable construction costs in excess of 

16 the estimated prepayment amount (if any), plus the IDC accrued on any excess 

17 construction costs, within 180 days from the date of written notice. After the 180-

18 day final payment option has expired, the reimbursable construction costs in 

19 excess of the estimated prepayment amount, plus the IDC accrued on those excess 

20 construction costs shall become a repayment obligation of the Jicarilla Apache 

21 Nation to be repaid in not more that 50 annual installments, at the amortization 

22 interest rate described in Article 6. 

23 (m) During construction, the United States will consult annually with the Jicarilla 

24 Apache Nation concerning the allocation of construction costs and any IDC to be payable 

25 by the Jicarilla Apache Nation under this Contract. All payments required under this 

26 Contract are due on the specified due date and will be made by electronic fund transfers. 

27 (n) Pursuant to section 9(c)(1) of the Reclamation Project Act of 1939, 43 U.S.C. § 

28 485h, following payment of the Final Repayment Obligation described herein, all other 

29 contract terms will remain in full force and effect until mutually agreed upon by the 

30 Jicarilla Apache Nation and the United States. 

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1 (o) Upon payment of the Jicarilla Apache Nation's Final Repayment Obligation as 

2 defined in the final cost allocation, the Jicarilla Apache Nation's Delivery Capacity 

3 Allocation shall not be subject to relinquishment to the Secretary for any reason, unless 

4 otherwise provided for in applicable law. 

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6 7. REASSESSMENT OF ABILITY TO PAY ANALYSIS 

7 (a) In the event that an appeal of the determination that the Jicarilla Apache Nation 

8 has the ability to pay 35% of their allocable construction costs results in an adjustment of 

9 the Jicarilla Apache Nation's ability to pay assessment, then Reclamation will notify the 

10 Jicarilla Apache Nation, as provided in Article 18, of the adjusted ability to pay 

11 percentage and will also include in the notification the change in the Estimated 

12 Repayment Obligation as presented in Article 6. 

13 (b) As provided in Section 10604(c)(3)(B) of the Navajo Settlement Act, the 

14 Jicarilla Apache Nation may demonstrate, to the satisfaction of the Contracting Officer, 

15 that the Jicarilla Apache Nation has an ability-to-pay of a lesser amount than the 

16 maximum of 35 percent of allocated construction costs. The Contracting Officer may 

17 adjust the Jicarilla Apache Nation's share of allocated construction costs, but such 

18 reduction cannot be less than 25 percent of construction costs allocated to the Jicarilla 

19 Apache Nation, plus accrued IDC. At intervals of not less than 5-years, starting the year 

20 of contract execution, either the Jicarilla Apache Nation or the Contracting Officer may 

21 elect to initiate the process for a reassessment of the Jicarilla Apache Nation's Ability to 

22 Pay (A TP) analysis. Initiation of the reassessment process shall be by written notification 

23 as provided in Article 18. The last and final reassessment of the ATP analysis shall be 

24 conducted no later than the 40th year of the Jicarilla Apache Nation's repayment term. 

25 On the year the Jicarilla Apache Nation has ten (1 0) annual payments remaining to fully 

26 repay its capital obligation to the United States, the ATP analysis that is in effect at that 

27 year shall be the final reassessment that determines the final percentage of reimbursable 

28 allocated construction costs that will be the Jicarilla Apache Nation's obligation. 

29 (c) Upon written notification by either party to initiate the reassessment process, the 

30 Contracting Officer will be responsible for the reassessment analysis and will draft and 

31 publish the final report, in consultation with the Jicarilla Apache Nation. All future 

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1 reassessments ofthe ATP analysis shall conform to the methodology employed in the 

2 original analysis unless otherwise approved by the Commissioner. The cost of a 

3 reassessment analysis will be borne by the party that initiated the reassessment through 

4 formal written notification. 

5 (d) If a reassessment of the ATP analysis confirms that the reimbursable percentage 

6 of allocated construction costs has changed for the Jicarilla Apache Nation, then the 

7 Contracting Officer will adjust and amend all repayment obligations and repayment 

8 schedules to conform to that change in the reimbursable percentage, in accordance with 

9 the Navajo Settlement Act. Upon implementing the change in the reimbursable 

1 0 percentage of construction costs, the Contracting Officer shall also recalculate 

11 reimbursable IDC based upon the new percentage ~md will adjust repayment obligations 

12 and schedules accordingly. All adjustments to the Jicarilla Apache Nation's obligation 

13 will be addressed through the repayment schedules at the project interest rate. No credit 

14 because of an adjustment will ever be made to the Jicarilla Apache Nation's obligation to 

15 account for alternative investment rates. 

16 

17 8. NOTIFICATION OF SUBSTANTIAL COMPLETION 

18 (a) When features or reaches ofthe Project have been declared to be substantially 

19 complete and water can be made available to the Jicarilla Apache Nation at the Jicarilla 

20 Apache Nation turnout near the community of Counselor, NM, the United States shall, 

21 after consultation, give the Jicarilla Apache Nation written notice, referred to herein as 

22 the "Notice of Substantial Completion". The Notice of Substantial Completion shall 

23 contain: (1) a list of the feature(s) or reach(es) of Project Facilities that have been 

24 determined to be substantially complete for water delivery, (2) the effective date of that 

25 substantial completion declaration, (3) a repayment schedule, as provided in Article 6 

26 above, for the portion of the Jicarilla Apache Nation's Estimated Repayment Obligation 

27 assigned to the Project Facilities declared substantially complete, and ( 4) the 

28 proportionate share of OM&R costs associated with each completed Project facility 

29 allocated to the Jicarilla Apache Nation. The OM&R responsibilities and cost provisions 

30 associated with each completed Project facility where title is not transferred will be 

31 identified in the OM&R Contract between Reclamation and the Project Operator. 

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(b) Each Notice of Substantial Completion shall become a part of this Contract. 

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3 9. PAYMENT OF OPERATION, MAINTENANCE, AND REPLACEMENT COSTS 

4 (a) The Jicarilla Apache Nation's OM&R cost obligation for those features or reaches 

5 for which they have received a Notification of Substantial Completion pursuant to Article 

6 8(a), shall be paid to the United States, or its designee if some organization other than the 

7 United States is operating the Project Facilities. 

8 (i) For any feature or reach of the Project through or by which water cannot 

9 be delivered to the Jicarilla Apache Nation for its use, the Jicarilla Apache 

10 Nation shall not pay any OM&R costs associated with that feature or reach. 

11 (ii) For any feature or reach of the Project through or by which water can only 

12 be delivered to the Jicarilla Apache Nation for its beneficial use, the Jicarilla 

13 Apache Nation shall pay all OM&R costs associated with water delivery, until 

14 such time water can be delivered through or by that feature or reach to other 

15 Project Participants, at which time Article 9(b) (ii) below shall apply. 

16 (iii) For any feature or reach of the Project through or by which water can be 

17 delivered to the Jicarilla Apache Nation and other Project Participants, the 

18 Jicarilla Apache Nation's OM&R cost obligation will be comprised of: 

19 (A) The Jicarilla Apache Nation's share of Fixed OM&R costs shall be based 

20 upon its proportionate share of the design capacity for all Project 

21 Facilities, or reaches of those facilities, which have identified through a 

22 Notice of Substantial Completion pursuant to Article 8 of this contract, 

23 Fixed OM&R costs include costs of labor, materials, equipment and 

24 replacements required to maintain all Project Facilities, as well as, the 

25 administration and overhead costs of the Project. 

26 (B) The Jicarilla Apache Nations' share of Variable OM&R costs shall be based 

27 on actual costs of power including energy consumption and that share of 

28 power demand costs for operation of the water treatment plants and 

29 pumping plants based on the proportionate share of water treated and 

30 delivered, as well as water treatment chemical costs. 

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1 b) Billing and payment for the Jicarilla Apache Nation's OM&R cost 

2 obligations shall be conducted as follows: 

3 (i) Fixed OM&R costs for the Project shall be paid on the basis of annual 

4 cost estimates made by the Contracting Officer, or the Project Operator, based 

5 upon the proportionate share of the design capacity for those Project Facilities 

6 which have been identified in the Notice of Substantial Completion pursuant 

7 to Article 8 of this contract. An estimate from the Contracting Officer, or the 

8 Project Operator, will be sent to the Jicarilla Apache Nation on or before May 

9 1 for the next Federal fiscal year, which begins October 1 of the same 

10 calendar year and ends September 30 of the next calendar year. The Jicarilla 

11 Apache Nation shall advance its share of the OM&R costs for each Federal 

12 fiscal year in quarterly payments which will be due on September 30, 

13 December 31, March 31, and June 30 of the Federal fiscal year of 

14 applicability. The first such billing will be issued immediately following a 

15 Notice of Substantial Completion as provided in Article 8 ofthis contract. In 

16 the event the first notice shall be for costs of service of less than a full year, 

17 such costs shall be prorated for the period covered. An itemization of the 

18 estimated Fixed OM&R costs will accompany the billing. 

19 (ii) Variable OM&R costs for the Project shall be paid on the basis of an 

20 annual notice provided by the Jicarilla Apache Nation to the Contracting 

21 Officer, or the Project Operator, on or before May 1 for the next Federal fiscal 

22 year, which begins October 1 of the same calendar year and ends September 

23 30 of the next calendar year. The annual notice will provide an estimate of the 

24 Jicarilla Apache Nation's anticipated water delivery requirements on a 

25 quarterly basis. Based upon these anticipated water delivery requirements, the 

26 Contracting Officer, or the Project Operator, will bill the Jicarilla Apache 

27 Nation quarterly on September 30, December 31, March 31, and June 30 of 

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the Federal fiscal year of applicability. An itemization of the estimated 

Variable OM&R costs will accompany the billing. 

c) In the event either the OM&R cost estimates fall short of the actual costs in 

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occur during the fiscal year, supplemental notices may be issued by the Contracting 

2 Officer requesting additional funds. OM&R funds not spent during one fiscal year will 

3 be carried over for use during the next fiscal year with funds required for that year being 

4 reduced accordingly. An itemized statement of actual costs incurred during each year 

5 shall be furnished to the Jicarilla Apache Nation. Billing adjustments will be made to 

6 correct for differences in the estimated and actual costs at the beginning of the next fiscal 

7 year, and in the case of Variable OM&R costs, for differences in the Jicarilla Apache 

8 Nation's estimated water delivery requirements and the actual metered flow. 

9 d) OM&R responsibilities and the Jicarilla Apache Nation's share of OM&R 

10 costs associated with the Project shall be further identified and provisions for payment 

11 made in the Project operations agreement identified in Section 10602(f) of the Navajo 

12 Settlement Act. Iftitle is not conveyed on a feature or reach, the OM&R responsibilities 

13 and the Jicarilla Apache Nation's share of OM&R costs associated with those Project 

14 features and reaches shall be further identified and provisions for payment made in a 

15 separate OM&R contract that will be required between Reclamation and the Project 

16 Operator. 

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18 10. USE OF WATER DURING CONSTRUCTION 

19 Prior to the completion of all of the Project Facilities as defined in Article 2(a), 

20 the Jicarilla Apache Nation may use a completed portion of the Project for delivery of 

21 water. Payment of OM&R costs for such use shall be made pursuant to Article 9, above. 

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11. WATER SHORTAGES 

There may occur at times during any year a shortage in the quantity of water 

available from the Jicarilla Apache Nation Water Supply for furnishing to the Jicarilla 

Apache Nation through and by means of the Project, but in no event shall any liability 

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

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

drought, or any other causes. 

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2 12. LEVY OF ASSESSMENTS, TOLLS AND CHARGES 

3 The Jicarilla Apache Nation shall, to the extent allowed by law, cause to be levied 

4 and collected all necessary assessments, tolls, and other charges and will use all of the 

5 authority and resources of the Jicarilla Apache Nation to meet the obligations of the 

6 Jicarilla Apache Nation specified herein, to make in full all payments to be made 

7 pursuant to this contract on or before the date such payments become due, and to meet its 

8 other obligations under this contract. 

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10 13. COVENANT AGAINST CONTINGENT FEES 

11 The Jicarilla Apache Nation warrants that it has not employed or retained any 

12 person or selling agency to solicit or secure this contract upon an agreement or 

13 understanding for a commission, percentage, brokerage or contingent fee, excepting bona 

14 fide employees or bona fide established commercial or selling agencies maintained by the 

15 Jicarilla Apache Nation for the purpose of securing business. For breach or violation of 

16 this warranty, the United States shall have the right to annul this contract without 

17 liability, or at its discretion, to add to the repayment obligation or consideration the full 

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

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20 14. TITLE TO PROJECT FACILITIES 

21 Pursuant to Section 10602(f)(b)(6) of the Navajo Settlement Act and Article 8 of 

22 this Contract, the Jicarilla Apache Nation recognizes that the retention of title by the 

23 Navajo Nation or the conveyance of title to the Navajo Nation for any Project Facility 

24 will not reduce the Jicarilla Apache Nation's obligation to repay all allocated 

25 reimbursable costs, as established by the final cost allocation. 

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27 15. SEVERABILITY 

28 If any provisions of the contract shall, for any reason be determined to be illegal 

29 or unenforceable, the parties, nevertheless, intend that the remainder of the contract shall 

30 remain in full force and effect. Furthermore, any adjustments or variations to this contract. 

19 
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STANDARD ARTICLES 

16. CHARGES FOR DELINQUENT PAYMENTS 

(a) The Jicarilla Apache Nation shall be subject to interest, administrative, and 

penalty charges on delinquent payments. If a payment is not received by the due date, the 

Jicarilla Apache Nation shall pay an interest charge on the delinquent payment for each 

day the payment is delinquent beyond the due date. If a payment becomes 60 days 

delinquent, the Jicarilla Apache Nation shall pay, in addition to the interest charge, an 

administrative charge to cover additional costs of billing and processing the delinquent 

payment. If a payment is delinquent 90 days or more, the Jicarilla Apache Nation shall 

pay, in addition to the interest and administrative charges, a penalty charge for each day 

the payment is delinquent beyond the due date, based on the remaining balance of the 

payment due at the rate of 6 percent per year. The Jicarilla Apache Nation shall also pay 

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

(b) The interest rate charged shall be the greater of either the rate prescribed 

quarterly in the Federal Register by the Department of the Treasury for application to 

overdue payments, or the interest rate of 0.5 percent per month. The interest rate charged 

will be determined as of the due date and remain fixed for the duration of the delinquent 

period. 

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

received shall be applied first to the penalty charges, second to the administrative 

charges, third to the accrued interest, and finally to the overdue payment. 

17. GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT 

(a) The obligation of the Jicarilla Apache Nation to pay the United States as 

provided in this contract is a general obligation of the Jicarilla Apache Nation 

notwithstanding the manner in which the obligation may be distributed among the 

Jicarilla Apache Nation's water users and notwithstanding the default of individual water 

users in their obligations to the Jicarilla Apache Nation .. 

(b) The payment of charges becoming due pursuant to this contract is a condition 

precedent to receiving benefits under this contract. The United States shall not make 

water available to the Jicarilla Apache Nation through Project Facilities during any period 

in which the Jicarilla Apache Nation is in arrears in the advance payment of any 

operation and maintenance charges due the United States or is in arrears for more than 12 

months in the payment of any construction charges due the United States. The Jicarilla 

Apache Nation shall not deliver water under the terms and conditions of this contract for 

lands or parties that are in arrears in the advance payment of water rates or operation and 

maintenance charges as levied or established by the Jicarilla Apache Nation. 

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18. NOTICES 

Any notice, demand, or request authorized or required by this contract shall be 

deemed to have been given, on behalf of the Jicarilla Apache Nation, when mailed, 

postage prepaid, or delivered to the Regional Director, Upper Colorado Region, Bureau 

ofReclamation, 125 South State Street, Room 6107, Salt Lake City, Utah 84138-1102, 

and on behalf of the United States, when mailed, postage prepaid, or delivered to the 

Jicarilla Apache Nation, Director, Water Administration, P.O. Box 507, Dulce, NM 

87528. The designation of the addressee or the address may be changed by notice given 

in the same manner as provided in this article for other notices. 

19. CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS 

The expenditure or advance of any money or the performance of any obligation 

of the United States under this contract shall be contingent upon appropriation or 

allotment of funds. Absence of appropriation or allotment of funds shall not relieve the 

Jicarilla Apache Nation from any obligations under this contract. No liability shall accrue 

to the United States in case funds are not appropriated or allotted. 

20. OFFICIALS NOT TO BENEFIT 

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

the Jicarilla Apache Nation shall benefit from this contract other than as a water user or 

landowner in the same manner as other water users or landowners. 

21. CHANGES IN JICARILLA APACHE NATION'S ORGANIZATION 

While this contract is in effect, no change may be made in the Jicarilla Apache 

Nation's organization, by inclusion or exclusion of lands or by any other changes which 

may affect the respective rights, obligations, privileges, and duties of either the United 

States or the Jicarilla Apache Nation under this contract including, but not limited to, 

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

consent. 

22. ASSIGNMENT LIMITED - SUCCESSORS AND ASSIGNS OBLIGATED 

The provisions of this contract shall apply to and bind the successors and assigns 

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

therein by either party shall be valid until approved in writing by the other party. 

23. BOOKS, RECORDS, AND REPORTS 

The Jicarilla Apache Nation shall establish and maintain accounts and other books 

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

including the Jicarilla Apache Nation's financial transactions; water supply data; project 

operation, maintenance, and replacement logs; project land and rights-of-way use 

agreements; the water users', land-ownership, land-leasing, and water-use data; and other 

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matters that the Contracting Officer may require. Reports shall be furnished to the 

Contracting Officer in such form and on such date or dates as the Contracting Officer 

may require. Subject to applicable Federal laws and regulations, each party to this 

contract shall have the right during office hours to examine and make copies of the other 

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

24. RULES, REGULATIONS, AND DETERMINATIONS 

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

to this contract is subject to Federal reclamation law, as amended and supplemented, and the 

rules and regulations promulgated by the Secretary of the Interior under Federal reclamation 

law. 

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

administer this contract that are consistent with its provisions, the laws of the United States, 

and the rules and regulations promulgated by the Secretary of the Interior. Such 

determinations shall be made in consultation with the Jicarilla Apache Nation. 

25. PROTECTION OF WATER AND AIR QUALITY 

(a) Project facilities used to make available and deliver water to the Jicarilla Apache 

Nation shall be operated and maintained in the most practical manner to maintain the 

quality of the water at the highest level possible as determined by the Contracting 

Officer: Provided, That the United States does not warrant the quality of the water 

delivered to the Jicarilla Apache Nation and is under no obligation to furnish or construct 

water treatment facilities to maintain or improve the quality of water delivered to the 

Jicarilla Apache Nation. 

(b) The Jicarilla Apache Nation shall comply with all applicable water and air 

pollution laws and regulations of the United States; and shall obtain all required permits 

or licenses from the appropriate Federal authorities necessary for the delivery of water by 

the Jicarilla Apache Nation; and shall be responsible for compliance with all Federal[, 

State, and local] water quality standards applicable to surface and subsurface drainage 

and/or discharges generated through the use of Federal or Jicarilla Apache Nation 

facilities or project water provided by the Jicarilla Apache Nation within the Jicarilla 

Apache Nation's Project Water Service Area. 

(c) This article shall not affect or alter any legal obligations of the Secretary to 

provide drainage or other discharge services. 

26. WATER CONSERVATION 

Prior to the delivery of water to the Jicarilla Apache Nation provided from or 

conveyed through federally constructed or federally financed facilities pursuant to this 

contract, the Jicarilla Apache Nation shall develop an effective water conservation 

program which shall contain definite water conservation objectives, appropriate 

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

objectives. At subsequent three-year intervals, the Jicarilla Apache Nation shall submit a 

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

conclusions of the review, the Contracting Officer and the Jicarilla Apache Nation shall 

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

paragraph shall be included in all subcontracts, and such measures shall be required for 

all water purchasers. 

27. INDIAN EMPLOYMENT- EQUAL EMPLOYMENT OPPORTUNITY 

(a) In accordance with the provisions of Title 42 U.S.C. 2000-e-2(i), the Jicarilla 

Apache Nation shall, during the performance of this contract, give preference in 

employment to Indian members of the Jicarilla Apache Nation Indian Reservation. The 

Bureau of Indian Affairs Office of Employment Assistance shall be notified of 

employment opportunities 48 hours before any positions are advertised to the general 

public. Nothing in this section shall be read as prohibiting the Jicarilla Apache Nation 

from giving preferential employment to members of the Jicarilla Apache Nation. 

(b) Except as provided above, during the performance of this contract the Jicarilla 

Apache Nation agrees as follows: 

(1) The Jicarilla Apache Nation will not discriminate against any employee or applicant 

for employment because of race, color, religion, sex, disability, or national origin. The 

Jicarilla Apache Nation will take affirmative action to ensure that applicants are 

employed, and that employees are treated during employment, without regard to their 

race, color, religion, sex, disability, or national origin. Such action shall include, but not 

be limited to, the following: employment, upgrading, demotion, or transfer; recruitment 

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

compensation; and selection for training, including apprenticeship. The Jicarilla Apache 

Nation agrees to post in conspicuous places, available to employees and applicants for 

employment, notices to be provided by the Contracting Officer setting forth the 

provisions of this nondiscrimination clause. 

(2) The Jicarilla Apache Nation will, in all solicitations or advertisements for employees 

placed by or on behalf of the Jicarilla Apache Nation, state that all qualified applicants 

will receive consideration for employment without regard to race, color, religion, sex, 

disability, or national origin. 

(3) The Jicarilla Apache Nation will send to each labor union or representative of workers 

with which it has a collective bargaining agreement or other contract or understanding, a 

notice, to be provided by the Contracting Officer, advising the labor union or workers' 

representative of the Jicarilla Apache Nation's commitments under section 202 of 

Executive Order 11246 of September 24, 1965, as amended (EO 11246), and shall post 

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

employment. 

(4) The Jicarilla Apache Nation will comply with all provisions of EO 11246, and of the 

rules, regulations, and relevant orders of the Secretary of Labor. 

(5) The Jicarilla Apache Nation will furnish all information and reports required by 

EO 11246, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant 

thereto, and will permit access to his books, records, and accounts by the Contracting 

Agency and the Secretary of Labor for purposes of investigation to ascertain compliance 

with such rules, regulations, and orders. 

(6) In the event of the Jicarilla Apache Nation's noncompliance with the 

nondiscrimination clauses of this contract or with any of such rules, regulations, or 

23 
1 orders, this contract may be canceled, terminated or suspended, in whole or in part, and 

2 the Jicarilla Apache Nation may be declared ineligible for further Government contracts 

3 in accordance with procedures authorized in EO 11246, and such other sanctions may be 

4 imposed and remedies invoked as provided in EO 11246, or by rule, regulation, or order 

5 of the Secretary of Labor, or as otherwise provided by law. 

6 (7) The Jicarilla Apache Nation will include this clause (a), including all provisions of 

7 paragraphs (1) through (7), in every subcontract or purchase order unless exempted by 

8 the rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 

9 of EO 11246, so that such provisions will be binding upon each subcontractor or vendor. 

10 The Jicarilla Apache Nation will take such action with respect to any subcontract or 

11 purchase order as may be directed by the Secretary of Labor as a means of enforcing such 

12 provisions, including sanctions for noncompliance: Provided, however, that in the event 

13 the Jicarilla Apache Nation becomes involved in, or is threatened with, litigation with a 

14 subcontractor or vendor as a result of such direction, the Jicarilla Apache Nation may 

15 request that the United States enter into such litigation to protect the interests of the 

16 United States. 

17 (b) The Jicarilla Apache Nation hereby agrees to incorporate, or cause to be incorporated, 

18 clause (a) as it appears above, including paragraphs numbered (1) through (7), into any 

19 contract for construction work, or modification thereof, as defined in the regulations of 

20 the Secretary of Labor at 41 C.P.R., Chapter 60, which is paid for in whole or in part with 

21 funds obtained from the Federal Government or borrowed on the credit of the Federal 

22 Government pursuant to grant, contract, loan, insurance, or guarantee or undertaken 

23 pursuant to any Federal program involving such grant, contract, loan, insurance, or 

24 guarantee. 

25 (c) The Jicarilla Apache Nation will be bound by clause (a) with respect to its own 

26 employment practices when it participates in federally assisted construction work: 

27 Provided, That if the Jicarilla Apache Nation so participating is a state or local 

28 government, clause (a) is not applicable to any agency, instrumentality, or subdivision of 

29 such government which does not participate in work on or under the contract. 

30 (d) The Jicarilla Apache Nation will assist and cooperate actively with the Contracting 

31 Officer and the Secretary of Labor in obtaining the compliance of contractors and 

32 subcontractors with this article (Article 27) and the rules, regulations, and relevant orders 

33 of the Secretary of Labor; that it will furnish the Contracting Officer and the Secretary of 

34 Labor such information as they may require for the supervision of such compliance; and 

35 that it will otherwise assist the Contracting Officer in the discharge of his or her primary 

36 responsibility for securing compliance. 

37 (e) The Jicarilla Apache Nation will refrain from entering into any contract or contract 

38 modification subject to EO 11246 with a contractor debarred from, or who has not 

39 demonstrated eligibility for, Government contracts and federally assisted construction 

40 contracts pursuant to EO 11246 and will carry out such sanctions and penalties for 

41 violation ofthis article (Article 27) as may be imposed upon contractors and 

42 subcontractors by the Contracting Officer or the Secretary of Labor pursuant to Part II, 

43 Subpart D, of EO 11246. In addition, the Jicarilla Apache Nation agrees that if it fails or 

44 refuses to comply with these undertakings, the Contracting Officer may take any or all of 

45 the following actions: cancel, terminate, or suspend, in whole or in part, this contract; 

46 refrain from extending any further assistance to the Jicarilla Apache Nation under the 

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program with respect to which its failure or refusal occurred until satisfactory assurance 

of future compliance has been received from the Jicarilla Apache Nation; refer the case to 

the Department of Justice for appropriate legal proceedings. 

28. COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS 

(a) The Jicarilla Apache Nation shall comply with Title VI of the Civil Rights Act 

of 1964 (Pub. L. 88-352; 42 U.S.C. § 2000d), the Rehabilitation Act of 1973 (Pub. L. 93-

112, Title V, as amended; 29 U.S.C. § 791, et seq.), the Age Discrimination Act of 1975 

(Pub. L. 94-135, Title III; 42 U.S.C. § 6101, et seq.), and any other applicable civil rights 

laws including the applicable portions of the Americans with Disabilities Act of 1990 

(Pub. L. 101-336), and with the applicable implementing regulations and any guidelines 

imposed by the U.S. Department of the Interior and/or Bureau of Reclamation. 

(b) These statutes prohibit any person in the United States from being excluded 

from participation in, being denied the benefits of, or being otherwise subjected to 

discrimination under any program or activity receiving financial assistance from the 

Bureau of Reclamation on the grounds of race, color, national origin, disability, or age. 

By executing this contract, the Jicarilla Apache Nation agrees to immediately take any 

measures necessary to implement this obligation, including permitting officials of the 

United States to inspect premises, programs, and documents. 

(c) The Jicarilla Apache Nation makes this agreement in consideration of and for 

the purpose of obtaining any and all Federal grants, loans, contracts, property discounts, 

or other Federal financial assistance extended after the date hereof to the Jicarilla Apache 

Nation by the Bureau of Reclamation, including installment payments after such date on 

account of arrangements for Federal financial assistance which were approved before 

such date. The Jicarilla Apache Nation recognizes and agrees that such Federal assistance 

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

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

·(d) Complaints of discrimination against the Jicarilla Apache Nation shall be 

investigated by the Contracting Officer's Office of Civil Rights. 

29. MEDIUM FOR TRANSMITTING PAYMENTS 

(a) All payments from the Jicarilla Apache Nation to the United States under this 

contract shall be by the medium requested by the United States on or before the date 

payment is due. The required method of payment may include checks, wire transfers, or 

other types of payment specified by the United States. 

(b) Upon execution of the contract, the Jicarilla Apache Nation shall furnish the 

Contracting Officer with the Jicarilla Apache Nation's taxpayer's identification number 

(TIN). The purpose for requiring the Jicarilla Apache Nation's TIN is for collecting and 

reporting any delinquent amounts arising out of the Jicarilla Apache Nation's relationship 

with the United States. 

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30. CONTRACT DRAFTING CONSIDERATIONS 

This Contract has been, negotiated and reviewed by the parties hereto, each of 

whom is sophisticated in the matters to which this Contract pertains. Articles 1 through 

15 of this Contract have been drafted, negotiated, and reviewed by the parties, and no one 

party shall be considered to have drafted the stated articles. 

31. CONSTRAINTS ON THE AVAILABILITY OF WATER 

(a) In its operation of the Project, the Contracting Officer will use all reasonable 

means to guard against a condition of shortage in the quantity of water to be made 

available to the Jicarilla Apache Nation pursuant to this Contract. In the event the 

Contracting Officer determines that a condition of shortage appears probable, the 

Contracting Officer will notify the Jicarilla Apache Nation of said determination as soon 

as practicable. 

(b) If there is a condition of shortage because of errors in physical operations of the 

Project, drought, other physical causes beyond the control of the Contracting Officer or 

actions taken by the Contracting Officer to meet current and future legal obligations, then 

no liability shall accrue against the United States or any of its officers, agents, or 

employees for any damage, direct or indirect, arising therefrom. 

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IN WITNESS WHEREOF, the parties hereto have caused this contract to be duly 

executed as of the day and year first above written. 

Approved: 

Attest: 

THE UNITED STATES OF AMERICA 

, Bx· 

egional irector 

~ 

Upper Colorado Region 

Bureau of Reclamation 

JICARILLA APACHE NATION 

List of Attachments: Exhibit A - Map 

Exhibit B - Environmental Commitments 

Exhibit C -Agreement on Methodology Regarding Application of 

New Mexico Cost-Share to Cost Allocation and Repayment 

Exhibit D - Ability to Pay Approval Letter 

27 
EXHIBIT A 

NAVAJO-GALLUP WATER SUPPLY PROJECT 

PROJECT MAP 
ANETH 

REACH 4 { Pumping Plant 02FRUITLAND UPPE 

NENAHNEZAD 

F\EQVALLEY 

• P~mpi'!p Plant 02A 

REACH 22 • Pumping Plant 928 

'ii> ; 

Pumping Plant 03 HUERFANO ~ er Treatment Plant 

I 

SAILEJWHEATJ.IELD.S 

I 

! 

1 

i 

. 

C~YSTAL ! SAWMILL j 

! RED LA~ 8MEXICAN SPRINGS 

~avajo 

i FORT DE;PlANCE 

Legend 

• Pumping Plants 

Water Treatment Plant 

Cutter Lateral 

- San Juan Lateral 

Interstate 

State Highway 

US Highway 

NTUALine 

Navajo Nation Non-Serviced Chapters 

Navajo Nation Serviced Chapters 

- JicarillaApache Nation 

REACH 5 Pumping Plant 03 

/

HORSE LAKE 

.... " 

Navajo Gallup Water Supply Project 

N 

~ 0 5 10 20 

- - 30 

Miles 

RECLAMATION 

Managing Water for the West 

1695-529-537 

Date: 12/6/2011 
EXHIBITB 

NAVAJO-GALL UP WATER SUPPLY PROJECT 

ENVIRONMENTAL COMMITMENTS 
INTRODUCTION 

Chapter VI 

ENVIRONMENTAL COMMITMENTS 

AND MITIGATION MEASURES 

Introduction 

General Commitments 

This chapter discusses the environmental and related commitments that have been made 

by the Bureau of Reclamation (Reclamation) during the development of the San Juan 

River Public Service Company ofNew Mexico (SJRPNM) Alternative (Reclamation's 

preferred alternative). Reclamation would share responsibility of implementing measures 

that would avoid or reduce potential environmental impacts of the Navajo-Gallup Water 

Supply Project (proposed project). This responsibility would be shared with other 

Federal agencies, the Navajo and Jicarilla Apache Nations, and the city of Gallup, as well 

as third-party entities that could include New Mexico and Arizona State agencies and 

local governments. 

This chapter summarizes the commitments made during the planning process and 

incorporated into the proposed project plan. Commitments are discussed in chapter IV, 

and mitigation measures are proposed in chapter V to reduce or avoid impacts that would 

otherwise occur as a result of the implementation of the preferred alternative. 

As described below, the commitments would be implemented by Reclamation, or 

Reclamation would require their implementation by construction contractors or 

management authorities. Commitments for pre-construction activities would generally be 

completed by Reclamation or by the contractors during the final design process and prior 

to construction activities. Wildlife, wetland, cultural resource, and other mitigation 

would be completed by Reclamation as described in the following paragraphs. Some 

commitments, such as monitoring, would continue beyond completion of construction of 

structural facilities. 

GENERAL COMMITMENTS 

Throughout the planning process for the proposed project, efforts have been made to 

avoid impacts where practicable. If avoidance was not possible, then mitigation 

Vl-1 
Navajo-Gal/up Water Supply Project---------------------

measures have been developed to reduce the level of impact. The proposed mitigation 

measures for each resource, if appropriate, were discussed in chapter V, and key 

measures are summarized here. In addition to specific mitigation measures identified in 

chapter V, other management practices would be employed during construction activities 

to minimize environmental effects and would be included in construction specifications. 

Many of these measures are required in order to comply with Federal, State, or local laws 

and regulations, regardless of whether they are specifically identified in this document. 

Reclamation would comply with all relevant Federal, State, and local laws, ordinances, 

regulations, and standards during the implementation of the preferred alternative. 

Reclamation would prepare and implement an environmental commitments plan for the 

proposed project to document and track the completion of the environmental 

commitments. 

Navajo Reservoir Operations 

Reclamation would be able to issue water service contracts to meet project demands from 

Navajo Reservoir now that a successful hydrologic determination was signed. At full 

San Juan River Basin (Basin) development, depletions would increase by 5,270 acre-feet 

from the Basin over the baseline presented in chapter V, table V-3. 

Releases would be similar to those described in the Navajo Reservoir Operations Final 

Environmental Impact Statement, Navajo Unit - San Juan River, New Mexico, Colorado, 

Utah (Reclamation, 2006) to meet the San Juan River Flow Recommendations; however, 

additional flows would be released from Navajo Reservoir downstream when needed to 

meet project demands at the SJRPNM intake structure. The demands for the Cutter 

Lateral portion of the proposed project would be delivered from Navajo Reservoir 

through the existing Navajo Indian Irrigation Project (NIIP) intake structure in Navajo 

Reservoir. 

Water Uses and Resources Commitments 

Until depletions in the Basin reach the baseline depletion in table V-3 plus the 

5,270 acre-feet added to the baseline for this project, the San Juan River Basin 

Recovery Implementation Program (SJRBRIP) Flow Recommendations can be met or 

only missed less than 0.01 percent of the time for only one category. When the total 

depletions reached this new baseline depletion, the Navajo Nation would reduce an 

amount from one or more projects that are presently in the baseline to ensure that the 

total depletions in the Basin remain below the baseline depletions (Navajo Depletion 

Guarantee). 

Vl-2 
---------- Chapter VI -Environmental Commitments and Mitigation Measures 

Navajo Depletion Guarantee 

The Navajo Depletion Guarantee is a commitment by the Navajo Nation which ensures 

that depletions for its uses under the proposed project will be offset by unused Navajo 

Nation depletions included in the San Juan River Basin, including forbearance of Navajo 

Nation uses on NIIP and/or Hogback and Fruitland Irrigation Projects as necessary, if and 

when required to keep the total depletions in the Basin from exceeding the following 

threshold (referred to as the depletion threshold): 

The sum of the actual annual depletions from all uses listed in the 

hydrologic baseline shown in table V-3 (excluding San Juan-Chama 

Project exportation) and all Navajo-Gallup Water Supply Project uses 

equals a total depletion amount of 752,127 acre-feet per year (AFY). 1 

Full proposed project depletions of 35,893 AFY would be made without requiring any 

forbearance of uses in excess of the 6, 7 40 acre-feet of change in use baseline depletions 

shown in tables V -5 and VI -1. The city of Gallup may subcontract with either the 

Jicarilla Apache Nation or the Navajo Nation, or both in combination, for the diversion of 

up to 7,500 acre-feet of water per year from the Navajo Reservoir supply for its proposed 

project uses (depicted in table VI-I as scenario 1 and scenario 2). 

Depletions by the San Juan-Chama Project and other projects that may be added to the 

hydrologic baseline (table V-3) after the U.S. Fish and Wildlife Service's (Service) 

issuance of the Final Biological Opinion for the Navajo-Gallup Water Supply Project 

(volume II, appendix C, part III) would not be used when comparing actual future 

depletions against the 752,127 AFY depletion threshold. 

If the threshold depletion is reached in the future, the Navajo Nation would reduce its 

total depletion in the Basin so that its consumptive uses under the proposed project do not 

cause the total actual depletions in the Basin to exceed the threshold depletions. The 

Navajo Nation could accomplish the required reductions in use by changes in the 

operation of any of the Navajo Nation's projects that deplete water from the San Juan 

River. The maximum Navajo Depletion Guarantee requirement in any year is a reduction 

in Navajo Nation depletions of20,782 acre-feet. 

When the depletion threshold condition is reached and the Navajo Depletion Guarantee 

must be implemented, the quantification of the threshold depletion amount will be 

recalculated using the baseline uses identified in table V-3 that are estimated in the most 

recent San Juan Hydrology Model. Changes in the Flow Recommendations for the 

San Juan River or the status of listed species may result in reduction or removal of the 

1 The total includes 854,370 AFY for all depletions in the hydrologic baseline, less 107,514 AFY 

average depletion by the San Juan-Chama Project, plus 5,271 AFY of new depletions included in the 

proposed project. 

Vl-3 
Navajo-Gallup Water Supply Project---------------------

Table VI-1 .-Summary depletions for full proposed project development 

Change in use Met within total 

of baseline New depletions threshold depletion 

depletion (approved in excess for Navajo Depletion 

(changed used) of baseline) Guarantee Total 

Water provider (acre-feet) (acre-feet) (acre-feet) (acre-feet) 

Scenario 1 - City of Gallup subcontract with the Jicarilla Apache Nation 

Jicarilla Apache 

Nation 16,740 21,960 0 8,700 

Navajo Nation 0 6,41 1 20,782 27,193 

Proposed project 

total 6,740 8,371 20,782 35,893 

Total reduced for 

3,100 acre-feet 

NIIP returns 35,271 

Scenario 2 - City of Gallup subcontract with the Navajo Nation 

Jicarilla Apache 

Nation 41,200 0 0 1,200 

Navajo Nation 55,540 8,371 20,782 34,693 

Proposed project 

total 6,470 8,371 20,782 35,893 

Total reduced for 

3,1 00 acre-feet 

NIIP returns 35,271 

1 Includes forbearance by the Jicarilla Apache Nation of 6,750 AFY of consumptive use on the Jicarilla 

Apache Nation Navajo River Water Supply Project (JANNRWSP) and 170 acre-feet of consumptive use 

under Jicarilla water rights for historic uses. 2 The Final Biological Opinion for the Navajo-Gallup Water Supply Project does not establish any right in 

the Jicarilla Apache Nation to retain approval for 1,960 AFY of new depletions in excess of the baseline 

depletions listed in table V-3 should this amount of Jicarilla water rights, over and above the change in use of 

6, 750 acre-feet of baseline depletion, not be required for the proposed project due to the city of Gallup 

subcontracting with the Navajo Nation, as shown in scenario 2. 3 By the time the Navajo Nation's water demands under the proposed project reach the full 27,193 acrefeet of depletion, the return flows from the NIIP to the San Juan River are anticipated to have increased by 

approximately 3,100 AFY, on average, over and above the current rate of return flow from the NIIP. This 

increase in return flows from the NIIP offsets an equivalent amount of new depletion by the proposed project 

and reduces the net new depletion from the river in the proposed project's biological opinion from 8,371 AFY 

to 5,271 AFY. 4 Includes a forbearance by the Jicarilla Apache Nation of 1,200 AFY of consumptive use on the 

JANNRWSP. 5 Includes forbearance by the Navajo Nation of 5,540 AFY of consumptive use on the NIIP or other 

Navajo projects for which depletions are in the baseline. 

Vl-4 
---------- Chapter VI - Environmental Commitments and Mitigation Measures 

Navajo Depletion Guarantee based upon reconsultation. Additional information 

regarding the Navajo Depletion Guarantee is included in volume II, appendix C, part III 

(final biological opinion). 

Monitoring Requirements.-No specific, detailed accounting of depletions will be 

required unless the sum ofNIIP and Animas-La Plata Project (ALP) depletions reaches 

290,000 acre-feet (table V-5). Since these projects are more easily tracked than 

depletions in the entire Basin, it will limit monitoring requirements. If this condition is 

met, all the depletions listed in the baseline for the proposed project will be monitored 

and reported on a 5-year cycle to coincide with the Reclamation Consumptive Use and 

Loss report. Depletions will be reported by the categories listed in the hydrologic 

baseline shown in table V-5 and the total computed. As discussed above, San JuanChama Project depletions will be removed for comparison to the Navajo Depletion 

Guarantee threshold depletion. 

If the sum of these depletions reaches the depletion guarantee threshold, the elements of 

the Navajo Depletion Guarantee will be implemented. At that point, modeling will be 

completed for the limits the Navajo Nation proposes putting in place to meet flow 

conditions specified in the biological assessment. 

Responsibilities.-

San Juan River Basin Recovery Implementation Program.- The SJRBRIP 

Hydrology Committee will be responsible for reviewing the accounting of depletions. 

The committee will also ensure that the San Juan River Basin Hydrology Model is 

implemented for compliance with the Flow Recommendations as specified in the 

proposed project's biological assessment. The biological assessment contains limits 

identified by the Navajo Nation at the time the Navajo Depletion Guarantee is 

implemented. 

Reclamation.-Reclamation will identify the point at which ALP and NIIP annual 

depletions reach 290,000 acre-feet. If that target depletion is reached, Reclamation will 

initiate reporting of depletions for the categories listed in the hydrologic baseline for the 

proposed project (table V-5) on a 5-year cycle as a part of the consumptive use and loss 

reporting procedure. As a result of the monitoring, Reclamation will identify the point at 

which the sum of actual uses reaches the Navajo Depletion Guarantee threshold. If this 

level of depletion is reached, Reclamation will limit deliveries to Navajo projects, as 

directed by the Navajo Nation, to levels required by implementation of the Navajo 

Depletion Guarantee. In the event that the SJRBRIP terminates, Reclamation will 

assume the responsibilities listed above for the SJRBRIP. 

Vl-5 
Navajo-Gallup Water Supply Project---------------------

Navajo Nation.-The Navajo Nation will limit uses as specified in the Navajo 

Depletion Guarantee if the conditions stated above are reached and provide to the 

SJRBRIP and Reclamation the projects it wishes limited. 

Condi(ions.-None of the actions and conditions listed herein shall limit the ability of 

Reclamation to reinitiate consultation on the proposed project to increase its baseline 

depletion or alter the requirements of the Navajo Depletion Guarantee. 

Reclamation will notify the SJRBRIP and the States of New Mexico and Colorado of any 

such requests to reinitiate consultation on the proposed project. Any reconsultations on 

the proposed project will be performed in conformance with the SJRBRIP' s Principles 

for Conducting Endangered Species Act Section 7 Consultations on Water Development 

and Water Management Activities Affecting Endangered Fish Species in the San Juan 

River Basin that is described in the SJRBRIP's Program Document, Appendix C, dated 

September 7, 2006, as may be modified by the SJRBRIP and the Service. 

The depletion levels discussed are conditioned upon current estimates of natural flow and 

baseline depletions for 1929-93 and are subject to change as hydrology or models are 

updated. If such updates occur, a newly computed Navajo Depletion Guarantee shall 

be computed and utilized based upon the same depletion categories as described 

herein. 

Indian Trust Assets Commitments 

There are no mitigation measures proposed for Indian Trust Assets. One of the goals of 

the SJRBRIP is to" ... proceed with water development in the Basin in compliance with 

federal and state water law, interstate compacts, Supreme Court decrees, and federal trust 

responsibilities to the Southern Utes, Ute Mountain Utes, Jicarillas, and the Navajos." 

(SJRBRIP, 1995). 

Water Quality Commitments 

Reclamation would develop and implement a program to reduce, minimize, or eliminate 

temporary, short-term increases in suspended sediment loading or other water quality 

constituents potentially caused by project construction through the incorporation of 

permits, Best Management Practices (BMPs), and sediment control structures as 

described under mitigation measures for water quality in chapter V. 

Vl-6 
---------- Chapter VI - Environmental Commitments and Mitigation Measures 

Vegetation Commitments 

Reclamation would: 

• Ensure that construction contractors limit ground disturbance to the smallest 

feasible areas and that they implement BMPs along with the planting or 

reseeding of disturbed areas using native plants to assist in the re-establishment 

of native vegetation as described under mitigation measures for vegetation 

resources in chapter V. 

• Use accepted erosion control measures during construction, supplement grass 

seeding with native shrub seed in upland areas where shrub cover is diminished 

due to pipeline disturbance, monitor planting to ensure establishment, and 

control noxious weeds in disturbed areas. 

• Replace riparian and wetland habitat with the creation of acre-per-acre 

replacement or enhancement of 3 acres for each acre lost to mitigate for impacts 

to riparian and wetland habitat. This includes revegetation of 17 acres of 

non-native riparian (Russian olive and tamarisk) and 3.6 acres of wetland 

temporarily removed during pipeline construction. Approximately 0.9 acre of 

non-native riparian and 1.1 acres of wetlands would be permanently removed 

for project features. 

Wildlife Commitments 

Reclamation would: 

• Ensure that construction contractors limit ground disturbance to the smallest 

feasible areas and that they implement BMPs along with the planning or 

reseeding of disturbed areas using native plant species to assist in the 

re-establishment of native vegetation as described under mitigation measures for 

vegetation resources in chapter V. 

• To minimize disturbance to raptors, major construction activities along the 

Nutria and Defiance Monoclines, Cutter Canyon, Blanco Canyon, and the 

corridor from Cutter to Largo Canyons should be restricted during the nesting 

season (January 15 to August 15). If that is not possible, extensive nest 

searches should be made up to three-quarters of a mile of proposed activities 

immediately prior to construction and active nests avoided. 

Vl-7 
Navajo-Gallup Water Supply Project---------------------

• Conduct extensive nest searches within one-quarter mile of proposed activities 

immediately prior to construction and avoid active nests if construction 

activities could not be scheduled outside the January 15 to July 15 timeframe. 

• Incorporate raptor perch guards or raptor safe configurations on all new 

transmission structures. 

• Avoid removal of riparian and wetland vegetation between March 15 and 

August 15 to avoid potential impacts to migratory bird nesting. 

• Trench and bury pipeline concurrently to minimize trapping of small wildlife as 

possible. Reclamation would construct escape ramps for trenches left open 

overnight. 

Aquatic Resources Commitments 

The SJRBRIP would monitor and report total depletions in the Basin as described 

previously in the "Water Uses and Resources Commitments" section. The Navajo Nation 

would implement a Navajo Depletion Guarantee when needed to keep the Navajo 

Nation's depletions within the Endangered Species Act depletion baseline. Reclamation 

would also incorporate BMPs, as previously described in the "Water Quality 

Commitments" section, to avoid or minimize project impacts to aquatic resources . 

. Special Status Species Commitments 

Reclamation would: 

Vl-8 

• Implement conservation measures found in the final biological opinion on the 

proposed project (see appendix C, part III). These measures address the 

Colorado pikeminnow, razorback sucker, Southwestern willow flycatcher, and 

Mesa Verde cactus. 

• Implement conservation measures for Navajo Nation listed species as described 

under "Special Status Species - Mitigation Measures" in chapter V. 

• Conduct surveys for ferruginous hawk and bald eagle in proposed construction 

areas 1 year in advance of construction for pipeline routes and construction sites 

not adjacent to highways, well-traveled roads, or areas of regular human 

activity. 
---------- Chapter VI - Environmental Commitments and Mitigation Measures 

• Implement appropriate protective measures to avoid or minimize nest 

disturbance if active nests were found. 

• Conduct surveys for Southwestern willow flycatcher in riparian and wetland 

habitat prior to construction within one-quarter mile of disturbed areas and 

avoid construction activities during the nesting season (March 15 to August 15) 

if active nesting is found. 

• Delineate and avoid beautiful gila plants where possible. 

• Refine the pipeline alignment to avoid individual Mesa Verde cactus and 

suitable habitat where possible. 

Reasonable and prudent measures (RPMs) for Colorado pikeminnow and razorback 

sucker included in the final biological opinion are not included as environmental 

commitments. RPMs are measures to reduce incidental take of threatened or endangered 

species and are described as terms and conditions. The terms and conditions are 

nondiscretionary actions required by the action agency and are not included as mitigation 

measures. 

Recreation Commitments 

No environmental commitments are made for recreation resources. 

Land Use Commitments 

Reclamation would: 

• Ensure that construction contractors limited ground disturbance to the smallest 

feasible area and that they implemented BMPs along with the planting or 

reseeding of disturbed areas to minimize impacts to existing land uses as 

previously described in the "Vegetation Commitments" section. 

• Ensure that construction contractors fenced revegetated areas to prevent grazing 

activities until disturbed areas became re-established. 

• Work with the Navajo Nation to provide temporary relocation assistance to 

affected livestock owners along the pipeline corridor. 

• Provide relocation assistance to affected residences displaced by construction of 

the San Juan River water treatment facility. 

Vl-9 
Navajo-Gal/up Water Supply Project---------------------

Hazardous Materials Commitments 

Reclamation would contact pipeline and gas well companies prior to construction 

activities to identify and avoid existing hazards. Pipeline alignments would be adjusted, 

as needed, to avoid impacts to pipelines and wells. 

Soils Commitments 

Reclamation would mandate that construction contractors use and implement measures 

contained in erosion control guidelines and BMPs to control soil erosion from 

construction areas as described under mitigation measures for soils in chapter V. 

Geology Commitments 

No environmental commitments are made for geologic resources. 

Paleontologic Commitments 

During construction activities, Reclamation would monitor areas with exposure of 

geological units or settings that indicated a high likelihood of yielding vertebrate 

fossils or noteworthy occurrences of invertebrate or plant fossils. In the event of 

discovery, Reclamation would evaluate the significance before construction could 

continue. 

Reclamation would manage, on a case-by-case basis, construction activities adjacent 

to the Lynbrook and Betonnie Tsosie Fossil Areas. Reclamation would conduct 

paleontologic clearances prior to any surface-disturbing activities along the pipeline 

corridor in the Lynbrook and Betonnie Tsosie Fossil Areas. 

Air Quality and Noise Commitments 

Reclamation would require that construction contractors implement measures to control 

fugitive dust during construction as described under mitigation measures for air quality 

and noise in chapter V. No environmental commitments are made for noise abatement. 

Vl-10 
---------- Chapter VI- Environmental Commitments and Mitigation Measures 

Socioeconomics Commitments 

No environmental commitments are made for socioeconomic resources. 

Environmental Justice Commitments 

No environmental commitments are made for environmental justice. 

Cultural Resources Commitments 

Reclamation would: 

• Implement a program to compensate for losses of archaeological sites that 

would occur as a result of construction and operation of the proposed project 

and the construction of conveyances as defined in the mitigation measures for 

cultural resources in chapter V. 

• Coordinate the program with the New Mexico State Historic Preservation 

Officer, Navajo Nation Tribal Historic Preservation Officer, Bureau of Land 

Management, Bureau of Indian Affairs, city of Gallup, and the Advisory 

Council on Historic Preservation. 

• Ensure compliance with mitigation measures developed in accordance with the 

Native American Graves Protection and Repatriation Act and Executive 

Order 13007 as described under "Cultural Resources - Mitigation Measures" in 

chapter V. 

Vl-11 
EXHIBIT C 

NAVAJO-GALLUP WATER SUPPLY PROJECT 

AGREEMENT ON METHODOLOGY REGARDING 

APPLICATION OF NEW MEXICO COST-SHARE TO COST 

ALLOCATION AND REPAYMENT 
United States Department of the Interior 

BUREAU OF RECLAMATION 

Upper Colorado Region 

Four Corners Construction Office 

IN REPLY REFER TO: 

FCC0-110 

WTR-4.00 

Honorable Mr. Levi Pesata 

President, Jicarilla Apache Nation 

P.O. Box 507 

Dulce, NM 87528-0507 

2200 Bloomfield Highway 

Farmington, NM 87401-8110 

DEC 0 1 L~·n 

Subject: Agreement on Methodology Regarding Application of New Mexico Cost-Share to Cost 

Allocation and Repayment, Navajo-Gallup Water Supply Project 

Dear Honorable Pesata: 

Enclosed for your records is a copy of the final signed subject agreement. The agreement 

acknowledges consultation occurred and allows the Bureau of Reclamation to begin 

implementation of the methodology described in the agreement for applying and allocating costs 

associated with the State ofNew Mexico's cost-share requirement. 

To further memorialize this agreement, this letter, along with the enclosed signed agreement, will 

be included in your repayment contract as an exhibit. 

We appreciate all of your efforts in approving this agreement. 

If you have any questions, please contact Pat Page at 505-324-5027. 

In Duplicate 

Enclosure 

Identical Letter Sent To: 

Honorable Jackie McKinney 

Mayor of Gallup 

P.O. Box 1270 

Gallup, NM 87305 

cc: See Next Page 
cc: Mr. Lance Allgood 

Executive Director 

Gallup Joint Utilities 

P.O. Box 1270 

Gallup, NM 87305-1270 

Mr. Herb Becker, Jicarilla Apache Nation 

JA Associates ofNM, LLC 

2309 Renard Place, SE, Suite 200 

Albuquerque, NM 87106 

(w/encl to ea) 

2 
United States Department of the Interior 

BUREAU OF RECLAMATION 

Upper Colorado Region 

Four Corners Construction Office 

IN REPLY REFER TO: 

FCC0-110 

WTRA.OO 

Honorable Mr. Levi Pesata 

President, Jicarilla Apache Nation 

P.O. Box 507 

Dulce, NM 87528-0507 

2200 Bloomfield Highway 

Farmington, NM 87401-8110 

SEP 2 7 2011 

Subject: Methodology Regarding Application of New Mexico Cost-Share to Cost Allocation 

and Repayment, Navajo-Gallup Water Supply Project (NGWSP), New Mexico 

Dear President Mr. Pesata: 

Public Law 111-11 authorized the Secretary of the Interior to design, construct, operate, and 

maintain the Navajo-Gallup Water Supply Project (NGWSP). In addition, the legislation 

(Section 10602 (d)(l)(D)) requires that the Secretary ofthe Interior and the State ofNew Mexico 

enter into an agreement " ... under which the State of New Mexico will provide a share of the 

Project construction costs of not less than $50,000,000, except that the State of New Mexico 

shall receive credit for funds the State has contributed to construct water conveyance facilities to 

the Project Participants to the extent that the facilities reduce the cost of the Project as estimated 

in the Draft Impact Statement. " 

The purpose of this document is to record and acknowledge the decision made by the Bureau of 

Reclamation, after consultation with the Jicarilla Apache Nation and the City of Gallup, 

regarding the application of the State's cost-share contribution of not less than $50,000,000 

towards NGWSP costs and how the State's cost-share would be applied towards the repayment 

obligations of those NGWSP Participants who have a repayment obligation. 

Application Methodology 

A. Cost-Share Obligated Amount (a.k.a. credit) which refers to monies provided directly to 

NGWSP Participants- Navajo Nation, Jicarilla Apache Nation, and City of Gallup) 

The determination of allowable credit shall be made pursuant to Paragraph 2 of the Cost-Share 

Agreement between the United States and the State ofNew Mexico, dated June 27, 2011 

(CostShare Agreement). Once the determination of allowable credit has been made, the credit 

shall be applied to those reaches or features that were constructed and the corresponding costs of 

those applicable reaches or features in the NGWSP Construction Cost Estimate (CCE) shall be 

reduced by the amount of the approved credit. The remaining NGWSP costs (if any) of those 

reaches or features shall then be allocated to each NGWSP Participant following the Use of 

Facilities Methodology, and the repayment obligations on those allocated costs will take into 

account the repayment Participants' Ability to Pay percentage. Ifthere are no remaining costs, 

then no costs would be allocated to the NGWSP Participants. 
B. Cost-Share Balance (monies provided directly to Reclamation) 

The balance of the cost-share obligation of the State ofNew Mexico (i.e., the total amount of 

cost-share provided by New Mexico minus the amount of credit allowed) shall be provided 

by the State pursuant to Paragraph 3 of the Cost-Share Agreement. The cost-share balance 

shall be applied to the remaining NGWSP costs (as is stated in Part A above) and be 

allocated to each NGWSP Participant following the Use of Facilities Methodology, and 

taking into account the repayment Participants' Ability to Pay percentage. 

The Fiscal Year 2012 Interim Cost Allocation (October 2011 price level) incorporated the 

methodology described above using estimated New Mexico Cost-Share obligations. The Cost 

and Repayment Summary page from the Fiscal Year 2012 Interim Cost Allocation is enclosed. 

Conclusion and Signature 

The repayment Participants' signatures on the enclosed signature sheets acknowledge that: 1) 

Reclamation has consulted with them regarding the substance of this memorandum, 2) 

Reclamation will implement the methodologies for applying the New Mexico Cost-Share 

contributions to the NGWSP CCE identified in this memorandum, and 3) without waiving any of 

their rights under statute or their repayment contracts, they will not object to Reclamation 

implementing the methodologies identified in this memorandum. Finally, the repaying 

Participants acknowledge that, pursuant to Section 10604 of Public Law 111-11, each entity's 

repayment obligation shall be subject to the final cost allocation. 

If you concur, please sign the appropriate signature sheet and transmit the signed original to this 

office, Attention: Pat Page, Deputy Construction Engineer. 

If you have any questions, please contact Pat Page at 505-324-5027 . 

In Duplicate 

Enclosure 

Identical Letter Sent To: 

Honorable Jackie McKinney 

Mayor of Gallup 

P.O. Box 1270 

Gallup, NM 87305 

cc: Mr. Lance Allgood 

Executive Director 

Gallup Joint Utilities 

P.O. Box 1270 

Gallup, NM 87305-1270 

cc: See Next Page 

. in~~ly, £ 

« ~ J , ~ .. 

. v 

~~ ~0 Barr

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. Construction En neer 

2 
cc: Continue From Previous Page 

Mr. Herb Becker, Jicarilla Apache Nation 

JA Associates ofNM, LLC 

2309 Renard Place, SE, Suite 200 

Albuquerque, NM 87106 

(w/encl to ea) 

be: UC-446, FCCD-5000 (Ehat), WCD.-RChristianson 

(w/encl to ea) 

WBR:PPage:bfox:09/14/20 11 

3 

V:\FCF Correspondence\Navajo Gallup Water Supply Project(NGWSP)-General Corresp\Memo 

to Sponsors- NM CostShare Methodolgy_rvsd 6-6-20ll.docx 
Cultural 

Construction Cost Summa[Y Resources 

- Total Cost 35,766,032 

Less NM Cost Share- Obligated Amount 1/ 

Remaining Federal Cost 

Less NM Cost Share - Remaining Balance 

Federal Cost 

New Mexico Cost Share Totals 

Repavment SummaN 

Allocation of Remaining Federal Cost 

Allocated Cost to United States 

Less NM Cost Share- Remaining Balance- US Allocation 

Responsibility to the United States 

Allocated Cost to be Repaid by Participant (35%) 2/ 

Navajo-Gallup Water Supply Project 

Cost and Repayment Summary 

October 2011 Price Level (FY2012) 

San Juan Cutter 

Mitigation Lateral Lateral Reach 27 

6,202,202 723,159,538 172,005,955 57,723,831 

3,981,569 18,423,494 8,387,518 

719,177,969 153,582,461 49,336,313 

14,980,589 3,199,147 1,027,683 

704,197,380 150,383,315 48,308,630 

18,962,158 21,622,641 9,415,201 

719,177,969 153,582,461 49,336,313 

Less NM Cost Share - Remaining Balance - Participant Allocation 

Participant Construction Cost Obligation 

Interest During Construction (IDC) 3/ 4/ 

Participant Investment Cost Obligation 

1/ Based upon estimations from preliminary submittals from State; final amount dependent upon Reclamation approval. 

21 The actual percentage will be no less than 25% and no more than 35%, based upon ability to pay. 

3/ All IDC estimates are based upon total project completion in the year 2025. 

4/ IDC rate based on FY2010 Planning Rate. 2 of 57 

I 

Total 

994,857,558 

30,792,581 

922,096,743 

19,207,419 

902,889,325 

50,000,000 

922,096,743 

857,279,401 

17,854,412 

839,424,990 

6/13/2011 

Allocation Allocation Allocation 

to to to 

Jlla11aio Nation Citv of Gallup Jicarilla Nation 

736,904,338 155,202,322 

15,341,684 3,241,037 

721 ,562,655 151,961,285 

736,904,338 155,202,322 

736,904,338 

15,341,684 

721,562,655 

100,881,509 

2,106,674 

98,774,835 

54,320,813 

1,134,363 

$53,186,452 

+ 

$21,113,482 

$74,299,934 

29,990,083 

624,698 

29,365,385 

29,990,083 

19,493,554 

406,054 

19,087,500 

10,496,529 

218,644 

$10,277,885 

+ 

$6,997,176 

$17,275,061 

Tota1AIIocation06.13.11(FY2012Price).xlsx 
Methodology Regarding Application of New Mexico Cost-share to Cost Allocation and 

Repayment, Navajo-Gallup Water Supply Project 

Signature Sheet 

JicariJla Apache Nation 

I" f., <f-I II 

Date 
Methodology Regarding Apptieation of New Mexito Cost-Shan to Coat AUotatlon and 

Repayment, Navajo-Gallup Water S14pply Project 

Signature Sheet 

··- ·- _., 

~\?::~~~ Cit.y of Gallup ~ 

.J<t•.: ki. •. l.Jr:K .inne y, Hnyor 
EXHIBIT D 

NAVAJO-GALLUP WATER SUPPLY PROJECT 

ABILITY TO PAY APPROVAL LETTER 
I 

United States Department of the Interior 

BUREAU OF RECLAMATION 

IN REPLY REFER TO: 

Honorable Levi Pesata 

President, Jicarilla Apache Nation 

P.O. Box 507 

Dulce, NM 87528-0507 

Dear President Pesata: 

Washington, DC 20240 

11AR 15 2012 

I am writing in response to your letters, dated October 6, 2011 and November 30, 2011. The 

October 6th letter appeals the conclusion of the Ability-to-Pay (ATP) analysis performed by 

Reclamation's Technical Service Center on behalf of the Upper Colorado Region to determine 

the percentage of Navajo-Gallup Rural Water Project (Project) costs to be repaid by the Jicarilla 

Apache Nation (Nation). The November 301h letter included a request for the Solicitor's opinion 

regarding the negotiability of the A TP percentage. That opinion is provided as an attachment to 

this letter. 

During our meeting in mid-December, the Nation agreed to provide financial information for 

Reclamation to review in order to help resolve the cost share issue. Prior to the review, 

Reclamation staff from the Commissioner's Office and Reclamation's Mid-Pacific Region met 

with representatives ofthe Nation in Dulce, NM, to discuss ATP concepts and methodologies, 

and to identify any relevant perspectives that should be considered during the review. 

Reclamation staff also communicated with the Nation's economic consultant to share 

information and discuss a reasonable and logical approach for the review. 

The Commissioner's Office staffhave independently reviewed the Nation's audited financial 

statements from 2003 to 2010. Revenues available from the Nation's financial assets, as well as 

revenues projected to be available from residential, commercial, and other sources, including the 

nation's water service contract with the City of Gallup, were evaluated against associated 

expenses. Taken together, it is Reclamation's conclusion that the Nation does have the financial 

capability to pay at least 35 percent of its allocated share ofproject costs. Therefore, I am 

upholding the conclusion of the Upper Colorado Region's original ATP analysis that the Nation 

should repay 35 percent of its allocated construction costs of the project, in accordance with the 

authorizing legislation. 
If you have any questions, please contact me at dmurillo@usbr.gov or 202-513-0615. 

David 

fJ:; G. Murillo /Y)~ Deputy Commissioner - Operations 

cc: 92-00000,94-00000,94-00010,96-00000,96-43000 

84-50000, 84-55000 (Stock, Christopherson, Reading file), 

UC-100, UC-101, UC- 110, UC-115, UC-446, WCG-CDeAngelis, WCG-EWamer, 

WCG-RChristianson, FCCD 100, FCCD 110, FCCD 5000 

2