Contract No. PSA

PROFESSIONAL SERVICES AGREEMENT

This Professional Services Agreement (this "Agreement") is entered into by and between the New Mexico Interstate Stream Commission, an agency of the State of New Mexico, (the " ISC") and the San Juan Water Commission, an organization established by a joint powers agreement, (the "Commission"), effective as of the date approved by the New Mexico Department of Finance and Administration ("DFA").

RECITALS

     THE PARTIES HERETO enter into this Agreement on the basis of the following facts, understandings, and intentions:

     A. The New Mexico State Legislature has determined that the public welfare and the future water needs of New Mexico can best be met by allowing each region of the State to plan for its water future, that the State can assist the regions in planning future water use by implementing a regional water planning program, and that the ISC is the appropriate agency to implement and administer such a program.

     B. Separate regions of the State of New Mexico have been identified, including the San Juan River Basin region (the "Region"), which is comprised of San Juan County and portions of Rio Arriba County, McKinley County, and Sandoval County. The river basin is the San Juan River system. The region is bounded on the north by Colorado, on the west by Arizona, on the south and east by the continental divide in McKinley County, Rio Arriba and Sandoval Counties.

     C. The ISC is authorized and desires to retain the expertise and services offered by a Commission to develop a regional water plan for the Region on a timely basis.

     D. Commission has represented and warranted to the ISC that Commission is an area wide planning organization capable of performing water planning for the Region and Commission is the appropriate party within the Region to contract with the ISC for the purpose of preparing a regional water plan.

     E. The ISC and Commission mutually desire to enter into this Agreement to provide for the development of such a regional water plan for the Region.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

     1. Term. The term of this Agreement shall be from the date of approval by DFA and shall expire May 31, 2003 unless this Agreement is amended or terminated pursuant to its terms. The services to be provided by Commission under this Agreement, however, shall not commence until Commission has (i) received a fully executed copy of this Agreement, and (ii) received specific instructions from the Regional Water Planning Manager designated by the ISC.

     2. Work.

        (a) Generally. Services to be provided pursuant to this Agreement include the following: Commission shall prepare a regional water plan for the Region in accordance with the Regional Water Planning Handbook published by the ISC December 1994). In addition, services and deliverables pursuant to this Agreement will be those specified in the scope of work for the regional water plan as more particularly described by Exhibit A attached hereto (collectively, the "Scope of Work").

        (b) Changes. The parties may enter into a letter agreement to expedite necessary but unforeseen changes in scheduling. Any such letter agreement shall not alter funding, which may only be altered pursuant to an amendment to this Agreement.

        (c) Regional Water Planning Manager. The Regional Water Planning Manager will be designated by the ISC. The Regional Water Planning Manager will coordinate all efforts and communications between Commission and the ISC related to, or in furtherance of the tasks to be performed under, this Agreement. The Regional Water Planning Manager will also recommend approval or rejection of deliverables and invoices.

        (d) Deliverables. Deliverables will be as specified in the Scope of Work.

        (e) Progress Reporting. Commission will provide progress reports on the services and applicable deliverables called for under this Agreement. Four (4) progress meetings shall be scheduled. Participants shall include key persons involved in performing services under this Agreement. Two (2) of the meetings will be held in the Region and two (2) will be in Santa Fe unless otherwise mutually determined by the parties to this Agreement. Progress reports and any deliverables, as applicable, must be submitted not more than thirty (30) days, and not less than fifteen (15) days, in advance of the progress meeting to ISC staff for timely review and comment.

        (f) Quality Assurance. Commission is solely responsible for assuring the quality of the services and deliverables pursuant to this Agreement. The ISC shall review and, at the progress meetings, comment upon services and deliverables provided under this Agreement. Written comment will be provided by the ISC as appropriate. If the ISC determines that progress and/or deliverable(s) are unsatisfactory, the ISC will provide Commission with written comments addressing the area requiring corrective action within thirty (30) days of receipt of the deliverable or as otherwise agreed. Commission shall have thirty (30) days following receipt of such written comments to respond to and to take corrective action to the satisfaction of the ISC.

        (g) Comprehensive Review. The ISC may require a comprehensive review of the performance of services under this Agreement at any time in the process to assure the project is reaching the goals set forth by the Scope of Work and this Agreement.

        (h) Personnel. The ISC may advise Commission when assigned staff and/or subcontractors are not, in the judgment of the ISC, satisfactorily meeting the requirements of this Agreement. The ISC and Commission shall in good faith attempt to agree upon appropriate remedial action to correct staffing or subcontracting problems.

     3. Compensation and Payment.

        (a) Cost. This Agreement is a "cost not to exceed" agreement. Commission shall complete all of the Scope of Work for no more than Two Hundred Twenty Five Thousand Dollars ($225,000.00). The ISC shall compensate Commission on a reimbursable basis. Commission shall not be separately paid nor reimbursed for subcontractor gross receipts taxes, if any, unless: (i) Commission actually reimburses such subcontractor for such subcontractor's gross receipts; (ii) such gross receipts taxes are actually owed by such subcontractor and paid by such subcontractor to the State of New Mexico.

        (b) Invoices. Commission may submit detailed invoices to the Regional Water Planning Manager not less frequently than quarterly. The original invoices shall, at a minimum: (i) contain the contract number; (ii) be signed by Commission; (iii) include a detailed accounting of the services and deliverables furnished, and costs and expenses incurred. Only costs and expenses covered in the Scope of Work will be reimbursed by the ISC. Invoices will be reviewed by the Regional Water Planning Manager and other ISC or Office of the State Engineer (OSE) staff, and such portions consistent with deliverables identified by the Scope of Work will be approved by ISC staff and submitted to the Administrative Services Division for payment. Commission shall not be entitled to receive any payment not invoiced and supported by appropriate documentation. Payment of the amount invoiced, or any part thereof, shall not relieve the Commission of any unperformed obligations.

        (c) Exception to Invoices. If the ISC finds the services performed or the deliverables provided pursuant to this Agreement are unacceptable because they are not consistent with the Scope of Work, within thirty (30) days of receipt of Commission's invoice for such services the ISC will provide to Commission a letter of exception explaining the deficiency along with details of how Commission may remediate the deficiency.

        (d) Equipment. Commission shall not be reimbursed for any equipment that Commission might acquire during the course of Commission's performance under this Agreement.

        (e) Mistake in Compensation. If Commission is compensated in error, Commission shall reimburse the ISC for the full amount thereof within thirty (30) days of written notice of such error. If Commission becomes aware of such an error independently of the ISC, Commission shall promptly notify the ISC thereof.

        (f) No Guarantee. The "cost not to exceed" amount is a maximum and in no way shall be interpreted as a minimum, a grant, or a guaranteed figure.

        (g) Appropriations. This Agreement is contingent upon sufficient appropriations being made by the New Mexico State Legislature for the performance of this Agreement by the ISC.

     4. Termination.

        (a) Events of Termination. This Agreement may be terminated as follows:

               (i) At any time by written agreement of the ISC and Commission.

               (ii) By the ISC for cause upon failure of Commission to materially comply with the terms of this Agreement. The ISC will give Commission written notice specifying Commission's failure to comply. Within thirty (30) days of receipt of such notice, Commission shall correct the failure (or, if such failure cannot reasonably be corrected in such thirty (30) day period, Commission shall begin in good faith to correct the failure and thereafter proceed diligently to complete correction of the failure). If within thirty (30) days Commission has not completed corrective action (or initiated corrective action, as the case may be) to the satisfaction of the ISC, the ISC may deliver written notice terminating this Agreement as of the date of such notice.

               (iii) By the ISC at any time if required by changes in state or federal law, because of court order, or because of insufficient funds appropriated, authorized, or encumbered. If the ISC terminates this Agreement pursuant to this subsection, the ISC will provide the Commission written notice of such termination at least thirty (30) days before the effective date of the termination.

        (b) Commission Obligations. Immediately upon the expiration or earlier termination of this Agreement (or the date of receipt of notice of the ISC's intent to terminate, as the case may be) Commission shall:

              (i) Incur no further financial obligations under this Agreement without prior written approval of the ISC.

               (ii) Cease all work to the extent specified in the notice of termination.

               (iii) Take such action as may be reasonably necessary for protection and preservation of records related to this Agreement.

               (iv) Cooperate fully in the completion or transition of any tasks so as to permit continuity.

        (c) Costs of Termination. Upon the expiration or earlier termination of this Agreement, the ISC shall pay Commission all amounts due for services completed before the effective date of such expiration or termination (or for services approved by the ISC as part of the transition described in Section 4(b)(ii) above).

        (d) Transfer of Files. Upon expiration or earlier termination of this Agreement, Commission shall assist and cooperate with the ISC in the orderly and timely transfer of files, documents, memoranda, notes, data, and/or related materials (whether provided by the ISC to Commission or created by Commission pursuant to, or in furtherance of the tasks under, this Agreement), to the ISC.

        (e) No Nullification. Neither party may, by termination of this Agreement, nullify obligations already incurred before the date of notice or required to be provided through the effective date of termination.

     5. Disputes. Commission and the Regional Water Planning Manager will attempt to informally resolve any disputes that may arise related to this Agreement. Before either party to this Agreement may bring suit in any court concerning any issues relating to this Agreement, such party must first seek in good faith to resolve the issue through negotiation.

     6. Status of Commission.

        (a) Independent Commission. Commission is an independent contractor providing services for the ISC and is not an employee of the ISC or the State of New Mexico. As a result of this Agreement, Commission shall not accrue leave, retirement, insurance, bonding, use of state vehicles, or any other benefits afforded to employees of the State of New Mexico.

        (b) Costs of Business. Commission shall be responsible to pay all applicable taxes insurance expenses, licensing fees, and other costs of doing business (other than reimbursable expenses specifically provided for herein, if any).

        (c) Authority of Commission. Commission shall not purport to bind the State of New Mexico, nor its agencies, officers, or employees, to any obligation not expressly authorized herein, nor shall Commission assert or imply the ISC's endorsement of the work performed under this agreement.

        (d) Other Contractors. The ISC may, for any reason, enter into other agreements for services related to the services contemplated by this Agreement. If the ISC enters into such other agreements, ISC shall provide prior notice to the Commission. The Commission shall fully cooperate with the ISC and such other Contractors. ISC agreements with other contractors shall not affect the "cost not to exceed" amount contemplated by this Agreement.

         (e) Subcontracting. Commission is solely responsible for fulfillment of this Agreement. Commission shall not subcontract, except as provided in the Scope of Work, any portion of the services to be provided under this Agreement in excess of Ten Thousand Dollars ($10,000) without the ISC's prior written consent, which consent shall be conditioned on the ISC's approval of the proposed subcontractor and the proposed subcontract, and which consent may be withheld in the ISC's sole and absolute discretion. Consent to any subcontract shall not obligate the ISC to the subcontractor nor make the ISC a party to such subcontract.

     7. Release. Commission, by acceptance of final payment of the amounts due under this Agreement, releases the State of New Mexico, its agencies, officers, and employees, from all liabilities and obligations whatsoever under, arising from, or related to this Agreement or the services provided under this Agreement.

     8. Records and Audit. During the term of this Agreement, including any extensions of the term agreed to by the parties, and for three (3) years after its expiration or earlier termination, Commission shall maintain detailed records that indicate the date, time, and nature of services provided. Such records shall be kept in accordance with Generally Accepted Accounting Principals and be easily separable from other records. The ISC, DFA, and the State Auditor, or the designee of any of the aforesaid, shall have the right to audit such records at any time upon three (3) days prior written notice to Commission. The period that Commission must retain records, and the corresponding right to audit, shall be automatically extended for records that relate to litigation and/or settlement of claims arising out of this Agreement for a minimum of three (3) years following the termination of any such litigation or the settlement of any such claims. Commission shall ensure that subcontracts related to Commission's performance under this Agreement contain the same requirements as contained in this Section regarding the maintenance of records the right of the ISC, DFA, and the State Auditor, or the designee of any of the aforesaid, to audit. Commission shall not be compensated for time spent or any costs incurred in complying with this Section.

     9. Standard of Care. The Commission warrants that it and its employees possess the experience, knowledge and character necessary to qualify them individually for the particular duties they perform in connection with the services to be performed in accordance with the standards of the profession. The Commission further agrees that subcontractors and agents will be required to warrant to the Commission that they possess the experience, knowledge, and character necessary to qualify them individually for the particular duties that are performed for the Commission pursuant to the Agreement. This warranty shall further state that the services so entered into shall be performed in accordance with the standards of the profession. Such warranty by subcontractors and agents shall not be construed as a diminution of the Commissions's liability and responsibilities pursuant to the Agreement.

     10. Indemnification. Commission shall indemnify, defend, and hold harmless the State of New Mexico, its agencies, officers, and employees, from and against any and all loss, cost, liability, or expense (including attorneys' fees incurred in connection with, and/or staff attorneys' salaries allocable to, any action the ISC takes to enforce this Agreement) for injury (bodily or otherwise) or damage to any person or organization directly or indirectly caused by any action or omission of Commission pursuant to, or in furtherance of the tasks to be performed under, this Agreement.

     11. Work Product. Commission warrants that all deliverables produced by Commission pursuant to, or in furtherance of the tasks under, this Agreement will be of original development by Commission, will be specifically developed for the fulfillment of this Agreement, and will not infringe upon or violate any patent, copyright, trade secret, or other property right of any third party. Commission shall indemnify, defend, and hold harmless the State of New Mexico, its agencies, officers, and employees, from and against any and all loss, cost, liability, or expense arising out of breach or claimed breach of the foregoing warranty. Nothing produced or developed, in whole or in part, by Commission pursuant to, or in furtherance of the tasks under, this Agreement shall be the subject of an application for copyright or other property right by or on behalf of Commission. All deliverables produced, developed, or acquired by Commission pursuant to, or in furtherance of the tasks under, this Agreement shall become the property of the State of New Mexico and shall be delivered to (or, if intangible, assigned to) the ISC upon the expiration or earlier termination of this Agreement. Commission shall execute, acknowledge, and deliver any documents and make any filings necessary to establish or evidenced the State of New Mexico's ownership.

     12. Equal Opportunity Compliance. Commission shall abide by all applicable laws, rules, regulations, and orders pertaining to equal opportunity. Commission shall indemnify, defend, and hold harmless the State of New Mexico, its agencies, officers, and employees, from and against any and all loss, cost, liability, or expense arising out of breach or claimed breach of such laws, rules, regulations, and orders.

     13. Governmental Conduct. Commission warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the services to be provided under this Agreement, and further warrants that signing of this Agreement will not be creating a violation of the Governmental Conduct Act, §§ 10-16-1 through 10-16-18, N.M.S.A. 1978. Commission acknowledges that it is familiar with the New Mexico Procurement Code, §§ 13-1-28 through 13-1-199, N.M.S.A. 1978, recognizes that the Procurement Code imposes civil and criminal penalties for its violation, and understands that New Mexico criminal statutes impose felony penalties for illegal bribes, gratuities, and kickbacks.

     14. Waiver. No term of this Agreement shall be deemed waived unless such waiver is in writing signed by the party making the waiver. No delay or omission by either party in exercising or enforcing any right or power hereof shall impair such right or power or be construed to be a waiver thereof. No custom or practice that may evolve between the parties shall be construed to lessen the right of a party to require the performance of the other party in strict accordance with the terms of this Agreement. A waiver by one party of a failure of the other party to fully comply with any of the terms of this Agreement shall not be construed to be a waiver of any subsequent failure to comply or any other failure to comply.

     15. Excusable Delay. Commission and the ISC shall be excused from performance for any period that they are prevented from performing any services or obligation hereunder in whole or in part as a result of an act of God, war, civil disturbance, epidemic, court order, or other cause beyond their reasonable control, and such nonperformance shall not be a ground for termination of this Agreement but shall not by itself extend the term of this Agreement.

     16. Policies and Procedures. Commission shall follow any policies and procedures that may from time to time be approved and established by the ISC and of which Commission is made aware, provided, however, that such policies and procedures shall not materially alter the terms of this Agreement.

     17. Notices. All notices and communications required or permitted under this Agreement (including change of address and facsimile or telephone number set forth below) shall be in writing and shall be deemed given to, and received by, the receiving party: (i) when hand-delivered to the street address of the receiving party set forth below; (ii) when sent by facsimile transmission to the facsimile number of the receiving party set forth below; (iii) one (1) day after deposit with a national overnight courier addressed to the receiving party at the street address set forth below; or (iv) five (5) days after deposit in the U. S. mail, certified mail, return receipt requested, postage prepaid, addressed to the receiving party at the mailing address set forth below.

     18. Amendment. This Agreement shall not be altered, changed, or amended other than by a written instrument executed by the parties. Amendments shall not become effective and binding unless and until approved by DFA.

     19. Assignment. Commission shall not assign or transfer any rights, obligations, duties, or other interest in this Agreement, or assign any claim for money due under this Agreement, without the prior written consent of the ISC. In the event this Agreement is assigned by the ISC to another governmental unit, including any assignment necessitated by any governmental reorganization, the Commission shall be made aware of such assignment.

20. Authority. If Commission is other than a natural person, the individual(s) signing this Agreement on behalf of Commission represent and warrant that they have the power and authority to bind Commission, and that no further action, resolution, or approval from Commission is necessary to enter into a binding contract.

     21. Incorporation. Each and all of the recitals set forth at the beginning of this instrument, and any exhibits referenced herein and attached hereto, are incorporated herein by this reference.

     22. Calculation of Time. Any time period herein calculated by reference to "days" means calendar days, i.e., including Saturdays, Sundays, and holidays as observed by the State of New Mexico; provided, however, that if the last day for a given act falls on a Saturday, Sunday, or such observed holiday, the day for such act shall be first day following such Saturday, Sunday, or observed holiday that is not a Saturday, Sunday, or such observed holiday.

     23. Interpretation. The captions and paragraph headings of this Agreement are not necessarily descriptive, or intended or represented to be descriptive, of all the terms thereunder, and shall not be deemed to limit, define, or enlarge the terms of this Agreement. Whenever used herein, unless otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular, the use of any gender shall include all genders, and the use of the words "include" and "including" shall be construed as if the phrases "without limitation" or "but not [be] limited to" were annexed thereafter. If Commission is other than a natural person, the use herein of "Commission" shall, where reasonable in the best interests of the ISC, be deemed to indicate and/or include all of the owners, partners, members, and employees of Commission; provided, however, that such interpretation shall not be used in connection with Commission's indemnity obligations contained in this Agreement.

     24. Applicable Law. Each party shall perform its obligations hereunder in accordance with all applicable laws, rules, and regulations now or hereafter in effect. This Agreement shall be governed by the laws of the State of New Mexico.

     25. Survival. Terms of this Agreement that provide for rights, duties, and/or obligations that expressly or logically extend beyond the expiration or earlier termination of this Agreement shall survive such expiration or earlier termination of this Agreement.

     26. Severability. If any terms of this Agreement, or the application of such terms to any person or circumstance, shall be held illegal, invalid, or unenforceable, the remainder of this Agreement, or the application of such terms to persons or circumstances other than those to which it is held illegal, invalid, or unenforceable, shall not be affected; provided, however, that the remainder of this Agreement is still capable of performance in substantial accordance with the original intent of the parties.

     27. Merger. This Agreement incorporates all the agreements, covenants, promises, and understandings between the parties concerning the subject matter hereof, and all such agreements, covenants, promises, and understandings have been merged into this Agreement. No prior agreement, covenant, promise, or understanding of the parties, verbal or otherwise, shall be valid or enforceable unless embodied in this Agreement. This Agreement may be executed in multiple originals, each of which shall be deemed an original.

     28. Effective Date. This Agreement shall not become effective unless and until approved by DFA.

     IN WITNESS WHEREOF, the parties have entered into this Professional Services Agreement effective as of the date approved by DFA.

COMMISSION

San Juan Water Commission

By: Name: Title:	Date:
ISC
New Mexico Interstate Stream Commmission an ISC of the State of New Mexico
By:       A. norman Gaume, Director	Date:
Approved as to budget sufficiency:
By:         Administrative Services Division	Date:
Approved as to form:
By:         ISC Attorney	Date:

TAXATION AND REVENUE DEPARTMENT

The records of the Taxation and Revenue Department of the State of New Mexico reflect that Commission is registered with the department to pay gross receipts and compensating taxes.

ID Number: ______________________________

By:	Date:
DEPARTMENT OF FINANCE AND ADMINISTRATION
By:         State Contracts Officer	Date: