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0278 Alternative 1: Transfer water t new use in the valley As the Ft. Lyon is the largest canal in the valley, with about 92,600 acres under cultivation, and historic average diversions of 210,000 acre-feet, transfer of a pan of the canal to new municipal, indusniaJ, recreational or agricultutal use in the valley is possible. Specific elements in the analysis of this alternative will involve: Cost of the Resource The fair market value of the Ft. Lyon water with reference to offering prices of other water presently aViilable for purchase in the valley will be established. Alternative sources of water have been identified in the Great plains ReselVoir studies and will be compared as to value and reliability. Transa~on ~~ including brokerage, financing, legal, and engineering will be estimated. Likely third party ~esulting from provisions of water court decrees, (such as revegetation) and environmental remediation costs, payments in lieu of taxes, and others will be evaluated. Markets Likely municipal and industrial development ~ valley will be projected based on the successes of similarly situated communities elsewhere, Incruding an estimate of the range of likely demand for such water. Likely recreational uses - based on long range plans of the DOW and DPOR, and USFS, FWS and NPS will also be identified, to include an estimate of the range of likely demand for such wa ter Likely a~cultural uses on other lands in the valley, either for an additional supplemental supply, or to return better lands to cultivation will also be identified. Impacts from such a transfer would involve many of the same impacts on Ft. Lyon shareholders, other water users, the environment, and possibly farm oriented businesses as an out of basin transfer. The impacts, using the baseline analysis above, to the local economy, tax base, service levels, and economic development opponunity c~uld be substantially different, however. In addition, environmental mitigation could occur depending on the type of use. Alternative 2: Water Supply Management Prior engineering studies for the Ft. Lyon Canal Company have indicated an irrigation efficiency under the canal averaging approximately 47 per cent. This value is based on canal losses averaging 30 percent, lateral losses averaging 10 percent, and fann losses averaging 2S percent. As previously described, a lower value of 18.24% for ditch losses was used in the Kansas v Colorado litigation. StrUctural improvements may be proposed in order to increase the irrigation efficiency under the system. These could include lining of canals or laterals or other on-farm delivery improvements. In 17