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Page 2 Legislative Interim Committee on Land and Water Resources RE:.Wolford Mountain Reservoir The subdistrict also agreed to construct a "compensatory storage" reservoir to address future West Slope water impacts caused by the additional diversion of Colorado River water to the east slope. At the time, Azure Reservoir was the anticipated compensatory reservoir located on the main stem of the Colorado River in Gore Canyon. . However, by 1985 the Azure Reservoir site had proven infeasible, and the subdistrict and the River District Boards again met and reached a supplemental agreement. In this amended agreement, the subdistrict paid the River District $10.2 million, in return for which the River District agreed to assume the responsibility for mitigating West Slope water supply impacts under the Conservancy District statute. These settlements occurred as a direct result of individual Board members of the respective districts agreeing that water development was needed and that a resolution must be forged outside of the litigation process in order to allow Windy Gap to proceed. PERMITTING The River District immediately initiated a NatioQal Environmental Policy Act (NEP A) review process with an eye toward a dam and reservoir on Rock Creek, also tributary to the Colorado River. The River District did not, however, pursue Rock Creek as its "preferred alternative" under NEP A. Instead, the District allowed the NEP A process to determine the preferred alternative. Muddy Creek was one of the alternatives evaluated. The BLM and the US Forest Service recognized the valid "purpose and need" for additional water storage for east slope use. Accordingly, the "no action" alternative required under NEP A would not be the preferred alternative, However, even with thepllblication of the Draft ElS, the BLM and USFS did not designate a preferred alternative between the Rock Creek and Muddy Creek sites. The federal agencies requested additional public input prior to determining a preferred alternative, The resulting public comment was not only overwhelmingly against Rock Creek, but strongly in favor of a reservoir at Muddy Creek. Rock Creek, it turned out, was a favorite "secret fishery" of a number of individuals, including the then director of the Division of Wildlife. Rock Creek also had 486 acres of high quality, mountain wetlands. Additionally, the Town ofKremmling was very supportive of the Muddy Creek site as it represented a nearby reservoir with recreation potential. Finally, the owners of the private lands which would be flooded by a Muddy Creek reservoir were not opposed to a sale for reservoir development, which addressed the River District Board's reluctance to condemn private property. Therefore, as a result of public comment, community acceptance, and land- owner willingness, the Final EIS concluded that Muddy Creek was the preferred alternative.