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I I I I I I I I I I I I I I I I I I ."'.: I Mr. William E. Green March 1 1, 1997 Page 3 Regulations, (2) "'steady-state- stream depletions with the timing of the stream depletions calculated using D. Schroeder's accounting model, and (3) usability discounts applied to depletions at the Colorado-Kansas Stateline. Table 4 shows the expected yields of LAWMA's existing replacement sources. The yield of these sources totals 1 1 ,800 acre-feet. Yields shown for the Stubbs, X- Y , and Manvel water rights include water, from both the direct flow component and Article II Accounts in John Martin Reservoir. When combined with the yield of the Highland and Fort Bent shares, the total yield becomes 16,700 acre-feet. it can be concluded that, with the acquisition of these Highland and Fort Bent water rights, LAWMA's replacement sources should ,be adequate or nearty adequate to provide the required replacements during an average year. it is noted that several of LAWMA's sources include Article Il storage and therefore offer some capability to carry over water from wet years for use in subsequent years. Additional Reclacement Sources and Strateoies Barring unforeseen developments in Kansas v. Colorado or more stringent replacement requirements by the State Engineer, or ultimately the Water Court, these Highland and Fort Bent shares should be LAWMA's last major water right acquisitions in the near future. LA WMA intends to meet shortfalls in the short term by making annual water purchases, probably from Colorado Springs and Pueblo. Such water should be available for at least 20 years. This will give LA WMA time for further assessment of how increasing dues charges may reduce future pumping. Also, the upcoming feasibility study being prepared for LAWMA will address strategies to reduce LAWMA's pumping. LAWMA is exploring additional strategies such as dry year option agreements. Depending on future pumping, LA WMA may need to acquire additional water rights in the future. Comcliance with C.R.S. g37-60-130 and S.B. 96-124 LAWMA's loan request meets the criteria in C.R.S. ~37-6o- 130(3) (appropriating funds for the Arkansas River Augmentation Loan Account) and in S.B. 96-1 24 (appropriating loan funds to LA WMA for the purchase of replacement water). The criteria to approve loans under both statutory provisions are the same. The Highland Irrigation Company's water rights have a reliable yield which will provide an additional permanent supply source to LAWMA. The collateral for the loan will be the Highland shares and LA WMA membership dues. As discussed elsewhere in this document, this cC?lIateral provides adequate security for the requested loan at the interest rate and for the repayment period requested. LA WMA supplies replacement water to a large number of farmers downstream of John Martin Reservoir who may not otherwise be able to irrigate. "The requested loan will increase the,irrigation supply available to LAWMA's members at a relatively low cost and will, therefore, improve the chances of a viable agricultural industry in the vaney in the face of Kansas v. CoiorBdrs. .