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I I I I I I I I I I I I I I I I I "I I approval from the CWCB to use the proceeds from the sale of the X- Y Ranch lands and additional loan funds to purchase the two sources. A letter report dated March 11, 1997 (enclosed as Attachment 1) describes the economic feasibility of acquiring the Highland and Fort Bent water rights. Also, a preliminary report in part which described the yields of Highland and Fort Bent water rights, was submitted to the CWCB in May 1997. This report is intended to complete and finalize the information provided in that preliminary report. At this point, LAWMA has neither purchased nor entered into contracts for the purchase of Fort Bent shares. The shares that originally triggered LAWMA's request are not available or have been sold to others, but other shareholders have expressed their interest in selling to LAWMA. In the interim, shares of the Amity Mutual Irrigation Company have become available. Amity shares are desirable because they would further diversify LAWMA's water rights portfolio, would increase storage reserves, and would provide replacement water lower in the system. In case of shortages of replacement supplies, pumping by members will be restricted. LAWMA is faced with distributing the replacement water to its membership in a fair and equitable manner. As part of this feasibility study, EnWater Resource Consultants studied several alternatives for allocating costs and replacement water. The results of their study are described in this report, and their report is included as Attachment 2. REPLACEMENT REQUIREMENTS The replacement water requirements are estimated using an accounting model of the Arkansas River basin prepared by the State Engineer's office. The model is broken down into 18 segments between Pueblo Dam and the Stateline. Well pumpage by LAWMA members affects only the lower 9 segments which represent the area from John Martin Reservoir to the Stateline. The stream segments can be logically reduced to 1) the segment between the Las Animas Consolidated Canal headgate and John Martin Dam, 2) the segment between John Martin Dam and the Lamar Canal headgate, 3) the drainage ditches and small creeks which contribute water to the Amity Canal, 4) the segment between the Lamar Canal and Buffalo Canal headgates, and 5) the segment between the Buffalo Canal headgate and the Stateline. Figure 1 is a schematic drawing of the Arkansas River from LaJunta to Stateline and shows these features as well as others. Pursuant to the State Engineer's amended rules, a depletion rate (referred to as ''wellhead depletion") is assigned to each irrigation well based on whether the well supplements ditch deliveries or provides a full supply of water for the owner's fields. Wells providing supplemental supplies are assigned a 30 percent depletion' rate, and wells providing the full supply are assigned a 50 percent or 75 percent depletion rate for flood irrigation methods and Page 2