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<br />LAWMA - Water Rights Purchase
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<br />Agenda Item 20b
<br />
<br />July 28-29, 2003
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<br />request and granted a one-year 100% deferral of its May 1, 2003 Contract No. C153715 loan
<br />payment in the amount of $122,000, its July 1, 2003 Contract No. G153756 loan payment in the
<br />amount of $ 7,718 and its November 1, 2003 Contract No. C153678 loan payment in the amount of
<br />$8,114. These loan deferrals totaled $ 259,832 and did not cover all of LAWMA's approximately
<br />$303,885 in expenses. Additionally, while these loan deferrals did assist LAWMA by freeing-up
<br />some cash-flow to pay for its participation in the trial, the deferred interest amount of each loan was
<br />added to the current loan balances and then re-amortized over each loan's remaining life so the
<br />CWCS will be fully repaid by LAWMA.
<br />
<br />Proiect Need - LAWMA's mainstem irrigation pumping averaged 59,769 acre-feet annually from
<br />1997 through 2002, and ranged from 75,465 acre-feet in 1997 to 42,380 acre-feet in 1999. For
<br />planning purposes, it is expected that LAWMA's mainstem irrigation pumping will average about
<br />59,703 acre-feet annually, and should total 44,777 acre-feet in a dry year. The replacement
<br />requirements are a maximum of 18,312 acre-feet annually. (At full allocation LAWMA provides
<br />shareholders 1 acre-foot of replacement water per share.) For the second consecutive dry year
<br />following a series of average years, the replacement requirements would total 13,360 acre-feet
<br />LAWMA's available replacement water sources are estimated to yield 15,923 acre-feet (87%
<br />allocation) on an average annual basis, with a minimum of 6,151 acre-feet (30% allocation.) Given
<br />LAWMA's maximum replacement requirements of 18,312 are-feet, LAWMA has a need to
<br />substantially increase the firm, minimum, yield of its water rights portfolio. Therefore, additional
<br />replacement water supplies of senior water rights that can provide consistent amounts of
<br />replacement water, even in dry years, and replacement water sources that can be stored and carried
<br />over in John Martin Reservoir, such as the Keesee water rights, are needed by LAWMA,to increase
<br />the minimum yield of its portfolio. With the addition of one-half of the Keesee rights, LAWMA's
<br />available replacement water sources will increase to 16,680 acre-feet on an average annual basis,
<br />with a firm, minimum of 8,038 acre-feet, an increase of 4.7% and 30.7% respectively.
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<br />Acquisition of one-half of the Keesee water rights, as proposed herein, would increase the firm yield
<br />of LAWMA's portfolio of replacement water sources by approximately 1887 acre-feet More
<br />importantly, according to LAWMA's operational study, which simulates the operation ofLAWMA's
<br />replacement plan from 1950 through 2005, with one-half of the Keesee water rights, full allocations
<br />of replacement water would be justified in four additional years during that time, and the allocations
<br />in the years of less than a full allocation increase by as much as 30 percent in some years and by
<br />11.2 percent overall. On average, this translates into 7,143 acre-feet of additional pumping in these
<br />years by LAWMA shareholders. Acquisition of one-half of the Keesee water rights is also needed
<br />because those rights can be stored in the Offset Account and would assist LAWMA with placing a
<br />cushion of replacement water in storage in John Martin Reservoir to assist it with making its required
<br />replacements during a series of dry years: The State Engineer has encouraged LAWMA to find a
<br />way to store more water in the Offset Account, and during the final phase of the Kansas v. Colorado
<br />trial the Special Master made it clear that LAWMA's continued and expanded use of the Offset
<br />Account in John Martin Reservoir would be critical to insuring Colorado's ability to comply with the
<br />Arkansas River Compact now and in the future.
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<br />Feasibility Studies
<br />
<br />LAWMA, through its engineer Helton & Williamsen, P.C., and attorney Moses, Witteymyer, Harrison
<br />and Woodruff, P.C., has completed a feasibility study in accordance with CWCS guidelines. CWCS
<br />will supply a maximum of $5000 for up to 50% of the cost of the Feasibility Study.
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