C150150 Feasibility Study

• Contract/PO #: C150150
• Contractor Name: Lower Arkansas Water Management Association
• Contract Type: Loan
• Water District: 67
• County: Bent
• Loan Projects - Doc Type: Feasibility Study

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I. Introduction

This report presents the results of a feasibility study that was completed for the Lower
Arkansas Water Management Association ("LA WMA"). The purpose of the study was to evaluate
LA WMA's replacement water supply needs and the suitability of and the current need for a
permanent replacement water source proposed to be acquired by LA WMA with CWCB loan funds.
This report provides information about LA WMA' s general service area, LA WMA' s membership,
their ground water pumping and the resulting stream depletions that need to be replaced under
Colorado law and the Arkansas River Compact. The report then describes the historical use and
estimated yield of one-half of the Keesee water tights that LA WMA is proposing to acquire with
CWCB loan funds, LA WMA' s need to purchase the water rights and the effect on the average and
firm yield of LA WMA's water rights portfolio of adding one-half of the Keesee water rights to the
portfolio. Finally, the report addresses the status of LA WMA's existing CWCB loans, the reasons
for LA WMA's previous CWCB loan payment deferrals and LA WMA's fmancial ability to repay
LA WMA' s existing CWCB loans and the current loan request in the amount of $2,250,000 for the
acquisition of one-half of the Keesee water rights.

II. Background

LA WMA is a non-profit corporation formed pursuant to the Colorado Non-Profit
Corporation Act, as amended, and pursuant to the Ditch and Reservoir Company Act, as amended.
Copies of LA WMA's Restated and Amended Articles of Incorporation and Bylaws are attached
hereto as Appendices A and B, respectively. LA WMA was formed for the primary purpose of
replacing depletions from its members' well pumping and other structures requiring augmentation
within the lower portion of the Arkansas River Basin in order to comply with Colorado law and the
Arkansas River Compact.

LA WMA' s powers and authorities are set forth in its Restated and Amended Articles of
Incorporation and Bylaws. The control and management of the business and affairs of LA WMA are
vested in its Board of Directors which consists of seven shareholders. A list of LA WMA's current
Board of Directors is attached hereto as Appendix C. The duties and responsibilities of LA WMA' s
Board of Directors are set forth in LA WMA's Restated and Amended Articles ofIncorporation and
Bylaws. Under LA WMA' s Bylaws there are currently two types of membership classes, shareholders
and non-shareholders. LA WMA has 213 shareholder members. Under LA WMA' s Bylaws the rights
and obligations relating directly to augmentation for the wells and other structures of non-shareholder
members is established by written contract between the non-shareholder members and LA WMA.
There are currently 18,495 shares of LA WMA stock outstanding.

For its 2003 Arkansas River Use Rules replacement plan, LA WMA included 533 wells, of
which 459 are located in the Arkansas River's mainstem area and 74 are located in tributary areas.
Further broken-down by use, there are 488 irrigation wells, 32 municipal wells and 13 commercial

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