LPPD000265

• Contract/PO #: C153756
• Contractor Name: Lower Arkansas Water Management Association
• Contract Type: Loan
• Water District: 67
• County: Prowers
• Bill Number: SB 96-124
• Loan Projects - Doc Type: Feasibility Study

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Trading of Shares: It is essential that the shares initially distributed can be
subsequently traded among members for market value. That is, one member can
sell his shares to another member at a price agreeable between the two parties.
With sufficient exchange shares will be traded at a market price. This trading
allows members to adjust their portfolio of depletion assets to their particular farm
operations. The trading is essential for the long-term efficient allocation of water.

Annual lease of water: Members may wish to lease water to or from other
irrigators on an armual basis (distinct from the buying or selling of shares).
LA WMA can also operate a short-term (spot market) for water traded temporarily
among its members. The price per leased water is determined by the dollar
amolUlt the market will bare. LA WMA simply records the price of the transaction
for reference by other users.

The Shares Organization from the LA WMA Perspective

Shares Organization: Normal-Year Allocation Method (S1)

Under allocation method SI the number of shares issued totals 18,049 - the total
replacement water demand during a normal year. Of this total, each user group is also
initially allocated a number of shares equal to their replacement demand in a normal year:
9,019 shares go to supplemental users, 3,068 shares go to sole-source flood users and
5,912 shares go to sole-source sprinkler users. The bill per share is set at $20.71 which is
LA WMA's 'annual cost per share ($400,000 118,049 af= $20.71). Table 6 indicates this
allocation method ~rior to secondary market trading) on different irrigators for a normal
year, 1st dry and 2n dry year scenarios. A result of this allocation method is that, in any
given year, curtailment is equalized across all groups. Supplemental uses, however, are
faced with the largest demand shortfall.

For LA WMA, allocation method Sl under a shares organization is described in the
following points:

I. Water sUIJplies, distribution and revenue in a normal year: In a nOITnal
year LA WMA water rights yield a replacement pool equal to 22,160 af. Water
(4,111 at) is held in storage at JMR resulting in a net supply available for
replacement of 18,049 af. With 18,049 shares, the share index is 1.00 af of
replacement water per share. Supplemental users are allocated 9,019 af of
replacement water, sole-source flood users use 3,068 af of replacement water,
sole-source sprinkler users use 5,912 af of replacement water and tributary
user accolUlt for 50 affor a total 18,049 af. The allocation of water among
users matches their respective pumping needs and demand for replacement
water. For example, supplemental users would normally pump 49,966 af
requiring 9,019 of replacement water to offset effects on the river. Tributary
and sole-source users groups also have a demand supply balance. All shares
pay the same $20.71 bill per share that amolUlts to total revenue of LA WMA
of$400,000.

EnWater Resource Consultants September 5, 1997 Final Report

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