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Areas of supply and areas of demand Areas of demand can be broken down into three categories: 1) areas where water is a vailable, but additional facilities are needed such as Colorado Springs and Pueblo; 2) areas that have sufficient water and facilities such as Denver and Fort Collins; and 3) areas that do not have adequate water, lack the necessary facilities, and do not have viable options to meet future demand such as Douglas County. In addition, Colorado Springs, Pueblo, and Aurora have committed, through MOUs, not to take additional water out of the Arkansas. They have agreed to keep water in the basin. These types of pervious agreements will provide obstacles to compact negotiations. How this is or will be addressed in proposed legislation: The categories within the areas of demand indicate that although front - range municipalities share many common policy concern s, they also have significant differences. The current legislation is set up on the premise that these entities have more in common than they have differences. This something that might need to be examined more closely. The existence of established MOUs between entities is not addressed in the proposed legislation. Again, it is an important issue that the Steering Committee will have to deal with as it moves forward in establishing the framework for interbasin negotiations. Suggestions and Observations The Colorado water rights system has proven very flexible in the allocation of water. It has incorporated federal reserved water rights and ESA issues better than many other western states. The down - side to the current system is it does not allow for ra tional statewide water planning and management. Interstate compacts provide certainty in what is available for use. Planning, management, and economic development can then occur based on these compact allocations. It is hoped that interbasin compacts wi ll achieve similar results within Colorado. The La Plata compact is an example of a compact negotiated under fully allocated river conditions. Interbasin negotiation will take place under a system that is almost fully allocated, however it is based up on interstate compact negotiations that occurred before the rivers were fully allocated. Examples such as the La Plata compact could prove useful. David and Russ noted that we need to think through appointments because the process should not be dependent upon personalities. David also noted that we need to make sure the process has sideboards to prevent it from moving in a direction that we do not want. 3