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Section 3 <br />Alternative Agricultural Water Transfer Methods to Traditional Purchase and Transfer <br />3.5.3 Water Banks <br />Water banks may operate in a variety of ways. <br />Important operational considerations include: <br />~ Model Type: Water banks may operate as a <br />deposit/withdrawal model or as a clearinghouse <br />model. In the first, anyone qualified may "deposit" <br />and the bank subsequently manages <br />"withdrawals." This may involve a commitment to <br />keep water available for some length of time or <br />until withdrawn. In the second model type, the <br />institution helps transferors and transferees find <br />each other, usually imposing standard forms, <br />information and assurance requirements, and <br />rules. <br />~ Funding: The bank may act with its own funding <br />and with its own specific objectives in mind, or <br />act solely as a service provider (i.e., impartial to <br />any water transaction. <br />~ Pricing: The bank may set prices atpre-defined <br />levels, allow prices to float subject to a known <br />index or market condition, or the parties may <br />negotiate a price. <br />~ Arrangement Duration: A transaction time <br />between water "moving" among a transferor and a <br />transferee can be short, as with banks that wheel <br />direct flow waters, to indefinitely long, as may be <br />the case for groundwater based banks. <br />Colorado's Pilot Water Bank <br />Colorado's pilot water bank program was <br />established in the Arkansas Basin and provides a <br />mechanism for leasing stored water on a short- <br />term basis without permanently transferring the <br />water right to another user and prohibited use <br />outside of the basin. Hypothetically, the owners <br />of stored water in the Arkansas River Basin have <br />the option to lease that water during times of <br />drought or simply during periods in which they <br />desire to forego irrigation. However, this formal <br />water bank had little usage. It should be noted <br />that some of the discussions outlined below are <br />broader in scope than aspects solely associated <br />with the Arkansas pilot program. Colorado also <br />has an informal water bank involving leasing of <br />Colorado-Big Thompson (CBT) units in the <br />Northern Colorado Water Conservancy District <br />(NCWCD). <br />The lack of usage may be related to the <br />restrictions placed on the type of water (only <br />stored) and no demand due to lack of <br />infrastructure to deliver to source of demand and <br />restrictions on the market (only in basin uses). <br />The informal water bank involving leasing of CBT <br />units in the NCWCD has been more successful than <br />the Arkansas water bank. <br />Depending upon the perspective of a water user <br />desiring additional supplies, water yielded from a <br />water bank could be considered water necessary <br />in a dry year, drought recovery year(s), or for an <br />average to wet year (as may be the case with a <br />water provider heavily reliant on non-renewable <br />groundwater). <br />3-16 FINAL DRAFT <br />_~_-~ <br />~- ~ _ <br />~, - -; <br />~~~ ~, <br />