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Section 6 Implementation and Recommendations for Colorado's Water Supply Future Water Supply Planning and Finance This Section of the CWCB manages the Construction Fund and Severance Tax Trust Fund Perpetual Base funds. The Board must Highlights: I manage the funds to meet • Construction Fund operational • Severance Tax Trust requirements, the Fund demand for loans and • Water Partnering non-reimbursable Projects investments. Currently only the Construction Fund can be used to pay for operational and non- reimbursable investment expenses. Obtaining the ability to manage the Perpetual Base Account conjunctively with Construction Funds will help address long-terms needs. The Section bas been challenged to defend the CW CB's financial resources and ensure that funds are not used for purposes unrelated to the CWCB's statutory authorizations. If the Board is to be successful in meeting the needs identified by SWSI it must have the ability to remain flexible and its funding sources must be protected, for without stable and reliable financing, none of the projects or programs identified can be implemented. efficiency in municipal water planning. Successes include: ~ Reaching consensus on how conservation may affect system reliability under various scenarios. ~ Quantification of potential long-term savings available from conservation measures. ~ Development of a range of potential water conservation savings from select measures that were in a comparable range to potential water conservation savings identified in the SW SI report. ~ Common understanding on reaching some issues. Limited progress was made on agricultural water efficiency and this remains a significant challenge. Based on initial work, there appears to be some opportunities to achieve additional efficiencies in agricultural water use. However, since agricultural return flows are used by downstream water users, at a watershed level there are significant limitations in the overall net potential savings that can be realized. Nevertheless, since agricultural water use accounts for over 85 percent of total water use in the state, follow-up efforts should include this group of water users. This issue is discussed in Section 3 of this report. New Program Initiatives and Highlights Input from CWCB Board and DNR from the CWCB Board meeting on November 14, 2007. 6.2 SWSI Phase 2 TRT Recommendations This section recaps the various TRT recommendations. 6.2.1 Conservation and Efficiency TRT As its mission, the M~SCI Water Conservation TRT set out to "develop a deeper understanding and greater consensus on conservation and efficiency for municipal, industrial, and agricultural water uses." In the category of urban water demand, the TRT made significant advances that forward our understanding of the important role of water conservation and In addition the impacts of climate variability on water conservation and system reliability have not been addressed by this TRT. The following conclusions and recommendations are made by CWCB staff after a review of the Water Conservation and Efficiency TRT efforts. The primary areas where there is a lack of consensus among TRT members is on the successful implementation of some of the conservation measures, especially turf replacement and the role of water conservation in eliminating the need for structural projects and processes that water providers have planned to meet future water demands. PRELIMINARY DRAFT 6-9