11c

• Board Meeting Date: 1/22/2008
• Description: CF Section – Construction Fund and Severance Tax Trust Fund Perpetual Base Account – New Loans - Lower Arkansas Water Management Association ‎(LAWMA)‎ - Keesee Ditch Water rights Acquisition
• Board Meetings - Doc Type: Memo

LAWMA -Water Rights Purchase Agenda Item 11 c
January 22-23, 2008
because those rights can be stored in the Offset Account and would assist LAWMA with placing a
cushion of replacement water in storage in John Martin Reservoir to assist it with making its required
replacements during a series of dry years. The State Engineer has encouraged LAWMA to find a
way to store more water in the Offset Account, and during the final phase of the Kansas v. Colorado
trial, the Special Master made it clear that LAWMA's continued and expanded use of the Offset
Account in John Martin Reservoir would be critical to insuring Colorado's ability to comply with the
Arkansas River Compact now and in the future.
Feasibility Studies
LAWMA, through its engineer Randy Hendrix, with Helton & Williamsen, P.C., and its attorney,
Richard Mehren, with Moses, Wittemyer, Harrison and Woodruff, P.C., have completed a feasibility
study in accordance with CWCB guidelines, dated January 2008.
Water Rights/Proposed Purchase
The Keesee Ditch is located on the mainstem of the Arkansas River approximately five miles
downstream of John Martin Reservoir. The Keesee Ditch shares a common diversion dam with the
Fort Bent Canal, and diverts from the south bank of the Arkansas River. Three priorities are decreed
to be diverted through the Keesee Ditch. Those priorities are No. 1 for 9.0 cubic feet per second
(cfs) with an appropriation date of March 31, 1871 which is senior to all water rights downstream on
the Arkansas River, and Priority No. 4 for 4.5 cfs with an appropriation date of December 31, 1883 is
senior to all but 24.75 cfs of water rights downstream on the Arkansas River. Accordingly, these two
water rights, totaling 13.5 cfs, generally are not affected by downstream river calls and can therefore
provide a consistent supply of replacement water to LAWMA even in dry years. The Keesee ditch
also includes Priority No. 1918-4 for 15.0 cfs with an appropriation date of September 3, 1893, and
the Keesee Ditch has an Article II Storage Account in John Martin Reservoir which is allocated
conservation storage water on an annual basis.
Under this purchase agreement, LAWMA would acquire the remaining '/ of the Keesee water rights,
and Keesee Article II Storage Account in John Martin Reservoir. Additionally, the remaining land
historically irrigated under the Keesee ditch would be dried-up.
Appraisal - An appraisal of the remaining one-half of the Keesee Ditch water rights was prepared in
March, 2006 by McCarty Land & Water Valuation, Inc. That appraisal estimated that the fair market
value was $6,000,000 (Based on a $3,000/AF of consumptive use water at an estimated yield of
2,000 AF) and is in the process of being updated as of the date of this memo. The updated
appraisal should be available before the January 22, 2008 CWCB Board Meeting. As part of the
purchase, LAWMA will also, acquire property rights in the form of 1) a real covenant for dry-up of
historically irrigated land; and 2) a real covenant for revegetation of dry-up lands, that is the
responsibility of the seller.
The Total Project cost is estimated to be as follows:
1. Acquire remaining'/ Keesee Water Rights $3,600,000
2. Engineering 50,000
TOTAL $3,650,000