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. I. . . I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LA WMA's current permanent augmentation sources yield approximately 20,966 acre-feet annually, with a minimum dry-year yield of8,824 acre-feet. In 19 years out of 56, LA WMA' s water rights are not able to provide a full augmentation supply to its shareholders and they must reduce their ground water usage. In the most recent trial in Kansas v. Colorado, issues arose over the amount of dry-up and resulting transferrable consumptive use under the X - Y Canal, the Lamar and Manvel Canal, and the Fort Bent Canal. Issues also arose over the volume of LA WMA' s Highland Ditch water rights that should be credited to the Offset Account. In addition, other issues arose concerning Sisson-Stubbs irrigated acreages. These issues have the potential to reduce to some degree the amount of augmentation credit available from LA WMA' s current portfolio of augmentation water rights. Even without these potential reductions, and absent any increase in computed well depletions, on the grounds urged by the State of Kansas, LA WMA does not have sufficient water to pennit full pumping by its members during consecutive dry years. Thus, LA WMA has a need for additional augmentation water to help meet the demands of its members. The sources for augmentation of stream depletions upstream of John Martin Reservoir are, as a practical matter, limited to water rights with points of diversion upstream of John Martin Reservoir. The principal reason for this is that Article V.H. of the Compact prohibits priority rights decreed to ditches in Water District No. 67 from being transferred to other water districts in Colorado orto points of diversion or places of use upstream from John Martin Reservoir if the effect of the transfer would be to cause a material depletion in the usable quantity and availability of waters of the Arkansas River to water users in either Water District No. 67 or Kansas. In order to move a water right from Water District No. 67 to a point of diversion upstream ofJoOO Martin Reservoir, the owner of the water right must:first obtain a fInding from the Administration that no depletion or adverse effect will result from the proposed transfer or in the decrees. While this is not an absolute bar to the transfer of water upstream from Water District No. 67, it does create a substantial practical impediment to the movement of water upstream, particularly given the current climate of dispute between Colorado and Kansas over the waters of the Arkansas River and the operation of the Arkansas River Compact. This, in turn, means that as a practical matter, the market for water rights with decreed points of diversion in Water District No. 67 is limited to that water district. It is possible, however, to change water rights upstream of John Martin Reservoir to provide augmentation for water for water rights below John Martin Reservoir. This can most readily be accomplished by quantifying the upstream water right's consumptive use and then delivering that water to the Offset Account to replace post-Compact well depletions. Not all upstream water rights are suitable for this purpose because of the stream flow conditions on the Arkansas River between Pueblo and John Martin Reservoir. Transit losses on downstream delivery of water and the ability of certain water rights to dry the river at their points of diversion limit the ability to move water downstream. This serves to somewhat increase the geographic extent of the market of water rights that may be used for augmentation in Water District No. 67. Stream conditions, however limit the area from which upstream water rights practically may be acquired to provide augmentation supplies for Water District No. 67. Page 18 of 66