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EXECUTIVE SUMMARY This report was prepared to document water supply planning studies completed for the Town of Paonia from 1999 through 2002. This final report was prepared by W. W. Wheeler and Associates, Inc. in accordance with the Colorado Water Conservation Board (CWCS) feasibility report guidelines. The report documents a CWCB loan for a water rights purchase associated with the Ark Land property located south and east of Paonia. Although the CWCS loan was approved in January 2002, Paonia declined to accept the loan because a final agreement could not be reached with the Ark Land Company. This report was finalized so that Paonia could receive the $10,000 CWCS grant authorized for the feasibility report. In June of 2002, Paonia's water supply system included 1,387 active water taps and 407 additional standby taps that could be put into service with continued western slope growth. The Town has enough water to meet its current and future demands during average years, but if these standby taps are put into s~:rvice in the near future, it could stress the Town's ability to provide water during dry years. During 2001 and 2002, the Town was working with the Ark Land Company and the Conservation Fund to purchase 770 acres of prime development land located south and east of Paonia. The land deal would have allowed the Town to remove 317 of its 407 standby taps from development pressure and keep the land in its current agricultural condition. The original asking price for the land was $3.0 million and the value of the 317 taps at the current out-of-town tap fee is over $2.0 million. The Town's estimated purchase price for the land was $1.9 million in January 2003. The firm yield of the Town was estimated to be 203 million gallons (623 acre- feet) per year during a two-year drought. The average inflow to the Town's two small water treatment plants in 1999 and 2000 was about 184 million gallons (565 acre- feet). With an average expected system-wide growth of 1.5 percent per year, the Town may reach its firm yield by the year 2007, and may need to implement short-term water restrictions during droughts. Paonia could significantly enhance its firm yield by providing additional storage for water that is currently spilled in its collection system and lost in its distribution system. During 1999 and 2000, at least 90 million gallons (276 acre-feet) of water was lost due to system spills that occurred during periods when the T!Own's spring-fed collection system exceeded demands. Paonia also lost approximately 43 million gallons (132 acre-feet) in its distribution system during this period. This feasibility report documents a master plan approach for improving Paonia's water supply system and includes a financial plan for implementing the first step of the master plan as it was presented to the CWCS in January 2003. The first step would have involved purchasing the Ark Land property. Subsequent steps were targeted at developing additional water storage for the Town.