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Lower Poudre Augmentation Company March 12-13, 2007 Agenda Item 16a ~~ dry-up of irrigated land at the Cornish Plains property; and various other sources, including some additional rental of native waters for return flows to the Poudre River. AUQmentation Plan - LPAC has filed a permanent well augmentation plan that is pending in Division 1 Water Court (Case No. 04CW025). The original plan filed by the Irrigating Company in February 2004 was amended in December 2006, assigning the plan to LPAC. Sources of water for the plan are direct releases or by-passes of augmentation water, recharge to the alluvial aquifer along segments of the Greeley NO.2 canal or off-canal recharge sites, augmentation wells, and other potential sources. Also, in December 2006, a change of use application (Case No. 06CW295) was filed to convert, 277 shares of the Irrigating Company (2,500 shares total) and 271.5 shares of Reservoir Company (3,000 shares total) from irrigation to augmentation. These surface rights are pledged by the well owners in perpetuity, to be used in the Augmentation Plan. Proposed Proiect - LPAC proposes to purchase the Timnath Flatiron Reservoir and 4.5 shares of Boxelder Ditch, and construct the necessary improvements to utilize the reservoir for augmentation purposes. The reservoir is located in Larimer County at the western edge of the Town of Timnath, in the northeast corner of 1-25 and Harmony Road. The reservoir is located on the east side of 1-25 and the conveyance system begins west of 1-25 at the Boxelder Ditch and crosses under the highway at the northwest corner of the reservoir. The reservoir has a storage capacity of 657 AF, with a depth of 12-15 feet, but needs additional inlet and outlet facilities to operate as an augmentation facility. The reservoir area was mined by the current owner Flatiron Companies for sand and gravel resources and once mining was complete the pit was lined with a clay liner. The completed reservoir received State Engineer's Office (SEa) certification as a lined gravel pit storage facility on February 4, 2004. The reservoir is located below grade and therefore is not considered a jurisdictional dam by the SEa. The reservoir would be filled from a lateral off the Boxelder Ditch on the west side of 1-25, and an agreement (dated January 10, 2005) exists with the Boxelder Ditch Company to allow the use of surplus ditch capacity to carry additional water from the Cache la Poudre River to the reservoir. The agreement is assignable. The reservoir location is desirable because of it's location relative to the Irrigating Company, and the depletions associated with the LPAC Augmentation Plan. The acquisition of the Boxelder Ditch shares provides the LPAC a good senior right with the flexibility to respond quickly to immediate augmentation needs. Water to fill the reservoir would come from the various sources available to LPAC through its augmentation plan - the Boxelder Ditch, Timnath Reservoir exchanges, water from the Irrigating Company and Reservoir Company change case, lease and rental water, and a future junior storage decree from the Timnath Flatiron Reservoir. The Irrigating Company originally contracted to purchase the reservoir and water rights in September 2005, and has been operating with a verbal commitment for contract extension. An amended purchase agreement is currently in process. Also, in conjunction with the proposed project, LPAC will file concurrent water court applications for: 1. A Change of Use for 4.5 shares of Soxelder Ditch, from irrigation to augmentation. 2. A Junior Storage Decree and Diversion for Timnath Flatiron Reservoir. Feasibilitv Studies LPAC, through their engineer Applegate Group, Inc., has completed the feasibility study in accordance with CWCS guidelines. The study includes an assessment of alternatives to provide augmentation water for its well users. 20f6