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Administration: Administration of the water rights associated with the System involves <br />interaction with the Water District 6 Water Commissioner and the Division 1 Engineer. <br />OPERATIONAL INFORMATION <br />Irrigation Season <br />During the irrigation season, FRICO-Marshall system irrigation demands are met from <br />Upper Community Ditch, when the ditch is in priority. Generally by early July, irrigation <br />demands are met by releases from Marshall Lake and the other smaller FRICO reservoirs. <br />Non-Irrigation Season <br />The Marshall Lake storage right is one of the senior rights during the non-irrigation season. <br />Marshall continues to store through early summer. Irrigation water not used by shareholders <br />prior to October 31 of each year is carried over to the next year and reallocated to all <br />shareholders. Historically, there has been minimal carryover storage. <br />FRICO is a mutual ditch company and allocates water to its shareholders based on a pro-rata <br />portion of the total amount of water diverted into the system, including releases from storage, <br />regardless of the location of each shareholder within the Marshall Lake Division. Reservoir <br />losses and evaporation and ditch losses are subtracted from the water in storage to determine the <br />headgate yield allocated per share. At the beginning of the irrigation season, the first allocation <br />is made with a conservation pool to allow for variable reservoir and ditch losses. As the amount <br />of water remaining in storage or from direct diversions allows, additional allocations maybe <br />made as the irrigation season progresses. <br />FRICO and Louisville entered into an agreement on November 15, 1978 which allows Louisville <br />to utilize excess storage capacity in Marshall Lake and excess conveyance capacity in the <br />Community Ditch when it is not used by FRICO shareholders. The agreement does not apply to <br />water owned by Louisville through stock ownership in FRICO. Water carried through the <br />system under water rights not owned by FRICO-Marshall is referred to as "foreign water". <br />The following provides more details on this agreement: <br />Marshall Lake Storage Agreement -Louisville can store its foreign water (subject to <br />seepage, evaporation, and carriage losses) when there is storage space available that is <br />not needed by other reservoir shareholders. If the shareholders require storage space <br />after Louisville has stored foreign water, then Louisville must release its water. Rather <br />than releasing by physically spilling water to make the space available, Louisville books <br />its water over to the FRICO shareholders. The bookover accounting is performed on a <br />daily basis and the agreement can be revisited based on present or future projects that <br />FRICO may undertake. Louisville must bookover twenty percent of all foreign water <br />stored to FRICO. <br />Upper Community Ditch Convey -Louisville can convey its foreign water through <br />the Upper Community Ditch when there is conveyance space not needed by other <br />FRICO_Marshall.doc 10 of 12 <br />