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legal proceeding. <br />SYSTEM OVERVIEW <br />The Highland Ditch Company is a significant irrigation ditch company providing direct flow <br />water and storage water to irrigators located north of St. Vrain Creek below the Town of Lyons. <br />The ditch company was incorporated in 1872 and consists of 700 outstanding shares of stock. No <br />changes have been adjudicated to the ditch company shares to-date as the ditch company bylaws <br />preclude shares from being changed to other uses. Shareholders are entitled to equal portions of <br />irrigation water supplies available pursuant to the ditch company's rights holdings. <br />Direct flow water is conveyed for direct irrigation uses and storage in company reservoirs <br />through the Highland Ditch headgate, located on the north side of the St. Vrain River below the <br />Town of Lyons. Storage units under the Highland Ditch include Highland Reservoir Nos. 1, 2, <br />and 3. Some individual shareholders have smaller privately-owned storage units that are filled <br />through the Highland Ditch. The ditch company also owns storage in other St. Vrain River basin <br />reservoirs that release water for re-diversion at the Highland Ditch headgate (from the upstream <br />Beaver Park Reservoir) or for replacement of ditch diversions by exchange (from the <br />downstream Foothills Reservoir and McIntosh Lake). The ditch company also uses transbasin <br />water from the Colorado Big Thompson Project (C-BT). <br />Key structures identified in the Highland Ditch System are as follows <br />1) Highland Ditch <br />2) Highland Ditch On-Ditch Reservoir System <br />• Highland Reservoir No. 1 <br />• Highland Reservoir No. 2 <br />• Highland Reservoir No. 3 <br />3) Highland Ditch Exchange Reservoir System <br />• Foothills Reservoir <br />• McIntosh Lake <br />• Beaver Park Reservoir (included here although located above Highland Ditch <br />headgate) <br />These infrastructure components are owned by the Highland Ditch Company: <br />Highland Ditch Company <br />4309 Highway 66 <br />Longmont, Colorado 80504 <br />Contact: Robert Schlagel <br />Phone: 970.535.4531 <br />The general locations of the Highland Ditch system and associated structures are shown on <br />Figure 1. <br />Highland Ditch Operating Memorandum.doc 2 of 16 February 24, 2005 <br />