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The Opportunity. Front Range M8~1 users are seeking additional water rights to <br />address the reliability of their supplies in fight of the unprecedented drought of 2002. They <br />are also seeking insurance against the potential for a call on the Colorado River, which <br />would negatively impact relatively junior municipal trans-basin diversions. In addition, M&I <br />users need additional water supplies to meet the demands of growth, as documented by <br />SWSI. <br />Expectations of the Lower District. Creation of the Super Ditch Company to provide <br />a voluntary alternative option to Lower Valley irrigators for the economic use of their water is <br />the number one priority of the Board of Directors of the Lower District. Special counsel, staff <br />and board members of the Lower District have been working on this concept for nearly five <br />years. In furtherance of this effort, the Lower District has expended roughly $750,000 to <br />date on technical, institutional, and legal analyses to further the Super Ditch Company. The <br />Lower District has been working closely with irrigator-representatives of Lower Valley ditch <br />companies for over a year on the institutional aspects of the Super Ditch Company, focusing <br />on how the company will be organized and operated. The Lower District has alsa been <br />negotiating with potential lessees since 2004, and has entered into two assignable letters of <br />intent with M&I lessees since last fall. Accordingly, the Lower District expects that in 2008 <br />Lower Valley irrigators will incorporate the Super Ditch Company, and the company will <br />complete negotiations and enter into ane or more long-term water leases with M&I users. <br />Importance to Lower District. The Lower District was "established for the purposes <br />of conservation of the water resources within the District, [and] for their greatest beneficial <br />use." In the Matter of the Lower Arkansas Valley Water Conservancy District, Case No. <br />02CV793 (Pueblo County Colo. Dist. Court, 2002}. The Lower District has undertaken <br />development of the Super Ditch Company for several reasons: <br />The Super Ditch Company furthers the primary mission that the voters in SE <br />Colorado tasked the Lower District with achieving. Creation of the Super Ditch <br />Company is the number one priority of the Board of the Lower District for 2008. <br />2. An alternative to historical buy-and-dry is desperately needed to provide owners of <br />irrigation water rights an economically viable attractive alternative to selling their <br />water rights outright. <br />3. Land fallowing and water leasing has been discussed in water circles and academia <br />for decades, has been successfully tested and implemented in California in a much <br />simpler institutional and legal setting, but has yet to be proven in Colorado. <br />4. The complexity and resources required to develop the Super Ditch Company are <br />beyond the capacity of individual shareholders, ditch companies, and potential water <br />users/lessees. In other words, someone has to step up and try to make fallowing- <br />leasing work, and the Lower District has both volunteered and committed to the <br />challenge. <br />