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institutional details. Irrigators will own and control the Super Ditch Company. Each <br />irrigagor whose water rights are leased by to another user will hold shares of classified stock <br />that evidences that the Participating Irrigator's water rights are under lease and of a number <br />reflecting the value of those water rights measured in accordance with their yield and other <br />factors. An irrigator whose lease of water has expired will cease to hold the shares <br />acquired. <br />The Super Ditch Company will be managed under the direction of a Board of <br />Directors elected by the shareholders. Governance will forever remain in the hands of <br />Participating Irrigators pursuant to the articles of incorporation. The Board of Directors may <br />establish any number of committees, including advisory committees that include committee <br />members who are not themselves shareholders but bring expertise in matters such as water <br />law, finance, trading mechanisms and the like. <br />The Super Ditch Company will earn revenues to operate the program from two <br />sources. First, the Company will charge membership fees to M&I users to lease water. <br />Second, the Company will charge irrigators for operating the leases, similar to ditch <br />company assessments. <br />Legal details. Many forms of legal entities -from corporations to cooperatives and <br />limited liability companies, although not mutual ditch and reservoir companies or non-profits <br />-are available for enterprises such as the Super Ditch Company. The Steering Committee <br />is pursuing afor-profit Colorado corporation beause of its inherent flexibility, although it <br />could be converted to a cooperative fallowing incorporation. <br />The Super Ditch Company will be responsible for engineering, drafting, filing, and <br />adjudicating changes of water rights for the leases, purusant to CRS § 37-92-305(3). It is <br />expected separate adjudications will be necessary for each lease, primarly because the <br />places and types of the new uses will be unique to the lessees, although multiple entities <br />may particpate in one single lease. The Super Ditch Company will also be responsible for <br />obtaining the approval of the State Engineer for substitute water supply plans required to <br />operate the leases while the applications are pending in water court, pursuant to CRS 37- <br />92-308(4). The Super Ditch Company will also be responsible for obtaining necessary land <br />use permits, i.e., county 1041 permits from Pueblo, Prowers, Otero and Bent counties, as <br />necessary based on the location of irrgated land included in the leases. <br />Project History. Shortly after the formation of the Lower District in 2002, special <br />counsel initiated informal discussions with an M&i user that historically purchased Lower <br />Valley irrigation water rights on leasing rather than purchasing water to meet their future <br />water supply needs. In depth discussions about the creation of a water leasing program <br />began with another M&I user that historically purchased Lower Valley irrigation rights in <br />2004, and expanded to include a working group of attorneys representing the Lower <br />^istrict, Colorado Springs, Aurora, Pueblo Board of Water Works, and the Southeastern <br />Colorado Water Conservancy District in 20(]5. Meeting bi-monthly for nearly a year, the <br />attorneys' working group developed a detailed outline for the formation and operation of a <br />fallowing-leasing program by early 2006. <br />