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San Luis Valley Water Conservancy District July 15, 2008 Page 2 of6 Agenda Item 16c Background The District operates a Water Augmentation Program within a portion of the San Luis Valley and the upper Rio Grande River Basin in Colorado. The Program has provided augmentation water primarily to residential and commercial water users since 1984. Since its first Water Court Decree's approval, augmentation water has been added to the Program through subsequent cases. The District's service area includes portions of Rio Grande, A1amosa, Saguache, Mineral and Hinsdale Counties. The actual augmentation service area is limited to the geographic area where depletions from augmented wells and ponds can be replaced by the District augmentation plans, either directly or by exchange. The District's Augmentation Program was developed to replace stream and river depletions resulting from withdrawal of groundwater through out-of-priority wells serving primarily residential and commercial uses. Rio Grande and transmountain surface water rights have been acquired by the District to replace these depletions. To replace depletions at the time and place that they occur, upstream water storage rights have been obtained through agreements with Rio Grande, Santa Maria and Continental Reservoirs. Through the use of reservoir releases and surface diversions, the District replaces depletions resulting from wells included in its Augmentation Program. Loan Feasibility Study The Loan Feasibility Study titled "Feasibility Study - Pine River Weminuche Pass Ditch Water Rights Acquisition, May 2008" was prepared for the District by Allen Davey, P.E. with Davis Engineering Service, Inc., Alamosa with assistance from Mike Gibson, Manager of the District. The study was prepared in accordance with the CWCB guidelines. San Luis Valley Water Conservancy District In 1949, the District was organized pursuant to the Water Conservancy Act by District Court in Alamosa, Colorado. Originally the District included the cities of Alamosa, Monte Vista, Del Norte, Center and Hooper and a patchwork of farm and ranch land that had petitioned into the new District. In 1984, the District Board of Directors decided to expand the boundaries and focus on establishing a central Augmentation Program. Revenue to the District consists of a current ad valorem tax of 0.483 mils and income from augmentation water sales and maintenance fees. The District facilitates its Augmentation Program through a Water Activities Enterprise. Water Rights The District intends to acquire additional water rights to add to its Augmentation Program. The new water rights are part of the Pine River Weminuche Pass Ditch (Ditch), which has the following decrees: