29 ‎(3)‎

• Board Meeting Date: 5/21/2008
• Description: IWMD Section - Alternative Agricultural Water Transfer Methods - Arkansas and South Platte Basins Competitive Grant Program
• Board Meetings - Doc Type: Memo

Institutional details. Irrigators will awn and central the Super Ditch Company. Each
irrigaoar whose water rights are leased by to anather user will bald shares of classified stock
that evidences that the Participating Irrigator's water rights are under lease and of a number
reflecting the value of those water rights measured in accordance vith their yield and other
factors, An irrigator whose lease of water has expired will cease to bald the shares
acquired.
The Super Ditch Company will be managed under the direction of a Board of
Directors elected by the shareholders. avernance will forever remain in the hands of
Participating Irrigators pursuant to the articles of incorporation. The Board of Directors may
establish any number of committees, including advisory committees that include committee
members who are not themselves shareholders but bring expertise in matters such as water
law, finance, trading mechanisms and the fke.
The Super Ditch Company will earn revenues to operate the program from two
sources. First, the Company will charge membership fees to M&1 users to lease water.
Second, the Company will charge irrigators far operating the leases, similar to ditch
company assessments.
Legal details. Many forms of legal entities -from corporations to cooperatives and
limited liability companies, although not mutual ditch and reservoir companies arnnn-profits
-are available for enterprises such as the Super ditch Company. The Steering Cammifikee
is pursuing afar-praflt Colorado corporation beause of its inherent flexibility, although it
could be converted to a cooperative following incorporation.
The Super Ditch Company will be responsible far engineering, drafting, filing, and
adjudicating changes of water rights for the leases, purssant to CRS 3~~9~-g5~3}. It i
expected separate adjudications will be necessary for each lease, primarly because the
places and types of the nev uses will be unique to the lessees, although multiple entities
may particpate in one single lease. The Super Ditch Company will also be responsible for
obtaining the approval of the State Engineer for substitute water supply plans required to
operate the leases v~hile the applications are pending in water court, pursuant to CRS 37-
g~-3g~~4}. The Super Ditch Company will also be responsible for obtaining necessary land
use permits, i.e., county 104 permits from Puebla, Provers, Otero and Bent counties, as
necessary based an the location of irrgated land included in the leases.
Pro~ect Histo .Shortly after the formation of the Lager District in 2ag~, special
counsel initiated informal discussions with an M&1 user that historically purchased Lower
Valley irrigation water rights an leasing rather than purchasing water to meet their future
water supply needs. In depth discussions about the creation of a water leasing program
began with anather M&1 user that historically purchased Lower Valley irrigation rights in
200, and expanded to include a working group of attorneys representing the Lower
District, Colorado Springs, Aurora, Puebla Board of water Ilvarks, and the Southeastern
Colorado Uvater Canse~rancy District in 2~g5. Meeting bi~mor~thly far nearly a year, the
attorneys' working group developed a detailed outline far the formation and operation of a
fallowing-leasing program by early ~g~fi.