26e

• Board Meeting Date: 11/19/2008
• Description: CF Section - New Project Loans - Republican River Water Conservation District - North Fork Water Rights Lease
• Board Meetings - Doc Type: Memo

Republican River Water Conservation District Agenda Item 26e
November 10 , 2008
Page 4 of 7

surface right s enior water rights on the North Fork of the Republican River for the rest of
2008 and a newly created Yuma County PID would buy the water rights for $20 million by the end
of 2008 . The Republica
purchase by agreeing to lease the water rights from the Yuma County PID for 20 years (North Fork
Lease). The $5 million is a one - time lease payment that will be paid to the surface ri ght owners at
closing.

An additional benefit of the water rights purchase is to assist the State of Colorado in complying
with the Republican River Compact by reducing the consumptive use charged to the State under the
Republican River Compact Administrat years by
approximately 2,500 AF/yr . The North Fork Lease will supplement the Republican River Compact
Compliance Pipeline and will reduce the amount of ground water that will be pumped during the
term of the No rth Fork Lease, thereby prolonging the life of the aquifer in the area of the wells that
will be used as Compact Compliance Wells.

Loan Feasibility Study

The Loan F easibility Study titled , dated October
2008, was prepared in part by James E. Slattery, PE, Slattery Aqua Engineering and Dennis
Montgomery, Esq., Hill & Robbins, P.C. The study was prepared in accordance with the CWCB
guidelines and includes : Republican District Enterprise formation documents, Purch ase Contracts,
lawsuit legal summary, and an Economic Development Report prepared by Colorado State
University.

Republican River Water Conservation District

The Republican District was established in 2004 by Senate Bill 04 - 235 to assist the State in
co m ply ing with the Compact. The Republican District is managed and controlled by a 15 - member
board of directors comprised of one member appointed by the county commissioners of each of the
seven counties wholly or partially within the Republican District , on e member appointed by the
boards of the seven ground water management districts within the Republican District , and one
member appointed by the Colorado Ground Water Commission (GWC) .

The Republican District establish ed a water activity enterprise in O cto ber 2004. The Enterprise
began impos ing a use fee of $ 5 .50 per assessed irrigated acre on diversions of ground water for
irrigation use by post - compact wells within the Republican District , which was increased to $14.50
per assessed irrigated acre in 2008 to generate revenues to address Compact compliance . There are
approximately 500, 0 00 assessed irrigated acres in the basin irrigat ed by post - compact wells.
Enterprise use f ees currently generate approximately $7 million in revenues annually. The
Enterprise has also imposed a use fee of $11.60 per AF on post - compact diversions of ground water
for municipal and commercial use. Municipal and commercial diversions within the Republican
District are small, but will generate an additional $ 119,000 in 200 8 .

Histo rically t he Republican District has used the Enterprise revenues to provide local cost - sharing
for federal programs designed to retire irrigated acreage in the basin, including the Republican
River Conservation Reserve Enhancement Program (CREP) and the En vironmental Quality
Improvement Program (EQIP). To date, approximately 30,000 irrigated acres have been