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Approvals by neither the RRCA nor the Colorado Water Court are required to implement <br />the North Fork Lease. <br />8.0 SOCIOECONOMIC AND ENVIRONMENTAL IMPACTS OF THE PROJECT <br />The social and economic impact of the Transaction are most evident in an analysis of <br />the alternative, that is the failure of the Transaction which could result in the curtailment <br />of wells servicing 190,000 irrigated acres within Yuma County and the interruption of <br />water service to the residents in the Cities of Wray and Yuma, Colorado and the Town <br />of Eckley, Colorado. The impact of fallowing 190,000 irrigated acres was analyzed in <br />an economic development report ("EDR") conducted by researchers at the Department <br />of Agriculture and Resource Economics at Colorado State University, a copy of which is <br />attached to this study as Attachment 7. According to the EDR, the expected economic <br />activity generated from 190,000 acres of irrigated cropland within the area which would <br />be dried up by the threatened well curtailment exceeds $148 million dollars a year. In <br />addition, the EDR identifies more than $20 million dollars attributable to associated <br />economic activities including wholesale trade, lending and consulting. Thus, the annual <br />impact of curtailing the wells threatened by the litigation could result in a net loss of over <br />$170 million in economic activity each year. 5 In addition to the loss of direct and <br />indirect economic activity discussed above, the permanent fallowing of the 190,000 <br />acres would result in a reduction of market property values and the eventual <br />reclassification of the subject property for tax assessment purposes at lower rates. <br />The economic impact of the threatened well curtailment as outlined in the EDR is <br />devastating, however, EDR does not address two significant additional economic <br />consequences. First, the EDR does not address the impact of shutting down 11 high <br />capacity commercial wells and all of the municipal wells for the cities of Eckley, Wray <br />and Yuma with a combined population of approximately 5,750. Second, the EDR does <br />not address the effect of fallowing the subject property on "downstream" industries <br />which rely on agricultural products for their own operation (e.g., feed lots, dairies, <br />ethanol plants). <br />Currently there are few economic alternatives to agriculture within the YCWA PID and <br />as such, the losses described above and outlined in the EDR are not likely to be offset <br />by other industries. <br />Both the economy and the society of Yuma County, Colorado are heavily dependent on <br />agriculture with nearly 54% of the total annual value of sales and services coming from <br />agricultural industries. YCWA PID has not conducted a study of the potential impact on <br />the social fabric of its approximately 9,830 residents if the Transaction is not concluded <br />and the wells are curtailed as called for under the litigation, however, it is reasonable to <br />expect a migration of residents engaged in agricultural pursuits as well as the loss of an <br />established agricultural heritage in the plains of Colorado. <br />s See Table 3 in the EDR. <br />12368\1 \1204400.5 9 <br />