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Executive Summary <br />The North Fork Lease is part of a settlement of a lawsuit brought by certain surface <br />water right owners on the North Fork of the Republican River in Colorado. Yuma <br />County has agreed to purchase the water rights from the surface owners for a total <br />consideration of $20 million, subject to a successful election to issue bonds to pay for <br />the water rights. Yuma County will pay the surface owners $15 million if the bond <br />election is successful. The Republican River Water Conservation District (RRWCD), <br />acting by and through its Water Activity Enterprise (WAE), has agreed to lease the <br />water rights for 20 years for cone-time, upfront lease payment to the surface owners of <br />$5 million if the bond election is successful. <br />The North Fork Lease will assist the State of Colorado in complying with the Republican <br />River Compact by reducing the consumptive use charged to the State of Colorado <br />under the Republican River Compact Administration's accounting procedures over the <br />next 20 years by approximately 2,500 acre-feet per year. The North Fork Lease will <br />supplement the Republican River Compact Compliance Pipeline and will reduce the <br />amount of ground water that will need to be pumped during the term of the lease, <br />thereby prolonging the life of the aquifer in the area of the wells that will be used as <br />Compact Compliance Wells for the Pipeline project. <br />An additional benefit of the North Fork Lease is contribute to the settlement of a lawsuit <br />to redraw the boundaries of the Northern High Plains Designated Ground Water Basin <br />that could result in the curtailment of a large number of wells in the Republican River <br />Basin. If the boundaries of the Basin were redrawn as requested by the surface <br />owners, it would threaten the ability of well owners whose wells were excluded from the <br />Basin to pay use fees that are the source of revenues that will be pledged to repay the <br />CWCB loan for the Compact Compliance Pipeline. Thus, a benefit of the North Fork <br />Lease is to ensure the ability of the RRWCD WAE to repay the CWCB loan for the <br />Compact Compliance Pipeline. <br />The State of Colorado has exceeded its compact allocations in 2003, 2004, 2005, 2006, <br />and 2007 by an average of approximately 10,500 acre-feet per year. The Colorado <br />Water Conservation Board has approved a loan to the RRWCD WAE to construct the <br />Republican River Compact Compliance Pipeline, which will deliver ground water to the <br />North Fork of the Republican River to offset stream depletions. Colorado is expected to <br />exceed its compact allocations for decades into the future without the Compact <br />Compliance Pipeline. The North Fork Lease will reduce the need to pump ground water <br />by an average of approximately 2,500 acre-feet per year during the term of the lease, <br />thereby prolonging the life of the ground water rights that will be acquired for the <br />Pipeline project. <br />The RRWCD was formed in 2004 to assist the State of Colorado to comply with the <br />Compact. The RRWCD, acting through its WAE, is seeking a loan of $4.545 million <br />(including the 1 % loan origination fee) from the CWCB Water Project Construction Fund <br />to make cone-time, up-front lease payment of $5 million to lease surface water rights <br />that have historically diverted water for irrigation use from the North Fork of the <br />