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major agreements are needed. To date, four agreements have been executed and-the remaining four are in various stages of negotiation. We hope to have the remaining agreements completed by the end of the year. Following is a brief discussion of each involved major entity, their involvement with the expansion, and any needed agreements. Also presented is the institutional background of the River District. City of Craig The City of Craig is a home rule community with a population of about 9,000 and is the owner and operator of Elkhead Reservoir. Craig owns 4,615 of of the existing capacity. In 2002, the River District entered into an agreement with Craig which allowed the River District to begin permitting the expansion. In July 2003, another agreement was completed which addresses construction of the expansion. For example, this agreement addresses a substitute supply of water for Craig during construction. The final agreement needed with Craig is a reservoir operating agreement which will address ongoing ownership and operation of the enlarged reservoir. This agreement is in draft form and is currently under negotiation. Yampa Participants The Yampa Participants own 8,522 of of capacity at Elkhead. The Participants are Tri-State Power and Generation, Xcel Energy, Salt River Power Authority, Platte River Power Authority, and Pacificorp. In September 2003, an agreement was executed with the Participants, which among others, provides for a temporary supply of water during construction. The Yampa Participants will also be a party to the operating agreement mentioned above. Upper Yampa Water Conservancy District The Upper Yampa District has agreed in concept to provide a temporary lease of water to replace the Participants' supply during construction. The lease agreement has been drafted and is currently under review by the Upper Yampa District. Colorado Division of Wildlife DOW has certain retained interests in the reservoir and property. For example, DOW holds a conservation easement that requires their consent to the enlargement. In August 2003, a Page -3-