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AGUA — Water Rights Purchase/Recharge Project
<br />September 22-23, 2003
<br />Agenda Item 5c
<br />AGUA relies heavily on annual or short-term leases for augmentation water. Typical lease sources
<br />include Pueblo Board of Water Works, SECWCD return flows (often up to 50% of AGUA's leased
<br />water need), Colorado Springs Utilities, Cherokee Metro District and the EIC. Currently AGUA
<br />leases about 92-95% of its replacement water. Lease agreements are negotiated on an annual
<br />basis, and therefore are subject to the terms and conditions imposed by the lessors. Due to
<br />uncertainty of availability and prices of leased water, AGUA has begun purchasing water rights for
<br />use in its augmentation plans. AGUA's goal is to acquire 50 to 60 percent of its total
<br />augmentation replacement water need during the next 20 to 25 years, and to continue to lease
<br />the remainder. In March 1998, with the help of a CWCB loan authorized in September 1997,
<br />AGUA purchased 1007 shares of the EIC from Mr. Dick Evans, AGUA President at that time.
<br />To further its goal of owning water, AGUA is currently requesting a loan for the purchase of an
<br />additional 785 EIC shares, offered by Mr. Dick Evans at $1,100 per share or a total cost of
<br />$863,500. In May 2003, the AGUA Board of Directors, absent Mr. Evans, current President,
<br />took action to pursue a CWCB loan to fund the purchase of the shares. With the additional
<br />shares of EIC, AGUA would own an average of about 12-15% of its annual replacement needs.
<br />AGUA has two existing loans with the CWCB, as summarized below:
<br />Loan No. Date of Principal Terms Current Annual Future
<br />Contract Balance Payment Payment
<br />C153800 10/23/97 $ 25,000 4% - 10 yrs $8,690.04 $3,082.27
<br />C153808 2/24/98 $ 590,590 3% - 40 yrs $600,872.67 $25,550.33 (1) $30,697.88 (2)
<br />Totals $ 615,590 $609,562.71
<br />(1) Deferred for 4 years (2002 through 2005)
<br />(2) New payment beginning 2006 through 2036
<br />In July 2002, CWCB granted AGUA a 4-year deferment on Loan No. C153808 to help it defray
<br />approximately $100,000 to $150,000 in legal and engineering fees related to obtaining a decree
<br />changing the use of the water rights represented by the purchased 1007 EIC shares, as well as to
<br />help AGUA with the financial impact of the drought. If the CWCB approves this loan request, AGUA
<br />will agree to increase fees. and to forego the remaining finro vears of the deferment. If the Board
<br />rescinds the deferral, the revised annual payment for the term of the loan would be $27,964. AGUA
<br />will add the 785-shares to its application for change of water rights, at minimal cost. In December
<br />2002, AGUA obtained a$100,000 Agricultural Emergency Drought grant from CWCB under S.B.
<br />02S-001 to help cover the costs of purchasing augmentation water. Disbursement of the funds by
<br />CWCB is in process.
<br />Proiect Need — AGUA annually submits an Arkansas River Replacement Plan (Plan) to the State
<br />Engineer's Office on March 1 st of each year. This Plan covers the upcoming water year (April
<br />through March of the following year) and is approved provided that AGUA demonstrates sources of
<br />adequate replacement water. The Plan presents a monthly schedule of replacement credits to be
<br />provided by each source to augment depletions. AGUA's recent history of total ordered pumping
<br />and wellhead depletions are shown below (including MAGUA, Booth, etc.) Because of the drought,
<br />2002 and 2003 were not typical years. With reduced availability of replacement sources, AGUA
<br />was unable to provide enough replacement water to support the total amount of pumping ordered by
<br />members. For example, of the 12,815 acre-feet of replacement water AGUA anticipated receiving
<br />from Pueblo, SECWCD and Cherokee, they received only 5,769 acre-feet, necessitating plan
<br />amendments. AGUA's March 1, 2002 Plan submittal (before amendments reflecting lack of
<br />replacement water) can be considered typical of its average annual operation.
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