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I . The Colorado District is authorized by its statutes, inter alia, "to perform all <br />acts and things necessary or advisable to secure and insure an adequate supply of water, present and <br />future," for beneficial uses in the Colorado District. See § 37 -46 -107, (C.R.S. 1999). <br />2. The Upper Gunnison District is authorized by the Water Conservancy Act to <br />enter into contracts with the United States for use of water (§ 37- 45- 106(e), C.R.S. (1999)), and to <br />acquire water for use within the boundaries of the District (§ 37- 45- 1060), C.R.S. (1999)). <br />3. The Parties are authorized by statute to "cooperate or contract with one <br />another to provide any function, service or facility lawfully authorized to each" of them "including <br />the sharing of costs" but "only if such cooperation or contracts are authorized by each party... ". <br />§ 29 -1 -203, C.R.S. (1999). <br />D. The parties desire and intend by this Agreement to implement their separate <br />authorities and powers referred to above by cooperating and contracting as they are authorized and <br />empowered to do under § 29 -1- -203 in order to provide the functions and services, and the facilities, <br />if any, which are required to implement their Subordination Agreement obligations. <br />NOW, THEREFORE, it is agreed as follows: <br />1. Subordination Coordination Areas. The parties agree that the Subordination <br />Agreement allocates depletion entitlements among the 40,000 AF /year drainage area which will be <br />coordinated by the Upper Gunnison District and the two 10,000 AF /year drainage areas which will <br />be coordinated by the Colorado District. That allocation is based upon the location of the physical <br />diversion of water from the natural streams and aquifers of the Gunnison River basin. Therefore, <br />it is recognized and agreed that in some circumstances diversions for which one party coordinates <br />the depletion entitlements under the Subordination Agreement may relate to uses which actually are <br />made in the geographical area allocated to the other party. To the extent required and permitted by <br />law, where diversions occur within the Upper Gunnison District's area for use in the Colorado <br />District's area, the Upper Gunnison District is authorized by the Colorado District to and it shall <br />provide the subordination coordination functions and services for the benefit of end -users in the <br />Colorado District's areas; and where diversions occur within the Colorado District's area for use in <br />the Upper Gunnison District's area, the Colorado District is authorized by the Upper Gunnison <br />District to and it shall provide the subordination coordination functions and services for the benefit <br />of end -users in the Upper Gunnison District's area. <br />