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Approaches To Head off Conflicts <br />✓A form of "water bank" has been in <br />operation in Northern Colorado for <br />over 50 years. Water delivered from <br />the federal Colorado -Big Thompson <br />Project (C -BT) can be rented on an <br />annual basis between agricultural <br />water users and municipalities within <br />the Project. Once the buyer and seller <br />have reached agreement on the price, <br />water is transferred when the seller <br />simply sends a postcard to the water <br />district that manages the water from <br />the C -BT Project. Permanent transfers <br />of water within the District can occur <br />between willing buyers and sellers in a <br />process that takes months, not years, <br />to complete with transaction costs of a <br />few thousand dollars. Over the years, <br />municipalities have acquired additional <br />Project water to meet the needs of <br />their growing populations during <br />droughts. However, a substantial <br />amount of the municipally -held water <br />supplies are rented back to farmers in <br />normal years. This combination of <br />permanent transfers and annual <br />rentals has allowed the region to meet <br />the needs of a growing population and <br />protect a very important agricultural <br />economy. <br />17 <br />✓A dynamic similar to the one in <br />Northern Colorado is currently <br />developing in California, where farmers <br />have the option to sell water on a short <br />term basis to urban areas within <br />California that have short term needs. <br />This flexibility allows farmers an <br />additional option in years when the <br />market for agricultural products will not <br />produce an acceptable rate of return, <br />and preserves their ability to stay in <br />production in the long term. <br />,,'Three Idaho water banks enable water <br />users to transfer their surplus storage <br />entitlements to other uses. These water <br />banks helped provide in- stream flows <br />for ESA - listed species of salmon. While <br />controversial, it prevented conflict <br />between traditional water users and the <br />federal government in the <br />implementation of the ESA. <br />✓In 2000, the State of Colorado <br />authorized a five -year water banking <br />program for the Arkansas River Basin to <br />help farmers receive revenues for <br />temporarily leasing their water to others, <br />with the water rights remaining in <br />agriculture. <br />Ts" Yti j <br />.. ;71 -11 <br />I J9 <br />r'. <br />_ a <br />