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Loan Feasibility Study for Raw Water Acquisition and Utilization Page 12 8) The selected project will provide a cost effective method to satisfy the District's growing demand for water. These factors were used to evaluate the water projects retained in the preliminary screening process and select the best project for the utilization of the Pleasant Valley Ditch water rights. 6.2 ANALYSIS OF ALTERNATIVES 6.2.1 Analysis of Alternatives for Water Right Purchase The purpose of a water right purchase by the District is to assist in providing an adequate and reliable water supply for the current demand and eventual build out of the District. The water right purchases considered were water rights on Beaver Creek offered by BPW, Lester and Attebery Ditch water rights offered by the Grisenti family, and Pleasant Valley Ditch water rights offered by Mr. Denzel Goodwin. Water Rights on Beaver Creek In 2002, BPW and the District opened discussion of potential opportunities in the District's purchase of BPW's interest in two priorities of the Hulbert right, being 0.25 cfs with appropriation date of May 2, 1871 and 0.25 cfs with appropriation date May 31, 1876, and the first 4.86 cfs of the Fremont Supply water right with appropriation date July 15, 1885. This concept remains under consideration by both parties, but a purchase process has not been defined at this time. Due to the cost and unreliability of the Beaver Creek supply, the District may choose not io pursue this water offer further. Lester and Attebery Ditch Water Rights In 2004, the Grisenti family offered the District its ownership of unchanged water rights in the Lester and Attebery Ditch. These water rights included 5.7 cubic feet per second (cfs) of the 9.1 cfs from the Arkansas River decreed for irrigation use to the Lester and Attebery Ditch (more specifically described as 2.5 cfs of the 3.5 cfs decreed as Priority No. 150, 0.5 cfs of the 2.0 cfs decreed as Priority No. 158, and 2.7 of the 3.6 cfs decreed as Priority No. 343.5). Per a report prepared by Charles DiDomenico at Mangini Reeves, Inc., the consumptive use associated with these water rights was projected to be 207 of /year and the offering price for the water right was $26,452 per of of consumptive use (approximately $5,500,000). At an annual yield of 207 of consumptive use, the Grisenti ownership in the Lester and Attebery Ditch satisfies approximately 53 percent of the current base demand for water and will satisfy approximately 22 percent of the projected base demand at build -out. Utilization of the Grisenti ownership in the Lester and Attebery Ditch would require a Water Court filing to change the type of use from irrigation to all uses including municipal and augmentation, and a change the place of use. The estimated engineering cost to change the Grisenti ownership in the Lester and Attebery Ditch in Water Court is approximately $200,000. The Lester and Attebery Ditch water rights and land are currently encumbered by a 15 year lease with Castle Concrete. While the proximity of the Lester and Leonard Rice Engineers, Inc. August 2006 — 1018PEN05 GMS, Inc.