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e . . COLORADO WATER CONSERVATION BOARD Clinton Reservoir January, 1992 Backqround The limits of available water supply in Summit County have become apparent, and similarly the shortages of water in Grand County have been serious for years. The Board was involved in contentious complex negotiations concerning instream flow claims in the Fraser and Blue River valleys in large part because the available water was so short in both areas. Now an opportunity has arisen to provide about 2100 acre-feet of new water supplies for users in both counties by purchase of an existing facility, Clinton Reservoir, from Amax. In recent years, both the Colorado Water Resources and Power Development Authority and the Board participated in or sponsored planning studies to identify opportunities for water supply development in those counties without promising results. Thus, the availability of an existing facility with a significant yield is worth pursuing. Although interests in both counties have requested Construction Fund assistance, their circumstances are distinctly different, and different financing arrangements are needed. Successful purchase with Board financial assistance would also entail execution of a complicated multi-party agreement involving the Board for both loan financing and protection of instream flow appropriations and decrees; the Clinton Reservoir Company to be formed by the water users, and the Denver Water Board because its facilities make implementation possible. The Colorado River Water Conservation District may also be involved. Discussion Purchase of Clinton Reservoir by a new entity is still in the development stage. Amax has set June, 1992, for completion of a deal. I am aSking the Board to consider this opportunity at this stage of development for two reasons: one, is the advantage of making available new water supplies in two counties with increasing demands; and second, because the Construction Fund can be a flexible vehicle to help assure that a complicated arrangement among the interested parties can be accomplished. Although the. first reason helps fulfill the Board I s first priority for the fund, the second requires further explanation. The financial status of the two areas is quite different. Although the Summit County users have explored other financing, including the Colorado Water Resources and Power Development Authority, and probably could finance that portion of the purchase elsewhere, the