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<br />. <br /> <br />. <br /> <br />. <br /> <br />Arkansas River Basin Issues <br /> <br />Reserved Rights Meeting: On May 4, the first supervised settlement meeting to discuss <br />Forest Service reserved rights claims in Division 2 was held in Colorado Springs. The parties <br />requested that retired water court Judge Tracey supervise the settlement process. The next <br />meeting is scheduled for July 6. Carol Angel from the AG's office will provide a full report at <br />our meeting. <br /> <br />Amity Vetoes Great Plains Reservoir State Park: During a special meeting March 30, <br />the shareholders of the Amity Mutual Irrigation Company voted not to accept the terms of an <br />agreement to build a State Park at the Great Plains Reservoirs. The proposed deal involved a <br />commitment of over $9 million from the DOW, State Parks, and Great Outdoors Colorado <br />(GOCO). Land adjacent to Nee Gronda Reservoir, where the park would have been built, had <br />already been purchased by GOCO several years ago. However, Amity shareholders, which own <br />the water in the reservoir, refused to sell a public recreational easement for the appraised value, <br />making construction of a state park impossible under state law. <br /> <br />The deal would also have involved a DOW purchase of water rights to help insure <br />adequate water levels in the lakes, several million dollars worth of improvements to the Amity <br />and Fort Lyon Canal systems, and perpetual maintenance funds to help with future operating <br />expenses of both canal companies. The Fort Lyon Canal, owned by a different group of <br />shareholders, was also involved because its canal helps bring Arkansas River water to the Great <br />Plains Reservoirs. Greg Waicher had made the park a top priority since his appointment to the <br />post in January 1999. Greg is still committed to building a state park in southeast Colorado and <br />the search for a different location, probably at John Martin Reservoir began immediately. <br /> <br />Model Land & Irrigation Company Collateral. In May 1999, we approved an <br />Emergency Infrastructure Repair Account Loan to the Model Land & Irrigation Company <br />(Company) for up to $335,000 to repair of the Model Dam which was breached in a flood that <br />same month. Two of the conditions of Board approval were that: <br />"The Company must provide collateral that is equivalent in value to the principal amount <br />of the loan and will provide any analyses and appraisals of the proposed collateral as <br />may be required to allow the Director of the CWCB to make a final determination as to <br />the adequacy of collateral. .. <br /> <br />"To the extent possible, the Company will pledge Model Land and Irrigation Company <br />water rights as all or a portion of the collateral for the loan. .. <br /> <br />We have been working with the Company's attorneys to use the Company's water rights <br />as collateral. We had hoped to obtain a security interest in the allotment contracts between the <br />Company and the Purgatoire River Water Conservancy District (District). Recently we learned <br />that, in order to obtain the permission of the District for this arrangement, we would have to <br />commit to purchasing water from the District in the event of foreclosure. We therefore asked for <br />an appraisal of the land owned by the Company. <br /> <br />An appraisal, which was done in 1997, indicates that the Company owns 2,627 acres of <br />land (irrigated and non-irrigated) with a total appraised value of$867,550. This results in an <br />average value of $330 per acre. I am satisfied that the average value of $330 per acre is <br /> <br />7 <br />