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<br />LAWMA. Water Rights Purcha.e
<br />July 28-29. 2003
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<br />Agenda Item 20b
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<br />Backaround
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<br />LAWMA was formed in 1973 for the primary purpose of replacing depletions from its members' well
<br />pumping, and other structures requiring augmentation, within the lower portion of the Arkansas River
<br />Basin, in order to comply with Colorado law and the Arkansas River Compact. LAWMA has 213
<br />shareholder members. There are currently 18,495 shares of LAWMA stock outstanding. For its
<br />2003 Arkansas River Use Rules replacement plan, LAWMA included 533 wells, of which 459 are
<br />located in the Arkansas River's mainstem area and 74 are located in tributary areas. Further
<br />broken-down by use, there are 488 irrigation wells, 32 municipal wells and 13 commercial wells.
<br />LAWMA's primary service area is the Arkansas River mainstem below John Martin Reservoir,
<br />although it has members in the Big Sandy Creek and Two Butte Creek basins and a few members
<br />above John Martin Reservoir. LAWMA membership also includes several municipal and rural
<br />domestic water suppliers that rely on Dakota and Cheyenne aquifer wells that are considered non-
<br />tributary and are not subject to the Arkansas River Use Rules.
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<br />LAWMA currently has four loans with the CWCB, as summarized below:
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<br />Loan No. Date of Principal Terms Cu rrent Annual Future
<br /> Contract Balance Payment Payment
<br />C153715 05/01/1997 $3,688,567 3% - 40 yrs $3,849,313 $122,000 $199,184 (1)
<br />C153678 05/11/1994 $ 65,000 4'1.% - 10 yrs $ 30,525 $11,052 (2)
<br />C153756 09/18/1997 $ 65,000 3'1.% -10 yrs $ 49,181 $ 9,154(3)
<br />C153768 OS/28/1997 $2,300,000 3% - 40 yrs . $2,300,000 $ 67,200 $118,397 (4)
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<br />Totals $6,118,567 . $6,229,019
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<br />(1) Beginning 2010 through 2036
<br />(2) Through 2006
<br />(3) Through 2009
<br />(4) Beginning 2014 through 2043 - This loan is still open with $1,875,584 in funds disbursed and
<br />accrued interest of $234,473 is due to CWCB.
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<br />In the late summer of 2001, the State of Colorado and LAWMA determined that it wouid be in their
<br />best Interest if LAWMA and its consultants took an active role in the final phase of the Kansas v.
<br />Colorado trial, in order to respond to Kansas' allegations against the LAWMA replacement plan.
<br />Accordingly, LAWMA and its consultants worked directly with Colorado on preparing detailed expert
<br />reports related to LAWMA's replacement plan and replacement water sources in response to
<br />Kansas' allegations. Those expert reports were submitted by Colorado to the Special Master and
<br />Kansas as part of Colorado's defense of the case. In totai LAWMA spent approximately $ 303,885 in
<br />engineering and legal expenses as a result of its need and Colorado's desire to have LAWMA
<br />participate in the trial. In order to free up some cash-flow for LAWMA to cover its expenses related
<br />to its direct participation in the trial, the CWCB agreed to defer some of LAWMA's CWCB loan
<br />payments. On September 25, 2001, the CWCB approved LAWMA's first loan deferral request and
<br />granted a one-year 100% deferral of its May 1, 2002 Contract No. C153715 loan payment in the .
<br />amount of $ 122,000. On November 26,2002, the CWCB approved LAWMA's second loan deferral
<br />request and granted a one-year 100% deferral of its May 1, 2003 Contract No. C153715 loan
<br />payment in the amount of $122,000, its July 1,2003 Contract No. C153756 loan payment in the
<br />amount of $ 7,718 and its November 1, 2003 Contract No. C153678 loan payment in the amount of
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