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Page 2 Vallecito Reservoir was decreed in 1966 for 129,674 AF, and currently provides a supplemental supply of water to decreed diversions downstream from the reservoir. The diversions range in amount from less than 10 cfs to approximately 300 cfs. In addition, during the winter . months, PRill and the Tribe have voluntarily made winter releases to the Pine River, which have been charged as water which could have been stored as part of the fill calculation. During the drought of 2002, there was insufficient storage in Vallecito to fully meet contract obligations. PRill and the Tribe have indicated their intent to adjust operations to secure a fill when water is legally and physically available for storage, These changes may result in reduced winter releases from the reservoir. At the February 2003 workshop, Steve Harris presented the letter from PRill and the Tribe and requested staff to consider the "water donation" proposal in lieu of a new instream flow appropriation. Staff agreed to work with all parties towards development of a plan that would include a potential water acquisition agreement to provide for stream flow protection at a level equal to or greater than a standard new instream flow appropriation, while allowing PRill and the Tribe more flexibility in their day-to-day operations. Staff believed that, if successful, the acquisition proposal could be considered in lieu of a new instream flow appropriation. All parties agreed that CDOW would collect additional field data, and that CWCB would not move forward with any new appropriations in Water Division 7 until 2005. Since 2003, staff has worked with PRID, the Tribe, the Division of Wildlife and the Attorney General's Office to craft an agreement aimed at achieving the identified objectives, Throughout this process, staff has consulted with the original proponents as well as CWCB Board member Don Schwindt, the Division Engineer and DWR staff. Staff has received the attached letters from PRill and the Tribe, and believes the agreement is now in a form to present conceptually to the Board. No formal action is required at this time. The parties expect that the agreemeut will be fiualized . and presented to the Board for initial consideration at its November 2005 Board meeting. Summary of Proposal The goal of the proposed water acquisition agreement is to provide for stream flow protection at a level equal to or greater than a standard new instream flow appropriation, while allowing PRID and the Tribe flexibility in reservoir operations, Staff, PRID and the Tribe have reviewed historic reservoir operations and developed a framework for the agreement which focuses on three distinct hydrologic scenarios tied to winter storage levels. Under each winter scenario, PRill and the Tribe have committed to donate a specified amount of stored water to the Board to preserve the natural environment in the Pine River from the outlet of Vallecito Reservoir downstream to the Highway 160 Bridge at Hayfield. During the summer months, the "donated water" would consist primarily of water delivered to meet contract obligations; however, PRID and the Tribe have also committed to guarantee a minimum flow to preserve the natural environment through the instream flow reach identified in the agreement. During both the summer and winter periods, the agreement provides for reduced releases during emergencies, shortages or projected shortages, and establishes the minimum release during those times. The agreement also includes the following provisions: . PRID and the Tribe may provide additional amounts of donated water to improve the natural environment. · CWCB shall not use the donation agreement to oppose any water right application on the Pine River so long as said application does not affect PRill or the Tribe's ability to provide Flood Protection. Water Project Planning and Financing. Stream and Lake Protection Water Supply Protection. Conservation Planning .