BOARD01632

• Board Meeting Date: 9/13/2004
• Description: ISF Section - Proposed Water Right Acquisition - Elkhead Reservoir Enlargement
• Board Meetings - Doc Type: Memo

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The second component of this acquisition involves the SUBLEASE of 2,000 AF of water from the
Elkhead Reservoir Enlargement for a period of 20 years (the "Short Term Water Supply") for the benefit of
endangered native fish species in the Yampa River. The primary lease will be between the River District
and Reclamation, and will provide up to 2,000 AF of additional water for the Short-Term Water Supply, The
Lease will be implemented through annual contracts with the River District, and water will be released on an
"as-needed" basis as determined by the Service. Pursuant to the terms of the Lease, Reclamation will pay
the River District for any water leased from the Short-Term Water Supply. Reclamation, on behalf of the
Service, will sublease, at no cost to the CWCB, all of its right, title and interest in the water it leases annually
from the River District for use by CWCB to monitor and protect to and through the Critical Habitat Reach of
the Yampa River. The CWCB will have no financial obligation with regard to the Short-Term Water Supply
or the Lease.

The Acquisition Agreement requires the CWCB to take such action as may be required to fully
exercise the conveyed water right and to coordinate, monitor and protect releases of water to and through
the, Critical Habitat Reach. The agreement also incorporates the provision from the 1993 Enforcement
Agreement which requires the Service (through the Recovery Program) to install operate and maintain any
stream gages required to ensure water releases are delivered to and through the Critical Habitat Reach of
the Yampa River.

Water ACQuisition Procedure

The attached Acquisition Agreement (Appendix 3) between the CWCB, River District, Reclamation
and the Service is being presented to the Board at this September 2004 Board Meeting for initial
consideration. The statutes provide 120 days for the Board to determine what terms and conditions it will
accept in an acquisition agreement for water, water rights, or interests in water to preserve or improve the
natural environment.

Furthermore, the ISF Rules require the Board to evaluate the "appropriateness" of the acquisition
and determine how best to utilize the acquired water rights to preserve or improve the natural environment.
The attached Preliminary Report (Appendix 4) contains additional technical information about the water
rights, instream flow needs for endangered fish, and other factors for the Board to consider in reviewing the
proposed acquisition. This meeting initiates the 120-day Board review period.

Staff has requested recommendations from the Division of Wildlife, the Division of Parks and
Outdoor Recreation, the U.S. Department of Agriculture and the U,S. Department of Interior, pursuant to
statute. Staff has also provided notice of the proposed acquisition to all persons included on the appropriate
ISF Subscription Mailing Lists pursuant to Rule 6; of the ISF Rules. Staff will report to the Board on any
comments or recommendations it receives.

Pursuant to Rule 6 of the ISF Rules, interested parties will have 30 days from the date of this Board
meeting to request a hearing on the proposed acquisition. If no hearing is requested, the Board may take
final action on the proposed acquisition at the November 2004 Board meeting. If a hearing is requested
pursuant to the Rules, the Board will consider the hearing request at its November 2004 meeting, and
consider final action on the proposal at the January 2005 Board meeting.

Staff Recommendation

Pursuant to ISF Rule 6b, the day the Board considers this memo will initiate the 120-day period for
Board review. No formal action is required at this time. The Board's action on this acquisition proposal
will occur at a subsequent meeting. At that meeting, the Board will decide:

How to utilize the acquired water;

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