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, i . . '~ MOSES, WITTEMYER, HARRISON AND WOODRUF"F", P. C. ~'<Y RECEIVED JUl 08 1998 LAW OFFICES 1002 WALNUT STREET, SUITE 300 Colorado Water Conservatic~ B.J~C' CHARLES N. WOODRUFF' (1941-1996) DAVlD L. HARRISON ..,lAMES R. MONTGOMERY TIMOTHY J. SEATON VERONICA A. SPERL.ING BOULDER, COLORADO 80302 TELEPHONE: (303) 443-8782 FAX: (303) 443_8796 COUNSEL. RAPHAEL J. MOSES .JOHN WITTEMYER GIL.BERT Y. MARCHAND, .JR. AMELIA S. WHITING KEL.LY J. CUSTER KEVIN J. KINNEAR ADDRESS CORRESPONDENCE TO: P. O. BOX 1440 BOULDER, CO 80.306-1440 SPECIAL COUNSEL HUNTLEY STONE July 6, 1998 Peter Evans, Acting Director Colorado Water Conservation Board 1313 Sherman Street, Room 721 Denver, CO 80203 Re: Lower Arkansas Water Manaqement Association Request for Authorization to Substitute Collateral Dear Peter: I am writing on behalf of the Lower Arkansas Water Management Association (LAWMA) to request authorization to use loan funds under Loan Contract No. C153768 to purchase shares in the Amity Mutual Irrigation Company. Bill Green of your staff and I have been discussing this request for the last several weeks and a report prepared by Helton & Williamsen with information that provides the basis for the request was provided to Mr. Green a couple of weeks ago. As you may recall, last year, the CWCB approved a $2.3 million loan to LAWMA for the purchase of 3,569 shares of the Highland Irrigation Company and 354 shares of the Fort Bent Ditch company. The CWCB also approved the use of the proceeds of the sale of the XY Ranch land (in the amount of $1,087,400) for the purchases. As of June 1, 1998, LAWMA has closed on the purchase of 3,382 shares of Highland and continues its efforts to buy the remaining 187 shares. To date, no Fort Bent shares have been purchased with CWCB funds. The shares which LAWMA contemplated buying at the time of its request to the CWCB are no longer available. While other Fort Bent shareholders have expressed an interest in selling their shares, LAWMA has also been offered the opportunity to buy 270 shares of stock in the Amity Mutual Ditch Company. I Both Fort Bent and Amity shares offer a good, reliable supply. However, Amity shares have the added benefits of further diversifying LAWMA's water rights portfolio, increasing storage reserves (with the addition of the Great Plains Reservoirs), and providing a source of replacement lower down in the system. In light of the additional advantages, LAWMA would prefer to buy the Amity shares over the Fort Bent shares.