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<br />Peter Evans, Acting Director <br />Colorado Water Conservation Board <br />November 16, 1998 <br />Page 2 <br /> <br />required to complete in Water Court, and for payment of various <br />expenses of the Horse Creek group. The Agreement provided for <br />settlement of the Horse Creek segment of the Division 2 Water Court <br />case concerning applicability of the Arkansas River Regulations. <br />It also contemplated settlement of an augmentation plant to support <br />certain wells Rodney preisser, involving payment of $100,000 by <br />Preisser to Box Springs by way of additional compensation for the <br />effect on Box Springs by Preisser's wells (not part of the Horse <br />Creek group), supported by a separate CWCB loan to Preisser. All <br />aspects of the Settlement Agreement have now been fulfilled except <br />for the requested grant. <br /> <br />State responsibilitv. Prior to the tenure of any present <br />State official, the State issued numerous irrigation well permits <br />in the Horse Creek Basin which had the direct effect of depleting <br />the water supply available to Box Springs, which holds the senior <br />water rights at the lower end of the Basin. The owners of the <br />irrigation wells relied on the validity of the permits, did not <br />realize the effect they would have on Box Springs and established <br />irrigated agriculture which is the basis of part of the local <br />economy at this time. This action destroyed the value of Box <br />Springs' senior rights, ruining another part of the local economy. <br />There were two possible solutions: shutting down the wells which <br />would have had an immediate, disastrous economic effect on the well <br />'users, and would have taken some years to restore flow conditions <br />to Box Springs, or financial compensation of the Box Springs <br />shareholders. The latter course was selected, but without the <br />grant, the compensation to Box Springs is unacceptably inadequate. <br />The State Engineer has always recognized that had that office not <br />issued the permits for the irrigation wells in the Horse Creek <br />Basin, Box Springs' water rights would not have been impaired. This <br />effect is shown in the table "Estimated Injury to Box Springs <br />Canal Water Right" and the graph "Box Springs Cumulative Annual <br />Di versions" prepared by Gary B. Thompson, P. E., W. W . Wheeler & <br />Associates. <br /> <br />Previous CWCB action: in order to make the loan provided in <br />the Settlement Agreement, the CWCB obtained the authority in ~37- <br />60-122.4. (S.B. 97-008) to create the Horse Creek Basin Loan <br />Account in the amount of $915,000 from the Colorado water <br />conservation board construction fund. <br /> <br />Alternative Fundinq Sources: Box Springs and the Horse Creek <br />group have diligently examined other possible sources of grant <br /> <br />Krassa. Madsen &: MiUer.LLC <br />