BOARD01815

• Board Meeting Date: 9/21/1998
• Description: WSP Section - Arkansas River Basin Issues - Horse Creek Basin Issues - Status Report
• Board Meetings - Doc Type: Memo

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SEP-18-1998 11:21 FROM KRRSSR MRDSEN & MILLER

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Ilobett F. T, Kmaa. P.C."
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Pueblo. Colorado 81003
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September 18, 1998

Peter H. Evans, Acting Director
Colorado Water Conservation Board
1313 Sherman Street, Suite 721
Denver, CO 80203

VIA FAX: [phone]

Re: Horse Creek Basin Grant

Dear Peter:

We appreciate the willingness of the Colorado Water
Conservation Board to receive preliminary information concerning a
grant/loan reduction to the Box Springs Canal and Reservoir Company
and the Horse Creek Water Users Association at their La Junta
meeting on September 21. This letter will provide a background
summary of the matter.

As a result of the unrestricted issuance of well permits by
the State Engineer's Office in the 1950's and 1960's to irrigation
well users in the upper Horse Creek Basin, the water supply to the
Box Springs Company at the lower end of that Basin (north of
Ordway, Colorado), was substantially depleted. With the assistance
of Chuck Lile and Hal Simpson, and with the background of the
Kansas litigation and the Arkansas River rules, the Box Springs
Company, the Horse Creek Water Users Association and the State
Engineer after extensive negotiation and mediation entered into a
settlement agreement to obtain adequate compensation for the
depletion of the Box Springs water rights.

The Settlement Agreement provides at Paragraph 7.1 that the
parties shall jointly seek a grant from a suitable government
agency, of at least $350,000.00, to be allocated $200,000.00 to the
shareholders of Box Springs so that their total compensation will
be sufficient to allow them to replace their depleted water supply
and $150,000.00 to the Horse Creek group to pay down their CWeB
loan.

Box Springs and the Horse Creek group have diligently examined
possible sources of grant funds and have concluded that Water
Conservation board funding is the only viable source. This grant

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