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.' . e. PROJECT DESCRIPTION LA WMA's consultant, Helton & Williamsen of Englewood, has estimated that as a result of well depletions it may be necessary for LA WMA to be able to make replacements averaging about 9,100 acre-feet per year to Colorado surface water rights in the Arkansas Basin and about 8,000 acre-feet per year to usable flows at the Colorado-Kansas Stateline (these amounts are not additive). LA WMA currently has available to it a number of water rights and sources of supply to offset a major part of these estimated depletions. The proposed project involves the purchase of additional water rights for use in a plan of augmentation which LA WMA's consultant estimates will offset, on an average annual basis, virtually all current depletions attributable to LA WMA members well pumping. The specific properties involved in the proposed purchase and the estimated prices are: (1) the X- Y Ranch with 66.0 cubic feet per second (cfs) of surface water rights, IS alluvial wells and approximately 3,000 acres of presently irrigated land at $3,008,000, (2) An additional 3.0 cfs of X- Y surface rights at $51,600, and (3) 4,380 shares of the Manvel Canal and Irrigation Company at $652,620. The total estimated cost then amounts to $3,712,220. All three project components are located in the lower part of the basin below John Martin Reservoir. LA WMA currently has an option agreement for purchase of item (1) above and is negotiating option agreements on the other two items. The X-Y Ranch option agreement calls for the payment by LA WMA of $500,000 within ten days of October IS, 1995 with the remainder of the purchase price due at closing which is October IS, 1996. If for any reason LA WMA does not close, the entire $500,000 is refundable. It is expected that the terms of all three option agreements will be identical with the exception of the dollar amounts involved. The Association is requesting a one-year loan for $714,300 to secure the options to the three purchases listed above. The amounts requested for each option agreement are: Item The X-Y Ranch, 66.0 cfs, and 15 wells Additional 3.0 cfs of X- Y water rights Manvel Canal and Irrigation Co., 4,380 shares Amount ~ dau>>t p~ $500,000 17,200 197.100 Total: $714,300 It is LA WMA's intent to request a Construction Fund loan for the balance of the purchases in 1996. It should also be noted that LA WMA intends to sell the X - Y Ranch lands included in the $3,008,000 estimated purchase price. The contract, which would be negotiated between LA WMA and the Board prior to lending the full $3,008,000, would specify how the proceeds from the sale and the issue of collateral would be dealt with if the Board approves the loan. LA WMA has proposed applying an amount equivalent to the proceeds of the sale to the purchase of additional water rights.