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<br />SECTlONFOUR
<br />
<br />Water Rights
<br />
<br />The Company currently owns the following water rights:
<br />
<br />I. Model Ditch, adjudicated in Case No. 6118, Las Animas County District Court, by decree
<br />dated January 12, 1925, for 200 cfs of water from the Purgatoire River, the Chicosa Arroyo
<br />and the Leitensdorfer Arroyo, for irrigation purposes, with appropriation date of January 22,
<br />1908, and Appropriation Priority No. 168, in Water District No. 19.
<br />
<br />2. Model Reservoir, adjudicated in Case No. 6118, Las Animas County District Court, by
<br />decree dated January 12,1925, for 20,000 acre-feet of water from the Purgatoire River, the
<br />Chicosa Arroyo, the Leitensdorder Arroyo and the Black Hills Arroyo, for agricultural and
<br />domestic purposes, with appropriation date of January 22, 1908, and Appropriation Priority
<br />No. 168, Reservoir Priority No. 10, in Water District No. 19; subject to the terms and
<br />conditions of the decree entered in Civil Action No. 19793, Las Animas County District
<br />Court, on April 15, 1965, in which the place of storage of the Model Reservoir water right
<br />was changed to the Trinidad Reservoir.
<br />
<br />3. 1.25 cfs of the Lewelling & McCormick Ditch, adjudicated by decree dated August 10, 1903,
<br />priority date January I, 1864, Appropriation Priority No. 13, in Water District No. 19, from
<br />the Purgatoire River, for irrigation purposes. Water from this water right can only be used
<br />for irrigation of the Company's lands lying under the Johns Flood Ditch system under
<br />decisions of the Colorado Supreme Court.
<br />
<br />4. 2.0 cfs of the Hoehne Ditch, adjudicated by decree dated August 10, 1903, priority date
<br />October 7, 1865, Appropriation Priority No. 20, in Water District No. 19, from the Purgatoire
<br />River, for irrigation purposes. Water from this water right can only be used for irrigation of
<br />the Company's lands lying under the Johns Flood Ditch system under decisions of the
<br />Colorado Supreme Court.
<br />
<br />In addition to the above water rights, there is a conditional water right for the Black Hills
<br />Reservoir for storage of24, 123 acre-feet of water from the Purgatoire River and other sources
<br />with a priority date of April 14, 1965, adjudicated in Case No. W-90, Water Division No.2, in a
<br />decree entered as of May 25, 1972. This water right is adjudicated for domestic, agricultural,
<br />industrial, recreation and other beneficial purposes. This water right is owned by the principal
<br />shareholders of the Company, who are the Thomas E. Oxley Trust, the John T. Oxley Estate, and
<br />the Mary Jane Tritsh Trust. Approximately 1,300 acre-feet of water was stored under this water
<br />right in Black Hills Reservoir in 1998, and was used for irrigation oflands owned by the Oxleys.
<br />
<br />The Company has granted the Purgatoire River Water Conservancy District the right to manage
<br />the four Company-owned water rights listed above pursuant to two contracts between the
<br />Company and the District dated May 28, 1966. One contract relates to the two Model water
<br />rights and the other contract relates to the Lewelling & McCormick Ditch and Hoehne Ditch
<br />water rights. Copies of the contracts are included in the Construction Fund Loan Application
<br />previously submitted to the CWCB. The Company usually receives its water from Trinidad
<br />Reservoir pursuant to these two contracts. Under the contracts and the Trinidad Project
<br />Operating Principles, water is stored in Trinidad Reservoir under the Model Reservoir storage
<br />right and under the Company's and other direct flow water rights managed by the District. In the
<br />spring of each year, the District determines how much water will be available from Trinidad
<br />Reservoir for irrigation of irrigable lands within the District. The District then allocates water to
<br />each of the ditches included in the Trinidad Project so that each irrigable acre in the District is
<br />allocated the same amount of water. This water can then be delivered on dam and to the various
<br />
<br />URS Greiner Woodward Clyde
<br />
<br />6800044333_00IR2.doc 31810O(2:20 PM)/PROJECTS 4-1
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