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I I I I I I I I I I I I I I I I I I I 3) Establish an augmentation plan based on importation of water owned by Preisser from outside the Horse Creek drainage basin. This would require the construction of a pipeline and booster delivery system to transport .water from the Upper Black Squirrel designated ground water basin, located approximately 30 miles west, to the Preisser property in Lincoln County. Although feasible in concept, providing 100% consumptive water for replacement, augmentation, or other uses in the Horse Creek basin, such a system would cost several million dollars to construct, with more funds needed for acquisition of rights of way, operation, maintenance, and replacement. The high costs involved render this alternative non feasible. 4) Establish an augmentation plan based on the purchase of Box Springs water rights, and establish a settlement agreement with Smith, Reid, HCWUA, and Box Springs. The Box Springs water rights are the senior rights in Horse Creek, and are the only senior rights in the basin of sufficient quantity for an augmentation plan that are available for purchase by Preisser. The Horse Creek basin is not tributary to the Arkansas River, so an augmentation plan based on these rig~ts.w.o~l~ be inE~o.I:~~ 1!.p to.the limits _estab~ished. "'- ---~--~-- ------------ by the plan and the settlement agreement. An augmentation plan based on Preisser's - . purchase of a portion of the Box Springs water rights, coupled with a cash settlement agreement to protect the interests of the intervening senior users (Smith and Reid) is considered feasible in concept. A settlement agreement between Preisser, Smith, Reid, HCWUA, and the State Engineer has been signed as of May, 1998, and a decree for a plan for augmentation involving the Box Springs rights has been entered by the Division 2 Water Court. For these reasons, this alternative is feasible and is preferred to the others. HRS WATER CONSULTANTS, INC. page 7