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('! ! ,L !".,. , In addition, the City of Pueblo has filed for a "recreation in-channel diversion" (RICO) water right for 100 cfs during the winter storage period and 500 cfs the remainder of the year (see attached application). PSOP participants are assessing the potential impacts of the water right, but so far have asked the City of Pueblo to consider a subordination of a small portion of the RICO water right to future exchanges that are needed to fully utilize enlarged storage capacity at Pueblo Reservoir and the conveyance of water through the Arkansas Valley Conduit. The City of Pueblo voiced concern about this approach and also expressed their concern and potential opposition to the conduit. The PSOP participants will redraft their proposal to the City at a meeting scheduled for January 14 at the District. We'll meet again with the City toward the end of January. Update: PSOP participants met January 14 to consider changes to their current proposal on f/ow'limitations. A redraft of that proposal will be sent to the participants for their review before sending it to the City of Pueblo. CS-U is preparing modeling information for the City of Pueblo and that should be ready to send out by January 25. We'll get back together with the City of Pueblo for additional negotiations about two weeks after they've received the modeling information. Because the issues will take time to resolve, I recommend to the Board that we stipulate with the City of Pueblo granting another 30 to 45 days to resolve our issues. At the same time the Board considers this matter, we will need to consider what action to take regarding the City's RICO water right filing. We need to preserve our option to participate in the CWCB review process and in water court. Lee Miller will walk through the details of this matter at the January 17 Board meeting. In the meantime I have started meeting with individual members of Pueblo City CounCil to brief them on our PSOP and the issues at stake with the City's RICO, Update: I met with Ray Kogovsek on Friday, January 11. He told me that the City of Pueblo, who is also a client of Mr. Kogovsek's, had asked him to prepare to oppose our PSOP legislation in Washington, D.C. That of course caught me by surprise because we have been negotiating with the City of Pueblo in order to resolve our differences. After meeting with Ray I met with Lee Evett (Pueblo City Manager) and Tom Florczak (City Attorney) to ask them whether or no( the City was committed to developing a win/win solution to the .flow issues beloW Pueblo Dam. Lee was very quick to say that they remain committed to th8it goal, but are concerned that the negotiations will not produce a positive outcome for the City. I assured Lee and Tom that the District is very much committed to finding a win/win solution. Lee and I both agreed that we would keep negotiating, 2