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10 PAONIA PROJECT, !COLORADO and the Leroux Creek divisions. Under the Fire Mountain division it was proposed to serve only the lands north of the river and under the Fire Mountain canal. This canal diverts from the main North Fork River near Somerset. The Minnesota division was proposed to serve lands south of the river with supplemental water to be de- veloped on Minnesota Creek, tributary to the North Fork River from the south. Preliminary study revealed the impracticability of con- structing a gravity canal from the North Fork River for the service of lands in the Minnesota division due to the rugged terrain of eroded shales. The Leroux Creek division was to provide irrigation service to lands of l'pper Leroux Creek, a northern tributary of North Fork River. These upper Leroux Creek lands are too high for economicaJ .service by gravity diversion from the main North Fork River. It was planned to develop a water supply for the lands of the Leroux Creek division by storage on the watershed of Leroux Creek, or on water- sheds from where the importation of water to Leroux Creek could be made. , A preliminary report by the Bureau of Reclamation, issued in August 1938, suggested development of a reservoir at the Horse Ranch site on Anthracite Creek to service land of the Fire Mountain division. Anthracite Creek is an upper tributary of the North Fork River. The report also discussed the need of water for land of the Minnesota division and suggested that additional invesbigation be conducted to see if needed water could not be stored on the Minne- sota Creek watershed. . On the strength of the 1938 report, the Paonia project was author- ized. under reclamation law, on March 18, 1939, by Presidential approval of the findings offeasibility of the Secretary of the lnterior, dated March 16, 1939. Appropriations for the construction of the project were made by the Interior Appropriations Act of 1940 in the amount of $300,000 and by the Interior Appropriations Act of 1942 for an additional sum of $600,000. Both sums were appropriated from the reclamation fund and are reimbursable. . The findings by additional study warranted the issuance of a revised report in 1940, which dealt only with the Fir.e Mountain division. This report recognized the need of storage on the North Fork River and the need of enlarging the Fire Mountain canal if all land' of the service area. under the canal were to be adequately served with North Fork River water, The report further recognized that with an en- larged Fire Mountain cdnal and a supply of stored water available on the North Fork River, a large quantity of Leroux Creek water. presently being used to service land under the canal could be trans- ferred for use on land of upper Leroux Creek where a critical water shortage exists. Cost estimates reported for reservoir storage showed development of the Spring Creek Reservoir site to be less expensive' than development of the Horse Ranch site previously suggested. Subsequent foundation exploration at the Horse Ranch site revealed complications not provided for in the original cost estimate. The report also represented the water supply at the Spring Creek site as more reliable than the supply at the Horse Ranch site. The 1940 report suggested that the Spring Creek Reservoir site/be developed by the Bureau of Reclamation and that the Fire MOl1ntain canal enlargement be made by water users during a 10-year develop- ment period. Funds for the canal enlargement were to be derived I