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<br />3501 <br /> <br />Work is currently in progress on the identification, <br />description, and feasibility level assessment of innovative <br />transfer strategies. This work will estimate the impacts of a <br />traditional transfer of agricultural water out of the valley and <br />contrast those expected impacts with what could occur using <br />alternative transfer mechanisms. Methods for mitigation of <br />unavoidable economic, social and environmental impacts will be <br />considered. A draft report describing this screening analysis will <br />be available in mid-March and distributed to the public sometime in <br />early April. Already some promising ideas have emerged which may <br />meet certain needs of both shareholders and the communities of the <br />area. On the other hand, there are important institutional <br />constraints, including the Arkansas River Compact, which may limit <br />the practicality of several other options. <br /> <br />Remainina Work and Schedule: <br /> <br />Following completion of Phase I in early April a significant <br />period of review and discussion is anticipated. Hopefully, one or <br />more alternative(s) that are legally, politically, financially, and <br />hydrologically feasible will be agreed upon all interested parties <br />by mid-May. At that point GEC will be instructed to commence Phase <br />II of the study. Phase II is intended to provide a detailed <br />analysis of the preferred alternative(s) and a suggested practical <br />plan for implementing it at such time as the Ft. Lyon shareholders <br />feel the need. <br />Attached, as Exhibit 2, is a revised study schedule showing <br />study elements, meetings, and proposed target dates. The entire <br />study is scheduled for completion and submission of the requisite <br />report by October 1, 1993. <br />sM/1m <br />LM005,OTH <br /> <br />7 <br />