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<br />19G6 <br /> <br />Engineerina Studv by the Colorado Water Conservation Board. The$tate <br />of Colorado authorized an engineering study of The Fort Lyon Canal Company in <br />1992 to analyze alternate uses of agricultural water. Funding for the study is through <br />a $100,000.00 state grant. The second phase of the study will explore the concept <br />of water banking and whether this alternative is technically and legally feasible. The <br />findings will also be used by the lower Arkansas RiverCommission which is exploring <br />availability of waterfor a permanent pool in John Martin Reservoir and a water supply <br />forthe Great Plains Reservoirs. In this regard, the Fort Lyon entered into a contract <br />with the Colorado Division of Wildlife to transport water purchased from the City of <br />Colorado Springs to Neenoshe Reservoir through the Fort Lyon main canal to the <br />Kicking Bird Canal. <br /> <br />Water Transfer Apolication bv Public Service Comoanv. In June 1992, the <br />Colorado Supreme Court affirmed the dismissai of an application which had been <br />filed by Public Service Company to exchange water rights which it owns in the Las <br />Animas Consolidated Canal Company upstream to Pueblo Reservoir. PsCO later <br />fiied a second application in 1992 again requesting approval of a similar exchange <br />pian. Various objectors have filed a motion to dismiss this application, and hearing <br />is set in December 1993 to consider dismissal of the application. <br /> <br />We wish to thank the directors, otficers, and other personnel of The Fort Lyon <br />Canal Company tortheir assistance in these and other legal matters concerning your <br />Company during the past year. <br /> <br />Respectfully submitted, <br /> <br />LEFFERDINK & BULLOCK <br />John S. Lefferdink <br /> <br />9 <br /> <br />