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r <br />SHAND, NEWBOLD &CHAPMAN <br />J. pOUGLAS SHANp <br />KEITH NEW BOLD <br />A. MICHAEL CHAPMAN <br />JAMES E. LINK 11 <br />~ Also Aomin EO in NEw MErico <br />PROFESSIONAL CORPORATION <br />ATTORNEYS AT EAW <br />150 EAST NINTH $TREET~$pITE 400 <br />REPLY To: P.O. BOX 2790 <br />DURaNGO, CO 81302-290 <br />TELEPHONE: 9~0.24~.3091 <br />FACSIMILE 970.247.3 I00 <br />WnIT[AS EmAlu <br />MCHAPMANeSNC-LAW.COM <br />,iuly 12, 2004 <br />Via Facsimile 259-2793 <br />& U.S. Mail <br />Frank J. Anesi, Esq. <br />P.O. Box 2185 <br />Durango, CO 81302 <br />RE: Dillon Ranches LLLP <br />Our Client: Animas Valley Ditch and Water Company <br />Dear Frank: <br />I was contacted by the Animas Valley Ditch and Water Company ("AVD&WC") after their receipt <br />of the Lvtd Use Application for a Special Usc Permit filed by Dillon Ranches LLLP. The fourth <br />paragraph of "Background" section of the submitted Narrative causes AVD&WC concern as it <br />states that the water rights which the Applicant can use associated with its Class A and B shares in <br />the AVD&WC can be converted into storage rights. I am informed that the Applicant has private <br />water rights that are transported in the Reid Ditch: however, these private water rights are separate <br />and apart from the Applicant's shares in the AVD&WC and the right to use the water associated <br />with such shares. <br />In checking with the CDWR, the water rights held by the AVD&WC are solely for irrigation <br />purposes (with one limited and minor exception). It is my widerstanding that the water righis held <br />by AVD&WC cannot be unilaterally utilized or changed to other uses (storage purposes or to <br />compensate for evaporative losses) by those owning shares in AVD&WC. Accordingly, I believe <br />the Application needs to be revised to clarify that AVS&WC water cannot be converted into a <br />storage water right. Below please find my suggested revision to the fourth paragraph of the <br />"Background" section of the submitted Narrative: <br />The Applicant has obtained a well permit for intercepting ground water and <br />has private water rights associated with its real property (said water is <br />carried in the Reid Ditch). The Applicant has the ability to convert its <br />private water rights into storage water rights, if necessary. Far information <br />purposes only, the Applicant also owns shares in Animas Valley Ditch and <br />Water Company ("AVD&WC"); however, these AVD&WC water shares do <br />not allow the Applicant to use the water associated with such shares for any <br />purpose other than for irrigation. Applicant's AVD&WC shares cannot be <br />