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Mr. Jared Dains May 17, 2011 <br />Middle Poudre Combined Plan - Lafarge West, Inc. Page 6 of 9 <br />is attached to this letter. The source of the replacement water will be from Gray Lakes, which can deliver <br />water to Box Elder Creek and from there to the Cache La Poudre River. Approximately 1.1 acre-feet 'of <br />water (0.25 percent per stream mile) from the Gray Lakes are estimated to be required to replace transit <br />losses. The water storage right for the Gray Lakes owned by LCRC is not presently decreed for <br />augmentation, therefore a change of use application for the Gray Lakes water storage right was filed <br />with the Division 1 Water Court in case no. 2006CW276. A detailed historical consumptive use analysis <br />was performed by TZA Water. Engineers, Inc. (`TZA") in support for case no. 2006CW276. According to <br />the analysis LCRC water rights have historically been used to provide supplemental water to irrigated <br />lands within the Lake Canal Service area. Based upon the crop mix, irrigated acreage and water <br />available for irrigation, TZA concluded that the Lake Canal system is water short. TZA also noted that a <br />historical consumptive use of 65% is not uncommon for the use of supplemental reservoir water within <br />water short ditch systems. For the purposes of this plan, the consumptive use associated with the Gray <br />Lakes water was assumed to be 45%. This also means 55% of the delivered water constituted historical <br />return flows, which must be maintained. Therefore, in addition to the 12.20 acre-feet of water to be <br />released for replacement purposes, an additional 13.6 acre-feet (for a total storage release of 25.8 acre- <br />feet) representing the return flow component shall be release from Gray Lakes to maintain the historical <br />return flow regime. <br />In accordance with the letter dated April 30, 2010 (copy attached) from the Colorado <br />Division of Reclamation, Mining, and Safety ("DRMS"), all sand and gravel mining operators <br />must comply with the requirements of the Colorado Reclamation Act and the Mineral Rules and <br />Regulations for the protection of water resources. The April 30, 2010 letter from DRMS requires <br />that you provide information to DRMS to demonstrate you can replace long term injurious stream <br />depletions that result from mining related exposure of ground water. The.DRMS letter identifies <br />four approaches to satisfy this requirement. The 4th approach requires documentation to identify <br />what water rights or other permanent water source will be dedicated to the SWSP to assure that <br />all permanent depletions from either an unforeseen abandonment of the site by the. Applicant or <br />as a result of long term ground water exposure after dompletion of mining and reclamation will <br />be replaced so as to prevent injury to other water rights <br />In accordance with approach no. 4, you have provided an affidavit dated November 22, <br />2010 that dedicates 8.5 Box Elder Ditch shares water as replacement water solely for this SWSP <br />for as long as there are depletions at this gravel pit sites or until such time as another <br />replacement source is obtained. A copy of the affidavit is attached to this letter. For the <br />purposes of this SWSP, this affidavit will be accepted for the dedication of the shares; however, <br />if the State Engineer determines that a different affidavit or dedication process is necessary to <br />assure proper dedication of the shares, additional information may be required prior to future <br />SWSP approvals. <br />A monthly breakdown of the stream depletions from the mining operations as well as the <br />replacements is shown in the attached Table 1. <br />Conditions of Approval <br />I hereby approve the proposed substitute water supply plan in accordance with Section § 37-90- <br />137(11), C.R.S. subject to the following conditions: <br />1. This plan is approved with an effective date of November 1, 2010 and shall be valid through <br />December 31, 2011 unless otherwise revoked or modified. If this plan will not be made absolute by a