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Mr. Don Loloff <br />RE Estimated Augmentation Plan Cost <br />December 23, 2011 <br />Page 7of7 <br />In addition to the costs associated with acquiring the water rights, there would be an additional <br />cost associated with applying for and acquiring a decreed plan for augmentation from the Water <br />Court. The assistance of a water attorney and water resource engineer would be required in this <br />effort. In the previous analysis provided to you on May 25, 2010, I assumed that a long -term <br />lease of augmentation water from the City of Greeley would be available as the primary <br />replacement source. The availability of such a lease which would greatly simplify a proposed <br />augmentation plan, which allowed me to estimate that the legal and engineering costs associated <br />with acquiring the plan would be between $20k and $30k. Assuming that a lease with the City <br />of Greeley is not available and all replacements must be made from other water rights, as was <br />done in this analysis, greatly complicates the proposed plan. Given the many unknowns <br />(including the source of the shares to be acquired, the availability of information regarding the <br />consumptive use history of the shares, and the time required to negotiate an agreement with <br />NCLPIC /LPAC) I am not able to provide an accurate estimate for the augmentation plan costs at <br />this time. However, it almost certainly would be higher than the previous estimate given the <br />greater complexities. <br />I hope you will find this information useful. Should you have any questions or require further <br />information, please feel free to contact me at your convenience. <br />Cordially, <br />Applegate Group, inc. <br />Jared Dains <br />Water Resource Engineer <br />JMD /ta <br />cc: Kim Lawrence, Lawrence Jones Custer Grasmick LLP <br />AG File No. 07 -154 <br />N \07154 Lolo6\Augnentanon Plan \Estimated GIC & NCLPIC Shares docx <br />