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,COLORADO Divisioii of Water Resource8 October 11, 2016 RE: Indian Mountain Subdivision Augmentation Water Supply Water Court Decree W-7389 To Indian Mountain Property Owners: As a property owner in the Indian Mountain subdivision, you have probably heard about potential changes to the water supply options for your property. These changes may impact your ability to either operate your existing well or obtain a permit to drill a well on your property in the future. You may already be aware of the litigation between the Indian Mountain Corporation and the Indian Mountain Metropolitan District (Park County District Court No. 14CV30056 and Court of Appeals No. 15CA1055) related to the Water Court decree for Indian Mountain subdivision in Case No. W-7389 (Decree). The recent (August 11, 2016) ruling of the Court of Appeals created the necessity for this letter, as I wilt explain below. First, let me take a moment to explain my role in regulating water diversions and use in northeast Colorado. One of the main duties of the Division Engineer (as part of the Division of Water Resources (DWR), also known as the Office of the State Engineer) is to regulate water diversions from streams and groundwater in accordance with Colorado's prior appropriation system of water law. The basic principle is that the person who first diverts water and places it to beneficial use has a better, or more senior, right to use the water than later diverters, i.e. "first in time, first in right". The primary water regulation objective of DWR is to optimize the use of water consistent with the prior appropriation system and the decrees of the water courts, As part of the regulation just discussed, I am required by law to order water users with more junior water rights (junior user) to cease diversions when that water is required by a user with a more senior water right (senior user). As part of the optimization also just discussed, the junior diverter can "augment" the water available to the senior diverter by supplying water from another source to the senior diverter, allowing the junior diverter to keep diverting water when they would otherwise be curtailed. However, the junior diverter may only do this as part of either: (A) a "plan for augmentation" decreed by the Water Court; or (B) a temporary plan for augmentation called a "substitute water supply plan" (SWSP) approved by the State Engineer while the permanent plan for augmentation is being considered by the Water Court. In either case, the plan (along with all other water rights) is regulated by DWR. It is important to note that pumping from wells affects surface streams, but those effects are delayed in time. When water is pumped from a well, that pumping eventually results in a corresponding decrease in water in the stream system. Wells almost always have very junior water rights and, because of this delayed well pumping impact on the stream system, it is impossible to predict if pumping a welt today will cause a decrease in stream flow that does or does not harm senior water rights in the future. This is where a plan for augmentation comes in; it allows wells to pump when they would not otherwise have the right to pump by providing a mechanism to replace the well pumping impacts to senior water rights to prevent injury to them. k109`tc€t Suto 200, Gte=,Aey, CO €,9 0252.V!2 f W0,3`rL'1816 icR<,odaU, cue(%tt�,e Duectr? i t'ic VVfe 11.z:., s,atc Er�sineer ; David "4eWttt A.L, L'nv3.d,An big.? neer