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Indian Mountain Property Owners Letter October 11, 2016 Page 2 Now let me get down to what all of the above information has to do with you as a property owner in Indian Mountain subdivision (Subdivision). The Decree entered in 1974 created a plan for augmentation to allow the individual lot owners in the Subdivision to obtain a water supply for in-house purposes from on -lot wells. The Decree also changed the use of parts of three water rights (the Slater Ditch (Ditch), Tarryall Ranch Reservoir No. 1 (Reservoir 1) and Tarryall Ranch Reservoir No. 2 (Reservoir 2)) to be used to augment these on -lot wells to prevent injury to senior users. The Decree basically operates by providing augmentation water from the Ditch in the summer and water from Reservoir 2 in the winter. However, the Decree did not expressly convey the changed water rights to the Subdivision lot owners. This non -conveyance does not impact use of the Ditch right because that water is simply left in the stream. It does impact the Reservoir 2 right because the non -conveyance led to the litigation mentioned in the second paragraph of this letter (Park County District Court No. 14CV30056 and Court of Appeals No. 15CA1055) after the Reservoir 2 right was sold a few years ago. The current result of this litigation is that the present Reservoir 2 (AKA Tarryall Ranch Reservoir) owners (now Bar Star Water, LLC) may charge individual well owners for releasing replacement water from the reservoir. All of the well permits currently issued within the Subdivision were issued only because they are covered by the Decree and must continue to be covered by a plan for augmentation. Likewise, any future well permits within the Subdivision will only be issued in compliance with a decreed pian for augmentation, either the existing Decree or, possibly, another plan for augmentation able to cover wells within the Subdivision. I realize that many of you do not agree with the current result of the litigation discussed above. I hope you all realize that I must remain neutral in this dispute. My duty is to follow state water law and the decrees of the Courts. As part of that duty, I have to tell you that all wells within the Subdivision MUST be covered by an operating plan of augmentation to continue to legally pump. Please understand that I am NOT telling you that your well must be or is not covered by the plan for augmentation represented by the Decree. Continuing to have your well covered under the Decree is one option. I believe there are also other options to cover your well in a plan for augmentation if your well is first removed from the Decree through a court action. You may want to contact the Indian Mountain Property Owners Association or Indian Mountain Metropolitan District or Bar Star Water, LLC for information on other options (plans for augmentation) that could cover wells within the Subdivision. It appears that unless wells in the Indian Mountain Subdivision are removed from the Decree* through a court action, the augmentation plan operators are required to make releases for all of the wells. The water commissioner recently ordered Bar Star to release water from storage for the winter obligation of the estimated 625 wells permitted and connected to dwellings within Indian Mountain Subdivision. We will work diligently to enforce that order, but if replacement water is not provided to the stream, senior water rights will be injured and I will be forced to issue well curtailment orders for all of the wells in the Subdivision. Furthermore, we will not be able to issue new well permits pursuant to the Decree. I will meet with Bar Star Water, LLC to clarify that they need to make a release to cover all of the wells in the subdivision. Any payment or collection of fees for the operation of the augmentation plan under the Decree is an issue between the parties subject to the requirements of the Decree (currently Bar Star Water, LLC and subdivision well owners).