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Board of Directors Meeting News Summary Page 1 January 2019 The Colorado River District Board of Directors for 2019 are from left, sitting: Mike Ritschard of Grand County; Kathy Chandler Henry of Eagle County; Dave Merritt of Garfield County, the new 2019 Board President; Marti Whitmore of Ouray County, the new Board Vice President; Tom Alvey of Delta County, the immediate past President; and Rebie Hazard of Saguache County; top row: Al Vanden Brink of Rio Blanco County; Karn Stiegelmeier of Summit County; Doug Monger of Routt County; Marc Catlin of Montrose County; John Ely of Pitkin County; Steve Acquafresca of Mesa County; Bill Trampe of Gunnison County; and Stan Whinnery of Hinsdale County. Absent is Tom Gray of Moffat County. Merritt elected President, Whitmore VP of Board The Colorado River District s Board of Directors elected new officers for 2019. The Board unanimously elected Dave Merri of Garfield County to serve as the 20th President. Mar Whitmore of Ouray County was also unanimously elected to serve as Vice President. Whitmore is the first woman to serve as a Board officer in the District s 82-year history. Under the Board's bylaws, officers may serve two one-year terms and are then term- limited. The Colorado River District represents 15 western Colorado coun es and each county s Board of County Commissioners appoints a representa ve to serve on the Board for individual terms of three years. All policies, resolu ons, budget ac ons and other major ac vi es of the River District are approved by the Board. Five Board members whose terms were set to expire were also reappointed by their respec ve County Commissioners in January. Those members include outgoing President Tom Alvey of Delta County, Kathy Chandler Henry of Eagle County, Karn S egelmeier of Summit County, Mike Ritschard of Grand County and Stan Whinnery of Hinsdale County. The Board annually reappoints the two key staff members that it directly employs, the General Manager and General Counsel. General Manager Andy Mueller and General Counsel Peter Fleming were reappointed to their posi ons.

Board of Directors Meeting Summary Page 2 January 2019 In the Upper Basin, there will be a combination of approaches to keep water in Lake Powell Expand removal of tamarisk Develop Demand Management: Temporary, compensated and voluntary reductions in consumptive use that would be water banked Augment snowfall through increased cloud seeding Design by Greg Peterson, Colorado Ag Water Alliance Move water from Colorado River Storage Project (CRSP) reservoirs Navajo, Flaming Gorge and Blue Mesa Reservoirs to Lake Powell to protect Powell levels In the Lower Basin, reductions will be tied to the elevation of water in Lake Mead and these amounts left there Elevation (feet) 1090 1075 1075 1050 Lake Mead Current Elevation 1082 ft 192K acre feet 512K acre feet 8K acre feet 21K acre feet 0 acre feet 0 acre feet 1050 1045 592K acre feet 25K acre feet 0 acre feet 1045 1040 640K acre feet 27K acre feet 200K acre feet 1040 1035 640K acre feet 27K acre feet 250K acre feet 1035 1030 640K acre feet 27K acre feet 300K acre feet 1030 1025 640K acre feet 27K acre feet 350K acre feet Less than 1025 CRD to take lead in developing demand mgt. policy The Upper Basin states, including Colorado, have approved a Drought Con ngency Plan to address plunging water levels at Lake Powell. Demand management, meaning a mechanism to conserve water and send it to Powell to protect water levels, could be a major part of the plan. Right now, the plan is to make a demand management plan. At the Colorado River District s urging, in 720K acre feet 30K acre feet 350K acre feet alliance with other western Colorado stakeholders, the Colorado Water Conserva on Board in September 2018 adopted a policy that demand management be accomplished through a voluntary, compensated and temporary program. The alterna ve is a mandatory, non-compensated reduc on of water use, which would be an economic and ecological disaster for western Colorado agriculture. Andy Mueller, the River District General Manager, told the Board of Directors at their 2019 January quarterly mee ng that it is incumbent upon the District to lead water users in a discussion of what voluntary, compensated and temporary forbearance of water means, especially in light of the alterna ve. Con nued on page 3

Board of Directors Meeting Summary Page 3 January 2019 Drought planning to involve water users Con nued from page 2 It is important for this District to orchestrate a broader discussion on the West Slope to create a significant feedback loop between water users and this District, Mueller said. He added that in conjunc on with the Southwestern Water Conserva on District (SWCD), the effort will reach out to stakeholders star ng in the next couple months. SWCD is a sister District that is based in Durango. Between the Colorado River District and SWCD, all western Colorado coun es are represented on Colorado River water issues. A er 19 years of sub-par snowpack and runoff, Lakes Powell and Mead are at historically low levels. In the Upper Basin, there is a risk to hydropower produc on at Glen Canyon Dam and in the Lower Basin, the risk is cuts in water alloca ons to the states. The U.S. Department of the Interior and the U.S. Bureau of Reclama on have been wai ng for the last half decade for the states to come up with Drought Con ngency Plans (DCP). The Upper Basin states approved their plan in December 2018 through the Upper Colorado River Commission (UCRC). Lower Basin states are s ll deba ng their plan. Because of that, Reclama- on Commissioner Brenda Burman gave the states a March 19 deadline to finish or Reclama on would stake steps to impose its own plan. The Upper Basin DCP has three elements (See graphic on page 2): 1) moving water stored in the Colorado River Storage Project (CRSP) Reservoirs of Navajo, Flaming Gorge and Blue Mesa to Powell to cushion levels there; 2) accelerated cloud seeding and phreatophyte removal; and 3) demand management. A dra of the Lower Basin plan specifies cuts to be taken by the states as Lake Mead levels go down. (See graphic on page 2) The total of the cuts would be about 1.3 million acre feet, which is equal to what is known as that basin s structural deficit, the use of more water than it receives from Powell. In the Upper Basin, the key to demand management is to gain federal approval that conserved water can be stored in Powell or the CRSP reservoirs and be separated from water ordinarily released to Mead. In other words, the saved water would not be a direct benefit to the Lower Basin states and could only be released by direc on of the UCRC to cushion low levels at Powell. Mueller said that within Colorado, there are par es primed to begin the process of crea ng the structure for a Demand Management program. Our District on behalf of and together with our water users does need to be prepared to engage in discussions related to the structure of a Demand Management Program. It will be useful for our water users to develop a vision of what we need to see in such a program in order to meet the needs of our water users and communi es, and it is not in our best interest to allow those discussions to be driven in direc ons which may be harmful to the preserva on and protec on of our cons tuents con nued use and development of water on the West Slope, Mueller wrote in his Board memo. We an cipate organizing an appropriate nego a on team and accompanying public input process to inform our nego a on team and keep our water users abreast of any developments so that they are provided with a meaningful opportunity for input, he added.

Board of Directors Meeting Summary Page 4 January 2019 Colorado General Assembly sees changes It s a new world at the State Capitol in 2019. Colorado Democrats enjoy the majority in both the House and Senate and con nue to hold the Governor s Office. In fact, Democrats won all statewide offices. Democrats have a strong 41-24 majority in the House and a 19-16 majority in the Senate. There are more House Democrats (41) than Republican members in the House and Senate combined (40). Addi onally, for the first me in history, women represent a majority in the House, 25 in the Democra c caucus and eight in the Republican caucus. Zane Kessler and Chris Treese reviewed with the Board the challenges and opportuni es the new faces represent in the 2019 legisla ve session. Encouragingly, West Slope House members will be in posi ons of leadership and influence in 2019. Representa ve KC Becker (D-Boulder) is the new Speaker of the House. Senator Kerry Donovan (D-Avon) will chair the Senate Agriculture Commi ee, and Representa ve Dylan Roberts (D-Eagle) will chair the House Rural Affairs and Agriculture Commi ee. Staff highlighted Kate Greenberg s appointment as Governor Polis new Agriculture Commissioner. Greenberg Like many rural special districts that are funded by property taxes, the Colorado River District is looking at cu ng its budget in 2020 because rising residen al housing values on the Front Range are triggering what are known as Gallagher Amendment cuts to residen al property tax-assessment rates. On February 15, the River District Board will hold a budget workshop to consider the District s financial sustainability and explore op ons. has been the western program director for the Na onal Young Farmers Coali on since 2013. The Young Farmers organiza on encourages and advises young people on how to enter and remain in the agriculture and agri-business industry. The River District has partnered with Ms. Greenberg on several projects and programs in the recent past. Announced following the quarterly Board mee ng were two other cabinet appointments of interest to the River District. Dan Gibbs, Summit County Commissioner, has been appointed to head the Department of Natural Resources, and Jill Ryan, Eagle County Commissioner, will lead the Department of Public Health and Environment. The Colorado Legislature is working on the issue and in the mean me, other special districts, such as Colorado Mountain College, have won ballot elec ons that restored property tax revenues to their previous levels. Gallagher is a cons tu onal amendment that took effect in 1982 se ng a 55-45 ra o between commercial proper es and residen al property values. Because of Front Range growth, the statewide residen al tax rate will be The Board set bi-weekly, special meetings star ng Thursday, February 7 at noon to adopt legisla ve posi ons and provide policy direc on. The Board then addressed the water-related legisla on that had been introduced as of the Board mee ng date. Among the bills of interest, the Board unanimously endorsed HB19-1082 clarifying that ditch water conveyance easement holders may maintain, repair, and improve their easements without addi onal approvals. The Board also voted unanimously to support HB19-1050, preven ng homeowners associa ons (HOAs) from prohibi ng the use of drought-tolerant landscaping (Xeriscaping) in common areas of a covenant controlled community and requiring special districts to permit drought-tolerant landscaping on lands within the district's control. In a 10-3 vote, the Board also endorsed Representa ve Roberts repeat bill, HB19-1113, protec ng water quality from post-mining opera ons. River District staff highlighted Rep. Roberts willingness to include Good Samaritan protec on language in this year s bill. For more on the District posi ons visit: www.coloradoriverdistrict.org/currentstate-legislation-2/. Board of Directors to discuss the Gallagher budget threat reduced again in 2020 to maintain the ra o. The assessment ra o was 21 percent of market value for residen al proper es in 1982 with the ini a on of Gallagher. The projected rate in 2020 is 6.95 percent, a 67 percent reduc on from its star ng point. This move hurts special districts and local governments outside of the metro areas who don t have the explosive residen al growth to balance out the rate cut.

Board of Directors Meeting Summary Page 5 January 2019 Federal affairs: hope for aquatic nuisance species money; fire funding changes urged No ng the welcome change in the nature and content of his quarterly report, Chris Treese highlighted passage of several important bills and other progress in the closing days of the 115th Congress. Notably, the Farm Bill and the Water Resources Development Act both passed, each with significant, posi ve elements for western water users. Treese noted the concerted efforts of Colorado s two Senators in securing several of the most posi ve provisions in both bills. The Farm Bill includes expanded authority under the Environmental Quality Incen ves Program (EQIP) for irriga on districts - for the first me ever - to receive funding as direct applicants for water conserva on measures. Addi onally, the final bill includes contrac ng procedures intended to streamline and improve the Regional Conserva- on Partnership Program (RCPP). The River District fought hard for these improvements based on our RCPP contracting experience. Treese also highlighted the December publica on of a proposal rule revising the Waters of the U.S. (WOTUS) rule. In the new, proposed WOTUS rule, ditches are generally defined not to be waters of the U.S. Encouragingly, the pre-publica on document explains, The regulatory status of ditches has long created confusion for (water users) and the transporta on sector, among others. In an effort to reduce that confusion, the agencies propose to specifically delineate the categories of ditches that are waters of the United States, proposing to exclude all other ditches from that defini on. While encouraging, conflic ng and confusing language exists elsewhere in the document. The River District will review the final, proposed rule carefully when it is published in the Federal Register. Following Treese s review of recent ac ons, the River District Board provided general direc on and iden fied priority issues for the District s federal advocacy. Generally, the River District will establish and maintain a close, working rela onship with each of the delega on s offices, both in D.C. and appropriate field offices with par- cular a en on to our new delega on member. The River District will monitor water-related legisla ve and administra ve proposals for poten al impact to the River District and western Colorado water users. The River District will leverage its membership and involvement in na- onal and West-wide organiza ons such as Na onal Water Resources Associa on, Family Farm Alliance, and Western Coali on of Arid States to amplify our voice and foster coali ons on issues of primary importance to the River District. Priority issues include: Secure funding for the Upper Colorado River and San Juan River Endangered Species Act Recovery Programs (legisla ve authoriza on and appropria ons); Colorado River Drought Con ngency Plan authoriza on/implementa on legisla on; Support for Bolts Ditch easement; Good Samaritan legisla on; Waters of the U.S. (rulemaking, legisla on possible); Monitor and protect water rights in proposed Colorado Wilderness (legisla ve) and other special land designa- ons (legisla ve and administra ve); Support healthy forest ini a ves and related programs that assist and fund forest and watershed health programs; Support the Water Rights Protec on Act (Congressman Tipton); Water and Wastewater Infrastructure Funding, (annual revolving loan fund appropria ons); Provide for legal irriga on through and with federal water infrastructure for hemp and marijuana; Support tax exemp on for water conserva on rebate programs; and Support reauthoriza on and full funding for the Land and Water Conserva on Fund. How to contact us: edinfo@crwcd.org, or call 970-945-8522 x 236 - website: www.coloradoriverdistrict.org

Board of Directors Meeting Summary Page 6 January 2019 Policies reviewed on water quality, the Endangered Fish Recovery Program, rec water uses and instream flows The Colorado River District Board reviewed four of its exis ng policies at its January 15-16, 2019 regular mee ng. The Board reviews and develops roughly one-third of its policies annually. Policies must be on mee ng agendas for at least two quarterly mee ngs before final ac on may be taken. The four policies reviewed included: Water Quality policy: Recognizing that there is a causa ve link between water quality and water quan ty, the District's primary policy objec ve with respect to water quality is to protect the ability of the District's residents to use water beneficially now and in the future with assured water quality appropriate to the use. Among other elements, the policy calls for the encouragement of voluntary implementa on of reasonable best management prac ces and programs for farming and ranching ac- vi es. The District will also generally advocate for incen ves on nonpoint pollu on preven on and clean-up efforts. Added to the policy was the issue of defining Waters of the United States (WOTUS) and its poten al ramifica ons on western water users. Directors directed staff to add language advoca ng that the WOTUS regula ons, and the Act s overarching goal of all waters being fishable and swimmable, not be applied to ditches, canals or ephemeral streams. Endangered Species Act policy: The River District strongly supports the Recovery Program and its dual purposes of recovering endangered fish while allowing historical water use and future water development to con nue consistent with state law. Con nued progress by the Recovery Program is vital to the con nued beneficial use of water in the District. An addi on to the policy was iden- fying cri cal habitat designa on as one of the key, but controversial, provisions when iden fying a species for lis ng as endangered or threatened. The River District has been an ac- ve partner and par cipant in the Upper Colorado River Recovery Program since its incep on and will con nue to advocate for the program and its key elements, including ensuring that the burden of the Recovery Program s implementa on is equitably distributed across all power and water users, including transmountain diverters. Recrea onal Water Use policy: Recrea onal water use and enjoyment of the state s waters are integral to western Colorado s lifestyle and economy. The District supports recrea onal water uses and the water rights confirming those recrea onal water uses that balance recrea onal needs with historical and future consump ve water uses. A recrea onal in-channel diversion water right should not be granted, however, if it would materially impair the ability to fully develop Colorado s en tlements under the Compacts of 1922 and 1948. Instream Flows policy: This policy affirms the District s general support for Colorado s instream flow program. The policy recognizes the environmental and human benefits of flowing rivers and streams, while no ng the statutory requirement for balancing the values and benefits of instream flows with the need for and benefits of consump ve water uses in the arid West. The Board modified its policy statement advoca ng that the state recognize the importance of protecting future water development opportuni es when deciding whether or not to file for new instream flow rights; that the amount of the instream right must allow for reasonably foreseeable future water development; and an allowance for the op on of decreasing the amount of an already-decreed instream flow. For full-text of these revised and previously approved policies visit: www.coloradoriverdistrict/policies. To comment on the four policies currently under review, please submit to edinfo@crwcd.org.

Board of Directors Meeting Summary Page 7 January 2019 District to assist Yampa planning The Colorado River District has agreed to be the fiscal agent for an Integrated Water Management Plan study in the Yampa River basin. The study will be the work of the Yampa-Green-White Basin Roundtable. Roundtables require fiscal agents to handle state grants from the Colorado Water Conserva on Board (CWCB). In this case, the Roundtable is seeking a $476,750 grant from the CWCB stream management grant program. The work is Staff Focus: Ian Philips The Colorado River District is highlighting our chief accountant, Ian Philips, CPA, this quarter. Ian joined the District in 2011. He began his professional career five years prior to joining the River District at a large accoun ng firm located just one floor above the River District s offices. Ian was born and raised in Durango, Colo. and relocated to Glenwood Springs 13 years ago. Ian says he has always felt a strong connec on to water. I grew up kayaking and ra ing on the Animas River in Durango, going to Lake Powell twice a summer for a week at a me and skiing in the winter. Early on, I made the connec on with the snow that fell in the winter with the Animas River flows that allowed me to also play in the summer me. As passionate as Ian is about water and recrea on, he s even more passionate about his family which includes his wife, Sara, and two very young sons, Harrison and Henrick. Gunner, Ian's black expected to last two and a half years and produce informa on to iden fy needs, projects and strategies to advance the Roundtable s Basin Implementa on Plan, a part of Colorado s Water Plan. The River District has a limited ability to be a fiscal agent for such ma ers under restric ons of the Taxpayers Bill of Rights (TABOR) cons tu onal amendment. To help offset direct District staff costs, a 10 percent management fee will be part of the grant administra on. Ian Philips: CPA, skier, dad, husband. lab, is o en in Ian's office, holding down the floor and hi ng up friends for treats. Future meetings Special Joint Teleconference Meetings to discuss legislation: every other Thursday, noon, starting Feb. 7, 2019 Board Budget Workshop: Feb. 15, 2019, Glenwood Springs Second Regular Quarterly Meeting April 16-17 2019, Glenwood Springs Four West Slope Basin Roundtable Meeting, May 2, 2019, Grand Junction Third Regular Quarterly Meeting, July 16-17, 2019, Glenwood Springs Colorado Water Congress Summer Convention, August 20-22, 2019. 2020 CRWCD Budget Workshop, September 17, 2019, Grand Junction Colorado River District Annual Water Seminar, September 18, 2019, Colorado Mesa University, Grand Junction All Roundtables State Summit, Sept. 25-26, 2019, Winter Park Fourth Regular Quarterly Meetings, October 15, 2019, Glenwood Springs Colorado River Water Users Association Convention, December 11-13, 2019, Las Vegas

Board of Directors Meeting Summary Page 8 January 2019 The Colorado River District this spring will change out the main outlet gate at Wolford Mountain Reservoir. A barge spread similar to this one at Steamboat Lake recently will be built and positioned with a crane and divers' equipment. Barge segments headed for Wolford Mountain for planned work The Colorado River District this spring will replace the main outlet gate at the Wolford Mountain Reservoir dam. At its January 16, 2019 Board meeting, Directors approved a $444,000 contract with Marine Diving Solu ons LLC of Centennial, Colo. to take out the old gate and install a new stainless steel one purchased previously by the District and being fabricated in Massachuse s. A large, floa ng work pla orm will be assembled to hold a crane, divers decompression chamber, work trailer, diving equipment and the gates as they are removed and installed. The work pla orm will be assembled near the boat ramp from the 8- by 10- by 40-foot segments when the reservoir is ice free and towed to the outlet tower. The main gate is in 100 feet of water when the reservoir is drawn down. This work needs to be completed in early spring to take advantage of the shallower reservoir depth. Once the exis ng 17,000-pound gate is removed the new gate will be installed and tested. The work pla orm segments and other equipment are coming off another Colorado reservoir project and will be seen stored in the south end of the reservoir s day-use parking lot near the boat ramp. The project is expected to take five weeks once the work pla orm is assembled and be completed near mid-may. The majority of the day use parking lot will be available for public use and the dam crest open for foot traffic during the project.

Board of Directors Meeting Summary Page 9 January 2019