THE NORTH POUDRE IRRIGATION COMPANY

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THE NORTH POUDRE IRRIGATION COMPANY

1989

DIRECTORS

Manuel Pineda ... Fort Collins, Colorado Arthur Meyer ... Wellington, Colorado Carl J. Judson, Jr ... Livermore, Colorado Dennis Marsh ... Fort Collins, Colorado Duane Aranci ... Fort Collins, Colorado

OFFICERS

Manuel Pineda ... President Arthur Meyer ... Vice President Robert L. Stieben ... Manager Vi Proctor ... Secretary/Treasurer

ORDER OF BUSINESS

According to the By-Laws, the order of business of the stockholders meeting shall be as follows:

1. Meeting called to order by the chairman at 10:00 a.m.

2. Appointment of three stockholders of the company as a credentials committee

3. Registration of proxies with credentials committee 4. Report of credentials committee

5. Annual report

6. Nomination of directors

7. Opening of polls for election of directors 8. Old business

9. New business

(A) Vote on assessment for the year.

The water supply forecast in the basin for 1989 was once again one of the lowest on record, and in looking back at the last 70 years of the North Poudre history this seems to be the norm. The river commissioner estimated that at the start of the irrigation season water supplies were at 83°/o of the 10 year average. Rains in the latter part of May, the first part of June and again in early September were a godsend and helped to alleviate the high demand for irrigation water during this exceptionally hot and dry summer season. Precipitation measurements varied throughout the Northern Colorado area but ended only slightly below normal.

On the 5th of April, the North Poudre Board appropriated one acre foot of penalty water, which was extended to expire the 22nd of May. On the 5th of May, when the Munroe Diversion gate was opened for the first time in the season, the company dried up approximately 2 miles of main river from the diversion to the confluence with the North Fork. This action brought immediate calls from fishermen and the Colorado Division of Wildlife requesting some water be left in the river to prevent loss of fish.

After being appraised of the situation, Manager Stieben agreed to bypass some water so that the fish could survive. This incident certainly served to portend what was in store for the Cache La Poudre valley for the rest of the summer. The North Poudre Board appropriated four acre feet of seasonal water throughout the rest of the season for a total of five acre feet. Almost all of the water shares put up for rent were taken. Even with the near-drought conditions encountered this year, crop production reports on sugar beets, beans, corn and alfalfa were near normal levels. Small grain crops seemed to be affected the most.

Construction on Clark's Lake began in September 1988. On the

28th of April North Poudre was allowed to make a partial fill of

water in the reservoir before total completion and before the final

inspection, so that it could deliver the first run of water to the lower

end of the system. The final inspection by the state engineer was

conducted on the 29th of June. The overall total cost of this project

was $809,000.00. The rehabilitation of Clark's Lake and the

significant role it plays in the irrigation operations in delivering

water to the system cannot be over-emphasized.

In 1985 the North Poudre stockholders approved by resolution the rehabilitation of three North Poudre projects, #15 Reservoir, Clark's Lake, and #2 Reservoir. Construction on #2 Reservoir is planned to begin in October 1990 and to be completed in May of 1991.

Discussions have taken place through most of the 1989 season between the North Poudre Irrigation Company and representatives of the City of Fort Collins Water Utility Department concerning the expansion and rehabilitation of Halligan Reservoir. The Board feels very comfortable with the manner in which the meetings and discussions are proceeding. In light of the short water years we have experienced in the past, the North Poudre Company and its stockholders are looking for the support and cooperation of the water community in Northern Colorado. We remain optimistic that we can accomplish this project in the future.

The cost of liability insurance for 1989 was about $19,000.00 less than for the previous year. This reduction was the result of an insurance program put together exclusively for irrigation compa- nies.

During 1989 the North Poudre Shareholders Association, a diverse group of stockholders, was formed. In May the association mailed out their first newsletter, a very informative letter. The association members attended several North Poudre Board meet- ings. Stockholders are welcome at Board meetings.

One item of interest is the composition and the transition the North Poudre Irrigation Company is still going through. The depressed farm economy is still affecting some farmers, with the result that farmland is still being foreclosed and water rights are being sold off separately, often bought by water brokers, munici- palities, and domestic water providers. This transition and change in use of irrigation water is not limited to the North Poudre Irrigation Company. We are aware of several irrigation companies along the front range whose major stockholders are municipal and domestic water users. Unless we get a dramatic turn around in the farm economy and the farmers financial problems are resolved, we will continue to see this change and transfer of agricultural water to others uses.

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Your present Board is very well aware of some of the ramifica- tions of this issue. We will try and prepare ourselves for this inevitable change. Addressing these changes should not be an insurmountable task, but I am sure they will eventually have some effect on the operations and administration of the company. It is a challenge for the Board to relate to the future water needs of a growing city and to meet the needs of stockholders who continue to farm.

After the election of one director at the Annual Meeting on the 6th of February, 1989, it was declared by the credentials committee that Duane Aranci had won over Robert Stieben for that position.

On the 7th of February, an additional legitimate ballot was discovered in the other ballot box by the Secretary. Alden V. Hill, Legal Counsel, and Vice President Manuel Pineda were contacted to discuss the matter. The credentials committee was called and on the 8th of February a recount was started. After several recounts were made, the credentials committee then declared that Robert Stieben had won the election. On the 10th of February, letters were mailed out to all the stockholders explaining what had occurred and that the matter was resolved. The decision by the credentials committee was accepted by the persons involved and recorded in the minutes.

Also on the 10th of February, 1989 Ben Dumler announced his retirement. The Board of Directors sincerely appreciate the thirteen years of service Ben gave the Company as Secretary-Manager.

The Board reviewed numerous applications for the position of manager following Ben's retirement. It was the determination of the Board that Robert Stieben's experience, background, know- ledge of the system, and his other credentials made him highly qualified for the job and position. He was appointed manager, and resigned from the Board of Directors March 6th.

On March 8th, Duane Aranci was elected by the Board to serve in the position vacated by Robert Stieben's resignation. At the same meeting I was elected by the Board to serve as President and Arthur Meyer was elected to serve as Vice President of the Board of Directors of The North Poudre Irrigation Company for 1989.

There were, as always, inspections of reservoirs and dams and

numerous activities that kept your Board, the manager, the office

staff and the employees very busy throughout the irrigation

season. Aside from their regular meetings the board members and the manager attended many meetings in Northern Colorado concerning water issues at the Federal, State and local levels.

Some of our employees continue to attend chemical, conservation and weed control seminars in order to be more knowledgeable about their jobs and provide better service to the company and its stockholders.

In conclusion, the North Poudre Board of Directors expresses its sincere appreciation and gratitude for the way you, the stockhol- ders, have responded to the Company's needs. We are very thankful for the positive spirit you have shown us in your cooperation and support during the past several years on our reservoir rehabilitation program. Thank you.

The North Poudre Irrigation Board of Directors requests your attendance, questions and comments at the Annual Meeting.

Respectfully Submitted, Manuel Pineda

President of the Board of Directors The North Poudre Irrigation Company

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Ben Dumler retired as manager of North Poudre in February of 1989 after 13% years of service to the company. From his

experience in the construction business he knew the value of having the proper equipment to work with and the need to maintain it properly. He was instrumental in updating the line of

Ben sharing information about North Poudre Irrigation Company with foreign students.

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equipment we have now. The relocation of the maintenance shop was ac- complished as the result of Ben's efforts as well.

Ben also knew very well how to make repairs and improve- ments through- out the system.

Those who worked with Ben wi II remember him as one who always wanted to get things done- NOW!

We wish you

well, Ben, in

your retirement

and any endeav-

ors you may pur-

sue.

The water supply for 1989 was marginal once again, however the Northern District issued a 100°/o quota which gave North Poudre 40,000 acre feet of CBT water. A full quota has not been allocated since 1981. Timely rains throughout the growing season helped to stretch the limited amount of irrigation water through the season.

This past year we experimented with having a maintenance crew of three men during the irrigation season. The other three maintenance people worked part time as ditch riders subject to call if needed. This was done because the major portion of mainte- nance on the system must be performed when water is not being run.

Controlling weeds along right-of-ways and at reservoir sites is becoming more difficult and more costly to do each year because of the limited amount of time when the job can be done effectively and the ever increasing cost of chemicals. Canada thistle is a very difficult weed to control, particularly around the perimeter of reservoirs.

The dry, mild weather this fall has given us the opportunity to do extensive maintenance throughout the system. There have not been any major maintenance projects this year, just an assortment of concrete repairs on smaller structures, cleaning and shaping of canals and ditches, and hauling rip-rap and gravel.

Please be reminded that the annual $50 pump permit fee must be paid each year before small pumps are allowed to operate, and in 1990 one share of water must be dedicated for pumping.

The office staff continues to receive on and off orders for the following day after 2:00p.m. Many times when these late orders are honored, mistakes occur in water deliveries because the orders are relayed to the ditchriders at 2:00 p.m. from the office, and if a ditch rider has accepted a late order the accounting is inaccurate in the office. Therefore in 1990

those orders for water placed through the office by 2:00p.m. the previous day will be carried out on a given day. Late orders will be carried out the second morning after the order is placed. Emergencies will be dealt with at the sole discretion of the management.

The table in this report that shows the assessments, acre feet of appropriation, and cost per acre foot by year has been revised beginning with this report. The table in 1988 covered two full pages and provided data for the past 80 years. In this edition the table will begin with the data from the immediate past 5 years with 1989 data added. Following years will be added to the list. The format of the table has also been changed so that a more accurate comparison

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of the cost per acre foot of water can be made.

It has been a pleasure working for North Poudre this past year. It is the goal of all the employees to provide the best possible service to the stockholders within the monetary constraints that are always present.

Source

Storage November 1, 1988 North Fork

Munroe Canal

Distribution

Storage October 31, 1989 Stockholders

Distribution loss

Fossil Creek Reservoir Preferred rights Rented

Exchange for CBT Carry-over

CBT Quota- 100°/o Dividends

Apri I 5, 1989 May 3, 1989 June 7, 1989 July 7, 1989 August 2, 1989

Acre Feet 15,705 25,182 38,623 79,510 17,236 39,988 57,224 22,286 79,510 3,225 4,000 3,370 10,595 505 11 '100

40,000 Acre Feet Per Share

(Penalty) 1.0

2.0

1.0

.5

.5

ANNUAL PRECIPITATION IN INCHES

Year Wellington Cactus Buckeye Livermore

1960 8.84 9.61 7.67

1961 24.95 19.38 18.51

1962 13.90 9.67 13.18

1963 12.10 9.70 11.84

1964 5.64 4.51 5.21

1965 16.50 11.55 15.46

1966 8.21 4.74 8.10

1967 22.52 18.28

1968 10.26 9.18 8.49 4.80

1969 15.39 15.80 14.83 15.82

1970 11.48 14.22 9.61 13.71

1971 13.27 13.04 10.57 12.45

1972 13.50 15.02 10.87 11.22

1973 10.90 15.11 11.10 14.64

1974 8.84 10.65 9.56

1975 11.13 11.90 7.48

1976 10.39 7.00 10.77

1977 10.35 9.72 13.88

1978 10.25 12.87 11.70 15.03

1979 19.59 20.78 16.27 21.50

1980 13.51 12.58 14.61 17.61

1981 12.93 12.01 15.48 14.56

1982 19.07 17.63 18.36 16.64

1983 16.68 18.73 17.67 20.73

1984 13.44 13.51 16.26 20.86

1985 12.73 10.19 10.30 12.06

1986 11.41 8.15 11.24 9.50

1987 9.87 9.40 10.58 14.93

1988 11.51 9.10 10.89

1989 13.26 10.59 11.98 10.20

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Items per Share

$ 8.00 for water assessment 19.00 for loan retirement

13.00 for reservoir rehabilitation

35.00 for operation, maintenance and weed control

$75.00

$45.00 per share due and payable April1, 1990, interest at 1 V2 °/o per month charged after May 1, 1990

$30.00 per share due and payable October 1, 1990, interest at 1 V2 °/o per month charged after November 1, 1990 Total amount owed must be paid prior to water delivery.

Total assessments of $75.00 per share are due April1, 1990 on two shares or less.

Year Assmt. Ac.Ft. Cost/ A c. Ft. Penalty

1985 100.00 9.0 11.11 2.5

1986 75.00 11.5 6.52 7.5

1987 75.00 7.5 10.00 3.0

1988 70.00 7.5 9.33 2.0

1989 75.00 5.0 15.00 1.0

HILL, HILL & MANGES, P.C.

Attorneys at Law A Professional Corporation Fort Collins, Colorado 80522

December 18, 1989

We have now represented The North Poudre Irrigation Company for over 22 continuous years. It is an interesting and pleasant association. We appreciate this opportunity to serve North Poudre.

During the year, Ben Dumler resigned as manager. The know- ledge he had from his years of practical experience in operating the North Poudre system will be missed.

As of this writing, we, in 1989, spent 250 hours on matters relating to the company - less than in the previous two years.

Fewer court related problems explains this.

Alden V. Hill attends the regular board meetings, and special meetings when requested.

The acquisition of a spillway over the Kellogg property, necessa- ry for the improvement of Clark Reservoir, was accomplished. We had to file a condemnation suit, but then were able to reach an amicable solution with Mr. Kellogg.

Efforts are being made to see if an enlargement of Halligan Reservoir is possible, how this would be financed, and who would own and operate an enlarged reservoir. Discussions have been held with the City of Fort Collins in this regard, and the Board plans to continue to explore this potential project.

North Poudre has followed the developments at Mountain Range Shadows south of Fort Collins. This subdivision has been discharg- ing sewage effluent into Fossil Creek Reservoir. It now appears that this subdivision will become a part of the South Fort Collins Sanitation District, and that should solve the concerns that have existed for several years.

Favorable referee's rulings were worked out with regard to water which is intercepted by the Fossil Creek ditch. However, there is still a challenge to a portion of this ruling before the water judge.

Time has been spent in a preliminary way working on the legal aspects of the rehabilitation of Reservoir #2. It's expected that this rehabilitation will be accomplished with the assistance of the Colorado Water Conservation Board.

There are no recent significant developments in the City of Thornton's efforts to use the water rights it has acquired in this area. We still expect a prolonged court battle when the matter reaches that stage.

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There are the usual activities where there is an occasional subdivision request or exemption request which affects a ditch or reservoir. We are still trying to work out a resolution of a minor residential development near the Moreng property, which sur- rounds Reservoir #9. After many years, we have still not reached a solution on the Cherry Heights proposed subdivision around Reservoir #10. However, the economic conditions in the country and Colorado have stalled any active subdivision of that land.

Again, we remind all stockholders to know where your stock certificate is located. A lost instrument bond is expensive. And please find out about what is required when you get ready to make transfers. It can save you and North Poudre time and frustration.

We're hoping, yes praying, for adequate snowfall on our watershed in the next few months.

Respectfully submitted, Alden V. Hill for

HILL, HILL

MANGES, P.C.

Alden T. Hill Alden V. Hill Richard B. Manges

Gerald W. Laska, Associate Attorneys at Law

160 West Mountain Avenue

Fort Coli ins, Colorado 80522

Telephone: 482-3683

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In Remembrance of Lawrence F. Cox

Lawrence F. Cox, former manager of the North Poudre Irrigation Company for 13 years from 1960 to 1973, died on May 11, 1989, at the age of 80.

Mr. Cox was a dedicated, hard-working manager who loyally served the North Poudre Irrigation Company. He worked to prepare himself for the matters he had to deal with, and had a capable grasp of what needed to be done. His efforts resulted in many accomplishments for the betterment of The North Poudre Irrigation Company system.

During his management, he saw the North Poudre system increase the amount of acre-foot deliveries of water per share, and also the stock price increased to amounts previously not reached.

Land for the Park Creek Reservoir was acquired, and the reservoir was built and added to the system during his time as manager. Funds for Park Creek were obtained through a water project loan with the United States not now available.

Mr. Cox seldom failed to remind us that lawyers stand in the way of getting things accomplished. It was his way of reminding us that he wanted lawyers to be more help than hindrance.

Lawrence & Freda Cox

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Pictured here with Mr.

Cox is his wife, Freda, who survives him. Freda also worked for The North Poudre Irrigation Company in the office.

Her help was very much appreciated.

With Lawrence's de- ath, we have lost anoth- er friend.

Submitted by Harlan Seaworth

Alden V. Hill

Board of Directors

North Poudre Irrigation Company

Wellington, Colorado November 9, 1989

We have audited the accompanying balance sheets of the North Poudre Irrigation Company as of October 31, 1989 and 1988, and the related statements of income and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the North Poudre Irrigation Company at October 31, 1989 and 1988, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.

Respectfully submitted,

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Brock, Watkins

Schommer Certified Public Accountants

MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

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North Poudre Irrigation Company Wellington, Colorado

Balance Sheet October 31, 1989 and 1988

Current Assets

Cash in the Bank Investments (Note 1) Assessments Receivable Other Accounts Receivable Notes Receivable (Note 2) Prepaid Expense

Total Current Assets

Property Assets (Note 1)

ASSETS

1989

187,670 12,578 29,649 6,630 2,689 6,353 245,569

Land 266,260

Construction in Progress 53,037 Priorities, Water Rights,

Easements 693,804 Ditches and Reservoirs 10,034,002 Buildings and Improvements 113,473 Radio and Office Equipment 44,531 Machinery and Equipment 169,110 Transportation Equipment 66,494

Total 11,440,711

Less: Accumulated Depreciation (2,261 ,758) Total Property Assets

Other Assets

Stock of Other Companies (Note 1) Notes Receivable (Note 2)

Total Other Assets

Total Assets

9,178,953 17,941 19,204 37,145 9,461,667

The accompanying notes are an integral part of these financial statements.

Exhibit A

1988

137,673 103,392 49,677 2,417 11,984 305,143

266,260

204,504

673,804

9,249,518

113,473

44,872

167,089

57,224

10,776,744

(2, 148,7 45)

8,627,999

17,941

21,910

39,851

8,972,993

Current Liabilities Notes Payable (Note 3) Accounts Payable- Trade Accounts Payable-

LIABILITIES

Water Purchase (Note 5) Accrued Interest

Accrued Payroll Taxes Accrued Wages Total Current Liabilities Long- Term Liabilities (Note 3)

Notes Payable Total Liabilities

1989 41,918 11,212 60,000 62,891

525 8,030 184,576

2,918,822 3,103,398 STOCKHOLDERS' EQUITY Paid in Capital

Common Stock (10,000 Shares Authorized,

$50 Par Value, 10,000 Shares Issued,

9,996 Outstanding) 500,000

3,450 Additional Paid In Capital

Total Paid in Capital Retained Earnings

Beginning Balance Net Income

Ending Balance Total Paid In Capital

and Retained Earnings Less: Treasury Shares at Cost . Total Stockholders' Equity

Total Liabilities

and Stockholders' Equity

503,450

5,634,223 220,743 5,854,966

6,358,416 (147) 6,358,269

9,461,667

1988 36,017 76,642 60,000 63,709 486 9,954 246,808

2,588,659 2,835,467

500,000 3,450 503,450

5,068,787 565,436 5,634,223

6,137,673 (147) 6,137,526

8,972,993

North Poudre Irrigation Company Wellington, Colorado

Statement of Operations

For The Years Ended October 31, 1989 and 1988

Operating Revenues Assessments

Recreational Leases (Note 4) Stock Transfer Fees

Other Operating Income Reimbursements Total Operating Revenue Operating Expense

Repairs and Maintenance, Buildings Ditches, Reservoirs,

Equipment Machine Hire

Gas and Oil Weed Control

Water Purchased and Assessments Engineering Fees

Salaries and Wages Payroll Taxes

Ditch Riders' Expense Insurance

Office and Other Expense Vehicle and Other Taxes Directors' Fees and Expense Utilities and Telephone Mileage

Legal Fees Accounting Fees Employee Benefits Depreciation

Total Operating Expenses Income From Operations

1989 750,277 76,022 5,440 137,211

6,732 975,682

59,945 784 11 '177 16,160 73,588 3,461 202,938 18,912 12,483 33,136 13,804 2,511 21,043 10,890 4,232 26,653 2,600 20,827 114,561 649,705 325,977

The accompanying notes are an integral part c~ these financial statements.

Exhibit B

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1988 700,282 62,470 5,840 46,252 7,299 822,143

75,278 182 9,907 11,462 76,385 425 203,890 20,461 11,717 49,215 10,551

2,449

26,478

11,792

6,628

26,039

2,600

15,749

110,012

671,220

150,923

North Poudre Irrigation Company Wellington, Colorado

Statement of Operations (continued) For The Years Ended October 31, 1989 and 1988

Other Income (Expense) Interest Income Oil and Gas Royalties Interest Expense

Total Other Income (Expense)

Net Income Before Extraordinary Item

Extraordinary Item

Loan Payoff Discount (Note 6) Net Income

1989 8,620 15,563 (129,417) (105,234) 220,743

220,743

The accompanying notes are an integral part of these financial statements.

Exhibit B

1988 8,142 19,174 (124,616) (97,300) 53,623

511,813

565,436

North Poudre Irrigation Company Wellington, Colorado

Statement of Cash Flows

For The Years Ended October 31, 1989 and 1988

Cash Flows from Operating Activities 1988 1987

Net Income 220,743 565,436

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Loan Payoff Discount

Depreciation

Decrease (Increase) in Assets:

Assessments Receivable Other Accounts Receivable Prepaid Expenses

Increase (Decrease) in Liabilities:

Accounts Payable Accrued Expenses Net Cash Provided by

Operating Activities

Cash Flows From Investing Activities Collection of Loans Receivable Purchase of Equipment and

Property Assets Net Cash Used by Investing

Activities

Cash Flows From Financing Activities Proceeds From Short-Term Debt Proceeds From Long-Term Debt Repayment of Short-Term Debt Repayment of Long-Term Debt Net Cash Provided by Financing

Activities

Net Increase (Decrease) in Cash Beginning Cash

Ending Cash

114,561 20,028 (6,630) 5,631 (65,430) (2, 703)

286,200

2,434 (665,514)

(663,080)

73,000 371,554 (73,000) (35,491)

336,063 (40,817) 241,065 200,248

The accompanying notes are an integral part of these financial statements.

Exhibit C

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(511 ,813) 110,012 (1,516) (6,001) 57,088 3,463

216,669

2,204 (159,864)

(157,660)

197,521 195,433 (197,521) (187,107)

8,326

67,335

173,730

241,065

North Poudre Irrigation Company Wellington, Colorado

Notes to Financial Statements October 31, 1989

Note 1 -Significant Accounting Policies

Property Assets - Property assets are recorded at cost. De- preciation is being taken by the straight-line method over the following useful lives.

Item

Ditches and Reservoirs Buildings and Improvements Radio and Office Equipment Machinery and Equipment Transportation Equipment

Life 100 years

20 years 10 years 10 years 4-5 years Investments - Investments consist of Strip Treasury Cou- pons stated at cost at October 31, 1989, and Certificates of Deposit stated at cost at October 31, 1988.

Income Taxes - The Company is incorporated under the laws of the State of Colorado as a tax exempt corporation;

therefore, no provision for income taxes has been made.

Stock of Other Companies - Investments in the stock of other irrigation companies is stated at cost.

Note 2- Note Receivable Detail Source

Smelker, Gerald

Lela, 10% interest, due in monthly payments of $396, prin- cipal due in full October 11, 1995, se- cured by 1st deed of trust.

Current Long- Term

2,689 19,204

Note 3- Note Payable Detail Source

Colorado Department of Natural Re- sources (Colorado Water Conservation Board), S

lo interest, payable in 11 annual installments of $19,782 begin- ning June 1S, 1989. Collateralized by the Park Creek Reservoir and water rights.

Colorado Department of Natural Re- sources (Colorado Water Conservation Board), S

lo interest, payable in 10 annual installments of $1,280 begin- ning January 1 of the year that con- struction is completed. Amount repre- sents advances for the feasibility study for No.2 dam improvements.

Colorado Department of Natural Re- sources (Colorado Water Conservation Board), S

lo interest, payable in 40 annual installments of $77,612 begin- ning May 1, 198S. Collateralized by an undivided one-half interest in the Fossil Creek dam structure.

Colorado Department of Natural Re- sources (Colorado Water Conservation Board), S

lo interest, payable in 40 annual installments of $67,192 begin- ning May 1, 1987. Collateralized by an undivided one-half interest in the No. 1S Reservoir dam structure.

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Current Long- Term

12,14S 140,610

9,88S

14,073 1 ,2S6, 702

11 ,600 1 '111 ,223

North Poudre Irrigation Company Wellington, Colorado

Notes to Financial Statements October 31, 1989

Note 3 continued-

Source Current Long- Term

Colorado Department of Natural Re- sources (Colorado Water Conservation Board), 5°/o interest, payable in 40 annual installments of $29,140 begin- ning January 1 of the year that con- struction of the project is completed.

Collateralized by an undivided one-half interest in the Clark Lake dam structure.

4,1 00 400,402

- - - - ' - - - -

Total 41,918 2,918,822

The following is a summary of the annual debt service:

Year Principal Interest Total

1990 41,918 151,808 193,726

1991 44,055 149,671 193,726

1992 46,257 147,469 193,726

1993 48,570 145,156 193,726

1994 50,999 142,727 193,726

1995-2029 2,728,941 2,726,545 5,455,486

Totals 2,960,740 3,463,376 6,424,116

Note 4- Lease Income

Lease income is derived from the lease of reservoirs and land to various organizations for recreatior.al and agricul- ture uses. All leases are normally annually renewable over a 5 year period with the exception of the following:

1) Luther Harris, lease of Fossil Creek Reservoir through 11/8/91 at $10,500 per year.

2) Ski and Camp Club, lease of No. 15 Reservoir through 11/1/91 at $10,000 per year.

3) Colorado Division of Wildlife, lease of Smith and #4 Reservoirs through 3/31/93 at $5,000 per year.

4) North Fork Recreation, lease of Halligan Reservoir through 6/1/08 at $6,000 per year for the first 5 years, remaining 15 years to be negotiated every 5 years.

Note 5- Water Allotment Agreement

The Company entered into a'n agreement December 5, 1945, with the Northern Colorado Water Conservancy District for the annual purchase of 40,000 acre feet of water, or any such portion that may be delivered, at $1.50 per unit.

Payment is due May 1 of every year and is secured by an irrevocable levy of assessment on the capital stock of the Company. Payments shall continue until the delivery system is paid for and thereafter for operating and maintenance charges.

Note 6- Loan Payoff Discount

The U.S. Department of Interior, Bureau of Reclamation offered the Company a discount for early repayment of the loan on Park Creek Reservoir. The principal amount of the debt, $676,134, was paid off by payment of $164,321, August 9, 1988, resulting in a discount to the Company of

$511,813. The early payment amount of $164,321 was financed through the Colorado Water Conservation Board as detailed fully in Footnote 3.

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THE FOLLOWING PHOTOGRAPHS ARE OF THE COMPLETED CLARK'S LAKE DAM REHABILITATION.

Before (above) and after (below) renovation of the outlet channel at Clark's Lake.

Final placing of rip-rap, Clark's Lake.

Rip-rap on upstream slope of Clark's Lake dam.

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Placing top soil on downstream face of Clark's Lake dam.

Gate operators, Clark's Lake.

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