THE NORTH POUDRE IRRIGATION COMPANY

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THE NORTH POUDRE IRRIGATION COMPANY

1982

DIRECTORS

Harlan Seaworth ... Wellington, Colorado Duane Arand ... Fort Collins, Colorado Philip Schnorr ... Fort Collins, Colorado Manuel Pineda ... Fort Collins, Colorado Robert Stieben ... Wellington, Colorado

OFFICERS

Harlan Seaworth ... President Duane Arand ... .Vice President Ben Dumler ... Secretary-Manager

ORDER OF BUSINESS

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

I. Meeting called to order by the chairman at 10:00 A.M.

2. Appointments 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 IRRIGATION SEASON

Each year when operating an irrigation system or any agricultural venture, we face different conditions and problems. The 1982 season was no exception.

The snow pack on the Cache La Poudre water shed by January 1, 1982 was thought to be very good. By April the Soil Conservation Service was predicting much below average run-off. However, we did have a good supply of storage water.

Weather conditions had allowed seed bed preparation and planting of small grains and sugar beets early in April.

At the regular board of directors meeting April 7th, the directors were of the opinion that if we did not get moisture by April 15, there would be a demand for irrigation water. On that day, an appropriation of 2 acre feet per share for the 1982 season was made. Also, an additional appropriation of 1 acre foot was made to be run by June 1, 1982. The board also directed the manager to make water available to all paid up stockholders by April 15, providing there were enough water orders to make deliveries without excessive loss.

The weather continued warm and dry so water delivery began April 15. On May 5, an additional 1/2 acre foot per share was appropriated to be run by June 15.

Irrigation for germination continued until May 13, then general rains fell over our system, some areas receiving over 5 inches.

Through the summer, we had several beneficial and timely rains which made the demand for irrigation water less than normal. We had a 6-1/2 acre foot total appropriation, but actually only delivered 5.05 acre feet per share.

I believe the majority of the farmers under our system harvested better than average crops. If the prices were as good as the crops we would not have much to complain about.

According to Jack Neutze, the Water Commissioner, the average

water produced on the total Cache La Poudre water shed is 275,000 acre

feet. In 1982, the water produced was 312,700 acre feet; 116,000 acre

feet left the Poudre valley and went on down the Platte. Sixty-one

thousand (61,000) acre feet of this water could have been stored in the

valley, but was lost due to lack of storage space. I am sure there will be

years ahead of us when this will be needed.

I have received some complaints that some stockholders do not get the word of appropriations of water that must be run by a certain date in time to get the benefit of the appropriation. I believe the solution to this problem is for the stockholder to keep in touch with the office, especially between April 15 and May 15.

HINKLEY RESERVOIR

It was reported to you last year the company was in the process of rebuilding the dam and outlet works at Hinkley Reservoir. This work was completed in time for the 1982 water season. Due to extra requirements by the State Engineer, the cost ran over the $100,000.00 estimate that was reported to you. The final total cost was $145,000.00.

BOXELDER FLOOD CONTROL DAMS

On September 30, 1982, a dedication of the Boxelder Creek Water Shed Flood Prevention Project was held on B-2 Dam, east of Buckeye.

Construction of this project started in 1975 and was completed in 1982.

The water shed includes some 251 square miles of drainage, mostly in Colorado, although 15,000 acres of the upper reaches extend into Wyoming.

Five flood retarding dams and one grade stabilizing structure were built. None of the five dams are gated. The water is only temporarily held behind the dam until it can flow through the outlet structure as controlled by the size of the outlet.

The temporary storage capacity and the cost of each structure is listed below:

Structure Storage Capacity Number in acre feet B-2 6,466

B-3 3,782

B-4 908

B-5 1,139 B-6 1,362

B-7 0

Construction Cost

$4,270,000.

965,457.

412,890.

1,285,999.

335,430.

108,938.

$7,378,714.

The construction costs were borne by the Federal Government (under

Public Law 566). The local sponsors that provided the necessary land

rights and easements were The North Poudre Irrigation Co., Larimer

County Board of County Commissioners and the Fort Collins Soil Conservation District. The North Poudre Irrigation Co. has the obligation of operation and maintenance. I believe the benefits will by far our-weigh the obligation.

NO. 4 INLET AND SMITH LAKE

This project was not anticipated for 1982. On June 26, the inlet drop structure to No. 4 Reservoir was washed out. This structure was located about 150 feet below a headgate in No. 3 lateral, which serves as the water supply for No. 4 Reservoir. Water ran across and then made about a 25 foot vertical drop into the reservoir. After the drop structure failed, it left the headgate on No. 3 lateral almost in mid-air. We do not know the exact cause of the failure. We believe it could have been rodents.

The only other way to get water to No. 4 Reservoir was by the outlet from Smith Lake, which was a 15 inch, 645 foot clay tile. The condition of this tile has not been very good for years. The Board felt the solution to both problems was to put a new pipeline in from Smith Lake. The old tile line has been replaced with a 36 inch concrete pipeline. A new gate well and a small dike on Smith Lake will be built in the spring of 1983.

The old inlet to No. 4 has been completely filled and graded.

FOSSIL CREEK RESERVOIR

The Fossil Creek Reservoir rehabilitation project is proceeding as it was projected to you at the 1982 annual meeting.

The reservoir was drained last fall to provide access for soil tests and for contractors to make pre-bid inspection of the site. This was done in October. So far we have not had any surprises, either financially or in structural planning. Water is now being stored in the reservoir for use in the 1983 season.

It is anticipated that bids will be taken in late spring and construction

should start by September 1983. We are hoping for completion by May

1984.

LAWN LAKE DISASTER

I believe you all are aware of the Lawn Lake breach that caused the flooding of the town of Estes Park this last summer. This incident points out what could happen to any reservoir and to its owner. It has put tremendous pressure on the State Engineer and his dam inspectors.

They, in turn, will transfer these pressures to us as dam owners. It will not make our financial obligations any better.

We have been informed by our liability insurance company that our liability policies will not be renewed in January of 1983. The board is attempting to get insurance with other companies.

CONCLUSION

The board of directors request your questions and ask for your comments for the improvement of the company. The Board hopes to see you at the annual meeting.

Respectfully submitted,

Harlan Seaworth, President

December 30, 1982

RECOMMENDED BUDGET FOR 1983 Items Per Share

$ 7 .00 for water assessment

34.50 for operation, maintenance and weed control 2.00 for loan retirement

3.00 for new equipment

3.50 for right-of-way acquisition 50.00 for reservoir rehabilitation

$100.00

$60.00 per share due and payable April 1, 1983, interest at 1 ½ % per month charged after May 1, 1983.

$40.00 per share due and payable October 1, 1983, interest at 1 ½ % per month charged after November 1, 1983.

Accounts past due over 1 year will be charged 25% interest.

Total amount owed must be paid prior to water delivery.

Total assessments of 100.00 per share are due April 1, 1983, on two

shares or less.

SOURCE OF WATER Storage to January 1, 1982 Storage to April 1, 1982 Storage after April 1, 1982 Total

Direct flow

C. B. T. (Horsetooth) Total

DISTRIBUTION

North Poudre Stockholders Fossi I Creek Stockholders Carry over October 1, 1982 Loss in storage and distribution Total

DIVIDENDS April 7, 1982 May 5, 1982 June 9, 1982 July 8, 1982 August 4, 1982

ACRE FEET 27,553

5,949 6,592 40,094

14,718 24,000 78,812

47,478 3,450 21,133 6,751 78,812

ACRE FEET PER SHARE

3.0 .5 1.0 1.0 1.0 6.5

PERCENTAGE 34.96 7.55 8.36 50.87

18.68 30.45 100.00

60.24

4.38

26.81

8.57

100.00

I reported in the 1981 Annual that I was looking forward towards having more water in 1982. Little did I guess what the future would bring. When we started the irrigation season in a very dry condition, I expected that we would be out of irrigation water by August 1. What a change Mother Nature can have in store for us! We know how it rained and rained and rained. On August 1, instead of being out of water, all reservoirs were full, and our demand was very low.

The plugging of the 8-6 flood control outlet created a problem in fall, but fortunately we were able to get it open in late October. This created some problems in the area further downstream, because of increase in the Boxelder that wasn't expected. The flooding in Sand Creek, Boxelder Creek and Rawhide Creek also caused a lot of trees and brush to wash downstream and gather at 8-6, 8-5 and 8-2, which also resulted in some fence damage. It seems to be a small price indeed, when we consider what could have happened, without the Boxelder flood control dams.

A new spillway was installed in the #3 ditch at the Poudre Valley Canal, allowing us to spill water into the canal in an emergency that could exist in #3 Reservoir. A check structure was installed in the #3 ditch at the Smith Reservoir inlet location. A new ditch check was installed in the Waverly Main just above the Stuchel gate, replacing the old check which required boards that were almost impossible to remove whenever hard rains required them to be out. The open space between the two Livermore tunnels on the north end was repaired. This has had very little maintenance since being built, and this was a must at this time. With a little consistent maintenance, the upper end of our system should continue to serve us well.

Park Creek and Halligan Reservoirs were full by January. We believe we'll have an adequate water supply for 1983.

Ben Dumler, Manager

YEAR WELLINGTON CACTUS HILL BUCKEYE LIVERMORE

1950 13.89 8.08 9.39

1951 21.59 15.83 15.02

1952 11.87 14.01 8.82

1953 12.10 7.79 13.11

1954 8.30 7.10 7.90

1955 12.84 13.48 10.20

1956 15.84 9.44 13.41

1957 19.48 12.90 16.67

1958 17.99 15.70 14.21

1959 14.58 12.61 12.61

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

Assmt. Ac.Ft. Cost Per 5 Yr. Av.

Year per share per share Ac.Ft. Interest

Per Ac.Ft.

Cost

1909 $ 5.00 $22,029.05

1910 5.00 26,533.46

1911 4.00 21,351.13

1912 5.00 3.09 1.61 21,137.50

1913 6.00 2.87 2.09 26,683.07

1914 7.00 3.44 2.03 35,698.51

1915 7.00 3.09 2.26 2.00 39,715.38

1916 7.00 2.29 3.05 37,843.74

1917 7.00 3.15 2.22 33,341.79

1918 7.00 2.41 2.90 39,510.20

1919 8.00 1.14 7.01 38,383.15

1920 11.00 2.98 3.69 3.77 37,483.88

1921 8.00 3.74 2.13 36,672.49

1922 6.50 1.83 3.55 37,269.08

1923 6.50 4.31 1.50 38,713.11

1924 9,50 4.59 2.07 42,899.56

1925 12.00 2.52 4.76 2.80 42,232.10

1926 5.00 4.63 1.08 40,525.92

1927 8.00 3.92 2.04 41,175.17

1928 8.50 4.59 1.85 37,054.95

1929 8.25 4.43 1.86 ^33,242.45

1930 8.25 3.09 2.66 1.90 31,879.06

1931 7.50 2.60 2.88 30,510.11

1932 7.00 1.37 5.10 29,314.38

1933 4.50 2.87 1.56 28,702.10

1934 5.00 1.37 3.64 28,773.75

1935 4.25 3.16 1.34 2.90 28,716.25

1936 6.00 2.07 2.89 28,863.61

1937 5.75 1.22 4.77 23,692.80

1938 6.75 3.21 2.10 23,626.89

1939 7.75 2.61 2.98 25,655.98

1940 7.25 .75 9.60 4.47 21,808.42

1941 4.00 2.00 2.00 19,102.96

1942 6.25 3.90 1.60 18,030.56

1943 8.00 4.19 1.90 17,423.15

1944 7.25 3.07 2.35 16,208.69

1945 7.25 2.10 3.45 2.26 14,149.96

1946 7.25 2.00 3.64 12,668.32

5 Yr.Av.

Assmt. Ac.Ft. Cost Per Per Ac.Ft.

Year per share per share Ac. Ft. Cost Interest

1947 9.00 3.30 2.72 ^11,266.32

1948 13.00 2.16 6.10 11,420.83

1949 12.00 3.00 4.00 8,956.62

1950 12.00 1.80 6.66 4.63 8,735.2E

1951 12.00 2.62 4.58 6,457.13

1952 12.00 3.20 3.75 5,077.05

1953 14.40 4.51 3.21 ^4,366.54

1954 18.60 3.40 5.47 2,860.71

1955 18.00 3.20 5.62 4.53 1,950.61

1956 16.00 3.40 4.71 1,564.16

1957 9.00 6.50 1.39 116.10

1958 15.00 6.00 2.50

1959 14.50 5.80 2.50

1960 14.50 5.30 2.73 2.77

1961 14.50 6.00 2.42

1962 14.50 7.00 2.07

1963 14.50 5.50 2.64

1964 15.00 5.30 2.83

1965 16.00 5.00 3.20 2.63 96.66

1966 16.50 5.00 3.30 172.51

1967 17.00 4.50 3.50 216.81

1968 20.00 6.30 3.17 120.81

1969 20.00 5.50 3.64 1,164.37

1970 20.00 7.00 2.86 3.29 273.78

1971 20.00 8.00 2.50

1972 21.00 5.00 4.20 2,667.00

1973 21.00 6.00 3.50 2,877.00

1974 22.00 7.00

1975 26.00 7.00 3.71 3.33

1976 35.00 6.00 5.83 5,262.00

1977 45.00 4.80 9.38 8,267.00

1978 45.00 6.35 7.08 8,161.00

1979 45.00 6.70 6.71 13,852.00

1980 55.00 4.7 11.70 7.88 21,917.00

1981 80.00 6.75 11.85 12,057.00

1982 80.00 6.50 12.31 18,676.00

Total Interest Paid $1,285,224.00

Principal indebtedness 1936 - $610,000.00

Total principal indebtedness paid off December 6, 1956

HILL AND HILL Attorneys at Law A Professional Corporation Fort Collins, Colorado 80522

December 31, 1982

As part of our representation of North Poudre, Alden V. Hi 11 attends regular monthly meetings of the Board of Directors, and special meetings as requested. The regular monthly meetings usually last between six to eight hours. In calendar year 1982, we spent over 278 hours on North Poudre business.

After stockholder approval, time was spent in getting approval from the Colorado Water Conservation Board for financial assistance for repairs at Fossil Creek Reservoir. The Colorado Water Conservation Board gave the go-ahead and the Colorado legislature approved the funding. Approval had also been obtained from the Bank of Co-ops from Wichita, but the interest costs would be higher. Bruns Incorporated of Longmont, Colorado, an engineering firm, is now working on plans so the rehabilitation can begin. The State Engineer must approve the final plans.

There are still pending residential developments around North Poudre Reservoir No. 10 and Hinckley Reservoir, which raise continuing legal questions. North Poudre has not yet reached an agreement with the two different subdividers involved with regard to boundary questions and other matters which affect North Poudre if the subdivisions are in fact developed.

We regularly spend time dealing with the problems of lost stock ~ certificates and advising owners,· realtors, and attorneys as to what must be done to get a new certificate issued. The present cost-for a lost instrument bond is about $22.50 per $1,000.00. All stockholders should know where their stock certificates are located and keep them in a safe place to avoid the irritation and expense which results when a

certificate cannot be found. ·

It now seems likely the Town of Wellington will construct a water filter plant near North Poudre Reservoir No. 3. All indications are that the Town has the necessary financing and is not going to take water from East Larimer County Water District. The Town and East Larimer County Water District were not able to agree on the terms of the contract.

We have spent time working on questions regarding the boundary lines for Reservoirs No. 5 and 6 to be certain North Poudre has adequate access and enough land above the high water line to allow for wave action.

As our area continues to grow in population, North Poudre has worked at putting fences on boundary lines. There is merit in the saying that "good fences make good neighbors."

As the year ended, North Poudre received notice of non-renewal from

its insurance carrier providing insurance for the reservoirs. We are told

Iowa National Mutual Insurance Company, the insurer involved, was

one of the companies insuring Lawn Lake, and after that loss decided to

get out of the business of writing coverage for reservoirs. There seems

to be a temporary panic in the insurance industry with regard to

insuring reservoirs. Few insurance companies are willing to provide

reservoir coverage. How much coverage can be obtained and what it

will cost is uncertain on the date of this report. A look into the future

seems to promise substantial increases in liability insurance costs on

the reservoirs.

Our representation of The North Poudre Irrigation Company has now been continuous for 16 years. We appreciate the opportunity to represent The North Poudre Irrigation Company. We have enjoyed working with its Directors, past and present.

HILL AND HILL

P.C.

Attorneys at Law

160 West Mountain Avenue Fort Collins, Co. 80521

Alden T. Hill Alden V. Hill Charles S. Unfug

J effrey L. Dykes

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November 17, 1982 Board of Directors

North Poudre Irrigation Company Wellington, Colorado

We have examined the balance sheet of the North Poudre Irrigation Company as of October 31, 1982 and the related statements of operations and changes in financial position for the year then ended.

Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the accompanying financial statements present fairly the financial position of the North Poudre Irrigation Company as of October 31, 1982 and the results of its operations and changes in financial position for the year then ended, in conformity with generally accepted accounting principles applied on a consistent basis.

Respectfully submitted,

Brock, Watkins and Schommer Certified Pub I ic Accountants

MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC

ACCOUNTANTS

Balance Sheet October 31, 1982

ASSETS Current Assets

Cash in the Bank Investments (Note 1) Assessments Receivable Accounts Receivable - Other Accrued Interest Receivable Notes Receivable (Note 2) Prepaid Insurance

Total Current Assets Property Assets (Note 1)

Land

Construction in Progress - Fossil Creek Reservoir

Priorities, Water Rights and Easements Ditches and Reservoirs

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

Total

Less: Accumulated Depreciation Total Property Assets

Other Assets

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

Total Other Assets Total Assets

20,911 327,945 58,035 3,000 4,190 878 2,128

417,087

242,330 63,827 672,935 4,369,971 36,364 30,901 148,691 46,158 5,611,177 (1,655,231)

3,955,946

17,941 11,758

29.699 4.402,732 The accompanying notes are an integral part of these financial statements.

Exhibit A

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

LIABILITIES

Accounts Payable - Water Purchase (Note 5) Accrued Interest

Accrued Payroll Taxes Accrued Wages

Total Current Liabilities Long-Term Debt (Note 3)

Notes Payable Total Liabilities

51,349 37,058 60,000 11,037 326 7,214

STOCKHOLDER'S EQUITY Paid In Capital

Common Stock, $50 Par Value, 10,000 Shares Authorized, 10,000 Shares Issued, 9,979 Shares Outstanding

Additional Paid In Capital Total Paid In Capital Retained Earnings

500,000 3,450

Beginning Balance 2,603,473

Net Profit Per Statement of Operations 224,795

(Exhibit B) - - - ' - - -

Ending Balance

Total Paid In Capital and Retained Earnings Less: Treasury Shares, 21 Shares at Cost

Total Stockholders' Equity Total Liabilities and

Stockholders' Equity

Exhibit A

166,984

904,803 1,071,787

503,450

2,828,268 3,331,718 (773) 3,330,945

4,402,732

NORTH POUDRE IRRIGATION CO.

Statement of Operations For The Year Ended October 31, 1982 Operating Revenue

Assessments

Leases - Boating, Pasture, Etc. (Note 4) Stock Transfer Fees

Easements and Miscellaneous Reimbursements

Total Operating Revenue Operating Expense

Repairs and Maintenance - Buildings Repairs and Maintenance - Ditches and

Reservoirs (Note 6)

Repairs and Maintenance - Equipment Machine Hire

Gas and Oil Weed Control

Water Purchased and Assessments Engineering Fees (Note 6)

Salaries and Wages Payrol I 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 Expense Income From Operations

798,916 31,675 6,240 23,549 5,132

3,521 145,103

44,880 2,296 30,527 6,977 68,443 25,467 195,380 14,658 11,557 15,401 7,566 2,018 6,124 9,283 5,419 16,773 2,150 8,042 60,201

865,512

681,786

183,726

(Continued next page)

NORTH POUDRE IRRIGATION CO.

Statement of Operations For The Year Ended October 31, 1982

continued

Other Income Interest Income

Royalty Income (Oil and Gas) Total Other Income Other Expense

Interest

Net Profit (Exhibit A)

31,383 28,362

59,745

(18,676) 224,795

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

Exhibit B

NORTH POUDRE IRRIGATION CO.

Statement of Changes in Financial Position For The Year Ended October 31, 1982 FINANCIAL RESOURCES WERE PROVIDED BY

Net Profit Per Statement of Operations (Exhibit B)

Add - Expense Not Requiring Outlay of Working Capital in the Current Period

Depreciation

Resources Provided by Operations Net Increase in Long-Term Debt Net Decrease in Other Assets

Total Financial Resources Provided FINANCIAL RESOURCES WERE APPLIED TO

Purchase of Additional Property Assets Net Increase in Working Capital - Below

Total Financial Resources Applied

224,795

60,201

174,519 178,535

Statement of Changes in Components of Working Capital Increase (Decrease) Cash

Assessments Receivable Accrued Interest Receivable Notes Receivable

Accounts Receivable - Other Prepaid Insurance

Notes Payable Accounts Payable Accrued Expense

Net Increase in Working Capital

158,258 19,924 2,506 (16) 3,000 2,128 (6,359) 5,848 (6,754) 178,535

284,996 67,117 941 353,054

353,054

The accompanying notes are an integral part of these financial

statements. Exhibit C

NORTH POUDRE IRRIGATION CO.

Notes to Financial Statements October 31, 1982 Note 1 -Significant Accounting Policies:

Property Assets - Property assets are recorded at cost.

Depreciation is being taken by the straight-line method over the following useful lives:

Item Life

Ditches and Reservoirs 100 years

Buildings and Improvements 20 years

Radio and Office Equipment 10 years

Machinery and Equipment 10 years

Transportation Equipment 4 - 5 years

Investments - Investments consist of a Certificate of Deposit of

$100,000 and a Cash Equivalent Fund of $227,945 both stated at cost.

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 Current Long-Term

Savage, 12% interest, interest due annually May 1, principal due in full

5/1/87 ^10,000

Antrobus, 10% interest, due in annual

payments of $878 plus accrued interest. 878 1,758

Total 878 11,758

NORTH POUDRE IRRIGATION CO.

Notes To Financial Statements (continued)

Note 3 -Note Payable Detai I:

Source

U. S. Department of Interior, 3.25%

interest on excess acres, principal calcu- lated annually, due in annual payments of

$19,900 plus interest until paid in full.

Collateralized by company property.

Colorado Department of Natural Re- sources (Colorado Water Conservation Board). The amounts indicated represent initial loan advances on a total loan com- mitment of $2,057,000 at 5% interest. The loan will be payable in forty annual payments of $119,882 beginning January, 1984. The loan will be collateralized by an undivided one-half interest in the Fossil Creek Dam structure.

First Interstate Bank of Fort Collins, 5.5%

interest, due in annual payments of $4,723 through 6/1/83. Collateralized by Cat loader.

First Interstate Bank of Fort Collins, 6.75% interest, due in annual payments of

$5,049 through 6/1/86. Collateralized by two 1979 I HC trucks.

First Interstate Bank of Fort Collins, 8.0%

interest, due in annual payments of

$11,624 through 6/1/86. Collateralized by a Case excavator.

Riddell Brothers, Ltd., 14% interest, due in annual payments of $12,669 through 1/5/89. Collateralized by real property at Fossil Creek Reservoir.

Current

19,900

4,476

4,670

8,544

5,426

Long-Term

755,735

63,777

29,947

49,264

Note 3 - Note Payable Detail: (continued) Erwin E. Neilsen, 8% interest, due in annual payments of $6,080 plus interest through 7 /1/84. Collateralized by company land.

Imogene Stephenson, 8% interest, due in annual payments of $2,434 through 6/21/83. Collateralized by company land.

Total

Note 4 - Lease Income

Current Long-Term

6,080 6,080

2,253

51,349 904,803

Lease income is derived from the lease of reservoirs and land to various organizations for recreational and agricultural uses.

All leases are for one year with the exception of the following:

1) North Fork Recreation Association, lease of Halligan Reservoir through 6/15/87 at $5,000 per year for the first 3 years, final 2 years compensation to be negotiated.

2) Curtis Cattle Company, pasture lease through 3/3/86 at

$500 per year (Clarks Lake).

3) Ted Baland, pasture lease through 1/8/85 at $100 per year (No. 3 Reservoir).

Note 5 - Water Allotment Agreement

The company entered into an 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 inevocable 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.

Notes To Financial Statements (continued)

Note 6 - Major Project Detai I

The following amounts are a breakdown by project of major maintenance, engineering and capitalized costs incurred

Fossil Creek Reservoir Hinkley and Smith Lake Livermore House Reservoir Fencing

Totals

Maintenance &

Engineering 13,554 108,523

122,077

Capitalized 149,038

5,156

14.192

168,386

New outlet from #3 ditch into Poudre Valley Canal

New check at Waverly Main

8-8 in late summer

The washed-out inlet to #4 Reservoir

NOTES

NOTES