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A T h e 2.5 c.f.s. appropriated b y the Railroad Com pany for railroad purposes is not included in the sale to the W ater D istrict, the Railroad Com pany reserving the right to apply to the State Engineer for perm ission to change the point o f diversion o f said 2.5 c.f.s. from said W e ll N o. 1 to a w ell located on its shop ground. A s the population grew , the First Parties drilled m ore w ells so that at the present time there are altogether eleven w ells upon the lands being purchased b y the D istrict, the waters from w hich are appropriated for m unicipal supply and certificates of appropriation issued b y the State Engineer of the State o f N evada are o f record in the County R ecorder’s office, for all of the waters from each o f said wells. T he total am ount appropriated, according to said certificates o f appropriation is 23.37 c.f.s, including 4.18 c.f.s. from said W e ll N o. 1. It is m y opinion that the First Parties and their successors and assigns are entitled to use, for municipal supply, all of the waters produced from these eleven wells, and I am further o f the opinion that should the underground aquifers from w hich these w ells draw their respective amounts of w ater be depleted or lessened by an appropriator w hose priority is later than that of First Parties, such later appropriator w ould be required to plu g his w ell and be enjoined from using w ater therefrom . A s to the acquiring of additional water from the C olorado R iv e r : U nder date of June 19, 1950, the W ater D istrict made application to the State Engineer for perm ission to appropriate 59 cubic feet per second o f w ater (43,000 acre feet per annum ) from Lake M ead and the C olorado R iver for municipal purposes. A perm it was granted under date o f January 31, 1951, w hich perm it is in g o o d standing. T h e D istrict has until January 24, 1962, in w hich to apply the appropriated water to a beneficial use. U nder and pursuant to the R eclam ation L aw of 1902, the B oulder Canyon P roject A ct, and the C olorado R iver Com pact, b y contract of M arch 30, 1942, as amended by supplem ental contract o f January 3, 1944, the U nited States of Am erica agreed to sell and deliver to the State o f N evada such waters from the C olorado R iver as m ay be necessary to supply the State but not to exceed 300.000 acre feet o f water annually; the contract is for permanent service. Pursuant to the laws o f Nevada, by agreem ent o f June 14, 1951, as amended by am endatory agreem ent o f M arch 6, 1954, the State o f N evada has agreed to sell and deliver to the D istrict such w ater as the D istrict may demand, not to exceed 43,000 acre feet annually o f said C olorado R iver w aters; this latter agreem ent is also for permanent service. U nder date of M ay 23, 1952, the D istrict entered into an agreem ent with Basic M anagem ent, Inc. w hereby Basic M anagem ent, Inc. w ill deliver into the D istrict’s w ater system , through B. M. I.’s existing water plant and system , up to 5,000,000 gallons o f w ater per day, and up to 13.750.000 gallons per day after the D istrict shall have, at its ow n expense installed pum ps and other facilities sufficient to handle such increased quantity. (T h e B .M .I. w ater system consists o f intake pum ps at the point o f diversion on Lake M ead, and a 4 0 " pipe line extending from the Lake to H enderson, N evada.) In m y opinion said agreem ent is a binding obligation on both parties thereto. It is m y opinion that to the extent that the D istrict applies such water to beneficial use in the tim e and manner provided b y law, said D istrict is entitled to use not to exceed 43,000 acre feet annually o f waters from the C olorado River. In N evada the w ater o f all sources o f w ater supply, within the boundaries of the state, w hether above or beneath the surface of the ground, belongs to the public. Subject to existing rights, all such waters m ay be appropriated for beneficial use as provided by our Nevada Statutes and not otherwise. T h e determ ination o f the relative rights to water and the adm inistration of said rights in N evada are im posed upon the State Engineer o f the State, subject to court confirm ation if disputes arise. Very truly yours, L A M :nd L E O A . M cN A M E E 2