Garwood Irrigation Company - Page 16

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          for irrigation.  As part of its commitment to assist petitioner             
          in securing approval for the Corpus Christi transaction, the LCRA           
          tried to induce opponents to withdraw their protests.  Some                 
          opponents did withdraw their protests.                                      
               In 1998, the LCRA had discussions with Austin regarding the            
          possibility of a long-term water supply contract that would                 
          substantially increase Austin’s water supply in the future.  On             
          September 17, 1998, Austin and the LCRA signed an agreement that            
          assured Austin adequate future water supply.  On the same day,              
          after reaching this agreement, Austin withdrew its protest to the           
          Corpus Christi transaction.  The 1998 discussions marked the                
          first time Austin clearly signified its interest in being a                 
          customer for petitioner’s water, and the LCRA had no assurance              
          that Austin would sign the water supply agreement with the LCRA             
          until the agreement was executed.                                           
               On October 7, 1998, effective as of October 3, 1998, the               
          TNRCC approved petitioner’s applications for the Corpus Christi             
          and LCRA transactions.  On January 7, 1999, the Corpus Christi              
          transaction for 35,000 acre feet closed, and on January 8, 1999,            
          the LCRA transaction for the remaining 133,000 acre feet closed.            
               On its books and balance sheet, the LCRA was required to               
          record the water right at fair market value by generally accepted           
          accounting principles.  The LCRA had informally agreed to the               
          purchase price before knowing what the fair market value of the             

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Last modified: May 25, 2011