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<br />if appropriate terms an~ conditions can be impos to prevent injurious effect on the owner of or
<br />persons entitled to use water under a water . ght (C.R.S. 37-92-305).
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<br />The water court to the end possib , also will consider pertinent interstate water compact
<br />provisions, For example, "This compact is not intended to impede or prevent future beneficial
<br />development of the Arkansas river basin in Colorado and Kansas by federal or state agencies, by
<br />private enterprise, or by combination thereof, which may involve construction of dams, reservoirs,
<br />and other works for the purposes, of water utilization and control, as well as the improved or
<br />prolonged functioning of existing works: Provided, that the waters of the Arkansas river, as defined
<br />in article III, shall not be materially depleted in usable quantity or availability for use to the water
<br />users in Colorado and Kansas under this compact by such future development or construction."
<br />(Arkansas River Compact, C.R.S. 37-69-101, Art. N, D)
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<br />Major transfers may have twenty or more opposing parties. The experts typically employed by the
<br />parties include water rights hydrologists supplemented with groundwater geologists, surface or
<br />groundwater modelers, and water quality analysts. Experts generally, but not always, prepare
<br />written reports describing the details of the proposed transfers. Generally, conditions to prevent
<br />injury are a part of the experts' opinions and become a part of the transfer decree (Pratt, 1984).
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<br />While the water court process has been criticized as costly and time consuming, thorough
<br />preparation, active case management, and aggressive setting of deadlines can result in timely
<br />decisions in water court. ]
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<br />Prior Transfer Interest in Ft. Lvon Canal Companv Water
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<br />In 1987 a group of 65 percent of the Ft. Lyon shareholders organized FORT-CO and joined together
<br />in an effort to sell Ft. Lyon water to municipal interests. The asking price was $2,500 per acre foot
<br />or $4,210 per share based on their analysis, The offer to sell was not accepted by any municipal
<br />interest and failed. This attempt to sell may have set the stage for the 1991 offer by the Colorado
<br />Water Supply Company.
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<br />In December 1991, Colorado Water Supply Cornpany (CWS), submitted an offer to shareholders
<br />of the Ft, Lyon Canal Company for the purchase of their shares. CWS is a sister company to
<br />Colorado Interstate Gas Company and a subsidiary of Coastal Corporation of Houston, Texas. CWS
<br />desired to purchase at least a controlling 51 % interest in the company. The offer was a 43 page
<br />contract accompanied by 118 pages of exhibits, including escrow instructions, easements, deeds and
<br />assignments, covenants, proxies and lienholder's consents. In February, 1992, CWS tendered 19
<br />pages of modifications to the contract and exhibits.
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<br />The deadline for shareholders acceptance was January 13, 1992; after the request of Colorado
<br />Governor Roy Romer for additional time to consider the impacts of the proposal, the deadline was
<br />extended to March 6, 1992. On March 13, 1992, CWS announced that this plan to acquire the
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<br />I The water transfer process in Colorado is described by several authors, Refer to Browning
<br />[1992J and Vranesh [1987J, For Colorado water transfer data, refer to MacDonnell and Robinson
<br />[1990J. For an explanation of policy and procedures in the western states, refer to Colby, et al.
<br />[1989J. Studies of policy-induced transaction costs of water transfers are presented by Howe,
<br />Boggs and Butler [1990J and Colby [1990J.
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