C153808 Contract Member Shares

• Contract/PO #: C153808
• Contractor Name: Arkansas Groundwater Users Association
• Contract Type: Loan
• Water District: 14
• County: Pueblo
• Bill Number: ARA
• Loan Projects - Doc Type: Contract Documents

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MEMORANDUM

TO:

Peter Evans
Bill Stanton

Bill Green 'f>if'

FROM:

DA TE:

February 23, 1998

RE:

Excelsior Ditch Water Rights Appraisal

At the September 22, 1997 Board meeting, the Board approved a loan from the Arkansas
River Augmentation Loan Account to the Arkansas Groundwater Users Association in
the amount of $650,000 for the purchase of 1,007 shares in the Excelsior Ditch. The
shares will be used in AGUA's replacement program to offset depletions on the Arkansas
River resulting from members well pumping. One of the conditions of Board approval
was that final approval of the loan be conditioned upon the submittal of an appraisal,
acceptable to the Director of the CWCB, of the Excelsior Ditch water rights.

In February 1998, AGUA submitted an appraisal (Estimated Fair Market Value of 1,007
Shares of Stock in the Excelsior Ditch Company, January 16, 1998) prepared by Blatchley
Associates of Denver. The Blatchley appraisal arrived at a value of $590,590 for the
1,007 shares of Excelsior Ditch rights.

Blatchleyestitpated-an-- annual yield (consumptive use of irrigation water) for
1,007 shares at 826 acre-feet ba d on Excelsior Ditch diversions for the years 1908
through 1938. , the feasibility study for the AGUA proposal by Rocky
Mountain Consultants (RMC) provided an estimate of 752 acre-feet based on diversions
for the years 1908 to 1985.

Blatchley bases his use of the 1908 to 1938 diversion record on the presumption that
future diversions on the Arkansas, under the new Rules and Regulations, are likely to be
similar to diversions in the years prior to the widespread use of wells and will
consequently be greater than they have been in the last 60 years.

Blatchley's valuation of the Excelsior Ditch shares is based on 20 sales of water rights in
the Arkansas Basin for the years 1994 to 1997. The sales are listed in the attached table
and the results of the analysis are shown on the attached figure, both from the Blatchley
report. The extrapolation on the attached figure indicates an envelope fro~800
per acre-foot of consumptive use in late 1997/early 1998 with an averag~

(The Blatchley analysis did not include the recent Highland or Fort Bent purchases by
LA WMA. Those two sales averaged $675 per acre-foot which is very close to the average
figure in the Blatchley report.)