PROJ01951 ‎(3)‎

• Contract/PO #: C150131
• Contractor Name: Paonia, Town of
• Contract Type: Loan
• Water District: 0
• Loan Projects - Doc Type: Approval Letter

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Town of Paonia - Water Rights Purchase
January 22-23, 2003

Agenda Item 100

The attached opinion from the Attorney General further clarifies the Board's auth:ority to make a
loan for the purchase of the water rights/water taps under Sec. 37-60-119 (1), C.,R.S. (2002), "if the
CWCB finds that the proposed loan will promote the general welfare of the citizeps benefited by the
. retired water taps by reducing demand and making the Town's water supply more reliable."

Based on the current cost of out-of-city water taps the value of 317 water taps could theoretically be
as high as $2,694,500 (317 x $8500). However, as part of the previous loan consideration, staff
requested a valuation of the German Creek Springs water rights in present day dollars. This was
addressed in a letter from Mr. Gary Thompson, P.E., W.W. Wheeler and Associates, Inc., dated
August 30, 2002. Based on the analysis, as well as the unique value of the w~ter rights to the
Town because of their excellent water quality, seniority, and year-round usability', it is the opinion of
Mr. Thompson that the original German Creek water rights are worth about $1,500,000.
I
Accordingly, based on a value of $1 ,500,000, and considering that the Town will :be re-acquiring
317 of the 400 original water taps, an adjusted "water right"/tap value would be $1,188,750
(317/400 x $1,500,000).

Using the above adjusted "water right" value of the taps, a calculated project cos't breakdown is as
follows: .

TOTAL

$1,188,750
611,250*
100.000
$1,900,000

1.
2,
3.

Ark Water Taps Purchase
Ark Land Purchase
Acquisition Costs

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* Note - The land value shown is calculated based on the total project cost of
,
$1,900,000, not based on the appraisal being conducted by The eonservation Fund.

Acquisition costs related to the property transaction include The Conservation Fond's staff time,
transactional costs such as appraisal costs and attorney's fees for contract review and negotiations,
as well as other related closing costs. .

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