PROJ01952 ‎(2)‎

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

In 1976, Paonia exchanged 400 water taps associated with residential
development land owned by Richard and Faye Mott for water rights associated with
what is now the German Creek Springs. Ownership of this land and the associated
water taps was then transferred to Delta Housing, Inc., a subsidiary of ARCO. It is
our understanding that this property was intended to be developed for housing for
ARCO's coal miners. This land and the associated water taps is now owned by the
Ark Land Company, which is a subsidiary of the Arch Coal Company, the nation's
second largest producer of domestic coal. There are currently 31 7 water taps
available for development from the original 400 water taps included in the
exchange. The Hidden Valley subdivision has reserved 80 of these taps and three
taps have been used by the previous owners.

The owner's of the Ark Land Company property have a right to place these
317 taps in service at any time without paying the Town any additional tap fees.
However, there are some significant restrictions associated with developing these
taps. One of the restrictions is that the first 200 of these taps must be developed
in the Lamborn parcel, which is located south of Paonia, before the other taps can
be placed in service. A development of this magnitude may require its own
wastewater collection and treatment system or connection to Paonia's system
before it would be approved by the Delta County Commissioners, which would
increase the cost of development on this land.

Paonia's water system has provided a reliable, high quality source of water
to the Town until 1988. During the dryer years of 1988 and 1989, the Town had
difficulty maintaining storage levels in its treated water tanks duriog some of the
hotter days of 1989, but no water restrictions or service interruptions were required
to meet demands during this dry period.

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