West Paradox Watershed Application for P.L. 566 Project (2)

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The main_ problem discussed at the meeting was how the project could be financed if the preliminary plan of the project showed that ditch headings and ditches needed repair work. Since the Articles of Incorporatio4 tsf the Paradox Canal and Reservoir Company include only that area above the outlet of .Buckeye Reservoir, the Paradox Valley Canal and Reservoir Company could not legally contract for repayment of loans made for improveme is beib'W skid poifit. The law further provides that to be eii4ible fdr Tocaffis c6dt sharing benefits under public Law 566, in as s -dtri ban nod contract with the Farmers Home Admin- i9tration. the contrac- a party must be a nonprofit corporation such as Niiattdi Ditch bbmpany. in order to overcome this technicality, three ptojoid a s were presented to those in attendance. They are as follows: Formation of a Water Conservancy District (quasi - municipal torporati6n� to act as sponsor. 2. Amendment of the Articles of Incorporation of the Paradox Valley Canal and Reservoir Company so it could control the ditches. 3. Formation of a nonprofit corporation to qualify as co- sponsors with the Paradox Valley Canal and Reservoir Company as sponsor. A review of these items in order as listed above follows: 1. Water Conservancy District - Formation of a water con- servancy district is governed by Chapter 149, Article 6, Colorado Revised Statutes of 1953. The requirements to form a district are very detailed and it is doubtful that it would be of any value to set forth all the requirements. A question arose as to whether or not those holding mineral claims would sign the petition for or against the district. Since the statute provides that owners of lands other than irrigated land must have an assessed valuation of at least $1000, it would appear that this would eliminate most of those owning mineral claims. 2. Amendment of the Articles-of incorpo of the Paradox Valley Canal and Reservoir Company - Under this approach, the Articles would be amended to include all lands below Buckeye Reservoir which would benefit from the project. As can readily be seen, if this were accomplished, then the Paradox Valley Canal and Reservoir Company would act as the sole sponsor for the project as it would control all areas where work is to be done. This approach seemed to meet with considerable opposition because of the history of how these Articles were originally drafted. In other words, there was a great hesitancy on the part of those present to in any way amend the Articles of Incorporation of said company. Memo -2- November 18, 1964