C150312 feas study - Laserfiche WebLink

Home Browse Search

� 1 Swan's Nest Metropotitan District Notes to Financial Statements December 31, 2008 � 9. Contingencies and Litigation , The District is currently involved in a dispute concerning water rights. Record title to those water righ#s appears to be held in the name of Breckenridge Meadows Development Company (BMDC). BMDC acquired , the water rights at the same time it acquired the properly in the District from the Resolution Trust Company in the mid 'C990's. As BMDC developed that property, BMDC designated the District as the water � provider for its developments. The water rights acquired by BMDC have historica(ly been used to serve the developed property without cost to the District. Under the circumstances, the District believes that the water rights required to serve the property within the District were implicitly dedicated from BMDC to the District. This interpretation is consis#ent with BMDC's statement in May 2008 that BMDC was considering donating the water rights to the District. However, in subsequen# communication on December 30, 2008, BMDC stated that it would begin charging the District the sum of $10,000 per month for the use of wa#er rights beginning in 2010. This would be the first time BMDC indicated it wou(d charge the District for water rights. Negotiations with BMDC have commenced but it is not clear whether, or how, the matter wi11 be resolved. Should negotiations break down, the question of who has legal title to the water rights will likely have to be litigated. The District believes it has a good chance of prevailing on the merits. However, if the District does not prevail in such litigation, the District would likely be required to purchase the water rights at a cost that is estimated to be about $175,000. No adjustment has been made to these financia! statements for this contingency. 12