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❑ �� Mr. Alan Wickert Mr. Gt�egory Timm D�ber 3, 20Q9 Page 8 are useful in evaluating the general demand and price for water and the differences in winter and summer water demands and vatues. Dillon Re�rvair Agreement ' We found no independent sales of storage rights ar agreements for storage in Dillon Reservoir. A portion of the 100 acre-feet af stora�e available to Summit County users may still he avai[able, but this storage space is not marketed by the County. The Caunty , faciiitates the apportianment of the storage allotment, but each user must independently negotiate an agreernent with the Denver Water Department. We have not placed an independent value on the 6 acre-feet of storage available to Swan's Nest. The Dillon ' Agreement is an important part of the Swan's Nest augmentation plan which allows for the plan to cover winter season depletions. Junior Well Ri�hts The junior well rights included in Case Na. 84CW719 carry a 1984 priority. Under the administration a£water rights an the Blue River above Dillon Reservoir, there is nearly always a senior call in effect, except for short periods in some years when DiIlon Reservair is spilling. Because the reservair does nat spill in every year, the junior well rights can only provide a reliable water supply when covered under a plan for augmentation. The main value of the well water supply is determined by the au�mentation rights and not by the well water rights. And, because an augmentation plan is required, there is very little advantage to having 1984 priority versus a new water right filed in 2449. There is same value, however, related ta the costs of filing for new water rights in tlte absence of the existing decreed rights for the wells. We have estimated that the separate engineering and legal costs to file junior ground water rights, independent of the costs af an augmentation plan, to be approximately $10,Q00. This represents the market vaiue assaciated with the existing 1984 well priorities. Reservoir Na. 1 The need for this reservoir has essentially been reptaced hy the Dillon agreement. In the current regulatory setting, the costs and environmental requirements of developing a new reservoir may be prohibitive. In addition, this right would carry an additional augmentation obligation due to evaporation charges. It is our opinion that this right carries no additional market value. Water Tank As part of our evaluation we requested an independent valuation of the existing 133,000 galIon storage tank from McLaughlin Water Engineers, Ltd.. We have attached a copy of the Novernber 25, 2009 repart by Mr. Ron McLaughlin, P.E., who pIaces a current value of $150,000 on the storage tanic based upon an assumed canstruction date of 1980, and a projected useful facility [ife of 50 years, or 75 years if the tank is insulated.