C150240 Contract Requirements - Laserfiche WebLink

Home Browse Search

1/1/13 Colorado Water Conservation Board Attn: Kirk Russell 1580 Logan St., Suite 600 Denver, Colorado 80203 Dear Mr. Russell, Bull Creek Reservoir Company PO Box 25 Molina, CO 81646 As detailed in my letters dated 7/1/12 and 10/1/12, currently prospects are quite limited for the sale of Bull Creek Reservoir Company water at a price that would be acceptable to BCRC shareholders. The most likely purchaser (Ute Water Conservancy District) has just made a very large purchase of water elsewhere at a very favorable price, and so is out of the market for the foreseeable future. BCRC's Reservoir #5 is the asset most likely to appeal to an entity seeking to purchase water, but it has infrastructure issues that need to be addressed. A geo- technical and slope stability study of the dam at Reservoir #5 was done in the fall of 2012, and though preliminary indications are that the dam is sound (the final report is currently being written), there are still some non- conforming characteristics and outlet issues that could discourage any potential buyers or depress the sale price until they are resolved. In 2013, BCRC plans to do what it can (meaning what it can afford) to improve the condition of Reservoir #5. BCRC is also going to re -write its previously issued water prospectus to bring it up to date and then send an updated copy to area water providers and energy companies. It is not expected that much real interest will be generated in the near term, but the information will be made available and potential purchasers will be reminded that BCRC is a potential source for water. Energy companies in particular will be targeted. That industry has been depressed in this area for the last several years, but there are indications that some of the bigger and better established companies may be looking to acquire water sources for future use. In any case, it does not appear that BCRC is going to be able to use its assets to reduce its shareholder assessment in the near future. The market is simply not there at this time at a price that would offer a good alternative for BCRC shareholders. Furthermore, it is extremely doubtful that any sale will ever occur that will lower the assessment to $125, or that a sale will involve Reservoirs #1 or #2. Considering all the current uncertainties and all that could (or could not) yet occur, this does not seem like the time to amend BCRC's loan contract with the CWCB. BCRC's belief is that the current loan contract should remain in place for at least another year, or until there is enough information or consensus to make appropriate amendments. Please contact me if you have any questions or comments. Yours truly, Jo . Groo Secretary / Treasurer, Bull Creek Reservoir Company