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<br />" <br /> <br />MOSES, WITTEMYER, HARRISON AND WOODRUFF, P. C. <br /> <br />Peter Evans <br />July 6, 1998 <br />Page 2 <br /> <br />.- <br /> <br />According to Helton & williamsen's June 1998 feasibility <br />study report, the average yield of the 270 Amity shares is 343 <br />acre-feet per year. Assuming that LAWMA will be able to close on <br />the remaining 187 Highland shares, this yield would almost cover <br />LAWMA's replacement shortfall during average years, which is <br />estimated at 369 acre-feet (not taking into account the annual 500 <br />acre-feet offset account fee).1 <br /> <br />LAWMA proposes to limit the amount it will pay for the <br />Amity shares to $675 per acre-foot of average yield. This is the <br />same price per acre-foot of average yield approved by the CWCB for <br />the Fo:::-tEent shares. In addition, a supplemental appraisal is <br />being prepared by Mr. William Paddock, Esq. to evaluate the Amity <br />shares. Closing on the shares will be contingent on the purchase <br />price being supported by the appraisal. Based on Helton & <br />Williamsen's report, an Amity share yields an average of 1.27 acre- <br />feet annually. Thus, the purchase price for the 270 available <br />Amity shares would be approximately $231,458 (at $675 per AF). <br /> <br />Because the proposed Amity purchases would yield <br />significantly more water than the approved Fort Bent purchases (an <br />estimated 342 acre-feet as compared to 262 acre-feet for the Fort <br />Bent purchase), the purchase price of the Amity shares exceeds the . <br />$177,000 already approved by the CWCB for the purchase of the Fort ,_ <br />Bent shares. However, the funds available under Loan Contract No; <br />C153768 are sufficient to cover the full purchase price. After <br />deducting the funds necessary to close on the remaining 187 <br />Highland shares (Le., $158,950) a total of $259,538.50 would <br />remain available to LAWMA from the $2.3 million loan under Loan <br />Contract No. C153768, which is more than sufficient to cover the <br />Amity purchase. Of course, the contract would have to be amended <br />to substitute the Amity shares as collateral. <br /> <br />If possible, LAWMAwould like to present its request to <br />the Board at their July, 1998 meeting in Telluride. LAWMA will <br />attempt to finalize purchase agreements with the two sellers prior <br />to the Board meeting. If agreements are not finalized by then, we <br />request that the Board authorize you to approve the purchase of <br />Fort Bent shares, Amity shares or a combination of the two in an <br />amount not to exceed $235,000. This approach would avoid having to <br />come back to the Board if a final agreement with either one or both <br />Amity sellers cannot be reached. <br /> <br />1 <br />water. <br /> <br />LAWMA still plans to cover any difference with leased <br /> <br />, <br />