BOARD02413

• Board Meeting Date: 3/22/2005
• Description: CF Section - Construction Fund/Severance Tax Trust Fund Perpetual Base Acct. New Loans Lower Sacramento Creek Reservoir Company - Reservoir Rehabilitation Project
• Board Meetings - Doc Type: Memo

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Lower Sacramento Creek Reservoir Company Agenda Item 14a
March 15. 2005
Page2of4 ..

The cumulative diversion rate of all seven shareholders is 2:4 cfs. If sufficient water is available in ..
Sacramento Creek, this rate of flow could fill the Reservoir in two weeks. To maximize the amount of
water in the Reservoir on October 1 of each year the Company would wait until/ate summer to divert
water. In 2001 the Company failed to store water in the Reservoir due to the CWCB minimum stream
flow right.

Feasibility Study

The feasibility study was prepared by Mr. William Blatchley, SecretarylTreasurer/Manager of the
Company in accordance with CWCB guidelines. The study includes preliminary engineering design
and cost estimates prepared by Kip White, KRW Consulting, Inc. The dam is greater than 10 feet
and is classified as a Class 3 Jurisdictional Dam. BiIt McCormick, SEO Division 2, will review the
design and construction plans. Mr. McCormick indicated that he is aware of the proposed
improvements in his Engineer's Inspection Report dated, September 14, 2004. The report also
indicates the dam required minor maintenance efforts such as exercising the outlet, removal of
vegetation from the dam surface and rodent eradication.

The Lower Sacramento Creek Reservoir COmDany

The Company is a non-profit mutual reservoir company with the management office in Lakewood,.
. Colorado. The Company was incorporated in the State of Colorado in'1988 and is in good standing
with the State. The Company consists of seven shareholders and currently has a total of 3700
shares of stock. Table 1 shows the distribution of shares in the Company.

Table 1. Share Distribution

..

Shareholder
Valley Of The'Sun Property Owners Association (396 Lots)
Sun Mountain Property Owners Association (80 Lots)
Foxtail Pines Property Owners Association (401 Lots).
FC Spruce Hill, LLC (8 Lots)
Venture 73 Owners Association (47 Lots)"
Widdowfield Property Owners Association (31 Lots)
Mountain Mutual Reservoir Co.lNorth Fork Assoc. (MMRC)
Total

Shares .
1311
175
873
166
127
116
932
3700

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According to the Company's Bylaws, the Company has the power to make annual and special
assessments. I n the event a shareholder fails to pay assessments in full when due the Company
may place a lien on the shares of stock. The Company may enforce the lien by foreclosure and sale
of stock. The plan of augmentation may also be suspended. The Company may notify thE?Division
Engineer so that he may take such action as necessary. In 1998, action was necessary utilizing the
Division Engineer's.powers to correct late payments and to educate well owners regarding the need
for the. Company's stored augmentation water. This avoided a Cease and Desist Order on the wells
within the shareholders membership. Issuance of well permits is also a mechanisms for leyerage.

Water Riahts

The source of water placed in storage is from the historic diversion structure of the Guiraud 3T Ditch.
The water is exchanged up the Middle Fork of the South Platte River up to the diversion structure of
the Platte City Placer Mine Ditch on Sacramento Creek. In addition, MMRC (one of the .-
shareholders) has water rights on the North Fork of the South Platte River, which can also be ...
exchanged to the Platte City Placer Mine Ditch diversion structure.