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<br />1836 <br /> <br />Assumptions <br /> <br />1. The water bank will be a non-profit corporation. Income tax liability will not be incurred. <br />The water bank will repay losses incurred in its early years and will generate adequate <br />reserves to cover future losses from climatic and hydrologic variations and future legal costs <br />of obtaining a water court decree. Thereafter, if a surplus of funds is earned, these may be <br />used to support worthwhile activities chosen by the Board of Directors. <br /> <br />2. The water bank will operate in cooperation with the Ft. Lyon Canal Company and may <br />possibly share office facilities with it on a cost-reimbursement basis. However, the water <br />bank will have an independent status with its own Board of Directors, a manager and support <br />staff and legal consultant. <br /> <br />3. At inception, the water bank manager will be a full-time employee who will be responsible <br />for planning, administration of operations, financial and water accounting, hydrologic analysis <br />of return flows, marketing and relations with Ft. Lyon shareholders and the public. His/her <br />starting salary is expected to be in the range of $30,000 to $40,000 per year plus fringe <br />benefits comparable to the Ft. Lyon Canal Company employees (35.14 percent of salaries). <br />The water bank also will have a clerical/word processing employee and a seasonal employee <br />to conduct field inspections of fallowed land. This will amount to 2.5 full-time equivalent <br />employees. <br /> <br />4. The water bank will have an office in the Ft. Lyon vicinity, two personal computers (for <br />financial and water accounting, and for word processing), facsimile and copying machines, <br />and other customary office equipment and furniture. If it is feasible to share office space <br />with the FLCC, some savings in expenditures can be realized The manager either will have <br />a vehicle furnished for business use or will be reimbursed for the use of a personal vehicle. <br />The seasonal field employee also will be reimbursed for vehicle use. <br /> <br />5. During the initial year of the water bank, efforts will be concentrated on organization, on <br />marketing the concept to Ft. Lyon shareholders and potential renters ofM & I water, and <br />on legal and hydrologic studies by the water bank and by the FLCC. No water will be leased <br />or rented during the initial year. During the first operating year, Year 1, these efforts will <br />continue, but the first bids will be invited from FLCC shareholders and lease agreements will <br />be signed for lease of 1,250 shares (1,588 af C.U.) of water for storage in Pueblo Reservoir <br />for the start-up supply. The bank will pay storage charges in Pueblo Reservoir for the start- <br />up supply used to help satisfy all water bank requirements during Year 2. No water will be <br />rented during Year 1. The water bank will pay storage charges in Pueblo Reservoir <br />according to the storage cost schedule shown in Appendix 8, Exhibit 5. <br /> <br />7-31 <br />