2019-12-23_REVISION - M1977342 - Laserfiche WebLink

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VALUATION OF SELECTED HENDERSON MILL WATER RIGHTS November 2019 to 2019 dollars using a CPI adjustment factor, resulting in a 2019 cost of$12,916 per acre- foot. 4.1.4 Silverthorne Water Rights Purchase In July 2014, the Town of Silverthorne entered into a purchase agreement to acquire 58.42 acre-feet of consumptive use water from Seminole Land Holdings, Inc. and Boulder Creek Holdings, LLC. The underlying water rights, the Buffalo and Valier No. 2 Ditches, are decreed from Willow Creek, an upstream tributary of the Blue River. The rights were changed to all beneficial uses in Case No. 85CW26. The agreement sets forth a purchase price of$20,000 per acre-foot. We have adjusted the value from 2014 to 2019 dollars using a CPI adjustment factor, resulting in a 2019 value of$22,272 per acre-foot. 4.1.5 Pueblo Leases In 2014 and 2015, Pueblo entered into lease agreements with Cripple Creek&Victor Gold Mining Company(CC&V), Holcim (US), Inc., and Climax. The CC&V lease was for 400 acre- feet per year for a ten-year lease period, at a beginning annual rate of$630.63 per acre- foot. The Holcim lease was for 175 acre-feet per year for a two-year lease period, at a beginning lease rate of$651.13 per acre-foot per year. The Climax lease was for 50 acre- feet per year for a 20-year lease period, at a beginning lease rate of$651.13 per acre-foot per year. These agreements do not specify the source of the water, but Twin Lakes and Turquoise Reservoir are identified, and presumably the water would be provided in the upper Arkansas River basin. the lease prices translate to a present worth cost of$22,192 per acre-foot if the leases were perpetual, using the average lease rate from the three leases and a 2.875 percent discount rate. We have adjusted the value from 2015 to 2019 dollars using a CPI adjustment factor, resulting in a 2019 cost of$24,425 per acre-foot. 4.1.6 Summary of Comparables The comparable sales and leases have a wide range of values, from approximately $13,000 to over $50,000 per acre-foot of consumptive use water. All of these comparables were considered in determining the value of the subject rights, although we relied more on the comparables that were most similar to the subject rights. The comparables in the middle and higher end of the value range generally consist of smaller transactions that are not directly applicable to the values of the subject rights. We believe the Vail Ditch comparable to be the most applicable comparable for the Incidental Water Rights, with adjustments as discussed further below. Spronk Water Engineers,Inc. Page 8