City Council Minutes 2000 02 15 - Laserfiche WebLink

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John Waschak, 627 West Hawthorn Street, asked the Council to not sell the water rights. Davidson called for Council Comments. Sisk asked Phare if he knew the current price for shares in Leyner-Cottonwood, South Boulder Canon, Erie and Coal Creek Ditch Companies,and what was the basis for selling the shares at $160,000. He noted the original purchase price was $125,000. He asked if the secretary's of the ditch companies could be contacted to determine the most recent selling price of shares and obtain comparable sales of the water rights. Phare stated that he did not have knowledge of current prices for ditch shares, nor knowledge of any transaction with municipalities for shares in these ditch companies. Phare stated that the selling price was based on a subjective estimation of the cost of junior water rights in South Boulder Creek or Boulder Creek Basin as well as the cost of transfer. He stated that the City could ask for recent selling price of shares but that there is no recorded information that comes with stock assignments. However, he could obtain an appraisal. Sisk stated that the City has not been in this market for the last five years and he would be more comfortable with an analysis of $160,000 asking price or an appraisal obtained. He asked for more empirical information. Phare stated that he had not received a request for less-senior water in the last ten years. He has asked other communities if they are interested in trading water rights. He stated that in order for theCity to put the water rights into municipal use it would probably cost twenty-five to fifty thousand dollars for a transfer and it is possible that the water rights may have gone down in value. He noted that a number of ditch companies have adopted bylaws which state that the cost of technical and legal analysis must be paid by the share owners. Phare stated that he would hire an appraiser to obtain the value on the open market. Mayer stated that reasonable appraisals could only be obtained from markets when there are active buyers and sellers. He noted that he has gone through appraisals that are not comparable. He asked Phare if he knew of any other activity or transactions for these water rights. Phare stated that the City of Lafayette may be engaging in some negotiations, however, he could not confirm any recent water rights transactions. Mayer stated that he was concerned about spending money on an appraisal that may not provide any useful information. He stated that the real junior water rights have very little utility to the City, and would probably end up costing the City money. He agreed with Phare that the City should not expend funds to transfer the rights. He stated that he would prefer to rely on Phare's appraisal as opposed to spending money on an appraisal to determine if there is a better price. 8