(Note: The following was provided by John Beebe as background history of the Deer Valley water rights purchase.)

Cap Allen Engineering


145 East 13th Street - Durango, Colorado 81301-5130 (303) 247-0088


Paul Romere
Deer Valley HOA

REF: STATUS OF WATER RIGHTS APPLICATION, COMMERCIAL WELLS

This letter is a chronology of events in the present augmentation plan effort for Deer Valley Subdivision. I understand from conversation with you that the Deer Valley Property Owners Association is interested in the reasons behind our pursuit of water rights for the subdivision.

Gordon Engelen, on behalf of the Deer Valley POA, approached me some months ago inquiring as to a plan to cover a few possible commercial wells drilled in Deer Valley. The request was precipitated from a belief that some lots in the South portion of the project would have very poor well yields and may need to be involved in small centralized systems.

To date, wells drilled in Deer Valley have been productive enough for single family homes. Some of the wells have quite good yields. Exempt individual well permits have been awarded because the project was subdivided prior to Senate Bill 35. Individual well permits can continue to be obtained for the subdivision without additional assignment of adjudicated water rights to them.

Some years ago, in the employ of Andy Fenney, who marketed Deer Valley, discussions with Chuck Lile of the Colorado Division of Water Resources indicated that planned commercial development at the North end of Deer Valley, near US 160, would require an adjudicated water source. Commercial development talked about at the time included a number of townhomes or condominiums on the property of the present small lodge/home.

In addition, should central water be needed for Deer Valley, adjudicated rights for that source would be needed. As a result, we pursued the purchase of existing water rights in Beaver Creek from Loleet Weiland, a rancher North of the highway. With those rights, we intended to create an augmentation plan whereby water would be stored in an enlarged pond on the Deer Valley property.

At that time, it was indicated by Chuck Lile that the stretch of Beaver Creek we were dealing with was overappropriated and would need augmented water rights for any commercial use. Although it is always a good idea under Colorado law to have adjudicated water rights for an application -future critical status can not be predicted- the advice on Beaver Creek seemed to be based on a present need.

A significant period of time elapsed after those initial conversations, Deer Valley was sold out, a number of exempt wells were drilled successfully, the commercial operation along US 160 was sold to others, and funds were spent in an initial repair of the Weiland ditch as part of the purchase of water agreement. I am not aware of the present status of that water right purchase from Loleet Weiland.

The recent request by Gordon Engelen to proceed with the development of an augmentation plan for Deer Valley was based on a desire to be in place with the proper legal water authority should a central well supply in the Southern part of the project be needed. The actual location and need of that supply is as yet undefined. However, a recent low yielding well indicated that that caution was justified.

I proceeded to draw up calculations, survey the existing pond, and draft a rough augmentation plan application. After a number of review cycles by Gordon, this draft was forwarded to Janice Sheftel of Maynes Bradford and Shipps, an attorney specializing in water law. This work was the source of my recent billings to the POA.

At the same time, at the prompting of Janice, reminding us of an issue we had once considered, I contacted the Pine River Irrigation District attorney in Bayfield, Dirk Nelson, with the idea of seeing if augmentation water from Vallecito Reservoir could be purchased in a simple augmentation agreement. I have done this routinely with clients both in the District and just outside of it, with a simple one page document executed with the PRID and payment of $120 for each acre foot of water used.

This option is far simpler for the POA and I have not received an answer from Dirk Nelson yet. It is a little embarrassing to have gone through all the specific expense and work of the on site augmentation pond when the PRID water may be available without court action. However, should that prove feasible, I would recommend abandonment of any further adjudication action on the pond.

As an aside, when pursuing the PRID solution, I called the water commissioner from the Pine River area. It is his opinion that Beaver Creek is not water critical and will not become so because of the return flows in the Pine River where Beaver Creek flows into it. This means that a new commercial water right could be filed on for the yet un-needed well and be valid without an augmentation plan or other extra mitigation.

I hope the above information brings the POA up to speed on what has been done to date. I will send a copy of this letter to Janice Sheftel if she has anything to add. At this time, if the Vallecito water is available, I would recommend that be the route you pursue. Given that you have no actual need at present for a commercial well, if the PRID water is available, there appears to be no need for proceeding quickly.

Thank you very much,
/signed by/
Cap Allen
December 10, 1992


Addendum from Paul Romere on 7/20/00 re: water rights
When we, DVEPOA,bought the water rights of 0.5 cfs from the developer, Fenney, we paid him $10,000 for the rights and the pond storage rights. Fenney had purchased the rights from Lolite Wieland as a part of the Citizens Irrigation Canal water rights she owned. Citizens Irrigation Canal gets its water from Beaver Creek and the Southern end empties back into Beaver Creek. The date of the actual transfer date of the deed for the water was March 7, 1985 and it was filed in the La Plata County records on March 26, 1985.