Vacant lot owners

Many MMWC vacant lot owners have expressed their disappointment with the $80 special assessment and the decision to raise availability fees to $150/year, starting 2010.

The two biggest objections are (1) they are not getting any water, so why should they have to pay, and (2) actual users aren't paying enough.

Are the costs being spread fairly -- or, more particularly, are MMWC's water users paying enough?

Let me start by saying that I agree with the second objection, to the extent that we are talking about high-volume users. But CCME also has quite a number of low-volume users, particularly those who use their properties only a few weekends or months a year. While it may be fair -- based on what others are paying -- for high-volume users in CCME to pay $60-$70/month, that would arguably be unfair to MMWC's low-volume users.

The fundamental problem is that MMWC's customers aren't metered. Until that happens, there is no practical way for MMWC to make high-volume users pay more than low-volume users.

I have some good news on this front. By the end of 2011, all MMWC water customers must be metered. Once users are metered, MMWC will be able to impose a rate structure that more fairly distributes the costs based on those who receive the most benefits.

Also, MMWC's special assessment is not, by any means, giving MMWC's water customers a free ride. MMWC water customers will be paying more in three ways. First, MMWC water users are also paying the $80 assessment. Second, most MMWC water users will see their fees rise to $50/month starting next year. This is a 100% increase over the $25/month rate they paid through Aug. 2007. By comparison, vacant lot owners will have experienced a 67% increase over the same time period. Third, MMWC water users will also soon incur several hundred dollars in expenses to install meters and meter pits, if they don't already have one. All in all, MMWC water customers will be making a very big investment in MMWC's water system and their water security.

Why is MMWC imposing the same $80 assessment on all of its members -- users and non-users alike?

The fairness argument: It costs money to maintain an infrastructure capable of delivering water to your lot, even if you never tap into it. The $80 assessment will enable MMWC to start making some very desperately needed improvements in that infrastructure. These capital improvements are critical to serving new users -- that is, people building on formerly vacant lots -- in CCME. Because everyone benefits , MMWC's existing users cannot be expected to shoulder the entire burden of those infrastructure improvements, which are compelled in large part by the need to meet the demands of new users.

The we-had-no-safe-alternative argument: MMWC's board considered imposing a higher special assessment on its water users than its non-using members. But Colorado law requires that special assessments on mutual ditch company members be assessed in a "pro rata" manner to its members.

What benefit do I, as a vacant lot owner, get out of paying availability fees?

First, the existence of a central water system in CCME increases the appeal and market value of lots in CCME. Most of the surrounding real estate lacks a central water system, and the value of that real estate suffers by comparison.

Second, your paying availability fees gives you a right to tap into MMWC's water distribution system and thereby obtain water and water service, and at a bargain price. Currently, availability customers are charged only $500 to connect to MMWC's distribution lines. This is considerably less than the tap fees that most water companies and districts in Teller County charge (tap fees typically range from $8000-$14000 in Teller County).

Third, the mere maintenance of your water rights is exceptionally valuable. Owners of most tracts of land in Teller County can't even legally dig a well because the area's water rights are heavily over-appropriated. Simply having the right to water here in Teller County is not something a typical property owner can take for granted any more.

Your paying availability fees plays an important role in maintaining those water rights. In 1983, MMWC secured a very valuable set of water rights to serve the then-existing and future anticipated needs of CCME residents. Under Colorado law, however, a person abandons their water rights if they (1) don't use the water and (2) act in a manner that indicates an intent to abandon their water rights. Your paying availability fees constitutes ongoing evidence of your intent to not abandon those rights.

But I don't ever intend to either sell or build on my lot!

I could ask, why did you acquire a subdivision lot in a covenant-controlled community if you don't intend to develop it? Particularly when there are so many non-subdivision tracts of land you might have acquired instead? (These questions are not fair to everyone concerned -- see below -- but they are fair to some owners).

To develop a rural subdivision with amenities presents a chicken and egg problem. It's hard to get people to move into a subdivision -- or in CCME's case, to build on their lots -- without first providing attractive amenities. At the same time, it would have been impossible for CCME or MMWC to establish the amenities they provide -- including a clubhouse, fishing ponds, and a central water supply -- simply by collecting fees from the then-existing homeowners. There simply weren't (and still aren't) enough of them.

To overcome that chicken-and-egg problem, Golden Cycle Land Corp. created a subdivision with covenants that required all members -- including vacant lot owners -- to both contribute to the maintenance of the property owner's association and to join the water company (which in 1973 became Mountain Mutual).

When you acquired a lot in CCME, you acquired a lot that was already "encumbered," legally speaking, with this development plan, fee-raising structure, and all the land-use restrictions that are recorded in the Covenants that run with the land.

Although this may conflict with some owner's notions of their property rights, CCME lots didn't come with absolute unencumbered property rights. They came encumbered with a vision of a planned, architecturally-controlled community with a central water supply. It costs money to sustain that vision. And hundreds of people have invested hundreds of thousands of dollars building homes in CCME in the belief and expectation that this vision will be sustained.

There are many CCME property owners who bought lots in CCME with the dream of one day building here, but for one reason or another (e.g., financial difficulties, health problems, etc.) no longer anticipate realizing that dream. For many such property owners, the property taxes they pay, the fees they pay CCMEPOA, and the availability fees that they pay MMWC are a hardship.

For some property owners, the best response to that change in circumstance is probably to sell their lot to a buyer who does share in that community-building vision. That is not to say that selling the lot will not be a hardship -- some might end up selling their lots at an inflation-adjusted loss. But CCME is, fundamentally, a community development. Its covenants and fees are structured to encourage the development of that community.