Mountain Mutual Water Company -- History

Golden Cycle Land Corp. develops Cripple Creek Mountain Estates

        Between 1970 and 1973, the Golden Cycle Land Corp. ("GCLC") subdivided the area now known as Cripple Creek Mountain Estates ("CCME").  As required by C.R.S. 30-128-33(6)(a),^[1], GCLC undertook to provide a central water system to the subdivision.  Almost every plat in CCME contains something to the effect of the following:

Water Statement:

Golden Cycle Land Corporation, a Colorado Corporation has obligated itself to supply water in each lot in the said "Cripple Creek Mountain Estates Filing No. ___" pending the supplying of water to said lots by a duly organized district.^[2]

        On June 1, 1973, GCLC formed MMWC as a non-profit "ditch and reservoir company" (C.R.S. Art. 14, Chptr 31) to acquire, own, operate, maintain, and improve the proposed pipeline distribution facilities to be located in CCME's streets.  And over the next 8 years, GCLC constructed the pipeline system, managed MMWC, and subsidized MMWC's expenses.

MMWC takes control of CCME's water distribution facilities from GCLC

        In 1981, just after GCLC completed construction of the distribution network, GCLC notified MMWC that it expected MMWC to take control over the pipeline distribution facilities and that after August 1981, GCLC would stop subsidizing MMWC's expenses.  GCLC offered to “guarantee” to provide water to meet MMWC’s needs, up to 0.75 cfs, and to transfer its facilities to MMWC without payment if MMWC would agree to assume and relieve GCLC of its legal and implied contractual obligation to supply water to CCME.

        After intensive negotiations, GCLC agreed to assign -- and not merely guarantee -- to MMWC a more abundant set of water rights than GCLC had originally offered.  GCLC also agreed to convey MMWC's building facilities and the associated lots, along with various vehicles and office equipment, to MMWC without cost.  GCLC also agreed to obtain the necessary easements and, if necessary, to relay the transmission line at GCLC's cost.  GCLC also agreed to repair and convey a new well and pump in Gillett to MMWC.

        In exchange, MMWC agreed to accept both the distribution and transmission systems "as is" and acknowledged that "repair and/or replacement work is necessary to stop leaks."  MMWC expressly accepted the distribution system "with the knowledge that the correction of the foregoing problems will be at Mutual's cost which will be significant."  Amended Agreement, § 1.  MMWC also agreed to conditionally honor Golden Cycle's commitments to supply water to certain non-members.  Amended Agreement, §§ 10-12.

To be continued...

[2] No water district was ever formed.  Moreover, MMWC -- which never had the funds or unilateral power to do so -- never agreed to undertake any obligation to provide CCME with "a duly organized district."