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Home My WebLink About2023CV30659 - East Larimer County Water Dist. v. K & M Co., et al. - 025 - Reply Iso Mot For Imm Possession DATE FILED: January 16, 2024 4:47 PM DISTRICT COURT, LARIMER COUNTY, COLORADO FILING ID: 39D4FC0D8AB83 201 LaPorte Avenue, Suite 100 CASE NUMBER: 2023CV30659 Fort Collins, Colorado 80521 (970) 494-3500 Petitioners: EAST LARIMER COUNTY WATER DISTRICT, a quasi-municipal corporation and political subdivision of the State of Colorado; and NORTH WELD COUNTY WATER DISTRICT, a quasi-municipal corporation and political subdivision of the State of Colorado, v. Respondents: K & M COMPANY, LLLP, a Colorado limited liability limited partnership; BOXELDER SANITATION DISTRICT; THE CITY OF FORT COLLINS, a municipal corporation; ANADARKO E&P ONSHORE LLC, a Delaware limited liability company; ANADARKO LAND CORP., a Nebraska corporation; POUDRE VALLEY RURAL ELECTRIC ASSOCIATION, INC., a Colorado cooperative association; and IRENE JOSEY in her official capacity as the COUNTY TREASURER OF LARIMER COUNTY, COLORADO COURT USE ONLY Attorneys for Petitioners: Case Number: Jamie N. Cotter, No. 40309 2023CV30659 Lauren A. Taylor, No. 52452 SPENCER FANE LLP Division: 3B 1700 Lincoln Street, Suite 2000 Denver, Colorado 80203 Telephone: 303-839-3800 Fax: 303-839-3838 E-mail:jcotter@spencerfane.com; ltaylor@spencerfane.com REPLY IN SUPPORT OF MOTION FOR IMMEDIATE POSSESSION , through their counsel, submit this Reply in Support of their Motion For Immediate Possession as follows: 1 CONFERRAL 1. As an initial matter, Respondent City of Fort Collins and the Districts have been portions of the property that is located within the NE ¼ and SE ¼ of Section 5, Township 7 North, Range 68 West of the 6th P.M., and is more particularly described in Exhibit 1 to the As of the date of this Reply, Respondent City of Fort Collins and the Districts appear close to finalizing such a stipulation, but require additional time to confirm all aspects of the stipulation. HEARING 2. s earliest opportunity so that the parties may present evidence to support their respective positions. See Petition in Condemnation, ¶ 11 & Prayer for Relief ¶ 3. LEGAL STANDARD FOR POSSESSION 3. At the hearing, the Districts intend to offer competent evidence of: (1) authority to condemn; (2) that the waterline Projectis in furtherance of a public purpose; (3) the necessity of the Property for the Project; (4) the immediate need to obtain immediate possession and use of the Property; (5) that the Districts engaged in good faith negotiations; and (6) the amount of the deposit that should be required. Pine Martin Mining Co. v. Empire Zinc Co., 11 P.2d 221, 225 (Colo. 1932); Thornton by Utilities Board v. Farmers Reservoir & Irrigation Co., 575 P.2d 382, 389 (Colo. 1978). 2 ARGUMENT 4. While the Court directed the Districts to address only the claimed immediacy of the need for possession in their Reply, K&M has raised each and every element of possession in their Response. As a threshold matter, this position is curious since representatives of the Districts and K&M have met multiple times and the only issue raised by K&M has been the amount of the deposit. Because K&M now seems to be raising every element in their Response, the Districts feel compelled to reply to such arguments. A. The Districts Have the Power and Right to Condemn 5. position is specious. 6. K&M owns a second parcel to the west of the Property at issue in this case. On October 13, 2023, K&M granted ELCO a Permanent Water Pipeline Easement for this same Project . Declaration of Eric Reckentine attached as Exhibit 1, ¶ 6 & Exhibit 1-D thereto. K&M also acknowledged that NWCWD has an existing easement and that purpose Id. ¶ 7 & Exhibit 1-D thereto. These prior acknowledgements show that there is no actual dispute about whether the Districts have the power to condemn. 7. Notwithstanding, the orders and decrees creating both Districtswhich are publicly available documentsshow that they are water districts and have the power and authority to condemn. Id. ¶ 5. 3 B. The Taking is For a Public Purpose and is Necessary 8. Again, K&M has already acknowledged that the taking is for a public purpose by virtue of the representations it made in the K&M West Easement. Id. ¶ 7. 9. Notwithstanding, the Districts will present the following evidence at the hearing: a. On May 5, 2023, the board of directors of ELCO approved and adopted Resolution 2023-05-01 approving and specifically authorizing the use of eminent domain to acquire the Property for the Project. Id. ¶ 3 & Exhibit 1-A thereto. b. On July 17, 2023, the board of directors of NWCWD approved and adopted Resolution 20230612-01 approving and specifically authorizing the use of eminent domain to acquire the Property for the Project. Id. ¶ 4 & Exhibit 1-B thereto. c. The Project is necessary to protect and promote public health, safety and welfare because the Project will provide the Districts with a needed increase in capacity to meet increasing demands of the public constituents located in their service areas and to provide redundancy to existing aging transmission systems as part of managing risks associated with critical infrastructure. It is a continuation of previously built NEWT 1 (2010) and NEWT 2 (2015) segments. Id. ¶ 8. d. More specifically, the Project, and the acquisitions of the Easements, are necessary to protect and promote public health, safety and welfare because: i. The acronym NEWT refers to the multi-year, multi-phase North Weld County and East Larimer County Districts Water Transmission Pipeline owned by NWCWD and ELCO. Phase 3 of the NEWT Pipeline Project, i.e., 4 the Project, is needed to connect the previously constructed Phase 1 (2010) Once complete, the Project will provide the Districts with a much needed increase in transmission capacity to convey treated water from the Soldier Canyon Filter Pla serving the public located within the Districts service area with potable water. In addition, a fully operational NEWT pipeline will provide the Districts with additional redundancy that will help mitigate risks associated with operating their existing and aging transmission lines. Id. ¶ 9(a). ii. The Districts currently rely on several treated water transmission pipelines located within the City of Fort Collins and Larimer County conveying existing water rights owned by the Districts. NWCWD currently relies on two transmission systems (North and South) to supply potable water to their service area. In association with ELCO, NWCWD relies on the existing 42- inch NEWT Phase 1 and 2 Pipelines as well as the shared 24-inch Mountain Vista Pipeline that was constructed in 1993 and the Summit View Pump Sation (SVAPS) that was constructed in 2001. These transmission pipelines and the SVPS are referred to as North System conveys flow by gravity unless higher customer demands is comprised of an existing 24-inch transmission line that conveys flow 5 Pump Station 1 (PS1) located on Mulberry Street east of Interstate 25. The installation of the existing 24-inch transmission line was completed in 1963. PS1 was originally constructed in 1984 with additional pumps added in 2000 to increase its capacity. The South System generally flows by gravity during lower demand seasons and then relies on PS1 to boost flows to meet higher demands between late spring and early fall. Id. ¶ 9(b). iii. Like NWCWD, ELCO also relies on the exiting 42-inch NEWT Phase 1 and 2 Pipelines, the 24-inch Mountain Vista Pipeline, and the use of the SVPS to meet customer water demands. In addition to these shared facilities, ELCO also relies on a 24-inch transmission line located between -inch transmission line generally operates parallel to the shared NEWT Phase 1 and 2 Pipelines and provides transmission capacity to the center of their distribution system. Id. ¶ 9(c). iv. In the mid-2000s, prior to the construction of Phase 1 and Phase 2 of the Project, the Districts identified the future need for Phase 3, i.e., the Project, to provide additional capacity east of Timberline Road which could not be accomplished by Phases 1 and 2, the 24-inch Mountain Vista Pipelines, and -inch transmission lines. Over the last several years, demands in both Districts have steadily increased and, during recent summer demand seasons, the Districts have 6 had difficulty maintaining appropriate water levels within their respective water storage tanks in order to appropriately serve all constituents located in their service areas. Id. ¶ 9(d). v. In addition to the need to increase transmission capacity, the Districts are in need of adding additional redundancy to their transmission systems. The -inch transmission line is 55 years old, and E-inch transmission line is 40 years old. With the age of these critical pipelines, the completion of Project will help the Districts properly manage the risks associated with the continued operation of their older transmission systems components to ensure continued service to the public located within the Districts service area with potable water. Id. ¶ 9(e). e. The Districts need to acquire the Permanent easement over, under, on and across the portions of the Property for the purposes of accessing, surveying, locating, marking and maintaining the marking of the location with suitable markers, relocating, installing, constructing, using, operating, maintaining, inspecting, repairing, altering, removing, and replacing one or more buried water pipelines at the depth and location shown on the construction plans, in whole or in part, and all necessary subsurface and surface appurtenances, for the transportation of water and the operation and control of water facilities, and the cutting and clearing of trees, brush, debris and other obstructions on the Permanent Easement 7 Area that might interfere with the operation and maintenance of the Permanent Easement. Id. ¶ 12. f. The Districts need to acquire the for the purposes of accessing, surveying, locating, installing and constructing the water pipeline(s), and all appurtenances thereto, within the Permanent Easement Area, and for all purposes necessary and incidental thereto, including cutting and clearing trees, brush, debris and other obstructions on the Temporary Easement Areas that interfere with the operation and maintenance of the Temporary Easements. Id. ¶ 13. C. The Districts Engaged in Good Faith Negotiations 10. In Colorado, condemning authorities cannot initiate any condemnation action 1121(3). In order to meet this requirement, the condemning authority must plead, in its petition in condemnation, that it made such an offer and that the parties could not reach an agreement with respect to compensation for the property. C.R.S. §381102(1). The Districts have already satisfied this requirement. Petition, ¶ 24. 11. However, K&M apparently disputes that the Districts have engaged in good faith negotiations. Response, ¶ 17. 12. Town of Silverthorne v. Lutz, 2016 COA 17, ¶ 29, 370 P.3d 368, 375. Once the Districts make the offer, no actual negotiation is required, the parties need not speak face-to-face, and K&M is not required to respond or make a 8 counteroffer. See City of Holyoke, 22 P.3d at 963; Bd. of Cty. Commrs v. Blecha, 697 P.2d 416, 417 responding before the deadline or extending a counteroffer, the Districts will have met their jurisdictional prerequisite. 13. Here, and as K&M is well aware, the Districts sent a Notice of Intent to Acquire and Offer to Purchase to K&M. Exhibit 1, ¶ 14. opinion of value for the taking of the Permanent Easement and the Temporary Easement. Id.K&M rejected that offer. Id. 14. While not required to do so, the Districts increased their offer and sent an Amended Notice of Intent to Acquire and Offer to Purchase to K&M. Id. ¶ 15. K&M also rejected that offer. Id. 15. Representatives of the Districts and K&M met on multiple occasions over several months to discuss compensation in light of engineering questions raised by K&M. Id.¶ 16. Additionally, both parties hired engineers to evaluate the engineering questions and exchanged the resulting engineering reports. Id. K&M acknowledges that the parties have been negotiating for months regarding appropriate compensation. Response, ¶ 37. 16. Despite this extensive and lengthy negotiation, the parties have been unable to come to an agreement regarding compensation. Exhibit 1, ¶ 17. This negotiation, while not required by Colorado law, clearly meets the standard for good faith negotiations. D. The Districts Have an Immediate Need for Possession. 17. The Districts started construction on the Project on January 17, 2023. Affidavit of Keith Meyer attached as Exhibit 2, ¶ 2. 9 18. The Districts require immediate possession of portions of the Property to proceed with the construction of the Project during the pendency of this proceeding. Id. ¶ 3. 19. Specifically, immediate possession to the Property is needed to install the No. 8 lateral crossing and culvert for the Project when the ditches are not running. Id. ¶ 4. 20. Larimer-Weld Inlet Canal March/early April 2024. The Project cannot be accomplished during the normal ditch running season (typically March to October) because of the presence of water in the ditches. Id. ¶ 5. 21. If work cannot be completed now, the Project will be delayed until next winter which is outside the current construction contract window (set to expire December 2024) and not rther render a segment of the pipeline unusable until work is completed. Id. ¶ 6. 22. Further, immediate possession is needed because access to the Property is necessary to deliver pipe in advance of the second pipelaying crew for the Project which is expected to arrive in February or March 2024. Id. ¶ 7. E. The Districts Will Present Evidence as to the Deposit Amount at the Hearing 23. According to C.R.S. § 38-1-105(6), prior to entering an Order for Immediate Possession, the Court must determine the amount of the deposit required and if the parties disagree as to the amount of the deposit, the Court may hold a hearing to ascertain the probable amount of the compensation that will be awarded to respondent-landowners. See also Swift v. Smith, 201 P.2d 609, 61415 (Colo. 1948). The amount of the deposit is the probable amount of the compensation that will be awarded for the taking. E-470 Pub. Hwy. Auth. v. 455 Co., 997 P.2d 1273, 1276 (Colo. App. 1999); Swift, 201 P.2d at 614. 10 24. As is typical in condemnation cases, the deposit amount is determined at the immediate possession hearing. However, it seems that K&M is taking the unorthodox position set forth evidence of the deposit amount in the Motion. There is no support for this in Colorado law. 25. However, in the event that the Court requires such evidence, the Districts are damages to the Property by virtue of the Project. See Exhibit 2 ¶¶ 8, 9, & Exhibits 2-A and 2-B thereto. The Districts will present further evidence of this issue at the hearing, which has been expressly requested by K&M as well as the Districts. WHEREFORE, the Districts respectfully request this Court to set a hearing pursuant to C.R.S. § 38-1-105(6) to determine the deposit necessary and to enter an order granting the Respectfully submitted this 16th day of January, 2024. SPENCER FANE LLP s/ Jamie N. Cotter Jamie N. Cotter Lauren A. Taylor Attorneys for Petitioners East Larimer County Water District and North Weld County Water District 11 CERTIFICATE OF SERVICE The undersigned hereby certifies that on January 16, 2024 a true and correct copy of the foregoing was filed and served via CCES upon all counsel of record. /s/ Lauren A. Taylor Lauren A. Taylor 12 EXHIBIT 2 DATE FILED: January 16, 2024 4:47 PM FILING ID: 39D4FC0D8AB83 DISTRICT COURT, LARIMER COUNTY, COLORADO CASE NUMBER: 2023CV30659 201 LaPorte Avenue, Suite 100 Fort Collins, Colorado 80521 (970) 494-3500 Petitioners: EAST LARIMER COUNTY WATERDISTRICT, a quasi-municipal corporation and political subdivision of the State of Colorado; and NORTH WELD COUNTY WATER DISTRICT, a quasi-municipal corporation and political subdivision of the State of Colorado, v. Respondents: K & M COMPANY, LLLP, a Colorado limited liability limited partnership; BOXELDER SANITATION DISTRICT; THE CITY OF FORT COLLINS, a municipal corporation; ANADARKO E&P ONSHORE LLC, a Delaware limited liability company; ANADARKO LAND CORP., a Nebraska corporation; POUDRE VALLEY RURAL ELECTRIC ASSOCIATION, INC., a Colorado cooperative association; and IRENE JOSEY in her official capacity as the COUNTY TREASURER OF LARIMER COUNTY, COLORADO COURT USE ONLY Attorneys for Petitioners: Case Number: Jamie N. Cotter, No. 40309 2023CV30659 Lauren A. Taylor, No. 52452 SPENCER FANE LLP Division: 3B 1700 Lincoln Street, Suite 2000 Denver, Colorado 80203 Telephone: 303-839-3800 Fax: 303-839-3838 E-mail:jcotter@spencerfane.com; ltaylor@spencerfane.com DECLARATION OF ERIC RECKENTINE I, Eric Reckentine, declare as follows: 1.I am the Manager of the and North Weld County Water District, and have personal knowledge of this action and the waterline pipeline project known as NEWT 3 pipeline (“Project”), and I make this Declaration in that capacity. 2.The East Larimer County Water District (“ELCO”) and North Weld County Water District (“NWCWD”) (collectively, the “Districts”) have determined that there is a need and necessity to construct the Project. 3.On May 5, 2023, the board of directors of ELCO approved and adopted Resolution 2023-05-01 approving and specifically authorizing the use of eminent domain to acquire the property interests the Districts seek to acquire for the Project. See Resolution 2023-05-01, attached hereto as Exhibit 1-A. 4.On July 17, 2023, the board of directors of NWCWD approved and adopted Resolution 20230612-01 approving and specifically authorizing the use of eminent domain to acquire the property interests the Districts seek to acquire for the Project. See Resolution 20230612-01 attached hereto as Exhibit 1-B. 5.The orders and decrees creating both Districts’, which are publicly available documents, show that they are water districts and have the power and authority to condemn. See Orders and Decrees attached hereto as Exhibit 1-C. 6.Respondent K&M Company, LLLP (“K&M”) owns a second parcel to the west of the property at issue in this case. On October 13, 2023, K&M granted ELCO a Permanent Water Pipeline Easement for this same Project (“K&M West Easement”). See K&M West Easement attached hereto as Exhibit 1-D. 7.K&M acknowledged in the K&M West Easement that NWCWD has an existing easement and that NWCWD’s use of that easement is “necessary for a public purpose . . .” Ex. 1- D.These prior acknowledgements show that there is no actual dispute about whether the Districts actually have the power to condemn. 8.The Project is necessary to protect and promote public health, safety, and welfare because the Project will provide the Districts with a needed increase in capacity to meet increasing demands of the public constituents located in its service area and to provide redundancy to existing aging transmission systems as part of managing risks associated with critical infrastructure. It is a continuation of previously built NEWT 1 (2010) and NEWT 2 (2015) segments. 9.More specifically, the Project, and the acquisitions of the Easements, are necessary to protect and promote public health, safety and welfare because: a.The acronym NEWT refers to the multi-year, multi-phase North Weld County and East Larimer County Districts Water Transmission Pipeline Project (“NEWT Pipeline Project”). The NEWT Pipeline Project is jointly owned by NWCWD and ELCO. Phase 3 of the NEWT Pipeline Project, i.e., the Project, is needed to connect the previously construction Phase 1 (2010) and Phase 2 (2015) pipelines to the Districts’ water distribution systems. Once complete, the Project will provide the Districts with a much needed increase in transmission capacity to convey treated 2 DE 8473111.1 water from the Soldier Canyon Filter Plant (SCFP) to the Districts’ distribution systems, thereby serving the public located within the Districts service area with potable water. In addition, a fully operational NEWT pipeline will provide the Districts’ with additional redundancy that will help mitigate risks associated with operating their existing and aging transmission lines. b.As shown in Figure 2-1 below, the Districts currently rely on several treated water transmission pipelines located within the City of Fort Collins and Larimer County conveying existing water rights owned by the Districts. NWCWD currently relies on two transmission systems (North and South) to supply potable water to their service area. In association with ELCO, NWCWD relies on the existing 42-inch NEWT Phase 1 and 2 Pipelines as well as the shared 24-inch Mountain Vista Pipeline that was constructed in the 1993 and the Summit View Pump Sation (SVAPS) that was constructed in 2001. These transmission pipelines and the SVPS are referred to a NWCWD’s North System and convey water from the SCFP to NWCWD’s distribution system. Under most cases the North System conveys flow by gravity unless higher customer demands require flows to be boosted by use of the SVPS. NWCWD’s South system is comprised of an existing 24-inch transmission line that conveys flow from the SCFP to Zone 1 of the NWCD’s distribution system and includes Pump Station 1 (PS1) located on Mulberry Street east of Interstate 25. The installation of the existing 24-inch transmission line was completed in 1963. PS1 was originally constructed in 1984 with additional pumps added in 2000 to increase its capacity. The South System generally flows by gravity during lower demand seasons and then relies on PS1 to boost flows to meet higher demands between late spring and early fall. c.Like NWCWD, ELCO also relies on the exiting 42-inch NEWT Phase 1 and 2 Pipelines, the 24-inch Mountain Vista Pipeline, and the use of the SVPS to meet customer water demands. In addition to these shared facilities, ELCO also relies on a 24-inch transmission line located between SCFP and North Timberline Road. ELCO’s existing 24-inch transmission line generally operates parallel to the shared NEWT Phase 1 and 2 Pipelines and provides transmission capacity to the center of their distribution system. d.In the mid-2000s, prior to the construction of Phase 1 and Phase 2 of the Project, the Districts identified the future need for Phase 3, i.e., the Project, to provide additional capacity east of Timberline Road which could not be accomplished by Phases 1 and 2, the 24-inch Mountain Vista Pipelines, and the Districts’ independently owned and operated 24-inch transmission lines. Over the last several years, demands in both Districts have steadily increased and, during recent summer demand seasons, the Districts have had difficulty maintaining appropriate water levels within their respective water storage tanks in order to appropriately serve all constituents located in their service areas. 3 DE 8473111.1 e.In addition to the need to increase transmission capacity, the Districts are in need of adding additional redundancy to their transmission systems. The shared Mountain Vista Pipeline is 25 years old, NWCWD’s 24-inch transmission line is 55 years old, and ELCO’s 24-inch transmission line is 40 years old. With the age of these critical pipelines, the completion of Project will help the Districts properly manage the risks associated with the continued operation of their older transmission systems components to ensure continued service to the public located within the Districts service area with potable water. 10.The Districts have determined that the acquisition of the following easements (jointly, the “Easements”) on, over, and across a portion of the property that is within the NE 1/4 and SE 1/4 of Section 5, Township 7 North, Range 68 West of the 6th P.M., and is more particularly described on Exhibit 1-E attached hereto (“Property”) is necessary for the purpose of constructing the Project: a.Permanent easement (“Permanent Easement”) over, under, on and across the portions of the Property (“Permanent Easement Area”) described and depicted in Exhibit 1-F; and b.Temporary construction easements (“Temporary Easements”) over, under, on and across the portions of the Property (“Temporary Easement Areas”) described and depicted in Exhibit 1-G. 4 DE 8473111.1 11.There is a public need and necessity to obtain and acquire the Property in order to allow the Districts to complete the Project, which is in furtherance of the public use and purpose of bringing critical water resources to the Districts’ water customers and the community through the Project. 12.The Districts need to acquire the Permanent Easement, and the purpose of the Permanent Easement is for accessing, surveying, locating, marking and maintaining the marking of the location with suitable markers, relocating, installing, constructing, using, operating, maintaining, inspecting, repairing, altering, removing, and replacing one or more buried water pipelines at the depth and location shown on the construction plans attached as Exhibit 1-H, in whole or in part, and all necessary subsurface and surface appurtenances, for the transportation of water and the operation and control of water facilities, and the cutting and clearing of trees, brush, debris and other obstructions on the Permanent Easement Area that might interfere with the operation and maintenance of the Permanent Easement; provided that the Districts shall, in so far as practicable, restore the surface of the Permanent Easement Area, to at least the condition that existed prior to any disturbance of the Permanent Easement Area by the Districts, by seeding all disturbed areas with native grasses, and restoring fences, drain tile, irrigation systems, landscaping, private roads and other improvements. 13.The Districts need to acquire the Temporary Easements, and the purpose of the Temporary Easements is for accessing, surveying, locating, installing and constructing the water pipeline(s), and all appurtenances thereto, within the Permanent Easement Area, and for all purposes necessary and incidental thereto, including cutting and clearing trees, brush, debris and other obstructions on the Temporary Easement Areas that interfere with the operation and maintenance of the Temporary Easements. 14.The Districts sent an initial Notice of Intent to Acquire and Offer to Purchase to K&M. The Districts’ offer was based on an appraiser’s opinion of value for the taking of the Permanent Easement and the Temporary Easement. K&M rejected that offer. 15.While not required to do so, the Districts increased their offer and sent an Amended Notice of Intent to Acquire and Offer to Purchase to K&M. K&M also rejected that offer. 16.Representatives of the Districts and K&M met on multiple occasions over several months to discuss compensation in light of engineering questions raised by K&M. Both parties hired engineers to evaluate the engineering questions and exchanged the resulting engineering reports. 17.Despite this extensive and lengthy negotiation, the parties have been unable to come to an agreement regarding compensation. 5 DE 8473111.1 I declare under penalty of perjury under the law of Colorado that the foregoing is true and correct. th DATED this 16 day of January, 2024. s/ Eric Reckentine Eric Reckentine 6 DE 8473111.1 EXHIBIT 2.B DATE FILED: January 16, 2024 4:47 PM FILING ID: 39D4FC0D8AB83 CASE NUMBER: 2023CV30659 BuubdinfouB.2 BuubdinfouB.2 BuubdinfouB.3 BuubdinfouB.3 BuubdinfouB.3 BuubdinfouB.3 BuubdinfouB.4 BuubdinfouB.4 BuubdinfouB.4 BuubdinfouB.4 BuubdinfouB.5 BuubdinfouB.5 BuubdinfouB.5 BuubdinfouB.5 BuubdinfouB.6 BuubdinfouB.6 BuubdinfouB.6 BuubdinfouB.7 BuubdinfouB.7 BuubdinfouB.7 BuubdinfouB.7 BuubdinfouB.8 BuubdinfouB.8 BuubdinfouB.8 BuubdinfouB.8 BuubdinfouB.9 BuubdinfouB.9 BuubdinfouB.: BuubdinfouB.: BuubdinfouB.: BuubdinfouB.: BuubdinfouB.21 BuubdinfouB.21 BuubdinfouB.21 BuubdinfouB.21 BuubdinfouB.22 BuubdinfouB.22 BuubdinfouB.23 BuubdinfouB.23 BuubdinfouB.24 BuubdinfouB.24 BuubdinfouB.25 BuubdinfouB.25 BuubdinfouB.25 BuubdinfouB.26 BuubdinfouB.26 BuubdinfouB.27 BuubdinfouB.27 BuubdinfouB.28 BuubdinfouB.28 BuubdinfouB.29 BuubdinfouB.29 BuubdinfouB.2: BuubdinfouB.2: BuubdinfouB.31 BuubdinfouB.31 BuubdinfouB.32 BuubdinfouB.32 BuubdinfouB.33 BuubdinfouB.33 BuubdinfouB.33 BuubdinfouB.33 BuubdinfouB.34 BuubdinfouB.34 BuubdinfouB.34 BuubdinfouB.34 BuubdinfouB.35 BuubdinfouB.35 BuubdinfouB.35 EXHIBIT 2.C DATE FILED: January 16, 2024 4:47 PM FILING ID: 39D4FC0D8AB83 CASE NUMBER: 2023CV30659 EXHIBIT 2.D DATE FILED: January 16, 2024 4:47 PM FILING ID: 39D4FC0D8AB83 CASE NUMBER: 2023CV30659 EXHIBIT 2.E DATE FILED: January 16, 2024 4:47 PM FILING ID: 39D4FC0D8AB83 CASE NUMBER: 2023CV30659 EXHIBIT 2.G DATE FILED: January 16, 2024 4:47 PMDATE FILED: August 16, 2023 2:45 PM FILING ID: 39D4FC0D8AB83FILING ID: B4D77CABC2E19 CASE NUMBER: 2023CV30659CASE NUMBER: 2023CV30659 EXHIBIT 2.H DATE FILED: January 16, 2024 4:47 PMDATE FILED: August 16, 2023 2:45 PM FILING ID: 39D4FC0D8AB83FILING ID: B4D77CABC2E19 CASE NUMBER: 2023CV30659CASE NUMBER: 2023CV30659 EXHIBIT 2.I DATE FILED: January 16, 2024 4:47 PMDATE FILED: August 16, 2023 2:45 PM FILING ID: 39D4FC0D8AB83FILING ID: B4D77CABC2E19 CASE NUMBER: 2023CV30659CASE NUMBER: 2023CV30659 EXHIBIT 3.B DATE FILED: January 16, 2024 4:47 PM FILING ID: 39D4FC0D8AB83 CASE NUMBER: 2023CV30659 Partial Acquisition Appraisal of K & MCOMPANY PROPERTY East edge of Fort Collins Larimer County, Colorado For: Randy Siddens, PE District Manager NEWT 3 Project P.O. Box 2044 Fort Collins, CO 80522 Date of Value: March 1, 2023 Date of Report: August 10, 2023 By Alan A. Axton Axton Realty Consulting th 6801 34St. Rd. Greeley, CO 80634 Axton Realty Consulting A Professional Real Estate Valuation Service th Greeley Office: 6801 34St. Rd, Greeley, CO 80634 Telephone: 970 352 1115, Fax: 970 330 2850, email: aaaxton@gmail.com August 10, 2023 Randy Siddens, PE District Manager East Larimer County Water District P.O. Box 2044 Fort Collins, CO 80522 RE:Appraisal of the K&M PropertyStorage/NEWT 3 water line easement acquisition Dear Client: As per your request, I have appraised the property owned by K&M Companyin northeast Fort Collins along Timberline. The property is a 189acre sprinkler irrigated farm with an old set of farm buildings in the southwest cornerwhich are not impacted by the project. In addition to valuation of the Before Larger Parcel (site) the appraisal also considers Just Compensation for a new underground pipeline easement being sought by NEWT 3 (Partnership of East Larimer County Water District (ELCO) and North Weld County Water District) for a new water transmission pipelineproject along subject’s southern portion. A permanent easement 40 feet wide of about 2.985 acres runs alongside the Larimer and Weld irrigation canal at the west end near Timberline then separates east along an existing WAPA powerline easement across the rest of the tract. In addition to the permanent 40’, another 60 foot wide temporary easement is needed adjacent to the south. The appraised property lies in within Fort Collins annexed area and zoned various districts, low and medium mixed use development, community commercial and E-Employment in the actual area of the easement. Old worn agricultural improvements are not impacted and not valued. The purpose of the appraisal is to estimate Just Compensation for the easements to be acquired by the districts. The property rights appraised are the fee simple interest subject to easements and encumbrances of record and interests being acquired. The estimates provided are Market Value and Just Compensation derived from the value of the new easements to be acquired. On March 1, 2023I inspected the premises from perimeter roads and ditch rider’s road. Valuation is as of that inspection.It has been viewed severaloccasions before and since the date of value. I submit herewith four copies of the report which describes the methods used and which shows an analysis of the data and reasoning involved in arriving at my conclusions. Estimated Just Compensation due the property owner as of March 1, 2023is $111,979. Respectfully submitted, Alan A. Axton Certified General Appraiser No. CG01313913 TABLE OF CONTENTS Title Page Letter of Transmittal Table of Contents Page COMPREHENSIVE APPRAISAL SUMMARY..................................................................... 1 PURPOSE, SCOPE, APPLICABLE LAW DIRECTINGAPPRAISAL................................... 2 AREA DESCRIPTION............................................................................................................9 NEIGHBORHOOD DESCRIPTION........................................................................................ 10 SUBJECT PROPERTY DESCRIPTION .................................................................................. 11 HIGHEST AND BEST USE.................................................................................................... 14 METHODOLOGY................................................................................................................... 15 FACTORS OF COMPARISON............................................................................................... 16 VALUATIONOF LARGER PARCEL....................................................................................17 COMPARABLE SALES DATA .............................................................................................. 17 COMPARABLE SALES MAP................................................................................................ 18 DESCRIPTION OF TAKING .................................................................................................. 19 VALUATION OF THE TAKING ............................................................................................ 21 SUMMARY OF CONCLLUSIONS........................................................................................ 23 ASSUMPTIONS AND LIMITING CONDITIONS.................................................................. 24 CERTIFICATION OF VALUE................................................................................................ 25 QUALIFICATIONS OF APPRAISER..................................................................................... 26 ADDENDUM Exhibit Subject Photographs.................................................................................................................A Legal Description/Last Deeds................................................................................................... B Zoning Regulations .................................................................................................................. C Surveys of the part taken.......................................................................................................... D COMPREHENSIVE APPRAISAL SUMMARY Project K&M Co. Property/ North Weld and ELCO Districts NEWT 3Water Pipeline Project Date of Value March 1, 2023 Date of ReportAugust 10, 2023 Intended Use/UsersEstablish fair market value and Just Compensation for water pipeline easement being acquired by Districts.Intended users are the Districts, their representatives, Western States Land Services and attorneys, landowner their representatives and counsel and no others. Owner(s)K&M Company Client North Weld County Water District and East Larimer County Water District Property typeCommercial/industrial development land LocationSEC Mountain Vista Drive and Timberline Road, northeast Fort Collins. Adjacent to Anheuser Busch Plant and surrounding buffer land. th Legal Description PtE/2 Section 5-T7N-R68W of the 6 P.M., Larimer County Colorado. Property HistoryWas in Einarsen family for many years. Sold at auction 10/27/22 for $3,990,000, closed 12/30/22, SWD 23-165. Additional closing extension payment of $10,000. Larger Parcel Description Size: 189ac Type: Pivot sprinkler irrigated Zoning: E-Employment farm, potential commercial/ Fort Collins industrial development ImprovementsOld minor ag buildings, not impacted and not valued.Contributory Value: N/A Water Rights4Irrigation Wells, PermitNos. 14491R, 92R, 94R and 2972F. Unknown condition and yield. Assessed Value and TaxesPIN No. R0156221 assessed for $61,602 with mil levy of 94.425 for annual taxes of $5,817. Highest and Best Use Conversion from agriculture to mixed use development Sales Comparison 189ac x $34,000/ac$6,426,000 Approach-Site Cost ApproachN/AN/A Income ApproachN/AN/A Value of ImprovementsN/A N/A Conclusion Larger Parcel 189ac x $34,000/ac$6,426,000 Value Fee Parcel Taken None N/A Easement Parcel Taken Parcel PE: 2.985ac x $34,000/ac x 50% of fee =$50,745 Temporary Easement Parcel TE: 3.010ac x $34,000/ac x 10% of fee =$10,234 Residue Comparison Residue before take: $6,375,255vs. Residue after take: $6,324,255 ($51,000 diff) Damages or Benefits to $51,000 severance/impedance damages to 30 acres of remainder Residue Total Just Compensation$111,979 -1- Axton Realty Consulting, Inc. APPRAISAL DEVELOPMENT AND REPORTING PROCESS This Real Estate Appraisal has been prepared in accordance with the USPAP Standard 1 and 2. Standard 1 has requirements and guidelines concerning the appraisal development, analyses, and process. Standards Rule 2 details requirements for the reporting of the appraisal in a Real Estate Appraisal Report. This appraisal involves collection of sales information and general and specific data. Appraisal processes for right of way acquisition entails a search for recent property sales (and rentals, as applicable) in the neighborhood or area. This may be accomplished by interviewing and learning from landowners about known property sales or rentals, searching county assessor's office records, requesting data from real estate brokers, local appraisers, title companies, or transaction principals and using any other data summary services that may be locally available and appropriate. Impressions of those knowledgeable of the current local market and any information about recent trends that may bear on property values are also solicited. Significant property transactions researched are analyzed for their degree of similarity to the subject property by physically visiting and visually inspecting the properties, viewing and examining recorded transfer of property deeds and documents, and considering construction costs of improvements obtained from either local contractors or other cost publication sources. For properties deemed to be appropriate and reliable indicators of value, verification with either buyeror seller is made to confirm the details of the transaction. Any additional data necessary for estimating the value of land and/or improvements in the acquisition and damages, specific benefits or cost to cure damages to the residue are gathered according to the circumstances of the individual appraisal assignment. Analyses of the data and subsequent reporting in a clear logical manner result in meaningful estimates of reasonable market value, benefits and/or damages (if any), restoration cost or cost-to-cure (if any) and estimate of compensation. Jurisdictional Exception to USPAP Standard 1.The Jurisdictional Exception in USPAP states "If any part of these standards is contrary to the law or public policy of any jurisdiction, only that part shall be void and of no force or effect in that jurisdiction." A Jurisdictional Exception does not invoke the Departure Provision of USPAP Standards. The jurisdictional definition of "reasonable market value" used in this appraisal is a Jurisdictional Exception to USPAP Standards Rule 1-2(b) and 1-4(f). There are three approaches by which the value of real estate may be estimated: sales comparison, cost, and income capitalization approaches. USPAP Standards Rule 1-4(b) covers the three approaches to value. Jurisdictional Exception as per 49 CFR 24.103(a)(3) states "When sufficient market sales data are available to reliably support the fair market value for the specific appraisal problem encountered, the Agency, at its discretion, may require only the market approach. If more than one approach is utilized, there shall be an analysis and reconciliation of approaches to value that are sufficient to support the appraiser's opinion of value." Where the appraiser determines the sales comparison approach adequately represents the market for the property type being appraised, availability of sales data is adequate, buyers and sellers in the market place primary reliance on this approach, and the appraiser believes this approach is the primary approach considered in the market, the appraisal process may be limited to the sales comparison approach. This Jurisdictional Exception does not invoke the Departure Provision of USPAP Standards Rule 1-4(b). Departure Provision to USPAP Standard 1.This is a complete appraisalbecause the appraiser performed a complete appraisal process and no departures of USPAP were invoked. -2- Axton Realty Consulting, Inc. DEFINITION OF REASONABLE MARKET VALUE Colorado Jury Instructions (CJI) -Civil 3d, 36:3contains the jurisdictional definition of reasonable market value as used in Colorado for eminent domain proceedings. The definition of reasonable market value is a Jurisdictional Exception to the Uniform Standards of Professional Appraisal Practice Standards Rule 1-2(b) and 1-4(f). Reasonable market value is defined as follows: "The value you are to determine for the property actually taken is the reasonable market value for such property on (insert valuation date). 'Reasonable market value' means the fair, actual, cash market value of the property. It is the price the property could have been sold for on the open market under the usual and ordinary circumstances, that is, under those circumstances where the owner was willing to sell and the purchaser was willing to buy, but neither was under an obligation to doso. In determining the market value of the property actually taken, you are not to take into account any increase or decrease in value caused by the proposed public improvement." DEFINITIONS OF OTHER SIGNIFICANT TERMS Following are definitions of other significant terms used in this appraisal report. Sources for the following definitions are shown as text notes. Benefits (Specific Benefits)."...any benefits to the residue are to be measured by the increase, if any, in the reasonable market value of the residue due to the (construction) (improvement) of the (...proposed improvement). For anything to constitute a specific benefit, however, it must result directly in a benefit to the residue and be peculiar to it. Any benefits which may result to the residue but which are shared in common with the community at large are not to be considered." (CJI-Civ. 3d, 36:4) Compensation."...ascertain the reasonable market value of the property actually taken and the amount of compensable damages, if any, and amount and value of any specific benefit, if any, to the residue of any land not taken." (CJI-Civ. 3d, 36:1) Damages. "...Any damages are to be measured by the decrease, if any, in the reasonable market value of the residue, that is, the difference between the reasonable market value of the residue before the property actually taken is acquired and the reasonable market value of the residue after the property actually taken has been acquired. Any damages which may result to the residue from what is expected to be done on land other than the land actually taken from the respondent and any damages to the residue which are shared in common with the community at large are not to be considered." (CJI-Civ. 3d, 36:4) Easement."An easement can be described generally as an interest in land of another entitling the owner of that interest to a limited use of the land in which it exists. An easement is an interest less than the fee estate, with the landowner retaining full dominion over his realty subject only to the easement, and the landowner may make any use of his realty that does not interfere with the easement holder's reasonable use of the easement. An easement can also subject the underlying property to specific restrictions on the use that the owner may make of the property." (Interagency Land Acquisition Conference, Uniform Appraisal Standards For Federal Land Acquisitions, th Washington, D.C., 6, 2016) "An easement is an interest in real property that conveys use, but not ownership, of a portion of an owner's property." (Appraisal Institute, The Dictionary of Real Estate Appraisal, Sixth Edition, 2015.) -3- Axton Realty Consulting, Inc. DEFINITIONS OF OTHER SIGNIFICANT TERMS -continued Fee Simple Estate (Title)."Possession of a title in fee establishes the interest in property known as the fee simple estate-i.e., absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat." (Appraisal Institute, The th Dictionary of Real Estate Appraisal, 6, 2015.) Highest and Best Use. "In determining the market value of the property actually taken (and the damages, if any, and benefits, it any, to the residue) you should consider the use, conditions and surroundings of the property as of the date of valuation. In addition, you should consider the most advantageous use or uses to which the property might reasonably and lawfully be put in the future by persons of ordinary prudence and judgment. Such evidence may be considered, however, only insofar as it assists you in determining the reasonable market value of the property as of the date of valuation (or the damages, if any, or the benefits, if any, to the residue). It may not be considered for the purposes of allowing any speculative damages or values." (CJI-Civ. 3d, 36:6) "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value." (Appraisal Institute, The th Dictionary of Real Estate Appraisal, 6, 2015. and Appraisal Institute, The Appraisal of Real Estate, 14th Edition, Chicago, 2013.) "The highest and best use of both land as though vacant and property as improved must meet four criteria. The highest and best use must be legally permissible, physically possible, financially feasible, and maximally th productive." (Appraisal Institute, The Appraisal of Real Estate, 14 Edition, Chicago 2013.) "Before it can be concluded that any use for the property is its highest and best use, that use must be physically possible, legally permissible, financially feasible, and must result in the highest value." (Interagency Land th Acquisition Conference, Uniform Appraisal Standards For Federal Land Acquisitions, Washington, D.C., 6 Edition, 2016.) Larger Parcel."The larger parcelis defined as that tract, or those tracts, of land which possess a unity of ownership and have the same, or an integrated, highest and best use. Elements of consideration by the appraiser in making a determination in this regard are contiguity, or proximity, as it bears on the highest and best use of the property, unity of ownership and unity of highest and best use." (Interagency Land Acquisition Conference, th Uniform Appraisal Standards For Federal Land Acquisitions, Washington, D.C., 6Edition, 2016.) "In condemnation, the portion of a property that has unity of ownership, contiguity, and unity of use, the three conditions that establish the larger parcel for the consideration of severance damages in most states." (Appraisal th Institute, The Dictionary of Real Estate Appraisal, 6Edition, 2015.) "A term used in eminent domain proceedings, signifying that the parcel taken is not a complete parcel but part of a 'larger parcel'; the owner, therefore is entitled to damages from the severance as well as the value of the parcel taken. Unity of ownership, use, and contiguity must be present, although federal courts and some states do not require contiguity where there is a strong unity of use." (Henry Campbell Black, M.A., Black's Law Dictionary, Sixth Edition, St. Paul, Minn., West Publishing Co., 1990, p.882) Part Taken (Partial Taking). "The taking of part of any real property interest for public use under the power of eminent domain; requires the payment of compensation." (Appraisal Institute, The Dictionary of Real Estate th Appraisal, 6Edition, Chicago 2015.) Residue (Remainder)."'Residue' means that portion of any property which is not taken but which belongs to the respondent, ..., and which has been used by, or is capable of being used by, the respondent, together with the property actually taken, as one economic unit." (CJI-Civ. 3d, 36:4) -4- Axton Realty Consulting, Inc. PURPOSE, INTENDED USE AND USERS OF THE APPRAISAL PurposeOf The Appraisal The purpose of this appraisal is to estimate the reasonable market value of the property actually taken; compensable damages, if any, to the residue after take; and specific benefits, if any, to the residue after take. Referred to as the modified state before-and-after rule, procedural steps to estimate compensation for the property actually taken, damages to the residue, and specific benefits to the residue are as follows: 1.Larger Parcel Value Before Take The first procedural step is to estimate the reasonable market value of the subject larger parcel had there been no taking. There is a jurisdictional exception to the Uniform Standards of Professional Appraisal Practice (USPAP) Standards Rule 1-2(b) and 1-4(f) involved in this step. Colorado Jury Instructions - Civil 3d, 36:3(CJI-Civ. 3d, 36:3) states the exception as follows: "In determining the market value of the property actually taken, you are not to take into account any increase or decrease in value caused by the proposed public improvement." This jurisdictional exception is also stated in the Code of Federal Regulations, Title 49, Part 24, Section 103(b)(49 CFR 24.103(b)) as follows: "Disregard any decrease or increase in the fair market value of the real property caused by the project for which the property is to be acquired, or by the likelihood that the property would be acquired for the project, other than that due to physical deterioration within the reasonable control of the owner." 2.Value of Part Taken The second procedural step is to estimate the reasonable market value of the land or property actually taken (38-1-114(1), C.R.S., 1987) (CJI-Civ. 3d, 36:3) (49 CFR 24.103(a)(5)). The same jurisdictional exception to USPAP Standards Rule 1-2(b) and 1-4(f) applies to step 2 as in the first step. 3.Residue Value Before Take The third procedural step is to estimate the reasonable market value of the residue before the property actually taken has been acquired. This step sets the initial basis for the ascertainment of damages and benefits to the residue. CJI-Civ. 3d, 36:4 defines residue as follows: "'Residue' means that portion of any property which is not taken but which belongs to the respondent, and which has been used by, or is capable of being used by, the respondent, together with the property actually taken, as one economic unit." The estimate of reasonable market value of the residue before the take is the mathematical difference of procedural step 1 minus procedural step 2. 4.Residue Value After Take The fourth procedural step is to estimate the reasonable market value of the residue after the property actually taken has been acquired. In this procedural step, the reasonable market value of -5- Axton Realty Consulting, Inc. PURPOSE OF THE APPRAISAL -continued the residue after the taking is no longer subject to the jurisdictional exception to USPAPStandards Rule 1-4(f) where any increase or decrease in value caused by the proposed public improvement is not taken into account. The influence of the proposed public improvement is considered except for any damages or benefits which are shared in common with the community at large. Colorado Jury Instructions -Civil 3d, 36:4addresses the ascertainment of damages and benefits to the residue and Colorado Jury Instructions -Civil 3d, 36:5addresses limitations on the ascertainment of damages to the residue. Following are quotations from Colorado Jury Instructions -Civil 3d concerning damages and benefits to the residue after take. "36:4 Ascertainment of Damages and Benefits to Residue Any damages or benefits are to be measured by the effects the acquisition of, and the expected uses of, the property actually taken has on the reasonable market value of the residue. Any damages are to be measured by the decrease, if any, in the reasonable market value of the residue, that is, the difference between the reasonable market value of the residue before the property actually taken is acquired and the reasonable market value of the residue after the property actually taken has been acquired. Any damages which may result to the residue from what is expected to be done on land other than the land actually taken from the respondent and any damages to the residue which are shared in common with the community at large are not to be considered. Similarly, any benefits to the residue are to be measured by the increase, if any, in the reasonable market value of the residue due to the project. For anything to constitute a specific benefit, however, it must result directly in a benefit to the residue and be peculiar to it. Any benefits which may result to the residue but which are shared in common with the community at large are not to be considered. Nothing should be considered as a factor of either damages or benefit unless you find that it increases or decreases the reasonable market value of the residue. Any finding of damages or benefits to the residue shall not affect your determination of the value of the property actually taken. You are to determine any damages or benefits as separate, independent items. You should not attempt to balance the two. Any adjustment or balancing must be done by the court." "36:5 Ascertainment of Damages to Residue -Limitations On In order for you to determine damages to the residue, you must find that the residue itself (has been) (will be) damaged by some diminution in its reasonable market value, either as a result of its being severed from the land actually taken or because the adjacent public use on the land actually taken from therespondent (but not on other land) will render the residue less valuable. Infringement of the owner's personal pleasure or enjoyment in the use of the residue or even the owner's annoyance or discomfort do not constitute compensable damages. Neither does the fact that the residue may be less desirable for certain purposes. Such matters are not compensable except as they are a natural, necessary and reasonable result of the residue being severed from the land actually taken or of the uses expected to be made of the land actually taken, and are measurable by a reduction in the market value of the residue. -6- Axton Realty Consulting, Inc. PURPOSE OF THE APPRAISAL -continued 5.Acquisition Analysis And Compensation Summary The final procedural step is an acquisition analysis and compensation summary. The compensation summary includes the following: a. Reasonable market value for the land or property actually taken. b. Compensable damages, if any, to the residue after acquisition of the land or property actually taken. c.Specific benefits, if any, to the residue after acquisition of the land or property actually taken. d.Rental value of temporary easements. SUMMARY OF PURPOSE OF THE APPRAISAL The purpose of this appraisal is to estimate the Market Value of the subject property,as of the date of inspection. Market Value is defined on the following page. The property rights appraised are the unencumbered fee simple title. The function of the appraisal is for support for land acquisition and eminent domain proceedings by the NEWT 3 Project (East Larimer County Water District and North Weld Water District). INTENDED USE AND USERS OF THE APPRAISAL The intended use of the appraisal is in connection with the acquisition of right-of-way for the referenced project to be constructed by the NEWT 3Project (East Larimer County Water District and North Weld Water District). If necessary, this appraisal report with supporting data, analyses, conclusions and opinions is to serve as a basis for court testimony in eminent domain proceedings. Intended users of this appraisal and appraisal report include but are not limited to: the property owner and property owner's attorney; attorneys with TheDistricts; officials with The Districts. REAL PROPERTY INTEREST APPRAISED The real property interest of the subject larger parcel and the part to be taken has been appraised as fee simple estate and easement rights, respectively. No hydrocarbons or mineral rights were included. Please refer to the Assumptions and Limiting Conditions. EFFECTIVE DATE OF APPRAISAL AND VALUE ESTIMATE The effective date of appraisal and the estimate of reasonable market value of the subject larger parcel and the estimate of compensation is as of March 1, 2023 when first inspected. It has been inspected several times before and since. -7- Axton Realty Consulting, Inc. SUMMARY OF APPRAISAL PROBLEMS The specific appraisal problems unique to this valuation include the following: Determine the larger parcel and/or affected area which must be valued Determine the value of the before property taking into consideration any potential changes in use which would enhance the Highest and Best Use. County zoning, availability of utilities and other development factors must be taken into consideration. Determination of the highest and best use of the actual taking and any differences in value from the larger before property Estimate the difference in the value of the actual taking if different than the fee simple interest value of the overall before larger parcel. Determine any potential damages or benefits which may result from the taking to the remainder. DESCRIPTION OF THE PROJECT The purpose ofthis appraisal is todeterminejustcompensationto property owners for new rights of way for permanent waterworksfacilitiesbeing constructed by a partnership between East Larimer County Water District (ELCO) and North Weld County Water District (NWCWD) and is known as the NEWT 3 water transmission pipeline project. The project runs 5.43miles from Timberline east to the county line, generally midway between Vine and Mountain Vista.After crossing I-25 the line veers south to an alignment midway between SH 14 and Vine. The proposed project would be a 42”buried PVC pipeline. The pipelinewillbe buried to adepthof4.5to 5.5feettotopofpipedepending on conditions. Such aboveground structureswhich arereservedfor in theeasementlanguage which might be neededinclude fire hydrants, air reliefs at highpoints(3 foot“candy canes”),atgrademanhole covers and valve boxes, meter vaults or blowoffs atlow topographicpoints. Subject -8- Axton Realty Consulting, Inc. Summary Regional Subject Analysis Property Subject property is located in Northern Colorado in the transitional zone between the Great Plains and the Rocky Mountains. Fort Collins, Loveland, Longmont and Boulder form the north “Front Range” corridor, a moderately dense population center along the level river valleys just below the foothills. At the latest count Larimer County was home to nearly 357,000 residents, most of which live in the two largest cities, Fort Collins and Loveland. Fort Collins itself is th estimated at 174,000 4largest in Colordo. Major Area Employers The main economic factors Company Business Employees affecting real estate in the area University of Colorado HealthHealthcare5,740 are high technology industries Hewlett PackardTechnology Product Design1,490 with large companies such as Banner Health: McKee Medical CenterHealthcare1,340 Hewlett Packard, Woodward Avago TechnologiesSemiconductor Components 1,300 Governor, Agilent Tech, Woodward Speed Controls1,230 Eastman Kodak, LSI Logic, Hach CompanyAnalytical Instruments800 Celestica, plus education with Qualfon Customer Care Center 770 University of Colorado, OtterboxProtective Case Manufacturing 580 Colorado State University, New Belgium Brewing Company Brewery 540 University of Northern Anheuser-Busch Brewery 520 Colorado, the oil industry and agriculture. The area has been Population Statistics booming for the last 15 years Year Ft CollinsLoveland Larimer County but declined in 2008-2010 with 2010122,239 67,008300,532 a national recession. The peak 2011144,975 69,052305,350 of the building boom came in 2012146,572 69,977310,960 2013 when 378 permits issued 2013149,655 70,758316,357 for new houses in the city. The 2014152,528 71,856324,149 county peak was 2005 with 402 2015156,569 74,253333,473 new residences. This activity 2016160,853 75,632339,182 slowed somewhat from 2015 to 2017162,938 76,003344,267 2019 but again regained 2018164,63176,872350,842 strength in 2020. 2019167,347 77,553356,938 2020170,318 76,378359,066 Fort Collins and Loveland form 2021174,081 81,127369,377 the gateway to Rocky Mountain National Park and Estes Park Building Permits –Single Family Residence with many of the state’s visitors Year Fort CollinsTimnathWellingtonLarimer County using the city as a starting point 2012440-- 69107 for vacations. Tourism is an 2013595166140147 important component of the 2014565167187108 local economy. Colorado State 2015430178212152 University with over 33,000 2016408157194131 total enrollment is also 2017303278186152 important to the Ft. Collins 2018286194101150 (est) culture and economy. 2019187384115137 2020237388205122 2021294347 ytd 8/21 68 ytd 11/21 108 2022Ytd 214111 -9- Axton Realty Consulting, Inc. Neighborhood Data The neighborhood on the east edge of Fort Collins is still mainly rural with most of the land use in agriculture but it is amidst transition where many parcels have been developed in smaller scattered county subdivisions Subject with larger country acreages but also the annexed areas of town are beginning to encroach this northeast Fort Collins district. Some land use along the interstate is industrial. The area is spotted with medium to large lakes such as Cobb, Black Hollow, Timnath and Windsor Reservoir serving as irrigation supply and private recreation. The booming small town of Timnath is just south, population now 7070 was only 625 in 2010 andhas been one of Neighborhood Map the fastest growing and most appealing communities in northern Colorado. Wellington a few miles north went from 6300 in 2010 to over 11,000 now. The Interstate 25 main access corridor for the region is about 1 air mile west, the nearest interchange at Mulberry (SH 14) 2 road miles. The boundaries of the neighborhood are mainly formed by Cobb Lake to the north, SH 14 to the south, the Larimer County line to the east and Turnberry to the west. The neighborhood phase is stable to developing with numerous still Subject vacant agricultural lands but quickly encroaching residential development, either for annexations or just scattered country residences. It no doubt will continue this urbanization trend as Fort Collins grows east. The main influences are of course the Anheuser Busch Plant and a new large planned community surrounding the plant, Montava, 860 acres and perhaps 3000 residences which is in the planning stages in the city. Neighborhood Aerial View -10- Axton Realty Consulting, Inc. Subject Property Description Property History No recent sales activity. The property has been in the K&M Company ownership since the early 1980s. Legal Description Pt. E/2 Section 5-T7N-R68W,of th the 6P.M., lying north of the Larimer and Weld Canal,Larimer County Colorado Tax and Assessment Information PIN No. R0156221 assessed for $61,602 with mil levy of 94.425 for annual taxes of $5,817. Location SEC Mountain Vista and Timberline Road, northeast Fort Looking southeasterly across the pivot irrigated cropland Collins. Old town is about 3 miles southwest. Anheuser Busch plant is directly northeast. I 25 is 1 mile east. Access Good paved city street/ county road access along the north and west sides of the property. Site Size & Shape Odd shape 189 acres, ½mile wide, ¾mile deep north/south. Flood Zone None. Land Use Subject site has historically been used as a sprinklerirrigated farm using part or all of threeirrigation wells. Flood irrigation is used on the south end. It is owned by a long term investment company awaiting market conditions for development.Interim use during hold is irrigated crop land leased to alocal farmer.Other than zoning and annexation the site has not undergone entitlements, platting or approvals. Aerial view of property -11- Axton Realty Consulting, Inc. Topography & Soils Subject property is moderately sloping toward the south.Soils are suitable for farming or for urban development.Most of the site is upland above the ditch at about 5000 feet.There is a distinct nob about 20-30 feet higher than the surroundings in the east end. A very deep drainage channel cuts through the parcel on the west side. Subject Surrounding Properties/Uses A mixture of open land still used for irrigated agriculture, the Anheuser Busch plant just across the street north ofMountain Vista and a few scattered rural residential tracts. There a few subdivisions starting to spring up north of Vine Drive encroaching into the once rural neighborhood. Anheuser Busch has always held a vast acreage, nearly 1000 acres as buffer around the plant. That land is now slated for urban mixed use development, a planned community called Montava which could bring 10,000 to 12,000 residents to the Topographic Map Mountain Vista/Giddings Corridors. Easements and Encroachments None besides utilities were noted. Large high voltage WAPA power line runs through thesite east/west separating the sprinkler field from the south flood field. Hazards and Detriments No major hazards noted. The appraiser is not an expert in environmental hazards and if desired the client should retain the assistance of a qualified professional for confirmation regarding hazards or contamination. Southwesterly view showing south flood irrigated field -12- Axton Realty Consulting, Inc. Water Rights 4irrigation wells, Permit Nos. 14491R, 92R, 94R and 2972F all located in the northeastern Subject portion of the property. Augmentation supply and condition are unknown.It is above the Larimer and Weld and has no supply from that structure. Zoning A mix of Community Project Commercial northeast, Low Area Density Mixed neighborhood use to the northwest, Medium Mixed Use in the center and E- Employment in the south, all within Fort Collins. The Employment District is a wide variety of business, work place endeavors such as light industrial, R&D, office, institutional plus support to that industry (commercial, housing, retail and nearly every type of typical urban use). Becauseof that “support” aspect the zone appears little different than any of the other Zoning Map CC, MMN, LMN (Bright Pink is E Employment) mixed use designations. It would preclude heavy industrial.See Exhibit Cfor more details. Public Services/Utilities All city utilities available. Improvements Old farm buildings of little remaining value. Not impacted and not included in the appraisal. Oil/Gas/Mineral Rights Not impacted. None included in appraisal. Leases Cropland leased out to local farmer. Looking north along Timberline Road -13- Axton Realty Consulting, Inc. HIGHEST AND BEST USE Defined The concept of Highest and Best Use is fundamental to the analysis and valuation of any real property. As used here for purposes of this appraisal report, it is defined as: "That reasonable and probable use that willsupport the highest present value, as defined, as of the effective date of this appraisal." "Alternatively, that use, from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and which results in the highest land value." An opinion of the highest and best or most probable use is premised upon, among other things, the site being vacant and ready for development, as well as its compatibility with the environment. Statement of Highest and Best Use for Subject Johnson Property:Continued rural residential use Farms in the vicinity of Fort Collins and in subject neighborhood will continue to move from agricultural production to urban uses as the city grows towards the north and east. Most of the corridor along SH 14 west of the interstate has developed for commercialand likewise the corridor along I-25 has been developing for light industrial and commercial uses, especially on the west side. Residential will be predominate north of Vine Drive within the LMN, low density zone. As the table of comparable sales will indicate later in the report, values have increased for this prospective development land to the point where agriculture is no longer a financially feasible alternative. Factors to Determining Highest & Best Use Physically Possible-Uses are considered in terms of location, size, shape, soils, and topography of the property. Given the size, topography, soils and other physical characteristics the use is for residential or crop use. Crop choice and rotation should match soils conditions. Residential, industrialand commercial uses are all adaptable to the property. Legally Permissible-The legality of uses results from limitations such as zoning, building codes, set-back requirements, easements, and environmental restrictions. Allowed uses according to current E-Employment zoning are a wide variety of industrial and commercial uses and additional “support” of the workplace uses.It is an extremely flexible zone. Financially Feasible-Normally, only uses which produce a net positive return after debt service are considered financially feasible. Agriculture is no longer financially feasible. Residential is less adaptable with the setting along the busy four lane roads Timberline and Mountain Vista and with the full I-25interchange nearby. The current zoning dictates some type of business or industrial useplus supporting commercial and housing for the work place. One would envision more intensive commercial uses along the two streets feathering back toward the south with lower and lower residential densities. The large WAPA line will have to be considered and incorporated into any planned land use. Maximally Productive-Future wide ranging mixed useurban development. -14- Axton Realty Consulting, Inc. VALUATION METHODS The appraiser has three methods of estimating value and each is considered in every appraisal: The Sales Comparison Approachis a comparison process between the subject property and similar properties that have recently sold. Considerable judgment is involved when analyzing each sale with respect to value factors such as time of sale, location, conditions of sale, and physical characteristics. The sales prices are then adjusted to account for these differences and the net result from each sale is a value indication for the subject. In utilizing the Cost Approach, the unimproved value of the site is first determined and to this is added the depreciated reproduction or replacement cost of any improvements. The total gives a value estimate based on current costs less any depreciation. Since the appraisal will deal only with the land value the cost approach is not applicable. The Income Approachutilizes an investment analysis of the property. The income stream of similar properties that have sold is analyzed to determine the rate of return to these investments. This rate is then applied to the subject's estimated net income and thereby capitalized into a value indication. This approach is applicable to all probable uses considered to be viewed as income producing by a prospective buyer. Income from farm and hunting is capitalized at a market derived rate of return. Due to motivations other than income and the wide fluctuations in values indicated from capitalizing net income, the approach is not a reliable measure of value in this particular market. -15- Axton Realty Consulting, Inc. VALUATION-SALES COMPARISON APPROACH Introduction In this section the analysis revolves around comparing subject property in it’s current “as is” condition with as similar sales of properties as is possible. The search for comparable data included the immediate neighborhood but as is often necessary the market area was expanded to include other competing neighborhoods around Larimer County and surrounding areas. The search was accomplished by a thorough examination of all possible sources including county assessors and clerks records, data bases maintained by this and cooperating appraisers and real estate agents active in this particular market. Elements of Comparison Sale Conditions Factors such as unusual conditions of the transaction, financing, or property rights can affect the price paid for real estate. In the case of the chosen data set, all are considered arm’s length having no unusual stress or pressure to sell, good exposure to the open market, most are cash or terms equivalent to cash and all are the transfer of 100 percent of fee simple interest. Cash equivalency adjustments, if necessary, can be made by a calculation equalizing interest rates and terms between market terms and actual. Date As discussed in the Area and Neighborhood analysis earlier in this report there has been continued migration of residents to this area of the county, mainly people seeking the quiet and simplicity of smaller town living. Parcels around Fort Collins and even the smaller towns in the county were being quickly converted for residential and industry in the years 2000 to 2007 and land prices rose dramatically. In 2008 the growth in the area came to a near halt as did much of the country and the market has stagnated. Prices flattened and even reversed in some property types. Agricultural parcels have remained strong with good commodity prices and profitability on the farm. Also, there have been exceptions to the decline in some industries, mainly in the energy sector. Generally, the data was chosen to reflect the current market conditions and major adjustments for date will not be required. Size Normally, the smaller the site the higher the unit price. This is due to higher demand for smaller parcels as well as the "wholesale" effect of the overall transaction size. Large investments have a smaller pool of potential buyers, therefore often reduced per unit prices. In this case size adjustments are minimal as there are adequate comparable examples of near the same investment size. Location Location is obviously one of the most important factors contributing to value, but is difficult to extract from other factors. Location nearby existing public services, especially sewer is key to timing of annexation and development. Being situated on a major highway attracts commercial and industrial investors and in the industrial market rail service is sometimes key. Particular attention was paid to the highway/frontage road location for this property. Water Rights Some sales may include water which must be allocated and adjusted in comparison to subject. These adjustments are based on continual tracking of current water market values in a very established market and by interviewing buyers regarding their allocation to water. Water with change of use or precedent for change are often based on dollars per Acre Foot of Consumptive Use. The most valuable water rights are those that have been changed and are in use in the respective cities treatment system which can be readily dedicated. Because water taps are extremely priceycurrently (a typical district tap is upwards of $100,000 in some neighborhoods) and the project or the taking does not impact subjects water tap, sales that included taps were adjusted down for that factor. Other The remaining adjustments are more minor and include age and condition of any buildings, availability of urban utilities, zoning, functional utility, access, topography, soils, and irrigation equipment among others. Industrial zoning was particularly important. Adjustments for such factors are based on the best information available including costs, surveys from market participants and extractions from the market when available. -16- Axton Realty Consulting, Inc. Value of the Before Larger Parcel-Continued Sales Comparison Approach-Vacant Site The value of the property is best estimated using the sales comparison approach, comparing subject to similar sales of transitional farms in the Windsor/Severance area. For the most part market data was focused on Larimer County sales rather than including the rare, often very expensive Larimer County farms. The list below shows the inventory of data availablefor this analysis. Sale LocationSeller/ BuyerPriceLand Size Comments Date 1Harmony Road and Kneivel/ Serfer$5,208,000181 acIncluded2 sh WR, 4 sh L&W, 1 2/21CR 13, east edge of $28,773/acsh L&WR and BH Eaton seep Timnath.right. 5 unit CBT not included. Old farm bldgs., NV. Harmony rd 3 annexation to Timnath. Residential use. 2North side of Laron/ Johnstown $2,800,00095 ac Not yet annexed at time. Irrigates 11/21 Johnstown, adjoining N. Inv. $29,474/acout of Home Supply. No imps. Rolling Hills. CR15 south of 50 3NW corner of JSCS Farm/ Town $4,147,200138 ac Open space and water. 4 sh LC, 12/21 Windsor, off CR 15, of Windsor $30,052/ac2/3 sh LCR, well permit N/S of rail tracks10946FR. Old junk buildings no value. Annexed in 2007. 4SWC CR 17 and Thornton Farms/ $15,169,500 320 ac Addition to Raindance. Included 12/21 Crossroads Blvd in Vima Ptnrs $47,405/ac67 units CBT. south Windsor. $34,842 w/o CBT Was planned as Tacincala project 5West side of SH 257 WINTAC Inv/ $10,000,000 294 ac annexed to Windsor, zoned residential 11/21 north of Windsor. Prairie Song $34,014/ac master plan. 198 SF lots. Included 24 Across from North sh CLPR, 8 shLC, 12 sh LCRplus Shores. well waterfrom 4 wells. thrd Sale included 14 sh GLIC, 2.5 rights 6NWC 10St. & 83Wilken, Schneider, $9,000,000163 ac LL. Family partition request lead to 2/22Ave in west Greeley. etal/ Journey $55,215/ac sheriffs sale. Cert $9M. Not annexed. Homes$33,804/ac Res devland. without wtr Midway between SH 56 and SH 60 7West side I-25 at SH Zimmerman Bros/ $13,000,000 325ac east of Campion. Pivotirrigated, 8/2260 near Johnsons John Sauer$40,000/ac 28.75 shHS and 12.5 sh Handy Corner included. 2 sets of farm bldgs. 1.5 sh Hillsboro allocated at $700k/sh. 8NWC CRs 13 and 44 Russell/ Johnstown $3,750,000100 ac 31 acres of floodway assigned 3/23in southwest 1 $37,500/ac $10k/ac. Johnstown. 1.5 mi $35,000/ac east of I25.land only Sales prices ranged from $28,773 to $40,000, but most in a fairly tight rangefrom $30,000 to $35,000.The average of the 8 sales is $33,245/ac. Sales 1 and 6 and 7 are the furthest from development, two no yet annexed. Sales 2, 3, 4, 5 and 8 are thebest, most reliable at $29,474, $30,052, $34,842, $34,014 and $35,000 per acre respectively. From these sales, adjusting for earlier dates and proximity to utilities, annexation, etc. would suggest aconclusion between about $30,000 to $35,000. Surrounding subject around the east and north sides is the once large buffer acreage owned by Anheuser Busch. That land was transferred to Anheuser Busch Foundation and then placed under contract about 5years ago by Montava development. Although that contract price has not been officially disclosed it is thought to be around $25,000 for this large site. It like subject is all annexed with various zoning and intended to be developed in a large possibly 3000 unit master planned community.Even a slight guess as to the final selling price needs to be adjusted for date when negotiated and very large size. When such adjustments are made it also would support a concluded sales price at or just over $30,000 per acre. A reasonable and well supported conclusion of value for subject is $34,000 per acre.Therefore: 189 acres x $34,000/ac= $6,426,000. -17- Axton Realty Consulting, Inc. Anheuser Busch Contract Sale3 Sale 1 Sale 5 Subject Sale 6 Sale 4 Sale 7 Sale2 Sale 8 Comparable Site Sales -18- Axton Realty Consulting, Inc. Description and Valuation of the Part Taken The project being constructed by the Districts through NEWT 3 partnership involves acquiring a permanent under ground pipeline easement along subjects south center generally 40’wide.There is a Sketch plan of the Parts Taken flare at the west end at Timberline and a bend north at the east end.This route runs alongsidea 75’ overhead WAPA powerline. Restrictions and allowances due to the easement rights being acquired include: NEWT 3can: Surveying,locating,installing, constructing, using, operating, maintaining, inspecting, repairing, altering, removing, markingand replacingone or more water pipeline(s)and all necessary subsurface and surface appurtenances Cutting and clearing trees, brush, debris andother interfering obstructions Access shall be from existing or future public and private roads located thereon where such roads are adequate. GRANTEE shall have the right to install access roads if determined necessary by GRANTEE OWNER cannot without consent of NEWT 3 Construct orallow the construction ofanystructures Looking eastalong easement areaon the south side of the WAPA power line with the Easement Area Install any landscaping, fences, plant or allow trees, crops, shrubs or landscapingthat exceeds three (3) feet in height when mature Alter ground level Install any berms or other improvements that require fill dirt more than one (1) foot above the surface Impound water Store or dispose of any dangerous, toxicor hazardous substances Store equipment or other items that interferes with easement or access Grant other easements in the Easement Area <2’ from pipe -19- Axton Realty Consulting, Inc. Taking Description, Con’t. A 60 foot temporary work area adjacent tothe south side of the permanent is also required during construction. In summary, the areas involved are as follows: Fee Taking: None Perm Easement: 2.985ac Temp Easement: 3.010 ac See survey and legal descriptions of take at Exhibit D. Improvements Taken None. Proposed water line easement 2.985 ac Aerial photo of the site and area of take WAPA75’ Proposed pipeline Easement route View west over one of the center line stakes -20- Axton Realty Consulting, Inc. Value of the Part Taken Value of the Parts Taken The value for the part taken is the same as the unit value demonstrated for the Before Larger Parcel. There is no measurable difference in the portion taken versus the average value of the parcel as a whole. The unit value was estimated to be $34,000per acrein the previous section. For the permanent easement, some ratio of fee interest value is appropriate for the rights being acquired. In this case the easement is partly encumbering for the purposes of underground pipeline use but leaves continued open land surface use to the owner. At some point in the future it may occupy areas of subject considered for development. As mentioned, no structures or major landscaping can be positioned within the easement area, streets and parking can. Typically, such a subsurface encumbrance constitutesapproximatelyhalf of the property rights, or about 50 percent of fee value depending on the structures and uses to actually be implemented. Such a rate of payment is mirrored by the market when both acquiring new easements but as well as recognizing the encumbrances of existing easements. Often it is difficult to measure the market difference for each individual easement but a parcel criss-crossedby a number of rights of wayand requiring shared use with various entities meets with obvious market resistance and a resulting discounted value. Moreover the 50% rate is very well accepted and expected ratioof valuein the right of way industry. Here, the taking along the edge of the property can still be used for required greenbelt dedication, streets and parkingand no off easement impacts are anticipated. It is a fairly typical case of sharing underground rights with surface rights practically equally. As a result a reasonable ratio of fee for the permanent underground pipeline(s) easement is 50 percent. Therefore: Before Larger Parcel Unit Value: $34,000/ac Fee Acquisition: N/A Permanent Easement Acquisition:2.985 ac x $34,000/ac x 50% of fee = $50,745 Total: $50,745 Value of Impacted Improvements None. Damages:Damages to the remainder are a loss in value due to the project or the taking. Damages to the remainder must be evaluated separately as to each parcel of property. To be compensable, damages must be “special”, i.e., affecting some right or interest which a landowner enjoys and which is not shared by the public generally and must adversely affect the fair market value of the remainder. Compensable damages are limited to those that are natural, necessary and reasonable as a result of the taking. Easement acquisitions that lie at the edge of the property are generally thought to not have lasting value impacts to the residue. Each development project must abide by setback requirements and a 40’easement at the extreme edge of a tract should not impede future planning and development. In addition, each development project in Fort Collins requires a significant percentage of greenbelt, either parks, open space, walking trails, etc. as to create a pleasing environmental for housing and business. Herethe easement does not run along the property boundary, rather along a half section line separating quarters. It was placed adjacent to an existing high voltage WAPA power transmission line in order to not create a new corridor. It does expand that utility corridor from 75’ by another 40’to 115’. And running through the middle of the site, one might expect some minor diminution in value to the remainder, those areas immediately adjacent to and the residue surface rights on the easement itself. The most recent telling of such a case lies on US Highway 34 east of Greeley where a farm that would have normally been expectedto sell for $15,000 to $20,000 per acre (Larson $28,000, Aurora $20,000, Western Equipment $43,800, albeit all of these with water but all similarly lining US 34). Without water rights the Cecil farm only brought $9700, in large part due to a diagonal ditchand 100’ combined oil/gas pipelines that ran through the middle. The broker was carefully interviewed regarding the marketing period (683 days to closing), showings, interest, and marketing challenges. When asked about the apparentlylow price, the first response was principally these easements. Other factors entered in as well, the tract was encumbered by a dry up agreement after Latham water was sold off, it had no water rights remaining, was flood irrigated rather than sprinkler. But as has happened along this stretch of US 34 between Greeley and Kersey with new truck centers, firestations, industrial/commercial this recent sale in February 2023 really demonstrates the market resistance that can happen when easements are particularly encumbering and impactful. -21- Axton Realty Consulting, Inc. On the reverse argument, the appraiser has witnessed new development around the edges of northern Colorado cities where easements have been ingeniously incorporated into the development plan, one in particular stands out in the St. Michaels and Ashton Estates projects where a large high voltage overhead power line was utilized as greenbelt and parkway with divided lanes really making ideal use of this imposed obstacle. But still, such adaptation requires creativity, flexibilityand possibly higher planning costs and definitely shifts greenbelt requirements to that specific area.And of course the major impact to subject future development has already occurred, that being the existing WAPA line. The new easement is another marginal addition. The easement is not felt to impact the installation of infrastructure for the normal development on the north side of the corridor, and moot on the south side. City engineering was interviewed about the challenges of installing utilities over and through existing easements and utilities, a process which as might be expected takes place continually as development occurs in the countryside adjacent to town and where all types of public infrastructure are necessary for the city’s growth. Still, the aforementionedexample does prove that market impacts are felt for certain easement placements and a minor diminution in value here is probable. The area of subject which is impacted is that part south of thepower line, that part of subject zoned E-Employment and does not impact those other zoning areas north of subject. A measurement from the power line easement south within the E-Employment zoning district was calculated at 30 acres and the area of subject which will be measurably impacted. From the data available (ie Cecil, 2/23 and others) a reduction of 15percent is anticipatedfor the combined electric and water line easements. Less than half is actually attributable to the NEWT 3 easement, about 5 percent. Applied to the earlier estimated unit value that comes to 30 acres x $34,000 per acre x 5 percent = $51,000. This damage estimate compared to the whole property value of $6.4M (<1%) and the value of the taking itself at $50,000 (doubling the compensation) seems reasonable and well demonstrated. Benefits: Specific benefits to the property as a result of the taking must be considered. These do not include general benefits from the project but cases where the taking actually creates a value enhancement to the specific property. The easement neither detracts nor enhances the value of the residue. The pipeline improvement being installed is a positive improvement for all neighboring properties as well as subject. In this case, there are no specific benefits which result from the taking. Temporary Easement: An additional temporary work area is needed during the construction period not to exceed 1 year (if a significantly longer occupancy is determined the district will pay additional compensation). It is a 60’ swath alongside (south) of the permanent and covers 3.010acres. The encumbrance for pipeline construction would last only the period of construction, then the area would revert back to subject owner unencumbered. A typical approach to value a temporary construction easement is to apply a reasonable rate of return to the land investment. Alternatively one can view it as a land rental based on going lease rates or this rate of return. A typical lease/return rate utilized mirrors a long term real estate rate of return of around 10 percent. For this 1 year temporary construction easement I find a 10 percent ratio of the fee value appropriate and reasonable. Therefore: Temporary Construction Easement: 3.010acx $34,000/ac x 10% of fee = $10,234 -22- Axton Realty Consulting, Inc. CONCLUSION OF VALUE AND SUMMARY OF COMPENSATION Value of the Before Larger Parcel (site value):$6,426,000 ($34,000/ac) Value of fee take-land: N/A Value of the permanent easement acquisition:$ 50,745 Value of Improvements Taken: $ 0 Value of the remainder before acquisition: $6,375,255 Value of the remainder after acquisition:$6,324,255 Damages to the remainder: $ 51,000 Benefits to the Remainder: $ 0 Value of Temporary Easements:$ 10,234 Total Compensation Estimate: $ 111,979 -23- Axton Realty Consulting, Inc. ASSUMPTIONS AND LIMITING CONDITIONS This appraisal is subject to the following assumptions and limiting conditions: 1.The maps and pictures are included with this report to assist the reader in visualizing the property.The legal description contained herein is approximate for identification purposes, no survey has been made by the appraiser. 2.I assume no responsibility for matters of a legal character nor do we render any opinion as to the title. 3.It is assumed that the title is merchantable, the property free and clear of liens and encumbrances, except noted leases, under responsible ownership and competent management. 4.The information furnished me by others is believed to be reliable, but I assume no responsibility for its accuracy. 5.I am not required to give testimony or attendance in court by reason of this appraisal, with reference to the property in question, unless arrangements have been previously made therefore. 6.Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media, without the written consent and approval of the author, particularly as to valuation conclusions, the identity of the appraiser or firm with which I am connected, or any reference to the Appraisal Institute. 7.Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimated is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. -24- Axton Realty Consulting, Inc. CERTIFICATION OF VALUE I certify that, to the best of my knowledge and belief, the statements of fact contained in this report are true and correct. the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report, and I have no interest or bias with respect to the parties involved. my compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report. my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Standards Board of the Appraisal Foundation and in conformity with the requirements of the Code of Professional Ethics and the Uniform Standards of Professional Practice of the Appraisal Institute. the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. I have made a personal inspection of the property that is the subject of this report. no one other than the person signing this report made significant professional contribution to the analysis or conclusions. the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. After consideration of all the foregoing, I have formed an opinion that Compensation for the subject property, as of March 1, 2023, is estimated to be: ONE HUNDRED ELEVEN THOUSAND NINE HUNDRED SEVENTY NINEDOLLARS ($111,979.00) Alan A. Axton Certified General Appraiser No. CG01313913 -25- Axton Realty Consulting, Inc. Qualifications of Alan A. Axton Greeley, Colorado Education B.S. Degree in Economics, University of Idaho, 1989. Course 1A-1-Real Estate Appraisal Principles, American Institute of Real Estate Appraisers, Oct. 1990. Course SPP Parts A & B -Standards of Professional Practice, Appraisal Institute, June 1991 Course 1A-2 -Basic Valuation Procedures, Appraisal Institute, October 1991 Courses 1BA & 1BB -Capitalization Theory and Techniques, Parts A & B, Appraisal Institute, June 1992 Course 540 - Report Writing & Valuation Analysis, October 1994 Course 550 -Advanced Applications, October 1994 Real Estate Appraisal Course, Colorado State University, 1988 Farm and Ranch Appraisal Course, Colorado State University, 1988 Farmers Home Administration Appraisal Training, U. S. Department of Agriculture, 1990. Course A-10, Fundamentals of Rural Appraisal, January 1995 Numerous other courses, seminars, field trips, lectures Professional Experience Currently owner and principal appraiser of Axton Realty Consulting, Inc. in Greeley, Colorado. April 1995 to February 1999, co-owner and principal of Mitchell, Axton & McCarty, Inc., Real Estate Appraisers and Consultants and Axton Realty Consulting February 1991 to April 1995, Associate Appraiser with Robert J. Mitchell, MAI, Greeley, Colorado, assisting in general real estate appraisal. February 1990 to January 1991, loan officer and residential appraiser for Farmers Home Administration, Lynden, Washington. Individually appraised residential buildings and vacant land, inspected construction projects, and prepared/approved loan documents for Federal agency. October 1985 to June 1986, Appraisal Assistant, Federal Land Bank of Wichita, aiding in the research and preparation of rural appraisals. Qualified numerous times as Expert Witness in Weld and Morgan County District Court Qualified as Expert Witness in Federal Bankruptcy Court Appointed Special Master valuation dispute by Morgan County Judge Appointed Lead Partition Commissioner, Weld District Court License Upgrade Reviewer, DORA Faculty, CLE International Eminent Domain Conference, Denver, 2020 Memberships Affiliate Member of American Society of Farm Managers and Rural Appraisers Certified General Appraiser -State of Colorado, #CG01313913 International Right of Way Association Board Member, Central Colorado Water Conservancy District-District Court Appointment May 2012 Notable Assignments Appraiser for CDOW/Parks Audit Project, 1998-01NCWCD Pleasant Valley Pipeline, 1999-01 Appraiser and Expert Witness for CDOT, 1998-2012 NCWCD Southern Water Supply Project, 1994 Greeley Urban Renewal Landowner Appraisals, 1997-98NCWCD SWSP II, 2015 School site selections, Greeley and St. Vrain NCWCD Loveland Headquarters, 2000 Recreational ranches, Ridgway, Edwards, Steamboat NCWCD Berthoud/Granby Headquarters 2021 Cokeville Meadows Wildlife Refuge, USFWLS, Aug. 1994 NCWCD Galeton Reservoir acquisitions, 2009-2021 Lafayette U.S. Hwy. 287 Bypass, CDOT, Feb. 1994Greeley Medical Clinic, Concordia Corp th 10St. (US 34) CDOT widening, 96-2000 Maynard Farms, US Bankruptcy Court, 1994 Kersey to Hardin, U.S. Hwy. 34 Realignment, Jan. 1993 Sears Irrigated Farms, Private, Nov. 1994 Cheyenne Mountain State Park, 1998 Federal Grazing Study, USFS & BLM, 1992 Water Valley Dev/Pelican Lakes, 1997 NCWA Southeast Pipeline, 2020-21 City of Thornton North Farms Asset InventoryLandowner Appraisals Thornton Pipeline, 2019-21 -26- Axton Realty Consulting, Inc. Expert Witness Qualifications, Con’t. Fees and rates The appraiser’s regular hourlyrate for appraisal, research and meetings is $250.00 per hour. Litigation rate applicable to any expert witness time in court and depositions is $250 per hour. Qualified and gave Expert Witness Testimony in the area: U.S. Bankruptcy Court, Denver, Colorado1994 Wysock Property, Town of Frederick, 1997, Hearing, Weld District Court Various properties, Ft. Morgan NCWCD Pipeline, 1997, Hearings Weld District Court Cervi Trial, NCWCD, 1998, Trial, Weld District Court Lambertson Trial, CDOT 1998, Trial and Deposition, Weld District Court Gordon Property, CDOT 1999, Deposition Grocery Kart Property, Special Master, 2000, Trial, Morgan District Court Nelson Property, CDOT 2000, Deposition and IP Hearing, Weld District Court Erie Auto Salvage Property, CDOT 2001, Value Trial, Weld District Court Kats Property, CDOT 2001, Deposition Golden Gate State Park/Smith Trial, Jefferson County District Court, Fall 2001 Kats Property-CDOT, Valuation Trial Testimony, February 2002 Viacom Outdoor vs. CDOT Trial, Weld DistrictCourt, January 2003 Nelson Family Partnership Deposition, Spring 2003 Nelson Family Partnership vs. CDOT Trial, Weld District Court, Spring 2003 Robinson vs. NCWCD Immediate Possession Hearing, Larimer District Court, Spring 2003 Lovely vs. CDOT Deposition, Spring 2003 Erie Exchange vs. CDOT Deposition, Spring 2003 Sedlak Deposition, Land Owner Work vs. City of Ft. Collins, Summer 2003 Baland Divorce Trial, Larimer District Court, Fall 2003 Erie Exchange Trial, Weld District Court, Fall 2003 Murata vs. Murata Divorce, Weld District Court, July 2006 North Weld County Water District v. Anhueiser Busch, IP Hearing, Weld District Court, Jan 2007 Land v. Leiberman/Salsman trial, Weld District Court, March 2007 North Weld County Water District v. Overturf, IP Hearing, Weld District Court, Jan 2008 North Weld County Water District v. Anheuser-Busch, Valuation Trial, Jan 2008 Lazy D Grazing Association v. Kinder Morgan Pipeline, Valuation Trial, Nov 2009 Franson v. Franson Abritration, Denver, CO, Yuma District Court, Oct 2012 CWCWD v. PVIC Canal Co (FRICO), IP Hearing, July 2013 Ray v. Lovisone and Cage, Deposition, February 2014 City of Fort Morgan v. Longacre Ranch, deposition, February 2014 Ray v. Lovisone and Cage, Valuation Trial, Boulder County District Court, January 2017 Messbergen v. Hardesty Trial, Weld District Court, July 2018 Ray v. Lovison, Cost Hearing, Boulder District Court, October 2019 Roecker v. Roecker, Valuation Hearing, Larimer District Court, February 2020 Mattoch v. Mattoch, Valuation Hearing, Larimer District Court, June 2020 Nelson v. Nelson, etal, Preliminary Injunction Hearing, Logan County District Court, May 2021 Leafgren v. Leafgren, Valuation Trial, Weld District Court, June 2021 Water Supply and Storage v. Cactus Hill, Valuation Trial, Weld District Court, July 2022 LAPCR v. Mirr, Trial, August 2022 -27- Axton Realty Consulting, Inc. EXHIBIT 3.C DATE FILED: January 16, 2024 4:47 PM FILING ID: 39D4FC0D8AB83 CASE NUMBER: 2023CV30659 QspqptfeDspttjoh )2#>311(* Fyijcju!2 QspqptfeDspttjoh QES!Dpodfqu!Qmbo