Garwood Irrigation Company - Page 30

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          petitioner would still be able to sell water to others in the               
          event that a transfer did not occur.  Although the changes the              
          1997 legislature would impose on the regulation of water in the             
          Colorado River Basin were unforeseeable as of the valuation date,           
          the regulatory and legislative risks affecting the Corpus Christi           
          transaction were not so great as to require a 30-percent discount           
          rate.  Given that petitioner had a buyer and a purchase price set           
          before the valuation date, a 15-percent discount, as Mr. Scheig             
          used, sufficiently factors in the regulatory and legislative                
          risks.                                                                      
               After 3 years of monthly payments, plus the payments that              
          were made before the valuation date, the balance due at closing             
          of $450 per acre foot would be $13,810,000.  Discounted at 15               
          percent, the value of this closing payment is $9,080,299.                   
          Therefore, the total value of the Corpus Christi component,                 
          including the monthly payments, is $9,853,428.                              
               C.   The Unused Water                                                  
               After providing 100,000 acre feet of water to its irrigation           
          customers and 35,000 acre feet to Corpus Christi, petitioner had            
          the right to use 33,000 additional acre feet of water (the unused           
          water) from the Colorado River.  In the several years leading up            
          to the valuation date, the unused water flowed past petitioner’s            
          diversion point.  There was no evidence that petitioner’s                   
          irrigation customers, the rice farmers, anticipated a need for              






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Last modified: May 25, 2011