Postal Customer

*****************ECRWSSEDDM****

Minturn, CO 81645
Overview of the Proposed Interconnect Water Agreement
Permit # 30
Gypsum, CO PO Box 56
PAID

between Minturn, Battle Mountain, and ERWSD

U.S. Postage
440 Eagle Street
ECRWSS Battle North LLC

(Eagle River Water & Sanitation District/Upper Eagle Regional Water Authority)
PRSRT STD

Overview of the Proposed Interconnect Water Agreement

between Minturn, Battle Mountain, and ERWSD
(Eagle River Water & Sanitation District/Upper Eagle Regional Water Authority)

Minturn AGREES TO: ERWSD AGREES TO: Battle Mountain AGREES TO:
Minturn will receive a redundant water supply as well as water ERWSD will receive the land to build a reservoir at the Bolts Battle Mountain will receive water for its Bolts Lake
capacity to allow additional development. It would eliminate Lake site in exchange for the following: project from ERWSD in exchange for the following:
the need to pay for water leased on an annual basis from ERWSD ➢ Waive all the tap fees to serve all of Minturn’s existing ➢ Convey 50 acres of land to ERWSD for the
and would also continue to maintain all of its senior Cross Creek users construction of a reservoir and associated
Minturn
water rights and junior rights which have been made absolute
in exchange for the following:
AGREES TO: ➢ ERWSD
Upon interconnection completion,
AGREES TO: provide immediate Battle Mountain
infrastructure at Bolts Lake AGREES TO:
redundant water supply to Town (currently, if failure of ➢ Pay for the construction of an interconnect from
➢ Providewill
Minturn anyreceive
required permits towater
a redundant ERWSD to construct
supply the
as well as water Minturn water treatment system, or fire in watershed,
ERWSD will receive the land to build a reservoir at the Bolts Dowd Junction
Battle Mountain to thewater
will receive 100-block areaLake
for its Bolts of Minturn ($5.6
reservoir to
capacity at allow
the Bolts Lake Site
additional development. It would eliminate Lakeno redundant
site system
in exchange exists)
for the following: projectmillion estimate)
from ERWSD in exchange for the following:
➢ the
Giveneed to storage
up its pay for water
rightsleased
in Boltson an annual basis from ERWSD ➢
Lake ➢ Upon
Waiveinterconnection
all the tap fees tocompletion, provide existing
serve all of Minturn’s ability for ➢ Convey
➢ Pay for an additional
50 acres of land to$3 million
ERWSD forinthe
improvements to
and would also continue to maintain all of its senior Cross Creek immediate
users water service to future Town development Minturn’sof
construction water system
a reservoir and associated
➢ Give ERWSD any interest Minturn has in Bolts Ditch to
water rights and junior rights which have been made absoluteallow
areas—including
Upon interconnection Battle North, Forest
completion, Service
provide area,
immediate infrastructure at Bolts Lake
ERWSD to fill the reservoir with Bolts Ditch ➢ ➢ Give up all its existing water rights to ERWSD
in exchange for the following: Dowd Junction,
redundant water 100 Block,
supply Union
to Town Pacific area,
(currently, and
if failure of ➢ Pay for the construction of an interconnect from
➢ Subordinate
Provide anyits junior conditional
required permits towater
ERWSDrights on the Eagle
to construct the Minturn water treatment system, or fire in watershed, ➢ Work
Dowd with ERWSD
Junction to obtain all
to the 100-block area permits and($5.6
of Minturn approvals
➢ other Town infill
Riverreservoir
and Cross Creek
at the Boltsto ERWSD
Lake Site at times when they need to no redundant system exists) for ERWSD
million to construct the reservoir
estimate)
fill the reservoir. (Minturn hasinnever historically used these ➢ Provide water to serve all of Minturn’s existing and
Give up its storage rights Bolts Lake Upon interconnection completion, provide ability for ➢ Give up all of its existing storage rights in Bolts Lake
➢
junior conditional water rights and they would be available
➢
future users at a rate of $11.11 per thousand gallons ➢ Pay for an additional $3 million in improvements to
➢ Give ERWSD any interest Minturn has in Bolts Ditch to allow immediate water service to future Town development Minturn’s water system
for Minturn’s use if ERWSD was not filling the reservoir.) (Minturn’s current raw rate is $14.42 per thousand gal.)
ERWSD to fill the reservoir with Bolts Ditch areas—including Battle North, Forest Service area, ➢ Give up all its existing water rights to ERWSD
Dowd Junction, 100 Block, Union Pacific area, and
 THE MINTURN TOWN COUNCIL NEEDS TO HEAR FROM YOU!
PLEASE ATTEND THE JULY 17 MEETING TO LEARN MORE AND ASK
QUESTIONS ABOUT THE FUTURE OF THE MINTURN WATER SYSTEM.

Dear Minturn Neighbors:

As you are aware, we have been working with Minturn for several years on the re-envisioning of the Battle Mountain project as a less dense, primary residential housing project
at the southern end of Minturn at Bolts Lake (the “Battle North” project). Although there are issues to be resolved for that project to move forward, it became very clear that a
safe reliable water supply is the most critical element, in the best interests of both the residents of Minturn and Battle Mountain.

Until Minturn residents provide the much-needed direction to their Town Council on the Water Agreement before them, all other discussions between Battle Mountain and the
Town are moot. While we recognize there are differing opinions and opposing positions within the community, we feel it is most productive to focus on securing a reliable water
system to serve Minturn’s current and future needs on what we believe to be significantly more favorable economic and operational terms.

Where are we today?

The Town of Minturn, Battle Mountain and Eagle River Water & Sanitation District/Upper Eagle Regional Water Authority (“ERWSD”) have been negotiating a tri-party water
agreement (the “Agreement”) for many months that we firmly believe is the best, most cost-effective plan to provide water to both the Battle North project and secure Minturn’s
present and future water infrastructure needs. Like all solutions, there is give and take necessary to satisfy the unique, complicated and challenging needs of all parties.

Battle Mountain and ERWSD have come to full agreement on the proposed deal terms. The Agreement is pending the Town’s final review and decision, and Town Council has
been asked to make that final decision on July 17 as to whether they will move forward with the Agreement or not.

Because this date looms and we sincerely believe the Agreement is critical to Minturn’s future, we are reaching out to our residential and business neighbors to provide you with
the facts and consequences to Minturn, as we understand them, so you are as informed as possible to express your views on how the Minturn Town Council should proceed.

What do we know?
Studies commissioned by the Town over the past several years have highlighted significant and imminent concerns with Minturn’s existing, aging water system. On June 1,
2019 the Town of Minturn distributed an 11-page Minturn Drinking Water Quality Report. The report outlined numerous violations with the Minturn water system during the 2018
calendar year, including unacceptable levels of turbidity (dirt) in the water, multiple issues with the ability of the out-of-date slow sand filters to meet water quality requirements,
and storage tanks that do not meet federal and state requirements.

At the June 5 Council meeting the Town’s water engineer (SGM) outlined upgrades proposed for Minturn’s water system to ensure future violations do not occur and bring
Minturn’s system into compliance. The extensive list of concerns presented in the packet included: limited physical water available, significant issues with the existing treatment
plant, emergency preparedness, ability to serve future growth, limits of existing service area, and economic feasibility to make improvements. It is our understanding that many
of the upgrades presented will be needed for Minturn to continue to serve its existing customer base irrespective of future growth in Minturn.

According to the 2019 budget, Minturn’s Water Fund had a balance of $1.81 million at the end of 2018. The SGM findings outline nearly $13 million worth of high- and medium-
priority improvements that will be required to upgrade Minturn’s water system. Assuming Minturn has the financial capability to borrow the funds necessary to complete the
improvements, the average monthly water bill for a Minturn resident would increase substantially to service the debt incurred.

Further, the $13 million estimate outlined in the SGM report could increase significantly as occurred recently with respect to the Town of Eagle. The cost of Eagle’s new water
plant, which was estimated at $19 million in 2016, ended up costing Eagle residents nearly $27 million (or 142 percent of initial estimates) in 2018 when construction contracts
were finally signed. Conversely, if Minturn approved the interconnect (discussed below), the town and its residents would be immune to any costs associated with its design
and construction.

The Solution
Minturn currently has a proposal from Battle Mountain to secure and fund an additional treated water source: an interconnect from the ERWSD system to Minturn without upfront
capital costs to Minturn residents. Among other things, this interconnect would directly and indirectly address many of the failing issues noted in the above reports.

Development of the Battle North project and other future growth, if it occurs, would fund the full cost of the interconnect (approximately $5.6 million) as well as nearly $3 million in
additional costs for a new storage tank in south Minturn and upgrades to the existing water treatment plant. In total, Battle Mountain alone would fund approximately $9 million
to improve the Minturn water system as part of the proposed development of the Battle North project.

The interconnect would provide a secondary source (Cross Creek would still be the primary water source) and much-needed redundancy for Minturn as well as capacity to
allow future growth at Dowd Junction and the Railroad property if Minturn approves either project. The Agreement between the Town, ERWSD and Battle Mountain would also
result in the construction of a reservoir off Tigiwon Road (at no cost to Minturn) that would be available for passive recreation by the public.

Battle Mountain has been working very hard to be part of the solution to Minturn’s water challenges, but the timing for us to move forward is quickly coming to an end. If Minturn
does not provide direction to finalize the interconnect Agreement at their July 17 meeting, this will no longer be an option for the community or the Developer.

Minturn’s Future Economic Security in Question

The costs presented in the SGM study would only cover the replacement and necessary upgrades of Minturn’s existing water infrastructure and would not provide the capacity
to enable Minturn to consider responsible economic growth projects – such as Dowd Junction or the Railroad parcel that would help stabilize and enhance the Town’s future.
Improvements are needed to allow Minturn to serve its existing population and prior commitments to serve. While the interconnect would serve the proposed Battle North
residential neighborhood, it would also provide Minturn with the capacity to serve other projects and enable those projects to move forward. Again, Minturn residents would
NOT be paying for Battle North water or these other potential projects. If Minturn rejects the interconnect and is unable to borrow the funds for the requisite improvements, it has
been stated that the Town government may need to dissolve and un-incorporate.

Battle Mountain wants to be an integral part of ensuring Minturn’s future. We urge you to contact Town leaders with your thoughts and questions, and please participate in the July
17 discussion. Additionally, should you wish to discuss any of the details of the prospective agreement and potential repercussions, please do not hesitate to reach out to me.

Sincerely,

Tim McGuire
Battle Mountain / Battle North
Director of Development
970-827-4609