Source: https://mountainmutual.com/membership
Timestamp: 2020-07-08 01:16:31
Document Index: 397084260

Matched Legal Cases: ['§ 1', '§ 1', '§ 3', '§ 1', '§ 10', '§ 7', '§ 5', '§ 10', '§ 7', '§ 5', '§ 10', '§ 7', '§ 2', '§ 2', '§ 2', '§ 7', '§ 2', '§ 2', '§ 501']

About MMWC - Its History and Membership Information
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MMWC History
MMWC water source located at Gillette Flats (click to enlarge)
Mountain Mutual Water Company (MMWC) was formed in 1973 to serve the domestic water needs of Cripple Creek Mountain Estates (CCME), a subdivision developed in the 1960s and 1970s by the Golden Cycle Land Corporation (GCLC).
CCME is located approximately 5 miles northwest of Cripple Creek, Colorado. MMWC was formed as a “ditch and reservoir” company. The right to water service from MMWC is represented either by membership in, or a contractual relationship with, MMWC. MMWC has water rights to an aquifer in the West Beaver Creek Watershed and has wells located at Gillette Flats. This aquifer is shared primarily with Cripple Creek and Victor. It is a high quality water source requiring only minimal treatment in compliance with Colorado regulations. These are the only water rights available to homeowners within CCME.
MMWC Membership
When MMWC was formed, the owners of each lot in CCME became members. MMWC's By-laws currently - and have always - restricted memberships to owners of platted lots in CCME. See MMWC By-laws, at Art. II, § 1 (“There may be one class of memberships known as Class A Memberships. Each member must own one platted lot in CCME per Class A Membership, as a condition of membership….”).
MMWC also serves several non-member customers in mining claims through which MMWC has secured easements for its water transmission line. MMWC’s “membership” consists of over 1400 residential lots - some developed, most still vacant - in CCME.
To be entitled to service, you must be a registered owner of a MMWC Membership. If you have recently purchased a lot in CCME, it is your responsibility to notify MMWC of the change in ownership. The fee to transfer the user’s membership is listed on our Rates and Fees website page. MMWC is not obligated to recognize any interest in any membership, or the rights deriving from a membership, unless the person claiming the interest is a registered owner of the membership. See MMWC Articles of Incorporation, at ¶ 9.
Member Entitlements and Obligations
Article VI, § 1 of the By-laws entitle each registered holder of a membership to take water as provided by the Board of Directors. Water supplied by MMWC may be used only for domestic purposes in single family dwellings on the associated lot. MMWC By-laws, Art. VI, § 3. In times of scarcity, MMWC has the right to require conservation measures and curtail water use. MMWC By-laws, Art. VI, § 1. There is one membership per non-forfeited lot, and each non-delinquent membership is entitled to one vote. See MMWC Articles of Incorporation, at ¶ V; By-laws at Art. II, § 10.
Delinquencies in paying one’s water rates may result in a loss of service, and your tap being turned off. State law authorizes ditch companies to withhold water until all assessments are paid. See C.R.S. § 7-42-104(3). MMWC's Articles of Incorporation provide that "[t]he corporation may refuse to provide service to any member who is delinquent in paying any assessment, charge or other debt to the corporation, and may refuse to recognize and treat as a member any transferee of a membership until all delinquencies of the transferor have been paid." See MMWC Art. of Incorporation, at ¶ 5. MMWC's By-laws, at Art. VI, § 5, provide that "[a] Member or non-member customer shall not be entitled to water, water service, to vote at meetings of members, or to be a director or officer until he/she has paid all delinquent assessments or charges...." Moreover, delinquent members are not entitled to vote on matters presented before the membership. Art. II, § 10 of the By-laws provides: "No member who is in violation of the Articles of Incorporation, these By-laws, or rules and regulations of the Corporation, or whose membership is delinquent shall be entitled to vote at any regular or special meeting of members."
MMWC currently permits - but is not obligated to permit - CCME lot owners for which membership rights have been forfeited and for which water service is feasible to purchase a membership, along with an accompanying right to tap, for a reinstatement fee. This fee is comparable to tap fees paid in other water districts.
Delinquencies and Loss of Rights
State law authorizes ditch companies to withhold water until all assessments are paid. See C.R.S. § 7-42-104(3). MMWC's Articles of Incorporation provide that "[t]he corporation may refuse to provide service to any member who is delinquent in paying any assessment, charge or other debt to the corporation, and may refuse to recognize and treat as a member any transferee of a membership until all delinquencies of the transferor have been paid." See MMWC Art. of Incorporation, at ¶ 5. MMWC's By-laws, at Art. VI, § 5, provide that "[a] Member or non-member customer shall not be entitled to water, water service, to vote at meetings of members, or to be a director or officer until he/she has paid all delinquent assessments or charges...." Moreover, delinquent members are not entitled to vote on matters presented before the membership. Art. II, § 10 of the By-laws provides: "No member who is in violation of the Articles of Incorporation, these By-laws, or rules and regulations of the Corporation, or whose membership is delinquent shall be entitled to vote at any regular or special meeting of members.
By law, a membership in a mutual ditch or reservoir company is a form of personal property. See C.R.S. § 7-42-104(4). Because the lien is against personal property, not against the lot, it is not defeated by a tax sale or foreclosure on the lot. Memberships in MMWC are, however, automatically transferred with sale of the lot. See MMWC By-laws, at Art. V, § 2. When a lot is transferred the unpaid charges of the prior owner are not "wiped out." The charges remain due and owing, and can be collected from either the old or the new owner. See MMWC By-laws, at Art. V, § 2 ("Obligations of the transferring member for unpaid assessments, charges, or other debts owed to the Corporation, including any such assessments or other charges accrued prior to a sale of the Lot for unpaid real property taxes or other liens, shall remain unimpaired by the transfer of the Lot, or the Certificate and membership.").
Until all past due charges and amounts are paid - whether by the old member or the new member - the new member is not entitled to service. See MMWC By-laws, at Art. V, § 2 ("The Corporation shall not be obligated to supply water or water service to the new member until all obligations of the old member to the Corporation have been satisfied. Until all assessments, charges, and other debts owed the Corporation are paid in full, the membership shall not be considered current or in good standing.").
Other consequences: State law empowers a mutual ditch and reservoir company to "prescribe by bylaws for a forfeiture or sale of stock on failure to pay the installments or assessments that from time to time may become due." C.R.S. § 7-42-104(3). A most serious consequence occurs if one allows the membership in MMWC to be forfeited because it could very significantly reduce the value of that property because that lot will no longer have water service from MMWC or other sources.
Regarding Non-Member Customers
MMWC has the right, under Art. VI, § 2 of its By-laws, to supply water and water services to non-member customers on a case-by-case basis. MMWC provides water and/or tap rights to many of the landowners through whose mining claims or lots MMWC's main transmission line from the Gillette wells run. Most of these commitments to supply water were made in exchange for easements for MMWC's transmission line. Also, in its 1983 contract with GCLC, MMWC agreed to assume the water supply commitments that GCLC had made to a few other non-CCME owners in exchange for the water rights and facilities that GCLC transferred to MMWC. But outside of these circumstances, MMWC almost always denies requests for service from non-CCME landowners, for a number of very good reasons.
First, MMWC has rights to a limited supply of water. MMWC's principal obligation is to supply water to its members in CCME. MMWC secured water rights that it believes will be adequate to meet CCME's current and future water needs, along with the needs of the few non-CCME customers that MMWC serves. Those water rights, however, are not adequate to serve a large population of non-CCME customers.
Second, it would generally not be cost effective for MMWC to extend distribution lines to isolated customers outside of CCME. Due to covenants that run with CCME lots, MMWC effectively has a monopoly on water service to CCME. See Amended and Consolidated Declarations of Protective Covenants of Cripple Creek Mountain Estates, dated March 16, 2005, at §§ 2.1(b) & (f). This ensures that by the time CCME is fully developed, MMWC's service area will have a sufficient customer density to enable MMWC to serve its members efficiently and cost-effectively. Generally, no such covenants run with land outside of CCME. In land outside of CCME, owners may have the opportunity to dig their own wells or secure water from other providers. Moreover, the areas outside of but proximate to CCME are unlikely to be developed as quickly or densely as CCME. Therefore, service by MMWC to these outside areas is unlikely to be cost-justified.
Third, the costs of operating, maintaining, and improving MMWC's water distribution facilities are shared by not only users but also - through annual availability fees - owners of CCME lots that are not yet connected to MMWC's system. In a sense, owners of empty CCME lots have long subsidized and are continuing to subsidize MMWC's operating and capital costs in exchange for the right and opportunity to connect and the value that the availability of MMWC's water service adds to their property. Unlike CCME's lot owners, owners of lots outside of CCME have not been subsidizing MMWC's costs over the past decades since the water system was established. Absent exceptional circumstances, it is difficult to justify allowing non-CCME lot owners - who were never subjected to such costs - to tap MMWC's lines, much less to share in the continuing subsidies provided by MMWC's availability fees.
Fourth, MMWC is a non-profit "mutual ditch and reservoir" company. In order to maintain its tax-exempt status, it must receive no more than 15% of its gross income from non-members. See 26 U.S.C. § 501(c)(12). Also, as a "mutual ditch and reservoir" company, MMWC was “formed expressly for the purpose of furnishing water to shareholders, not for profit or hire.” See Jacobucci v. District Court, 189 Colo. 380, 541 P.2d 667, 671 (1975) (emphasis added). MMWC's status as a non-profit mutual ditch company restricts MMWC from engaging in profit-making activities. Accordingly, MMWC's members stand to gain little benefit - but nevertheless must bear additional liabilities - by extending service to non-members.