Spouse's Night

Last week we held an evening meeting at Ron Clark's lakeside home and I have to admit, it is the first function I have been to where guests arrived by canoe. Those that attended enjoyed a beautiful evening of camaraderie, hamburgers, hotdogs, and side dishes and desserts.

Foreign Trade Zones

GUESTS
We welcomed Doug Couse of Bank of Choice as a guest.

ANNOUNCEMENTS
We inducted Shannon Spangler as our newest member.

PROGRAM
The program for the day was brought to us by Eric Swanson who introduced Tim Kent of Great Western Development Co. who talked to us about the proposed Foreign Trade Zone for the Windsor area. Tim said that this zone would provide for tax free and duty free treatment for production facilities whose output is destined for abroad. It allows companies to defer taxes and duties to match revenues also. Such zones are used by virtually every country in the world.

For the last 30 years, the US has imported more products that we have exported. In 2002, we ran a $485 billion deficit with other countries and in 2005 that number was up to $726 billion. This creates a condition where we have to borrow from foreign countries and banks. Tim pointed out that China has used the Foreign Trade Zones better than anyone else in the world and their economy has benefited accordingly.

The advantages for businesses are many; it allows business to manage their inventory flow better. There is no tax impact on state or local government with these zones. Kodak is setting up a special zone for their business.

QUIZ ANSWER
No one owns Antarctica. By international agreement it is reserved for research and other non-military functions. With global warming, there may be an opportunity for some beachfront homes in the future.

NEXT QUESTION
For years, Disneyland has been the top tourist attraction in California. This last year, it fell to second place. What unseated it?

Real Estate Market in Northern Colorado

Ardin Wright assumed the role of Ron Clark last week, and only the very astute observer could tell the difference.

GUESTS
Doug Couse with Bank of Choice who has voiced an interest in joining the club, Shannon Spangler (should be a member shortly), and Brad Pietsch.

ANNOUNCEMENTS
Ardin reminded everyone that next week, there will be no regular club meeting. As it is a month with five Thursdays, we will be having a "Spouse's Night" at President Ron Clark's House.

PROGRAM
Dan Leuschen and Steve Kawulok provided the program about the status of Real Estate Market in Northern Colorado. Dan passed out some interesting literature and statistics.

Kawulok said that new residential sales are down between 8 and 10 percent; whereas, new construction is down about 20% from last year. Condos and attached units are off 50%. There is currently between 8 and 12 months of new construction in inventory. Ideally, this number should be about six months which is the average time to construct a house.

One of the problems is affordability. The rise in interest rates has changed the market. For each one percent change in the interest rate, it reflects a 1-% change in what you can borrow... The interest rates in 2004-05 were at historic lows which allowed many first time home buyers to qualify and pushed the cycle. It took many renters out of apartments and put them in new homes.

Steve also told us that one third of the new construction contracts nationwide are failing, but he thinks today's market challenges are just a hiccup in the overall health of the real estate market. Part of this is based on projected growth in the area which predicts an increase of 225,000 people in the area in the next 20 years. Windsor, he says, is at the apex of this growth. He pointed out that after the Money Magazine article about Ft. Collins being the most livable city, the phones rank, and the internet hits spiked.

Kawulok had some recommendations for his clients:

1. Sell of excess inventory
2. Don't open up too many lots at one time
3. Differentiate your project
4. Resale homes compete with new homes, so prepare and update the used home accordingly

QUIZ ANSWER
Ryan Airlines Co. built the Spirit of St. Louis. Incidentally, the plane was called the Ryan NYP (New York to Paris).

NEXT QUESTION
Who owns Antarctica?

Colorado Water Law

GUESTS
Guests included Debbie Ledbetter (former member who we hope will rejoin us), Shannon Spangler (prospective new member), Joe Jelinek, John Stone, and Michal Conners from the Chamber of Commerce.

ANNOUNCEMENTS
Pete Hyland again announced our intent to sell beer during the Labor Day Weekend festivities.

PROGRAM
Ray Liesman, Water Referee for Division 1 (South Platte River) talked to us about Colorado Water law; how it came into being and how it is being used. This is a most complex subject, and Ray presented it in a very forthright and understandable fashion.

He pointed out that there is evidence of ditch irrigation by the Ancient Ones at Mesa Verde. In addition, the Spaniards built ditches centuries ago in what was to become Colorado. When Colorado became a territory, the importance of establishing a water use scheme was recognized. The Colorado Doctrine was created which, unlike the Riparian Laws of the eastern states, determined a priority system based on the principal of "First in Use, First in Right". In Colorado, you don't own the water (the water belongs to the state), but you can own the right to use the water so long as you don't waste it. It must be determined that it is put to beneficial use.

In 1879, the Water Adjudication Act was passed and at that time, all water matters went through District Court. In 1969, the Water Rights Determination Act passed and this set up a system of Water Courts that are in use today. Colorado is divided into seven water divisions based on the major rivers in the state, Division #1 covers almost a quarter of Colorado including all of the South Platte Basin as well as the Republican and Arikaree Rivers. Each Division has a water judge who is appointed annually, but in reality, once a water judge is appointed, it is a lifetime appointment unless the judge resigns or retires from the bench.

There are two types of water rights, Absolute and conditional. Absolute rights are those that have already been put to beneficial use and are said to be "perfected". Conditional rights are those where the plans are in the works to use the water but it has not yet been put to use. Conditional Use rights must be taken back to court periodically to show "due diligence". (I loved those Conditional Use cases. They could provide consulting fees for years).

QUIZ ANSWER
Texas is the only state that can fly its state flag at the same height as the US flag. This was part of the treaty between the US and sovereign nation of Texas that brought Texas into the union.

NEXT QUESTION
What was the name of the San Diego company that built Lindberg's "Spirit of St. Louis"?

Passenger Rail in Northern Colorado?

GUESTS
We were graced last week with five guests including previous guest and potential member Shannon Spangler, Sarah Moore, wife of Ralph, and three of our recent RYLA students Leah Ackerman, Hannah Adams, and Lonni Sharshel.

ANNOUNCEMENTS
We inducted Karen Trusler as our newest member. Welcome aboard Karen!

PROGRAM
Our program last week was presented by Alex Yeros and Cliff Davidson. Their program was about the potential for passenger rail service in Northern Colorado. Yeros gave a background of the Great Western Railroad which was part of Great Western Sugar at one time.

Davidson is the director of the North Front Range Transportation and Air Quality Planning Council. Cliff told us that in thirty years, the area is expected to be one large regional city. He also said that the gas tax has plateaued out and has total receipts has started to go down. He also said one of our main problems is that wherever there is a road, we (sic) build on that road until it is broken. I-25 is a perfect example.

Yeros told us that Great Western had passenger service as recently as 1986 when they used to haul excursions to Bruce's Bar in Severance. (Now that is the way to run a railroad). Great Western Railroad goes through nearly every town in Northern Colorado east of the Front Range.

QUIZ ANSWER
Trains, coincidentally, was the driving development that required coordinated accurate time.

NEXT QUESTION
What is the only state flag that can be flow at the same height as the Stars and Stripes, and for extra credit, why?