Non-Member (Non-CCME) 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 be cost-ineffective 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 three decades.  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. Copyright © 2009-2011 MMWC Director Eric W. Cernyar