The Johnstown Town Council approved a $500,000 agreement Monday night to purchase one share of water rights from Gillam Development Corporation. The proposed acquisition, approved October 19, remains subject to verification and closing requirements before ownership can be transferred to the Town.
The agreement was approved as part of the Council’s consent agenda in a 5–0 vote, with Councilmembers Jesse Molinar Jr. and Damien Berg absent. According to the Town’s meeting documents, funding for the purchase is available in the 2026 fiscal year.
What the Town Is Purchasing
The agreement involves one share of capital stock in the Consolidated Home Supply Ditch and Reservoir Company, identified as Certificate No. 7036. The share carries associated water rights that would be transferred to Johnstown upon completion of the transaction.
Unlike a traditional real estate purchase, the agreement concerns water rights rather than land or buildings. Ownership of those rights would provide the Town with an additional water asset, although the meeting documents do not specify how much usable water the share is expected to provide.
The agreement references previous Colorado Water Court proceedings affecting the water rights. Before the purchase is finalized, the ditch company must provide a stock trace documenting the share’s history, which will be reviewed by the Town’s water engineering consultants.
Purchase Includes Financial and Legal Safeguards
Under the agreement, Johnstown will have 10 business days after receiving the stock trace to investigate the documentation and obtain any required approvals. During that period, the Town may terminate the agreement at its discretion by providing written notice to the seller.
The purchase agreement also discloses $375,000 in indebtedness to SouthState Bank and requires Gillam Development Corporation to satisfy that obligation on or before closing. The seller is responsible for the costs associated with transferring the water share, while the Town is responsible for expenses related to its review of the stock trace.
If the transaction proceeds, closing is generally required to occur between five and 30 days after the contingency period expires, unless both parties agree otherwise in writing. The agreement requires the seller to deliver the original stock certificate, a deed conveying the associated water rights, and documentation assigning the share to the Town.
Town Confirms Funding Is Available
Town Manager Matt LeCerf presented the purchase agreement for Council consideration. According to the October 19 staff report, funding is available in the Town’s 2026 fiscal year to complete the $500,000 transaction, and the Town Attorney reviewed the agreement before it was submitted for approval.
Town staff identified the purchase as aligning with Johnstown’s strategic objective of maintaining safe and reliable public infrastructure and utilities. However, the meeting documents do not identify a specific municipal project or development for which the water rights would be used.
Water rights are an important part of long-term municipal water planning because they establish legal interests in water supplies. The amount of water available through a particular share depends on its associated rights and applicable legal conditions, which are among the details the Town must verify before completing this purchase.
What Happens Next
With Council approval secured, the purchase can proceed through the agreement’s verification and closing process. The Town’s water engineering consultants must review the stock trace, and the seller must satisfy the agreement’s requirements before ownership can be transferred.
The approved purchase price is $500,000, but the Town’s meeting materials do not establish a final closing date or confirm that the transaction has been completed. Additional information about the share’s expected water yield and intended municipal use was not provided in the Council packet.
Source: Town of Johnstown, October 19, 2026, Town Council meeting agenda and purchase agreement.