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Lessee's use of the 30% portion of t11e return flows. is determined to be fair and <br />reasonable, compensation for the operation, repair, maintenance, installation and <br />expansion of the Lessee's water distribution system that also benefits lessor by making <br />return water flows. available for appropriation. Lessee's maintenance and control of the <br />distribution system also provides for the metering and quantification of the return flows <br />referred to above. <br />SECTION 3: CONSIDERATION <br />A. Bonds -The Lessee hereby agrees to furnish bonds with approved corporate surety in <br />the sum of $10,000 conditioned upon compliance with terms of the lease. The purpose <br />of the bond is to provide payment to the Lessor for accumulated water use charges and to <br />cover costs for shutting in the well, in the event that the Lessee is financially unable to <br />make payments for water and the lease is subsequently terminated. The first $5,000 <br />bond shall be furnished to the Lessor no later than 90 days after this lease is signed by the <br />Lessor and Lessee. The second $5,000 bond shall be furnished to the Lessor no later <br />than January 1, 2008. The face value of the required bond will be adjusted at periods of <br />no less than five years at the same rate of increase or decrease that is identified for water <br />charges from the well by the independent appraisal referenced in Section 1 C of this lease. <br />B. Fees and Water Charges -The Lessee hereby agrees to pay the Lessor: <br />1. A minimum water use fee for each lease year, payable at the end of each lease <br />year on 20`h day of the month that follows the anniversary month during which <br />the original water lease was signed. The minimum lease charge will be based _ <br />upon a running average of the total annual water fees paid to Lessor during each <br />of the previous five years, multiplied by a factor of 33 percent. ~' <br />2. $0.43 per 1,000 gallons of water diverted from the well for municipal and <br />domestic use; payable monthly not later-than the 20`h of the month following <br />calendar month in which diversions from the well were recorded. The ruin, of <br />such monthly payments for alease-year will be credited against the minimum <br />lease-year charge described in Section B 1. <br />c;~ <br />C~iii <br />3. $0.23 per 1,000 gallons of water diverted from the well for incidental in-igation <br />use. <br />If the stun of the monthly charges for any one lease-year is less than the ntinimt-m charge <br />described in Section B1, the difference will be due and payable to the Lessor not later <br />than the 20"' day of the month that follows the anniversary month on which the original <br />water lease was,signed. If the sum of the monthly charges in any one year exceeds the <br />minimum charge described in Section B1, no refund is due to the Lessee. T}ie water fees <br />and charges set forth above will be reviewed by the Lessor at five year intervals, <br />commencing with the effective date of this instrument, to determine the fair market value <br />of this lease and charges to be made for the next successive five-year period: Lessee <br />~t <br />r.~a <br />...~ ~ <br />:.~ C~ <br />~'~`~ u~ <br />r- <br />-~~ <br />..~~ <br />C~~ <br />i <br />