Elkhead Reservoir Final Acquisition Agreement

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EXHIBIT C .AN:~'UAL SERVICE CHARGE l . Once Elkhead Reservoir has been enlarged and the Yampa Participants have utilized their «°ater rights to fully fill their storage pool in the enlarged reservoir, commencing with the next calendar year the Yampa Participants shall pay the Operator $12,000 per year as a service charge for their use of the Reservoir Enlargement. This service charge is intended to compensate the Operator for services furnished to the Yampa Participants resulting from the incurrence of costs and fees associated uZth the operation, maintenance and repair of the Yampa Participants pro rata share of the storage and release facilities of the Reservoir Enlargement, not including any fees and,'or costs associated v~Tith the provision of public access or recreational facilities or uses. In addition to routine, day-to-day maintenance, maintenance shall be deemed to include replacement or rehabilitation of dam equipment, facilities, installations, and infrastructure. This annual service charge shall be adjusted every year by that percentage change in the Consumer Price Index .- All Urban Consumers U.S. City average so as to provide for prospective changes in costs, with the actual costs controlling as to the accounting described below. The Operator shall advise the Yampa Participants annually as to how the service charge for operation, maintenance and repair of the Enlarged Reservoir compared to the actual costs and expenses for these purposes. 2. At the end of the second year anniversary of the imposition of the service charge, an accounting of the Operator's expenses will be provided by the Operator to the Yampa Participants to determine whether the service charge has been adequate to account for furnishing reservoir storage and release facilities at the Reservoir Enlargement to the Yampa Participants. Any shortage or overpayment, shall be applied to the following year's service charge. The Operator shall also estimate the service charge for years three and four. Another accounting and estimate of the service charge shall be provided at the end of the fourth year, and every fourth year thereafter, addressing the same matters established above with regard to the second year accounting. zany accounting or estimate provided by the Operator shall be subject to the approval and audit by the Yampa Participants. If the Yampa Participants dispute the determination or estimation of the service charge, they shall so notify the Operator. 3. In the event of any emergency repair or maintenance which qualifies under paragraph 1 above, the pro rata cost of which exceeds 50 percent of the annual service charge, the Operator may bill the Yampa Participants for their pro rata share of the cost and the Yampa Participants will make pa~~rnent within b0 days. The Operator shall give the Yampa Participants as much notice as possible, preferably before the repair is made, of the emergency repair and an estimate of the repair costs. Emergency repair includes any unforeseen repair, which if not made, threatens the safety and integrity of the dam, or could result in substantial Loss or damage to the dam and appurtenances or downstream properties. 4. For purposes of this Exhibit, the costs and fees which pertain to the service charge are the costs and fees associated with operation, maintenance, administration, equipment, material, construction and repair of the Yampa Participants' pro rata share of the storage and release facilities of the Reservoir Enlargement, not including any fees and/or costs associated with the 21