Elkhead Reservoir Final Acquisition Agreement

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Page 3 7. ~'~THEREAS, the River District has entered into the following agreements: an Intergo~Ternmental Agreement between the River District and the City of Craig, dated February 1, 2002 (creating a joint venture between the River District and the City of Craig for the construction of the Elkhead Reservoir Enlargement); a Memorandum of Agreement between the River District, the City of Craig, and the Colorado Division of Wildlife, dated August 6, 2003 (granting the River District the right to interfere with certain interests owned by the Division in order to construct an enlargement of the existing Elkhead Reservoir); an Intergovernmental Agreement between the River District and the City of Craig, dated August 6, 2003 (setting forth the Agreement of the River District and the City of Craig related to the construction, operation, and maintenance of the Elkhead Reservoir Enlargement); and an Amended and Restated Agreement between the Yampa Participants, the River.District, and the City of Craig dated January 21, 2005 (date signed by Tri-State Generation) (setting forth the Agreement of the River District, City of Craig, and Yampa Participants related to the post-construction operation, maintenance, and repair of the Elkhead Reservoir Enlargement). The above-described agreements between the River District, Craig, Division of Wildlife, and the Yampa Participants confirm that title to the storage space created by the enlargement of Elkhead Reservoir will vest in the River District. The Elkhead Reservoir Enlargement will result in an estimated 11,750 acre- feet of additional storage capacity at the site of the Elkhead Reservoir. The agreements described in this paragraph are incorporated herein by reference and made a part thereof; and 8. ~~4THEREAS, the River District, in a separate agreement, is willing to convey to the CWCB a 20/47th interest in the River District's ownership of the storage capacity of the Elkhead Reservoir Enlargement and in certain water rights owned by the River District decreed to fill the Elkhead Reservoir Enlargement to provide the Permanent Water Supply (after those «aater rights have been decreed absolute), in exchange for the Recovery Program paying for 20/47ths of the cost of constructing the Reservoir Enlargement. The parties to this Reservoir Enlargement Agreement shall be responsible for placing to beneficial use the water subject to the conditional water storage right prior to conveying that water right to the CWCB. Once the conditional water right has been placed to beneficial use, the River District will file the necessary pleadings, and prosecute the case, to make the right absolute. After the water storage right in the Reservoir Enlargement has been made absolute, the River District intends to convey a 20/47th interest in the storage capacity and the absolute water right to the CWCB for the Permanent Water Supply in perpetuity for uses including in-river fish habitat and river flow maintenance and enhancement uses, and uses in furtherance of the Recovery Program; the CVt' CB will hold and administer these rights for Recovery Program purposes; and 9. `WHEREAS, the River District is willing to enter into aShort-Term (20 years) Water Supply Lease v~~ith Reclamation and the Service for up to 2,000 acre-feet of water annually to be used by the Recovery Program for the benefit of the endangered native fish species in the Yampa River Basin; and 10. ~~REAS, the River District, the CWCB, Reclamation and the Service have entered into an Acquisition Agreement, dated February 17, 2005, that provides, inter alia, for the conveyance to CVV CB of a 20/47th interest in the River District's ownership of the storage I: ?QC~°°:Clienu~~2i~er District°=~ 1-EIlchead-1028'~~~eemenUlteservoir Enlargement Agreement fmal_wpd Iviarch c6. ?005