Elkhead Reservoir Final Acquisition Agreement

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provided for in paragraph B. therein, and upon written notice to the parties hereto, this sublease and all responsibilities and obligations identified in paragraph II.B herein shall be terminated. I~'. OPERATION, l`:LaINTENANCE AND REPAIR OBLIGATIONS (OM & R) A. The OM & R obligations associated with the Elkhead Reservoir Enlargement are more fully- described in (1) the Reservoir Enlargement Agreement and (2) the Amended and Restated Agreement between the River District, the City of Craig, and the Yampa Participants, v~-hich provisions are incorporated herein by reference. The Recovery Program, through Reclamation, shall be responsible for payment of its Pro-Rata share of the River District's OM & R costs associated with the storage space easement described in paragraph II.A.2 herein. The CWCB shall have the right, but not the obligation, to fund annual OM & R costs for the Elkhead Reservoir Enlargement. B. In the event the Service, Reclamation and the Recovery Program determine that the Permanent `'Water Supply is no longer needed to maintain occupied habitat for endangered fish species in the Critical Habitat Reach pursuant to paragraph XII herein, Reclamation may= choose not to pay the pro-rata share of the River District's OM&R costs allocated to the Permanent V~Tater Supply storage space easement In the event Reclamation chooses not to pay the pro-rata share of the River District's OM&R costs, the forfeiture provisions in paragraph IV.E. in the Reservoir Enlargement Agreement shall apply. Any disposition and use of the Permanent `'Vater Supply and storage space easement shall be addressed pursuant to paragraph XII herein. ~-. RELEASE SCHEDULE AND CONTACT PROCEDURES A. On account of drought, errors in operation, operational constraints imposed by the State of Colorado or otherwise, or other causes, there may occur at times a shortage during any year in the quantity of water available to be stored within the Reservoir Enlargement, and in no event shall any liability accrue against the parties hereto for any damage direct or indirect, arising therefrom. In any year in which there may occur such a shortage in the Reservoir Enlargement water supply, the River District and the CWCB shall share such shortage using the Pro-Rata Formula. The Pro-Rata Formula is the allocation of the storage space created by the construction of the Reservoir Enlargement, estimated to be 11,750 acre-feet, as follows: 27:`47`'' interest (6,750 acre-feet) to the River District and 20.E ~7`'' interest (5,000 acre-feet) to the CWCB. The Pro-Rata allocation is based on the percentage contributions of the parties to fund the total costs related to the construction of the Reservoir Enlargement as well as the long term costs of the Reservoir's operation, maintenance and repair allocated to the Reservoir Enlargement. In the event that the actual percentage contributions of the parties to fund the total costs related to the construction of the Reservoir Enlargement differ from the 27147th and 20147th relationship described herein, then the Pro-Rata Formula shall be adjusted in accordance I_ ' ~~~T CCI~c~t ~~i~-er Dismcc3l-Elkhead-IO'- 8 ~~eements _~cq'n ~Qmt ° l.w De~~r_iber'- ~, =~~"-I ~age~9 of 17