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Resolution for Purchase of Water Rights A RESOLUTION FOR SWAN'S NEST METROPOLITAN DISTRICT (SNMD), BRECKENRIDGE, COLORADO TO PURCHASE THE WATER RIGHTS WHICH ORIGINALLY WERE ACQUIRED FOR THE DISTRICT TO MEET IT'S SERVICE PLAI�. WHEREAS, n settlement of a dis�ute regarding the water rights and related assets that are currently being used to provide water service to customers within the SNMD service area, SNMD has negotiated a proposal to pay Breckenridge Meadows Development Company (BMDC) the sum of $285,000 ("Settlemen� Amount"), and that proposal is acceptable to BMDC; and Without admitting that SNMD is required to make any payment to BMDC for these water rights and related assets, the Board of Directors of SNMD believe that it is in the best interests of SNMD to resolve this dispute by settlement as opposed to litigation; and In payment of the Settlement Amount, BMDC will accept a cash payment of $85,000 and a 6 month promissory note for the rest; and SNMD has the cash payment of $85,000 on hand but will need additional revenues this year to pay off the 6 month promissory note; and Both the Homeowners Association for the Villas at Swan's Nest (a development within the SNMD) and individual customers within the SNMD have expressed an interest in providing the additional revenues necessary to pay off the 6 month promissory note; and In addition, SNMD may be eligible for loan funds from the state Water Project Loan Program for these additional revenues; and SNMD would pay any loans from the Villas at Swan's Nest Homeowners Association, or the individual customers within the SNMD, or the state Water Project Loan Program with an increase in service fees sufficient to meet the necessary payments of principal and interest; and There is also the possibility that the Homeowners Association for the Tiger Run RV Park (a development outside of the SNMD but within the SNMD service plan that is currently being served under a lease agreement) may be interested in providing some or ail of the additional revenues necessary to pay off the 6 month promissory note as a credit against future fees that the Tiger Run RV Park may be subject to. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS, SNMD, BRECKENRIDGE, CO THAT: 1. The proposal for settling the dispute regarding the water rights and related assets that are currently being used to provide water service to customers within the SNMD service area is acceptable but will require the adoption of a supplemental budget and appropriation. The President and Secretary of the Board of SNMD are authorized to take all actions necessary for the proposal and adoption of the necessary supplemental budget and appropriation.