C150317 Resolutions and Agreements

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1 23 14 Page 9 of 19 Pipeline, which shall include, but shall not be limited to, route alignment, pump design,and pipeline capacity. 6. Lake Durango Reservoir. Upon LPWWA commencing delivery of water to Lake Durango Reservoir, LDWA will allocate twenty-three (23) AF of storage capacity in Lake Durango Reservoir to LPWWA. This capacity shall be continually available to LPWWA and LDWA shall permit LPWWA to vary the amount of water stored in Lake Durango Reservoir, but at any one time the amount of water stored by LPWWA shall not exceed twenty-three (23) AF. LPWWA will compensate LDWA for use of Lake Durango Reservoir as a capital allocation, whereby LPWWA's payment corresponds to LPWWA's percentage share of the estimated replacement cost. This cost is set forth on the attached allocation Exhibit B. Reservoir evaporation losses will be calculated annually. LPWWA agrees to replace its proportionate share of the Reservoir evaporation losses by delivering additional water to the Reservoir. LPWWA's share of the evaporation losses shall be based on the actual amount of water stored in the Reservoir by LPWWA and LDWA for the year at issue.. Thus, the fraction for calculating LPWWA's evaporation replacement obligation shall contain the average annual volume of water stored by LPWWA as the numerator and the average annual volume of total water stored as the denominator. 7. Acquisition of Water. LDWA is responsible for securing its use of water from Lake Nighthorse. 8. Operating Agreement. Operation of the 210 Pipeline shall be governed by Sections 2.5, 2.6, and 2.7 of the Three Party Agreement. LDWA shall reimburse LPWWA for its proportionate share of the costs incurred by LPWWA under Section 2.6 of the Three Party Agreement, which costs shall include all operation, maintenance, and repair costs ("OM&R"), both fixed and variable. LDWA's proportionate share shall be determined in an Operating Agreement between LDWA and LPWWA. 9. LPWWA and LDWA Collective Interest in Operating Agreement. LPWWA and LDWA shall negotiate the material terms for their collective interest in a Multiparty Operating Agreement with the SUIT and the UMUT, prior to construction of the Water Conveyance System. If requested by either Party, an impartial third party may be used as a mediator/facilitator to assist in defining such terms. The Parties agree to equally share the costs and fees associated with use of a mediator/facilitator.