BOARD01632

• Board Meeting Date: 9/13/2004
• Description: ISF Section - Proposed Water Right Acquisition - Elkhead Reservoir Enlargement
• Board Meetings - Doc Type: Memo

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reservoir releases to and through the Critical Habitat Reach to assist in the recovery of
endangered fish in the Yampa River.

NOW THEREFORE, in consideration ofthe mutual agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which are
hereby ackriowledged, the River District, Reclamation and the Service agree as follows:

TERMS and CONDITIONS
A. Amount Leased. During each annual period from July I to February 28
(of the next succeeding calendar year), the River District shall make available to
Reclamation and the Service up to 2,000 acre-feet of water (the Short-Term Water
Supply) in the Reservoir Enlargement for lease on an "as needed" basis, as determined by
the Service, to supplement the Permanent Water Supply. The provision of water to
Reclamation and the Service under this Short-Term Water Supply Lease shall be subject
to the water shortage provisions as described in Paragraph M and Reclamation's payment
obligations as described in Paragraph N.

B. Term. The Short-Term Water Supply Lease shall be for a term of twenty
(20) years. Notwithstanding the date of execution of this Lease by the parties, the Short-
Term Water Supply Lease shall commence on the date on which the River District first
makes the Short-Term Water Supply, or at least 500 acre-feet thereof, available to
Reclamation and the Service, regardless of whether the Service gives notice of its intent
to take any water (pursuant to Paragraph F) during that year. Upon expiration ofthe
Short-Term Water Supply Lease, Reclamation and the Service shall then have a first right
of refusal for 6 months after the expiration of this Lease to enter into negotiations with
the River District for a renewal of the Short-Term Water Supply Lease, ifthe Service
determines that continuation of the Short-Term Water Supply Lease is needed to
supplement the Permanent Water Supply. In the event that Reclamation and the Service
desire to renew the Short-Term Water Supply Lease, the lease terms shall be subject to
renegotiation including:

1. The charge for the water supply may be increased or
modified based upon the adequacy of the charge to cover the River
District's operation and maintenance costs together with capital
costs that have not been recovered under the prior Short-Term
Water Supply Lease.

2. The need or appropriateness of any conservation plan, state
or federal regulation, or other requirement concerning
Reclamation's and/or the Service's use of water stored in the
Reservoir Enlargement.

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