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I. I I I I I I I I I I I I I I I I I I " .~, 17.1 Cost Recovery. All of the Authority's ex- penses incurred in carrying out its functions, or pro- viding its services pursuant to paragraph 2.2 hereof, shall be recovered by assessing to each of the Con- tracting Parties service charges made up of the follow- ing components: a. Debt service, including, but not by way of limitation, annual principal and interest payments, and any fees and charges associated therewith, on the Authority's outstanding debt obligations incurred on behalf of ~on- tracting parties. All Contracting Parties who issue their own bonded indebtedness and make direct capital contributions to the Authority for acquisition or construction of Authority assets, shall be exempt from as- sessment of the debt service component re- lated to such direct capital contribution. b. Depreciation and replacement, including, but not by way of limitation, charges for major repairs and replacement of capital equipment. Charges collected shall be deposited into a reserve fund. The depreciation and replace- ment component shall be assessed to each Contracting Party on a continuing basis. c. Operation and maintenance, including, but not by way of limitation, cost of acquiring raw water, administration fees~ and all normally recurring expenses incurred in the conduct of Authority activities. The operation and maintenance component shall be assessed to each Contracting party on a continuing basis. Each Contracting Party may pay its annual pro rata share of service charges from any funds lawfully avail- able to said Contracting Party. 17.2 Water Rights. Each of the Contracting Parties shall lease its water rights, or assign whatever in- terests it may have to utilize water rights, to the Authority, subject to limitations contained in existing decrees affecting said water rights. The Authority shall undertake to secure legal transfer of the points of diversion of those water rights leased or assigned, to the Authority. Such transfer shall not detrimentally affect the water rights of any Contracting Party under existing decrees, without prior written consent of such Contracting party, such consent not to be unreasonably withheld, or in the case of a leasehold interest, con- sent of the Lessor. Reasonable assistance required by the Authority for such transfers shall be provided by all Contracting Parties. As consideration for such lease or assignment, once tranferred to the Authority's points of diversion, the Authority agrees to administe~ each Contracting Party's Plan for Augmentation or water transfer decree and to provide whatever services are necessary to protect all such water rights leased or assigned to it from legal injury. 17.3 Financing Commitment. Through its service contract, each Contracting party shall set forth its determination whether to participate in the Authority's revenue bond financing or to raise its own pro rata capital contribution through issuance of its own bonds. ~ 11