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<br />WATER LEASE <br />THIS WATER LEASE ("Lease") is made and entered into this 3 ~ day of October 2006 <br />and between the CITY OI~ LOVELAND, COLORADO, a home rule municipality, whose address is <br />500 East Third Street, Loveland, Colorado 80537 ("City"), and JAKE KAUFFMAN & SON, INC., a <br />Colorado corporation, whose address is 808 South County Road 9E, Loveland, Colorado 80537 <br />("Lessee"). <br />WHEREAS, Lessee desires to acquire augmentation water for the purpose of augmenting <br />certain wells, ponds, or pumps along the Big Thompson River; and <br />WHEREAS, the City is the owner of certain water that may be used for the purpose of <br />augmentation; and <br />WHEREAS, the City is willing to lease, on a temporary basis, a portion of its water, which <br />may include, but is not limited to, Windy Gap re-use water or water stored in the Loveland Storage <br />Reservoir (commonly known as Green Ridge Glade Reservoir) under the terms and conditions of the <br />Transfer Decree entered in Case No. 82CW202A to Lessee on the terms and conditions set forth <br />herein. <br />NOW, THEREFORE, in consideration of the mutual covenants and agreements herein <br />contained, the parties agree as follows: <br />I. erm. This Lease shall be effective for a teen of three (3) years commencing Tanuary <br />I, 2007 and ending December 31, 2009, unless sooner terminated as provided herein. <br />2. Water. Ttte City shall supply up to thirty-five (35) acre-feet of augmentation water <br />per year to Lessee for Lessee's temporary substitute supply plan for evaporation at Kauffman Pit M- <br />78-327, also known as Great Western Pit #1, or as directed by the River Commissioner or the Office <br />of the State Engineer. <br />3. Annual Lease Payment. <br />a. Regardless of water supply source, Lessee shall annually pay the City the <br />Four Hundred Dollars ($400) per acre-foot of water. <br />b. Lessee shall remit the annual lease payment to City on or before April 1" of <br />each year during the term of this Lease. <br />c. The annual lease payment due shall be based on Lessee's approved temporary <br />substitute supply plan or as directed by the River Commissioner or the Office of the State <br />Engineer. In the event Lessee uses more water in any year than that approved in Lessee's <br />temporary substitute supply plan or as directed by the state, the City shall bill Lessee for such <br />excess water usage at the rate set forth in subparagraph 3.a, above. Lessee shall pay said <br />amount to the City within fifteen (15) days of receiving the City's bill. <br />4. Terminati n b Ci . In the event the City has an urgent need for water, as <br />determined in the sole discretion of the City, for reasons including, but not limited to, drought, the <br />City may terminate this Lease. The City will endeavor to give Lessee thirty (30) days notice of such <br />Kanfjman Leasel- GW Pi[HI 2007-09.doc <br />Page 1 oj3 <br />