Loading...
HomeMy WebLinkAbout2000-07-11 WSB AGENDAWATER & SEWER BOARD AGENDA JULY 11, 2000 CITY MANAGER'S CONFERENCE ROOM (THROUGH THE CITY MANAGER/CITY ATTORNEY DOUBLE DOORS ON WEST SIDE OF THIRD FLOOR) 1. MINUTES OF JUNE 6, 2000 MEETING . (ATT. 1) 2. SOUTHGATE SUPPLEMENTS #148 AND #149. (ATT. 2 & 3) 3. ENGLEWOOD/CENTENNIAL AGREEMENT . (ATT . 4) 4. BROWN & CAULDWELL-GROWTH PROTECTION AND FACILITIES NEEDS . 5. OTHER. WATER AND SEWER BOARD MINUTES JUNE 6, 2000 ATT, I 1. MINUTES OF THE MAY 9, 2000 MEETING. The Englewood Water and Sewer Board Minutes from the May 9, 2000 meeting were approved as written. Mr. Higday moved; Ms. Bradshaw seconded: Ayes: Nays: Members absent: Motion carried. To approve the May 91, 2000 Englewood Water and Sewer Board Minutes. Higday, Otis, Clark, Wolosyn, Habenicht, Bradshaw, Burns, Cassidy, Kasson None None 2. IRS RULING FOR THE McLELLAN RESERVOIR FOUNDATION. The Board received a copy of the favorable ruling dated May 9, 2000 from the Internal Revenue Service stating that the Englewood /McLellan Reservoir Foundation has tax exempt status. 3. AWWA REGULATORY ALERT. The Board received a copy of a Regulatory Alert from the American Water Works Association regarding the U.S. Environmental Protection Agency guidelines under which community water suppliers would inform their consumers of any violations affecting their water supply. 4. QUIT CLAIM & EASEMENT FOR JAMES & GAIL PENNS AT 4685 S. MARIPOSA ST. In the process of applying for a minor subdivision of their lot, the Penns discovered a strip of unclaimed land between their lot and the City Ditch. At this location, the City Ditch only has a 25' right-of-way , but the ditch right-of- way description also claims "slopes and embankments" for the City Ditch. At this location the ditch slope and embankment does extend outside of the 25' right-of-way and into the unclaimed land. An argument could be made that the unclaimed land belongs to the city , which is why the Penns approached us to see if the City would be willing to quit claim the land to them. It is recommended that the Quit Claim Deed and Grant of City Ditch Easement be granted to James and Gail Penns for the purpose of clarifying boundaries of Englewood's City Ditch right-of-way and obtaining a definite City Ditch Easement in that area. The area to be quit claimed is approximately 4,132 square feet or .009 acres. The Easement protects the slopes and embankments of the City Ditch and allows the City access for repairs, improvements and maintenance. Upon acquisition of the property the Penns will be responsible for the maintenance. Mr. Otis moved; Mr. Clark seconded: Ayes: Nays: Members absent: Motion carried. To recommend Council approval of the Quite Claim Deed for unc l aimed land between the City Ditch and 4685 S. Mar i posa St. and subsequent Grant of City Ditch Easement. Higday, Otis, Clark, Wolosyn, Habenicht, Bradshaw, Burns, Cassidy, Kasson None None 5. EASEMENT AGREEMENT -CHERRY HILLS COUNTRY CLUB. The existing sanitary sewer system across the Cherry Hills County Club Golf Course currently belongs to Cherrymoor South. At the time the system was built, an easement was supposed to have been recorded to Cherrymoor South but was not. The easement would enable Cherry Hills Village and their contractor (Englewood) access for repairs and maintenance to the sewer line which is a main interceptor sewer with various connections coming from parts of Cherry Hills Village on the north and south sides of the County Club. Except for emergency maintenance, all maintenance work on the district's sewer lines shall be performed during November of each year. If the work cannot be performed during November, two months out of the ensuing months of December through February shall be designated. The Englewood City Attorney has reviewed and approved the easement document and it is being approved for form only. Mr. Burns moved; Mr. Kasson seconded: Ayes: Nays: Members absent: Motion carried. To recommend Council approval as to form of the Easement Agreement between Cherry Hills Country Club and the Cherrymoor South Water and Sanitation District. Higday, Otis, Clark, Wolosyn, Habenicht, Bradshaw, Burns, Cassidy, Kasson None None 6. AMENDMENT TO WASTEWATER COLLECTION SLYSTEM MAINTENANCE AGREEMENT -CITY OF CHERRY HILLS VILLAGE. Cherry Hills Village is in the process of combining small sewer systems operated by individual special districts into sewage collection system owned by Cherry Hills Village. As each district is dissolved, its connector agreement with Englewood must be amended. Cherry Hills Vi llage is requesting to contract with Englewood for the same level of service that is currently being provided to Cherryridge sewer collection system acquired by Cherry Hills Village in 1995. Upon approval of the Amendment to wastewater Collection system Maintenance Agreement with the City of Cherry Hills Village, Englewood can extend sewer maintenance and repair services within the bou ndaries of Cherry Hills Village. Mr. Clark moved; Mr. Otis seconded: To recommend Council approval of the Amendment to Wastewater collection system Maintenance Agreement with City of Cherry Hills Village . Ayes: Nays: Members absent: Motion carried. Higday, Otis, Clark, Wolosyn, Habenicht, Bradshaw, Burns, Cassidy, Kasson None None 7. CUSTOMER PROFANITY IN THE WORKPLACE. Stu noted that there was an occasional incident of employees encountering customer profanity, which has customarily not been tolerated. The Board recommended that an official policy be set establishing that customer profanity does not have to be tolerated by the Utilities' Department employees. Mr. Otis moved; Ms. Wolosyn seconded: Ayes: Nays: Members absent: Motion carried. To establish a formal policy that customer profanity need not be tolerated by Utilities' Department employees and that the employees should cease discussions with customers who are using profanity. Higday, Otis, Clark, Wolosyn, Habenicht, Bradshaw, Burns, Cassidy, Kasson None None The next meeting will be held July 11, 2000 at 5:00 p.m. Respectfully submitted, Cathy Burrage Recording Secretary All, 2 COUNCIL COMMUNICATION Date Agenda Item Subject July 17, 2000 Southgate Supplement #148 INITIATED BY Utilities Department STAFF SOURCE Stewart H. Fonda, Director of Utilities COUNCIL GOAL AND PREVIOUS COUNCIL ACTION None. RECOMMENDED ACTION The Water and Sewer Board, at their July 11 , 2000 meeting , recommended Council approval of a Bill for an Ordinance approving Southgate Supplement #148. BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED The City of Englewood provides sewage treatment to a pop u lation of about 70,000 people outside the City through contracts with numerous connector districts. The area is defined by the natural drainage and extends south and east from Broadway to the Valley Highway and from Hampden to Lincoln Ave. excluding Highlands Ranch. By contract the City of Englewood must approve any additions of land to be served by the districts. These are usually in-fill situations that are within what the City considers to be the area it has committed to serve. Adequate capacity has been provided in the treatment plant t o accommodate all such future inclusions. Annexation of this parcel of land will not increase the tap allocation of the Southgate Sanitation District. A request was made by the Southgate Sanitation District rep resenting the owners, Charles and Maria Savage, for inclusion into the Southgate Sanitation District. Supplement #148 is for 2.29 acres. The lot has a Residential R2.5 Zoning and will remain the same for a single family residence. The legal is attached as Exhibit A. The property is located north of E. Orchard Ave., south of Belleview and west of Colorado Blvd. in Greenwood Village. The address is 5611 S. Colorado Blvd. FINANCIAL IMPACT None. LIST OF ATTACHMENTS Bill for Ordinance Southgate Sanitation District Supplement #148 SUPPLEMENT NO.~ TO CONNECTOR'S AGREEMENT THIS AGREEMENT, made and entered into by and between the CITY OF ENGLEWOOD, acting by and through its duly authorized Mayor and City Clerk, hereinafter called the "City," and SOUTHGATE SANITATION DISTRICT, Arapahoe and Douglas Counties, Colorado, hereinafter called the "District," WITNESS ETH: WHEREAS, on the 20th day of June, 1961, the City and the District entered into an Agreement in which the City agreed to treat sewage originating from the District's sanitary sewer system within the area served by the District, which Agreement was most recently renewed by Connector's Agreement dated November 16, 1988; and WHEREAS, said Connector's Agreement provides that the district may not enlarge its service area without the written consent of the City ; NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein set forth, the parties agree as follows: 1. The City hereby consents to the inclusion of certain additional area located in Arapahoe County, Colorado, owned by Maria Ania and Charles R. Savage and more fully described on Exhibit A attached hereto and incorporated herein by reference, into Southgate Sanitation District. The City agrees that said additional area may be served with the sewer facilities of the District, and that the City will treat the sewage discharged into the City's trunk line from said additional area , all in accordance with the Connector's Agreement dated November 16, 1988. Accordingly, Exhibit A referred to in Paragraph 1 of the Connector's Agreement dated November 16 , 1988 , is hereby amended to include such additional area . 2. Each and every other provision of the said Connector's Agreement dated November 16, 1988, shall rema in unchanged. IN WITNESS WHEREOF, the parties have set their hands and seals this __ day of , 20_. ATTEST: CITY CLERK (SEAL) ATTEST: _ _b~.Jt,.u- SECRETARY (SEAL) CITY OF ENGLEWOOD By : ________ _ MAYOR SOUTHGATE SANITATION DISTRICT, ARAPAHOE AND DOUGLAS COUNTIES, COLORADO Byil~·~ ESI NT EXHIBIT A (Legal Description) The East one-half (1/2) of Tract 280, South Denver Gardens, County of Arapahoe, State of Colorado. ... IZ ---····- I I-A ~of-A ,,. ,., GRE NWOOD II I > , j &H:A ·· ~ViLLAGE ! '. "" I 13 1 I .'""' I I '· i ' • l+ L· • r:. .:1•.1 . ,_. l 1 ~ ?SI~ I ,~r/t . . ; ! 111 ~C lh'~ Ii (~ . ..\1~• . I . I I -"· I : II ,_ .. , ..... -•, Rf;;US. . 91'· - TR . zzz 7 1,,' ~ ' lT / •• /;·· L --( tll! • !!...._ > I I l ·· 1 ·· ///: 1 8 E L_: ::/.1 ~~-,/_. l ·-.. ~lt£ASAJT I RI~~ ... I I ~-t ~.:·-11 .. ·1 ·1:· '. .. ~~I\:.~:~ . J . . . -~i L __ -------· ------------------------------------·····---·-____ ::: -t·-y---~. -...... - -..... ... I I I I \' L. .. I ..J) ")Cil ..... .,, . . I> I ,rEllllA ~ I / : 11 11 .I ' ( ; ATT. 2. COUNCIL COMMUNICATION Date Agenda Item Subject July 17, 2000 Southgate Supplement #149 INITIATED BY Utilities Department STAFF SOURCE Stewart H. Fonda, Director of Utilities COUNCIL GOAL AND PREVIOUS COUNCIL ACTION None. RECOMMENDED ACTION The Water and Sewer Board , at their July 11 , 2000 meeting, recommended Council approval of a Bill for an Ordinance approving Southgate Supplement #149. BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED The City of Englewood provides sewage treatment to a population of about 70,000 people outside the City through contracts with numerous connector districts. The area is defined by the natural drainage and extends south and east from Broadway to the Valley Highway and from Hampden to Lincoln Ave. excluding Highlands Ranch. By contract the City of Englewood must approve any additions of land to be served by the districts. These are usually in-fill situations that are within what the City considers to be the area it has committed to serve. Adequate capacity has been provided in the treatment plant to accommodate all such future inclusions. Annexation of this parcel of land will not increase the tap allocation of the Southgate Sanitation District. A request was made by the Southgate Sanitat ion District representing the owners, Ta Uk and Rebecca Reed Cho, for inclusion into the Southgate Sanitation District. Supplement #149 is for Lots 1 and 2 totaling 2.45 acres. The lots have a Residential R2.5 Zoning. Lot 1 contains a single-family residence. Lot 2 will be sold and a single-family residence will eventually be built. The legal is attached as Exhibit A. The property is located north of E. Orchard Ave., south of Belleview and west of Quebec in Greenwood Village. The address is 6777 E. Orchard Rd. FINANCIAL IMPACT None. LIST OF ATTACHMENTS Bill for Ordinance Southgate Sanitation District Supplement #1498 ,' SUPPLEMENT NO. I 4 CJ TO CONNECTOR'S AGREEMENT THIS AGREEMENT, made and entered into by and between the CITY OF ENGLEWOOD, acting by and through its duly authorized Mayor and City Clerk, hereinafter called the "City," and SOUTHGATE SANITATION DISTRICT, A rapahoe and Douglas Counties, Colorado, hereinafter called the "Distr ict," WITNESSETH: WHEREAS, on the 2oth day of June , 1961 , the City and the District entered into an Agreement in which the C ity agreed to treat sewage origin ating from the District's sanitary sewer system within the area served by the District , which Agreement was most recently renewed by Connector's Agreement dated November 16, 1988 ; and WHEREAS, said Connector's Agreement provides that the district may not enlarge its service area without the written consent of the City ; NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein set forth , the parties agree as follows : 1. The C ity hereby consents to the inclusion of certain additional area located in Arapahoe County , Colorado , owned by Tae Uk & Rebecc a Reed Cho and more fully described on Exh ibit A attac hed hereto and incorporated he re in by reference , into Southgate Sanitation District. The City agrees tha t said add itional area may be served with the sewer facilities of the District , and that the City will treat the sewage discharged into the City 's trunk line from said additional area , all in accordance with the Connector's Agreement dated November 16 , 1988 . Accordingly , Exhibit A referred to in Paragraph 1 of the Connector's Agreement dated November 16 , 1988 , is hereby am e nded to include such additional area . 2. Each and every other provision of the said Connector's Agreement dated November 16 , 1988, shall remain unchanged . IN WITNESS WHEREOF, the part ies have set their hands and seals this __ day of , 20_. ATTEST: CITY CLERK (SEAL) CITY. OF ENGLEWOOD By :---------- MAYOR SOUTHGATE SANITATION DISTRICT, ARAPAHOE AND DOUGLAS COUNTIES, co i oo B y :~~ PRESIDENT \ EXHIBIT A (legal Description) PARCEL A: Lot 1, Clark Colony No. 3 Amendment Plat, County of Arapahoe, State of Colorado, TOGETHER WITH an easement for ingress and egress over the East SO feet of the South 1/2 of Tract 123, Clark Colony No . 3, County of Arapahoe, State of Colorado. PARCEL B: Lot 2, Clark Colony No. 3 Amendment Plat, Count y of Arapahoe, State of Colorado, TOGETHER WITH an easement for ingress and egress over the East SO feet of the South 1/2 of Tract 123, Clark Colony No. 3, County of Arapahoe, State of Colorado . . ) ) l ~ ... ., I ( 1 .. .!! I ~~-·l ~ ~ r .. 1 _J1 .. I BELLEVIEW TERRACE SEWER LINE RE IM- BURSEMENT AREA '. ~1'~\\.' . ,, . . . -~~~~-~ I n I ! 1 I I Ii '\'"'"'l ': . -·-·· r· ··-J [--·-.. , --__ .J --·- IL •• CHRISMAN BYNUM & JOHNSON June 19, 2000 Stewart H. Fonda Director of Utilities City of Englewood 1000 Englewood Parkway Englewood, CO 80110-0110 Daniel L. Brotzman, Esq. City of Englewood 1000 Englewood Parkway Englewood, CO 80110-0110 Joe Pershin Water Production Supervisor City of Englewood 1000 Englewood Parkway Englewood, CO 80110-0110 Joe Tom Wood, P.E. Martin and Wood Water Consultants, Inc . 602 Park Point Drive, Suite 275 Golden, CO 80401 CHRISMAN, BYNU .\t & JO H NSON, re AlTORNEYS AND COU NS ELO R-SAT L\W 1900 FIFTEE :>;TH 5IB.E ET BOULDER . COLORADO 80302 Rick McLoud, P .E. A I T . 3 TELEPH ON E 303.i46.JJOO FAC SIMILE JOJ.449.i +26 E-MAIL CB j li;CBJ .COM WWWCBJ .COM Centenni al Water and Sanitation District 62 West Plaza Drive Highlands Ranch, CO 80126 John Hendrick Centennial Water and Sanitation District 62 West Plaza Drive Highlands Ranch , CO 80126 J. Craig Green, P.E. 3888 N. Cheyenne Place Sedalia, CO 80135 Veronica A. Sperling, Esq. Moses, Wittemyer, et al. P. 0. Box 1440 Boulder, CO 80306-1440 Gilbert Y . Marchand, Esq. Moses , Wittemyer, et al. P. 0. Box 1440 .. Boulder, CO 80306-1440 Re: Revised Englewood-Centennial Agreement Dear Madame and Sirs: I enclose a complete draft of a revised Englewood-Cen tennial agreement, including the facilities lease provisions. It still contains my not es regarding areas as to which I did not fully understand the intent of the negotiators. VERY IMPORT ANT : Let's keep the drafts straight. I am sending this to Rick McLoud by e-mail, per his request, so he can alter it. PLEASE RICK MAKE THE CMRISPrMN, B'vNUM 8r: JOHNSON. P.C. IS A MEMBER 01" MACINTYRE STRATER INTERNATIONAL LIMITED (M$1 ), A ""ORLDWIOE ASSOCIATION 01" INO£P£NOENT l,,.AW ANO ACCOUNTING FIRMS WITH TWO HUNOR£0 MEMBER ,.-I RMS I N SC'VENTY·EIGHT C OUNTRIES. CHRISMAN BYNUM & JOHNSON Stewart H. Fonda, et al. June 19, 2000 Page 2 CHANGES IN RED LINE FORMAT SO WE WILL KNOW WHAT IS CHANGED. Also, let's keep the drafts numbered. The one accompanying this letter is dated June 19 on a trailer. Let's date all subsequent drafts, so we will know for sure which ones we are reviewing. I would prefer to keep the draft revisions here; Pat Gabel, my secretary, can do them quickly. However, I acknowledge Rick's desire to be able to work within the document. But let's keep revisions red-lined and dated. I await comments. Hope this is useful. Sincerely, /-1/i 7. · /dlY~ .__,.- David G. Hill '· 1999 AGREEMENT FOR PURCHASE AND SALE OF WATER 1. Introduction: Parties and Purposes. The City of Englewood, a Colorado home rule city (Englewood) and Mission Viejo Company, a California corporation (Mission) entered into an agreement dated November 3, 1980, entitled WATER SUPPLY AGREEMENT (Englewood-Highlands Ranch) (the Prior Agreement). Mission's rights and ob ligations under the Prior Agreement were transferred to Centennial Water and Sanitation District, a Colorado quasi-municipal corporation (Centennial). The Prior Agreement, in general, provided for the sale of water by Englewood to Centennial, and various ancillary and related matters. The Prior Agreement was subject to various ambiguities which developed over time, and to a degree was rendered obsolete by de velopments with respect to Englewood's water rights, developments of Colorado water law with respect to re-use of so-called "consumptive use water", and accomplished or contemplated changes in the physical water storage and delivery facilities of the parties. Therefore, the parties hereto (which are Englewood and Centennial), desire to eliminate the Prior Agreement, and to enter into this Agreement (t h e 1999 Agreement) for the sale of water by Englewood to Centennial, and for the leasing of a portion of the capac ity of certain Englewood water storage and delivery facilities to Centennial. 2 . Prior Agreement Revoked. As of the date hereof, the Prior Agreement is revoked, and is of no further force or effect except for any payments from Centennial to Englewood which are presently due, which are listed on Exhibit __ hereto, and except that there are presently acre feet of water in the 15 .5 percent of McLellan Reservoir hereafter referred to, which water be longs to Centennial, and there are presently acre feet of water in the 15.5 percent which belong to Englewood. Englewood will withdraw its water therefrom as promptly as practical; and if Centennial has water which it could put into the 15 .5 percent prior to the withdrawal of the Englewood water, then to the extent of such Centennial water, the Englewood water shall be booked over to Centennial. 3. Purchase and Sale of Water. Englewood agrees to sell surplus water to Centennial, and Centennial agrees to purchase that water from Englewood, under the following terms and conditions. The term "surplus water" is defined below. 4. Water to be Sold is Surplus to Englewood's Present Needs. But Possiblv Mav Not Continue to be Surplus; Definition of "Surp lus"; Compliance With Charter; Curtailment of Deliveries for Drought. " 4.1 The water to be sold is surplus to Englewood's needs as of date hereof, but may not continue to be surplus if Englewood's population grows as anticipated, or if there is severe and protracted drought, or if other adverse circumstances develop. Centennial is given no assurance that the water to be sold will continue to be surplus to Englewood's needs, and Englewood may cease to supply all or a part of the water to Centennial under the terms and conditions set forth below. 4.2 Surplus water is that water available t o Englewood under its decrees and contracts which exceeds that necessary for the needs of the inhabitants of the city (and those persons, areas or entities other than Centennial which are served by Englewood on d ate hereof, which are described on Exhibit A), subject, however, to any future needs o f the city and its inhabitants (and those persons or entities described on Exhibit A). 4.3 This 1999 Agreement is subject to, and is intended to be construed to be in compliance with, all the provisions o f the Englew ood City Charter. 4.4 It is recognized by Centennial and Englewood that in future there may be circumstances such that Englewood has no surplus water, or has materially less surplus water than is anticipated to be available on date hereof. Since this 19 9 9 Agreement involves the sale of water outside the territorial limits of Englewood, Englew ood shall have the right, in its reasonable discretion, to interrupt or reduce deli very of wat er under this 1999 Agreement to provide adequately for users within the territorial limits of E nglewood and those persons or entities described on Exhibit A. However, Englewood shall not have the righ t to int errupt or reduce delivery of water under this 1999 Agreement to serve users outside the territorial limits of Englewood who are not served on date hereof. NOTE: DGH IS UNF Ai\.1ILIAR WITH ANY UNDERST Ai'IDINGS EN GLEWOOD MAY HA VE WITH CHERRY HILLS VILLAGE OR GREENWOOD VILLAGE TO SERVE VERY SMALL NUMBERS OF DWELLINGS IN THOSE MU'NICIPALIT IES WHICH ARE ON ENGLEWOOD 'S BORDERS Ai'ID WHICH IT WOULD BE INCONVENIENT FOR THE NEIGHBORING MUNICIPALITIES TO SERVE . THIS .MUST BE CHECKED OUT. E N GLEWOOD PRESENTLY SERVES A FEW RESIDENCES JUST OUTSIDE ITS BORDERS, WHICH WILL BE LISTED ON EXHIBIT A. 5. Englewood to Make Good Faith Efforts to Suoply That Water Which Is Surplus; Good Faith and Fair Dealing . Englewood agrees to make good faith efforts to supply to Centennial, under the terms of this 1999 Agreement, that water which is surplus to Englewood's needs . T he parties acknowledge that they have an obligation of good faith and fair dealing to one another. 6. Non-liab ility of Englewood for Monetarv Damages : No Qualitv Warranty. The parties recognize and agree that Englewood's ability to supply water to Centennial, and the quality of the water supplied, are dependent upon num erous forces beyond Englewood's control, such as, but not limited to, drought; flooding; fire; w indstorm or other storm events; war; riot; 2 deterioration, physical failure or inadequacy of storage or delivery facilities; adverse results of litigation; changes in applicable constitutional provisions, statutes or regulations; available flows provided by the ditch outlet manifold from Chatfield Reservoir and associated piping; pollution; earthquake; and the like. Under no circumstances shall Englewood be liable to Centennial for monetary damages for either 1) failure to de liver water to Centennial , 2) the quality of the water delivered to Centennial, or 3) for failure, inadequacy or unavailability of any storage or delivery facilities, whether or not leased to Centennial by Englewood. Englewood makes no warranty, representation or other assurance of the quality of the water to be delivered to Centennial. It is agreed that the water delivered will be untreated, and that Centennial will provide such testing of quality and such treatment as it deems appropriate and is requi red by applicable government regulations and the health and safety of its customers. 7. Entities and Area to be Served. The entities to which Englewood's water is to be provided are limited to Centennial Water and Sanitation District and its subpurchaser Northern Douglas County Water and Sanitation District (and their customers who are direct users of the water). The area within which Englewood's water is to be provided is limited to that described on attached Exhibit B. 8. Deliveries and Obligation to Take Deliveries: Pumoing Cost. 8 .1 Point of Delivery. The point of delivery shall be Englewood's McLellan Reservoir, or at Centennial's choice (if legally permissible and physically practical) at Centennial's proposed South Platte Reservoir (that reservoir being a gravel pit lake to the north of Chatfield Reservoir and adjacent to the north side of Colorado Highway C470, and west of the South Platte River). 8.2 No Ern:dewood Obligation to Change Water Rights or Construct Facilities: No Opoosition bv Centennial. Nothing herein shall obligate Englewood to bring any proceeding to change any water right, or to build any delivery facility, or to construct any well. However, if Englewood chooses to change any water right or ob tain a decree for any well or exchange to accommodate requested deliveries to the proposed South Platte Reservoir, or otherwise to assist in fulfilling its obligations under this 1999 Agreement, Centennial shall no t object (although Centennial may file a statement of opposition for purposes of monitoring the proceedings, assuring the compliance with this 1999 Agreement, and dea ling with objections of others). 8.3 Pumping Costs from Citv Ditch to McLellan. Pumping costs from City Ditch to McLellan Reservoir shall be borne by-------------- 8.4 Maximum Deliveries Which Must be Accepted or Paid For: Englewood Mav Deal With Unaccepted Water as It Sees Fit. 8.4.1 The maximum amounts of water of which Centennial must take delivery (or pay for) during each calendar month are set forth on Exhibit C. (Exhibit C contemplates three levels of obligatory acceptance of delivery: one as of date hereof, and two sets oflarger amounts to become effective as Centennial's demand for water grows.) In addition to the limitation on amounts which 3 Centennial must accept contained in Exhibit C, Centennial shall not be obligated to accept "Low- Priced Water" (as defined below). Water available for delivery is not classified as Low-Priced Water until the maximum amounts of High-Priced Water and Medium-Priced Water have been delivered during any calendar year. Thus, there are two maximum limits (maximums)on Centennial's obligations to accept (or pay for proffered) deliveries: the first is the monthly maximums; and the second is an annual .maximum which is the sum of the maximum amount ofHigh-Priced Water and the maximum amount ofMedium-Priced water for that calendar year. Centennial is obligated to pay for amounts of water which are proffered for delivery and which fall below both maximums (although Centennial may choose to decline to actually take amounts of water which are proffered for delivery and fall below both). That water (for which Centennial must pay)is called the Obligatory Acceptance water, and the amount which must be accepted or paid for is called the. Obligatory Acceptance amount. That Obligatory Acceptance water which Centennial declines to take (but must pay for) is sometimes hereafter referred to as Foregone water. Centennial may accept (and then must pay for) delivery of additional quantities of water, in excess of either maximum, if proffered by Englewood. If during any month Centennial accepts delivery in an amount in excess of the monthly Obligatory Acceptance amount for that month, then, at Centennial's election, it may apply the excess against the monthly Obligatory Amount for any subsequent calendar month in the same calendar year. 8.4.2 Englewood may deal as it sees fi t with surplus water which Centennial does not accept for delivery. 8.5 Single-Use Water and Reusable Water. Englewood may deliver single-use water or reusable water. (Single-use water is that as to which, under applicable Colorado water law, the return flows after a first use belong to the other appropriators on the stream. Re-useable water is that as to which, under applicable Colorado water law, the return flows may be re-used to extinction by the appropriator of the water or its designee, assuming retention of"dominion and control".) Ifreusable water is delivered, the return flows shall belong to Centennial (unless the parties otherwise agree; see below). Englewood shall appropriately identify the character of the water being delivered. If Englewood delivers reusable water, then the amount delivered shali be deemed to be the amount initially delivered plus one hundred and twenty percent of the amount of the initial reusable return flows therefrom, determined pursuant to the return flow factors contained in Centennial's decree in case number 85 CW 415. Centennial shall accurately account for such return flows, pursuant to that decree, and promptly provide the account ing to Englewood. (The parties may separately agree upon reuse of the return flows by Englewood instead of Centennial, and therefore vary the quantity which was deemed delivered to Centennial.) 8.6 Rate ofDeliverv. No restriction is placed on the rate of delivery (although Centennial may condition its acceptance of deliveries in excess of the Obligatory Acceptance amount on a particular maximum or minimum rate of delivery). 8. 7 Notification by Englewood of Amounts Available for Del iverv; Centennial Response. No less than days before the beginning of each calendar month , Englewood shall notify Centennial of the amount of water which it will have available (or attempt to have available for 4 delivery) during that particular month, and the character of the water to be delivered. Notification shall be by fax, E mail, or by delivery of written notice. If Centennial chooses not to accept all of the proffered amount, then within 10 days after the day of receipt of the notice from Englewood, Centennial must notify Englewood of the maximum amount which it will accept. Englewood will be credited with having delivered (and will be paid for) water which Centennial does not accept, which is withing the Obligatory Amount (or which is in excess of the Obligatory Amount but which Centennial did not decline to accept in the manner above provided). 9. Pricing of Water. 9 .1 Introduction to Pricing of Water. There will be three price categories for water. The first will be High-Priced Water. The second will be Medium-Priced water. The third will be Low- Priced water. The price category into which each delivery (or Foregone water) falls will be determined, in essence, by the relationship of the amount of water delivered in the current calendar year to the amount of water which Englewood has de li vered (plus Foregone water) during each of the previous ten years (except for an initiating period). 9.2 Hi£h-Priced Water. 9.2.1 Hi£h-Priced Water is the First Delivered. Up to the Threshold. High-Priced water is that water which is delivered (plus Foregone water), and which is within the Threshold Amount. There will be a Threshold Amount established for each calendar year. All water delivered (plus Fore gone water) during each calendar year which is within the Obligatory Acceptance amount, or which is accepted even though in excess of that amount, will first be applied against the Threshold Amount, until the Threshold Amount has been reached. The water (plus Foregone water) so applied against the Threshold Amount will be paid for as High-Priced Water. 9.2.2 Ultimate Threshold Definition: Minimum Deliverv. For calendar year 2014 and succeeding years, the Threshold Amount will be the smallest amount delivered (plus Foregone water) during any one of the previous ten calendar years. That "smallest amount" is hereafter sometimes referred to as the Minimum Delivery. 9.2.3 Initiation of the Threshold Amount. For initiat ion purposes, the Threshold Amounts shall be established as follows: For purposes of payments for deliveries and Foregone water during the remainder of calendar year 2000 after date hereof, the Threshold Amount shall be deemed to be ____ _ ___ ,and amounts delivered (or foregone) up to that amount shall be paid for as High-Priced Water. For purposes of payments for deliveries and Foregone water during 2001, the Threshold Amount will be 1600 AF, but only if the amount delivered plus Foregone water (in 2001)equals 1600 AF or more. If the amount delivered plus Foregone water is less than 1600 AF, then the Threshold Amount for 2001 will be 1500 AF. 5 ·For purposes of payments for deliveries and Foregone water during 2002, the Threshold Amount will be 1700 AF, but only ifthe amount delivered plus Foregone water in 2001 was 1600 AF or more, and the amount delivered plus Foregone water in 2002 was 1700 AF or more. If there is a failure to meet either of those requirements, then the Threshold Amount for 2002 shall be 1500 AF. For purposes of payments for deliveries and Foregone water during 2003, the Threshold Amount will be 1800 AF, but only ifthe amount delivered plus Foregone water in 2001 was 1600 AF or more, the amount delivered plus Fore gone water in 2002 was 1700 AF or more, and the amount delivered plus Foregone water in 2003 was 1800 AF or more. Ifthere is a failure to meet any of the three requirements, then the Threshold Amount for 2003 sh all be deemed to be 1500 AF. For purposes of payments for deliveries and Foregone Water during 2004 and subsequent years through 2013, the Threshold Amount shall be 1800 AF, ifthe Threshold Amount for 2003 was 1800 AF; and if it was not, then the Threshold Amount sha ll be the lesser of 1500 AF or the Minimum Delivery during all the preceding years back through 2001. It is recognized that during the Initiation Period and for a period thereafter the Threshold Amount may be greater than the ten year average . Nevertheless, water delivered (and Foregone Water) within the Threshold Amount w ill be paid for as hig h -priced water. 9 .2.4 Pavment Calculations During the Initiation Peri od When the Threshold is Uncertain. For purposes of payments during the Initiation Period, it shall be assumed that all the requirements for the Threshold Amount during each calendar year will be met; and if there is a failure to do so, then, within 30 days after the end of the calendar year in question, Englewood will make an appropriate refund to Centennial. 9.2.5 Paid Deliverv Water Under the Englewood-Cyprus-Denver Agreement for Threshold Purposes and Ten-Year Average Purposes . Neither the Minimum Delivery nor the Ten- year Average includes water taken by Centennial, and paid for, as "Paid Delivery" water under paragraph 3 .3 of the Settlement Agreement dated August 11, 1995 between Englewood, Cyprus Climax Metals .Co. and the City and County of Denver, acting by and through its Board of Water Commissioners. However, if Centennial chooses not to take and pay for the Paid Delivery water, Englewood may take it and use it or sell it as Englewood sees fit, including delivery (or proffered delivery) to Centennial like any other water subject to the terms hereof, in which event the Paid Delivery water would be taken into account in calculating Minimum Delivery and the Ten-year Average. (Paid Delivery water, initially taken and paid for by Centennial, is to be treated for payment purposes under a separate provision. It does not apply against the Threshold Amount, and is not treated as High-Priced Water, Medium-Priced Water or Low-Priced Water.) Centennial shall have any rights to reuse of the Paid Delivery water. 9.2.6 Reductions in the Thresho ld Amount Ameliorated by Virtual Storage. 9 .2.6.1 Introduction to V irtual Storage. Reductions in the Threshold Amount which would occur under the provisions set fort h above, when the Minimum Delivery is less than 6 the Threshold Amount, shall be ameliorated (i.e . reductions in the Threshold Amount which would otherwise occur shall be reduced) by what is termed "Virtual Storage". The concept of Virtual Storage arises out of the provision allowing Cent ennial the use of 15 .1 5 percent of the storage space in McLellan Reservoir, and out of resolution of a protracted dispute over the meaning of certain provisions in the Prior Agreement concerning that 15.5 percent. 9.2.6.2 Virtual Sto rage Does N ot Change with Sil tation. For purposes of the Virtual Storage concept, the 15.5 percent is assumed to be 900 acre feet, and will not vary with siltation ofMcLellan Reservoir. I.e. the maximum Virtual Storage amount is 900 AF, which does not change with siltation . 9 .2.6.3 Hypothetical Use of900 AF of Storag e; No Relationship to Actual Storage. Under the Virtual Storage concept, it is assumed that Englewood could have used the 900 AF (of storage space) to store available and undelivered water for later del iv ery to Centennial, ifthe 900 AF of storage space had not been provided to Centennial , and that by those later deliveries Englewood could have avoided or reduced a reduc tion in the Threshold Amount arising from a small Minimum Delivery. (The Virtual Storage concept bears no relationsh ip to amounts actually stored in McLellan Reservoir, and must not be confused by re lating it to act u a l stored amounts.) 9 .2 .6.4 Virtual S torage Initially Zero; Not More th an 900 AF or Less than Zero; 1999 Amount. The amount in Virtual Storage is initially zero . The amount accumulated during 2000 after date hereof shall be appropriat ely prorated to equate to a full calendar year. The amount in V irtual Storage cannot exceed 900 AF or be less than zero. 9.2.6.5 Increases in V irtual St orage. The amount in Virtual Storage is increased by water delivered (plus Foregone water) du ri n g any calendar year which is in excess of the Threshold Amount for that year. 9 .2.6 .6 Decreases in Virtual S torage. The amo unt in Virtual Storage is decreased by the amount by which the amount de livered (plus Foregone w atei) during any calendar year falls below the Threshold Amount for that year . 9.2.6 . 7 Effect of Virtual Storage on Minimum De li v erv. The result of the use of Virtual Storage is that if the Minimum Deliv ery for a calendar y ear would be beneath the Threshold Amount for that year (absent Virtual Storage), then the deficienc y (absent Virtual Storage) is reduced by Virtual Storage, the reduction being the lesser of 1) the deficiency or 2) the amount in Virtual Storage at the beginning of the year. 9.2 .6.8 Attached Examples ofMinimum Delivery and Virtual Storage (Exhibit ill. Examples, narratives, and charts illustrating the Threshold Amount, Minimum Deliveries and Virtual Storage are set forth in Exhibit D . In the ev ent o f ambiguity between Exhibit D and the body of this 1999 Agreement, Exhibit D shall govern. 7 9.3 Medium-Priced Water. 9.3.1 Medium-Priced Water Defined. Medium-Priced Water is water delivered (plus Foregone water) during a calendar year which is in excess of the Threshold Amount for that calendar year and less than the Ten Year Average for that calendar year. 9.3.2 Ten Year Average Deliveries. The Ten Year Average for each calendar year is the average amount of water delivered (plus Foregone water) during the ten preceding calendar years. 9 .3.3 Initiation of Ten Year Average. For purposes of phasing in the Ten Year Average, the amount delivered during 1999 and all priors years will be assumed to have been 1500 acre feet. NOTE: THIS MEANS THAT THE TEN YEAR A VERA GE WILL BE LESS THAL'J THE THRESHOLDFORMANYYEARS.AL'JDTHATTHEREFORETHERECAL"'l"BENOMEDIUM- PRICED WATER FOR A VERY LONG TIME: WAS THAT INTENDED? 9.4 Low-Priced Water. Low-Priced Water is water delivered during a calendar year which is in excess of the Ten Year Average for that calendar year . 9.5 Pricing of the Various Catesmries of Water. 9.5 . l High-Priced Water. The initial price for High-Priced water shall be __ __ per acre foot (AF). 9 .5.2 Medium-Priced Water. The initial price for Medium-Priced water shall be ____ per AF. 9.5 .3 Low-Priced Water. The initial price for Low-Priced water shall be __ _ ____ per AF. '• 9 .5.4 Paid Deliverv Water Under the Englewood-Cyprus-Denver Agreement. 9.5.4.1 Price for Paid Delivery Water in Earlier Agreement Superseded. The charge for Paid Delivery Water, and the "right of first refusal" on same as set forth in paragraph 21 and related paragraphs of the agreement initially made .between the City of Englewood and the City of Thornton (the City of Thornton's rights having later been assigned to Centennial), entitled Water Lease and Management Agreement, dated August 3, 1977, shall no longer be effective, and the provisions of this 1999 Agreement shall supersede same, effective on the date hereof. 9.5.4.2 New Price for Paid De li very Water. The price per AF for the Paid Delivery Water taken by Centennial shall be the sum of 1) the charge imposed by the City and County ofDenver, acting by and through its Board ofWater Commissioners (Denver), to Englewood ·for delivery of the water, and 2) an initial charge of.$20 per AF paid by Centennial to Englewood, 8 and 3) the cost to Englewood of pumping the water from City Ditch to McLellan Reservoir (as such cost is hereafter defined), or, in the alternative to the pumping cost, Denver's charge to Englewood for delivery of the water through the High Line Canal. 10. Record Keeping and Billing. 10 .1 Accurate continuous-recording flow measurement de vices shall be installed and maintained by Centennial at each po int of delivery hereunder, which shall be utilized to measure deliveries to Centennial. The records for deliveries during each calendar month shall be delivered to Englewood within ten days after the end of each month. (It is recognized that some deliveries may be made by "bookovers" from Englewood to Centennial of water already in storage in McLellan Reservoir, which was diverted and stored by Englewood prior to the bookover.) Englewood may keep its own records of deliveries . 10.2 Englewood shall keep records o f deli veries which are necessary or useful in the calculation of prices and amounts due , such as , but not limited to , the Threshold Amount, the Ten Year Average, the Ten Year Minimum Del iv ery , Foregone Wat er , total deliveries, monthly deliveries, and the like . Within 60 day s after the close of each calendar year, Englewood shall deliver to Centennial an accounting of such items . Centennial shall ha ve 60 days after date of receipt of the accounting to object thereto in writing de liv ered to Englewood , specifying the items to which objection is made . In the absence of such objection (or as to items as to which no objection is made) the accounting shall be deemed to be correct. 10.3 Englewood shall bill Centennial as of the end of each calendar month for water delivered during that month. Payment shall be due in full 30 days from date of delivery of invoice. Payments past due shall bear interest at the rate o f 12 percent per annum, compounded quarter- annually . As of the end of each calendar year, a reconc iliation shall be m ade ofbillings for that year, and any necessary adjustment payments shall promptly be made between the parties. 11. Facilities Lease. 11.1 Introduction. In addition to the provisions for sale and delivery of water set forth above and elsewhere herein, Englewood, as landlord, leases to Centennial, as tenant, and Centennial, as tenant, leases from Englewood, as landlord, a portion of the capacity of certain physical facilities to be used for the storage and delivery of water, all on the terms and conditions more particularly set forth below. 11.2 Identification ofPhvsical Facil ities, Capacitv in Which Is Leased; Use of Same. The physical facilities in which capacity is leased (Physica l Facilities) are McLellan Reservoir, City Ditch from its inception downstream to the McLellan Reservoir Pump Station, Nevada Ditch from its inception downstream to the outlet works carrying water to Cen tennial' s _____ _ Reservoir, the Englewood pump station and pumping facilities from City Ditch to McLellan Reservoir, and (QUESTION: IS THIS PART OF THE DEAL? NO RENT HAS BEEN NEGOTIATED FOR SANIE Englewood 's right to use of the Highline Canal.) The leased capacity 9 may be used by Centennial for any water which may legally be utilized therein. In addition, Englewood leases to Centennial those easements described in paragraph 11.4 below. 11.3 Storage Space in McLellan Reservoir. Centennial is leased the exclusive right to use, for storage of water, 15.5 per cent of the capac ity ofMcLellan Reservo ir (subject to the rights of the parties to temporarily unused space of the other; see below). 11.4 Determination of Capacity ofM cLellan Reservoir. The parties are uncertain as to the exact present capacity of McLellan Reservoir (because capacity of the reservoir changes with siltation, and because minor irregulariti es in the elevation of the bottom of the reservoir limit the exactitude of any determination of capacity). A survey taken by Centennial shows the capacity as ___ acre feet. However, because of previous negotiations and understandings betWeen the parties , for purposes of determining the initial amount of capacity leased, the capacity shall be treated as 5940 acre feet, so the capacity initially leased to Centenni al is 900 acre feet. "Capacity'', as applied to McLellan Reservoir, means the capacity at the maximum water elevation level which is both safe and presents no apprec iable risk of damage to the phy sical structures involved, as reasonably determined by Englewood (the maximum elevation). Either party, at its own expense , may undertake surveys to better determine the actual capacity. If either party, at its own expense, obtains a survey by a professional engineer registered in the State of C o lorado showing a different capacity (at the maximum ele vation), th en the parti es shall reasonably attempt to agree upon a revised capacity for purposes of the lease; pro vided, ho wever, that the capacity leased to Centennial shall not exceed 900 acre feet. If the parties cannot agree on a revised capacity, the dispute will be resolved by arbitration in the manner hereafter provided for. (The parties may mutually agree, in writing , upon other methods of determining capacity and sharing the c ost of the determination.) 11.5 Centennial to Bear Risk of Si ltation; N o Reduction in Rent for Same. The rent for McLellan reservoir capacity will not be reduce d on account of siltation which reduces the capacity leased to Centennial. 11 .6 Removal of Silt, or other Increases in Capacity. Performed bv Englewood. If Englewood determines to restore (or increase) the storage capacity of M~Lellan Reservoir by dredging, enlargement or other methods , then Centennial shall have the option of paying 15 .5 per cent of the cost thereof, and of using 15.5 per cent of the increase in capacity, pursuant to its lease . If Englewood determines so to restore or increase capacity, it shall give Centennial written notice, in reasonable detail, of its plans for restoring or increasing capaci ty , and an estimate of the anticipated cost of its efforts . If Centennial is to exerci se its option to pay 15 .5 per cent of the cost, and obtain 15.5 per cent of the resulting capac ity , it must do so within 45 days after the date of receipt of Englewood's notice, by delivery of Centennial's signed written notice of exercise to Englewood. If Centennial does not so participat e, then all increases in capacity shall belong solely to Englewood. 11. 7 Removal of Silt by Centennial. Centennial may remove silt to increase capacity (but may not take other actions to increase capacity) at its own initiative and at its own expense, but may not, by so doing, obtain more than 900 acre feet of storage capacity. If Centennial desires to remove silt at its own expense, then Centennial shall give Englewood written notice of its plans for so doing, 10 in reasonable detail, including the proposed plans, specifications, construction contract, disposition of the removed material, name of the contractor (or contractors who will be permitted to bid), a cost estimate by an experienced engineering firm, an engineering firm to supervise the work, public liability insurance, indemnification of Englewood, and the bond to be obtained. Englewood shall have the power, reasonably exercised, to approve or disapprove or require alteration of all or any part of the plans, specifications, contractor, bond, engineering firm, method of disposition of removed material, public liability insurance to be provided, indemnification ofEnglewood, or any other aspect of the project, by written notice to Centennial delivered within forty five days after date ofreceipt of Centennial's notice. If Englewood so delivers such notice, Centennial shall not proceed without written approval from Englewood. 11.8 Reduction in Storage Space by Causes Other Than Siltation. If Centennial's storage space is reduced by a reduction in capacity of Mclellan Reservoir other than by siltation, then Englewood shall proceed, within in a reasonable period of time after the reduction, to restore the reduction either 1) by a transfer to Centennial of a portion of Englewood's capacity, or 2) by reasonable and practical repairs or alterations to Mclellan Reservoir, at Englewood's expense, to restore the reduction. If Englewood has restored the reduction by a transfer of a portion of its own capacity, then Englewood may subsequently restore the reduction in capacity by repairs or alterations to Mclellan Reservoir, and the previously transferred capacity shall then be returned to Englewood. 11.9 Drainage of Mclellan Reservoir for Repairs. If Englewood determines, in its sole discretion, that it is ne c essary to drain water from Mclellan Reservoir to facilitate repairs or replacements, or because of pollution or contamination, then the parties shall share the loss of water in proportion to the amounts of water which they each had in the reservoir prior to the drainage. 11. l 0 Losses from Seepage. Evaporation. Failure ofFacilities and the Like. Losses of water from Mclellan Reservoir caused by seepage , evaporation, failure of facilities, or any cause beyond the reasonable control of Englewood shall be borne by the parties in proportion to the amount of water they had stored in the reservoir when the losses occurred. 11.11 Storage by Either Partv in Capacitv of the Other Party. Either party may store its water in temporarily unused capacity (i.e . storage space) of the other party (the non-using party). However, when the non-using party wishes to use its space which has been occupied by water of the other party, and has water available which it could store therein, the water of the occupying party in the space of the non-using party shall be "booked over" to the non-using party, to the extent that the non-using party could have delivered water into its storage capacity (i.e. its non-used storage space). 11.12 Records, Accounting, Evaporation, Seepage. Englewood shall keep accurate records of the amount of water which each party has in Mclellan Reservoir, and shall assess evaporation and seepage losses according to recognized engineering standards. Centennial shall keep and promptly supply Englewood with accurate daily records of all of its del iveries of water into Mclellan Reservoir, and its withdrawals from same, including records of the point of delivery and method of delivery (e .g. pumping, flow from the Highline Canal, flow from Centennial wells), the decree under 11 which the water was delivered, and whether the water is single-use or reusable water. Englewood shall keep similar records. Each party may review the records of the other during business hours. 11.13 Rent for Mclellan Reservoir Capacity. Centennial shall pay Englewood $200,000 per annum as rent for the Mclellan Reservoir storage capacity. The rent shall be paid in quarter- annual installments due in advance on the first day of January, April, Ju ly and October of each year during the term of the lease. Rent for the quarters during which the lease commences and ends shall be appropriately prorated, the initial payment being due upon the commencement date. 11.14 Lease of Capacitv in City Ditch. Englewood shall de termine the maximum carrying capacity of City Ditch, in its sole and reasonable discretion, based upon safety, risk of overtopping, and avoidance of injury to the physical facilities, and Englewood's relationships with third parties concerning capacity of the ditch. The capacity in City Ditch which is leased to Centennial is that which remains at any time after filling the capacity needs of others who presently have rights to use of capacity in City Ditch, including but not limited to Englewoo d (including capacity used by Englewood for delivery of water to Centennial), contract users of City Ditch water, the City and County of Denver, and the Littleton Cemetery. The rights of Centennial are expressly made subject to that agreement concerning City Ditch entered into between Englewood and the City and County of Denver, acting by and through its Board of Water Commissioners dated October 20, 1995. 11.15 Englewood Not to Make Additional Transfers of Caoacitv In Citv Ditch. Englewood will not make further leases, ass ignments or other transfers of capac ity in City Ditch without the prior written consent of Centennial. Centennial may withhold its consent in its own reasonable judgement, except that Centennial will grant its consent to transfers in settlement of litigation or threatened litigation with third parties, by or against Englewood, which wi ll not materially affect the volume of water which Centennial can convey through the ditch. 11.16 Lease ofCapacitv in Nevada Di tch . The lease ofEnglewood's capacity in the Nevada Ditch shall be subject to the bylaws of the Nevada Ditch Holding Company, and for purposes of the bylaws as presently in force, shall be deemed to be between Englewood and Centennial. Those bylaws shall determine Englewood's share of the capacity of the Nevada· Ditch. The share of Englewood's capacity in the Nevada Ditch which is leased to Centennial is that which remains after satisfaction of Englewood's needs for that capacity, (including cap acity used by Englewood for delivery of water to Centennial), without regard to whether Englewood uses its Nevada Ditch capacity for delivery through the Nevada Ditch below the Nevada sti lling basin after delivery through the Chatfield Reservoir ditch outlet manifold, or uses its Nevada Ditch capacity for delivery of water through City Ditch. 11.17 Rent for Capacitv in Nevada Ditch and City Ditch. The rent for capacity in City Ditch and Nevada Ditch shall be $30,000 per annum , (adjusted for consumer price increases as provided below), plus operation and maintenance charges (O&M charges) described below. The rent shall be paid in quarter-annual payments due in advance on the first day of each January, April, July and October of each year during the term of the lease . Rent for the quarter s during which the lease commences and ends shall be appropriately prorated, the initial payment being due on the commencement date . 12 11.8 Lease of Capacity in the Existing City Ditch Pump Station. The lease includes capacity in the presently existing pump station and pumping equipment which transfers water from City Ditch into McLellan Reservoir (and water out ofMcLellan Reservoir into Dad Clark Gulch and thence to the South Platte River). The capacity which is leased to Centennial is that which remains after satisfaction of Englewood's needs, including in Englewood's needs for the delivery of water to Centennial by Englewood. 11.9 Payment of O&M Costs as Rent. As additional rent due under the lease, Centennial shall pay to Englewood the following O&M costs: (the term "O&M costs" refers to Operation and Maintenance costs, including a reasonable reserve for replacement of facilities) 11.9.1 Centennial shall pay to Englewood a fraction of the O&M costs of City Ditch, as reasonably determined by Englewood in the manner set forth below, from its inception to the McLellan pump station. In making its determination, Englewood shall first utilize the methodology set forth in the agreement between Englewood and the City and Co unty of Denver, acting by and through its Board of Water Commissioners, dated October 20, 1995, which is incorporated herein by reference and attached hereto as SCHEDULE? EXHIBIT?------------- to obtain the entire O&M cost for the reach of City Ditch in question . A fraction of the result shall be allocated to Centennial, the fraction being acre feet of water carried by Centennial during the preceding calendar year divided by total acre feet of water carried during the preceding calendar year, measured at the flume below the stilling basin. 11.9.2 Centennial shall pay to Englewood any charges of the Nevada Ditch Holding Company expressly made to Englewood for carriage of Centennial water. Englewood shall pay the other assessments of the Nevada Ditch Holding Company without reimbursement by Centennial. 11.9.3 Englewood shall reasonably calculate the O&M costs for operation of the existing City Ditch pump station and related facilities, and keep adequate records of such costs, which shall be available for inspection by Centennial during business hours. As of the end of each calendar month during the term of the lease, Englewood shall invoice Centennial for Centennial's share of the O&M costs for that month. The invoice shall be due in full 30 day ~ from date ofinvoice. Centennial's share of the O&M costs shall be a fraction of the total O&M costs, the numerator of which is the amount of Centennial's water pumped, and the denominator of which is total water pumped during the month in question. 11.3 Control of Operations. Englewood shall have complete and exclusive control of the operation, maintenance and repair of the leased facilities and any alterations, improvements or additions thereto, and of replacement thereof, except as expressly provided above in the case of removal of silt from McLellan Reservoir by Centennial. 11.4 Lease of Easements to Centennial. 11.4. l Englewood agrees to lease certain easements (the Centennial easements) to Centennial, upon the following terms and cond itions: 13 11.4.2 The lease of any particular easement to Centennial will not be effective until a surveyed legal description of the easement is obtained by Centennial, and a separate written instrument is signed by both the parties setting forth th e legal description of the particular easement which is leased. 11.4.3 The Centennial easements shall be across any of the following properties owned or controlled by Englewood, and as to which Englewood has the right to lease the easement: 1) the Englewood property surrounding Mclellan Reservoir; 2) the Englewood property south of County Line Road; 3) City Ditch from the stilling basin below Chatfield Reservoir to the Mclellan pump station; and 4) a route from Englewood's Union A venue pump station to McLellan Reservoir. 11.4.4 The Centennial easements shall be non-exclusive. 11.4.5 The Centennial easements shall be for the purpose of transporting water, and to that end Centennial may install, maintain, repair and replace pipes , pumps and related facilities in the easements. 11.4.6 Englewood shall have the right reasonably to select the route of any Centennial easement, so as to avoid the location of, or minimize disrupti on of, existing or anticipated streets, structures, pipes, ditches, utility facilities , or areas to be developed, and/or to concentrate easements for various utilities into particular corridors. 11.4 . 7 Englewood may set reasonable standards for the depth at which pipes must be installed, compaction of earthwork, protection of Centennial's pipes or other facilities against anticipated surface uses, protection of exi sting structures and ditches , separation from or protection of adjacent utilities, the repair or replacement of streets or. other facilities or structures through which the pipes must be installed, the timing o f construction so as to minimize disruption of traffic or other ongoing activities, and the maintenance and repair of facilities constructed by Centennial. 11.4.8 No easement shall be leased , which in the reasonable opinion ofEnglewood, is likely to necessitate a review under Section 7 of the Endangered Species Act or any similar or successor legislation. 11.4.9 Englewood shall not unreasonably set locations or standards which increase the construction, maintenance or operating cos t s of Centennial. 11.4 .10 Englewood may reasonably relocate any Centennial easement and reconstruct the facilities therein, at Englewood's sole expense and risk. The relocation and/or reconstruction must be accomplished without interruption of Centennial ' s water service . The reconstructed facilities must be equivalent to those replaced. Englewood shall give Centennial reasonable advance notice of any proposed relocation or reconstruction, and give serious consideration to all written suggestions of Centennial concerning same. 11.5 Englewood's Use ofExcess Capacity of Centennial Facilities. Centennial shall allow Englewood to use excess capacity (i.e. that capacity which Centennial does not then need for 14 carriage ofits own water supplies) in Centennial' s water transmission facilities capable of delivering water from the South Platte River to or toward McLellan Reservoir or City Ditch or Englewood's property located to the south ofMcLellan Reservoir. Englewood shall reimburse Centennial for the O&M costs of those facilities on a monthly basis, the O&M costs to be apportioned to Englewood in proportion to the water carried for each party during the month in question through the facility in question. 11.6 Englewood's Option to Participate in the Construction ofNew Centennial Facilities. If Centennial decides to construct new facilities for the transmission of water from Chatfield Dam or any Centennial reservoir or from Englewood's Union Avenue pump station to City Ditch or McLellan Reservoir or to or through any of Englewood's property lying south of McLellan Reservoir, Englewood shall have the option to participate in such facilities in accordance with the following provisions. Centennial shall, prior to preparation of final plans and specifications for such facility or facilities, provide Englewood with conceptual information concerning the estimated costs, sizing, location and operation of the facility . Within 60 days after receipt of such conceptual information, Englewood shall give notice to Centennial in writing as to whether Englewood is interested in participating in the facility. If Englewood does not give such notice to Centennial, Englewood shall have no further rights hereunder to participate. If Englewood gives notice that it desires to participate in the facility, Englewood and Centennial shall seek to reach agreement as to the design of the facility to accommodate use by both Englewood and Centennial and the terms of Englewood's participation in the facility. If no agreement can be reached between Englewood and Centennial within 120 days after Englewood's notice to Centennial of Englewood's desire to participate in the facility, Centennial shall be free to proceed with the facility and Englewood shall have no further rights hereunder with respect to the facility. If Englewood participates in any facility, Englewood shall pay its proportionate share of the costs and expenses of the facility based on the relation of the capacity reserved for Englewood's use (when full capacity is being used) to total capacity . Costs and expenses to be shared by Englewood shall include all costs and expenses including design, construction, interest and financing costs. If Englewood desires to participate in a facility but does not then have payments available from Centennial under this Agreement with which to finance its proportionate share of the costs and expenses of the facility, Centennial and Englewood agree to use their best efforts to establish an arrangement by which Centennial will construct the facility at Centennial ' s initial cost and expense, with Englewood repaying to Centennial Englewood's proportionate share of costs and expenses of the facility, together with interest thereon at the then prevailing interest rates on AAA rated municipal debt, out of sums received by Englewood under this agreement in excess of $100,000 per year. 15 11. 7 Capital Improvements of City Ditch Facilities. 11. 7.1 Facilities Principally Benefitting Citv Ditch and/or Englewood. If Centennial wishes to construct improvements to City Ditch (such as replacing the Marcy Gulch siphon to increase its capacity) or to Englewood's existing City Ditch pump station (such as removing the intake manifold and constructing a wet well), Centennial may do so and pay for same, ·and Englewood may later acquire the facility and its capacity by electing to reimburse Centennial for the capital costs of such facility as described below, at Englewood's option. Englewood must approve plans and specifications for construction, and will not unreasonably withhold such approval. Englewood may, at is sole discretion, and only following reimbursement of capital costs to Centennial, plus CPI adjustment, less depreciation under an agreed upon depreciation schedule for each facility, own such improvements. Centennial will have a priority of usage for the capacity from any improvement whose capital expenses have not been reimbursed by Englewood. Centennial's priority of usage for a given improvement does not extend to any other elements(s) of which Englewood City Ditch/City Ditch Pump Station w h ere capacity is unavailable to Centennial. For example, if Centennial were to enlarge the capacity of a given segment of City Ditch by 10 cfs, and thereby establish its priority of usage of this 10 cfs, said enlargement by Centennial would not entitle Centennial to any priority of usage of Englewood's City Ditch Pump Station, if such pump station capacity were limiting at a given time. Englewood will operate such improvements whether Centennial is reimbursed for capital expenses or not. 11.7.2 Separate Facilities Principallv Benefitting Centennial. If Centennial wishes to construct a separate facility which will principally benefit Centennial (such as a pump station along City Ditch between Chatfield and Eng lewood's City Ditch pump station), Centennial may do so and pay for same. Englewood must approve plans and specifications for construction and will not unreasonably withhold such approval. Centennial would have a priority of usage of such facility and Englewood would have access to the fac ility's excess capacity. Centennial shall maintain such facility. Englewood should operate such facil ity in accordance with Centennial's desires to divert or pump Centennial's water through such faci lity, consistent with Centennial's rights to capacities in Englewood's City Ditch/City Ditch Pump Station established by this agreement. 11.8 Capital Improvements of Nevada Ditch Facilities. Improvements to Nevada Ditch facilities by Centennial will be made in accordance with the ditch company bylaws and subject to Englewood's prior approval of plans and spec ifications, which approval will not be unreasonably withheld. 12. Change in Water Prices and Rent for Consumer Price Increases. The prices paid for water and the amounts of rent (other than O&M payments) shall be adjusted annually in proportion to changes in the Consumer Price Index, All Urban Consumers, Denver Colorado Metropolitan Area, All Items , as published by the U.S. Bureau of Labor Statistics (the Index). The adjustment shall be made as follows: the initial Index shall be the Index for January of 2000. Beginning with the year 2001, the prices and rents shall be increased or reduced in proportion to the change in the Index between January for that year and January of the preceding year. It is acknowledged that the Index for each January will not be available until after that January, 16 and an adjustment between the parties to correct the interim payments shall be made within thirty days after the Index for the requisite January is published, and after publication all payments shall be made pursuant to the revisions necessitated by the newly-published Index. If the Index just described ceases to be published, the parties shall seek to agree upon a reasonable substitute index; and if such agreement cannot be reached, the substitute index shall be established by arbitration as provided below. 13. Mutual Cooperation. It is anticipated that Centennial and Englewood will work together and use their best efforts to enter into further and ancillary agreements relating to the construction, operation and maintenance of facilities which would enhance the availability of water for bo th Englewood and Centennial. However, such further or ancillary contracts shall be separate and d istinct from this agreement and this agreement shall not be conditioned in any way upon the entering into by either party of any such future or ancillary agreements. 14. Centennial's Control Over Its Other Water. Centennial shall have the full right and authority to use, manage and utilize any and all water rights owned, controlled or acquired by Centennial, subject to the provisions hereof concerning delivery and storage facilities. 15. Default and Remedies. If either party shall fail to keep or perform any agreement on its part to be kept and performed according to the terms and provisions of this Agreement and other party gives written notice specifying the particular default or defaults , the party in default shall have such time as provided in said notice, which period of time shall in no event be less than 909 days, in which to correct such default or defaults. Failure to correct such default within the specified time period allowed, may result in the termination of this Agreement by the party not in default upon the giving of 60 days written notice to the party in default. Waiver or failure to give notice of a·particular default or defaults, shall not be construed as condoning any continuing or subsequent default. If either party should contest any action pursuant to this Section in court, this Agreement shall remain in effect pending a determination by the arbitration in said action. 16. Notices, etc. All notices, consents or other instruments or communications provided for under this Agreement shall be in writing, signed by the party giving the same, and shall be deemed properly given and received when actually given and received or three business days after mailed, if sent by registered or certified United States mail, postage prepaid, addressed to a party at its address set forth at the beginning of this Agreement or such other address as such party may designate by written notice to the other party. 17 17. Inurements. This agreement shall be binding upon and inure for the benefit of the parties and their successors and assigns. 18. No Third Party Beneficiaries. None of the terms or provisions of this agreement shall be deemed to be for the benefit of any person or party other than Centennial and Englewood. 19. Entire Agreement. This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof and all prior agreements or understandings shall be deemed merged herein. No representations , warranties or certifications, express or implied, shall exist as between the parties except as stated herein. 20 . Modifications in Writing. No amendments, waivers, or modific ations hereof shall be made or deemed to have been made unless in writing executed by the party to be bound thereby . 21 . Severabilitv. If any provision of this Agreement shall be invalid, illegal or unenforceable it shall not affect or impair the enforceability of any other provisions of this Agreement. 22. Time Not of the Essence. Time shall not be of the essence with respect to performance required under this Agreement. 23 . Applicable Law. This Agreement shall be interpreted and enforced according to the laws of the State of Colorado. 24. Headings and Captions for Convenience. All headings and captions used in this Agreement are for convenience only and are of no meaning in the interpretation or effect of this Agreement. 25. Arbitration. Except as provided below, any and all di sputes arising under or related to this Agreement which cannot be resolved through negotiations between the parties shall be submitted to binding 18 arbitration. If the parties fail to reach a settlement of their dispute within thirty (30) days after the earliest date upon which one of the parties notifies the other(s) in writing of the existence of and its desire to attempt to resolve the dispute, then the dispute shall be promptly submitted to arbitration by a single arbitrator through the Judicial Arbiter Group of Denver, Colorado, any successor of the Judicial Arbiter Group, or any similar arbitration provider who can provide a former judge to conduct the arbitration ifthe Judicial Arbiter Group is no longer in existence ("JAG"). The arbitrator shall be selected by JAG, if possible, on the basis of his or her expertise in the subject matter(s) of the dispute. The decision of the arbitrator shall be fin al, nonappealable and binding upon the parties, and it may be entered in any court of competent jurisdiction; provided, however, that any party to the arbitration proceeding may seek a court order vacating the decision of the arbitrator in accordance with the provisions of and on the grounds set forth in C.R.S. § 13-22-214 and/or a modification or correction of the arbitrator's aw ard in accordance w ith the provisions of C.R.S. §§ 13-22-211 or 13-22-215, and may take an appeal from court orders related to the arbitration proceeding or award as provided in C.R.S . § 13-22-221. The arbitration shall take place in Denver, Colorado. The arbi trator shall be bound by the laws of the State of Colorado applicable to the issues involved in the ar bitration and all Colorado rules relating to the admissibility of evidence , including, without limitation, all relevant privileges and the attorney work product doctrine. Discovery shall be permitted and shall be completed in accordance with the time limitations prescribed in the Colorado Rules of Civil Procedure, unless extensions of such time limitations are approved by all parties to the ar bitration or are ordered by the arbitrator on the basis of strict necessity adequately demonstr ated by the party requesting an extension of time . The arbitrator shall have the power to grant equit able relief where available under Colorado law, but shall not be entitled to make an award of punitive damages. The arbitrator shall issue a written opinion setting forth his or her decision and the reasons therefor within thirty (30) days after the arbitration proceeding is concluded. The obligation of the parties to submit any dispute arising under or related to this Agreement to arbitration as provided in this section shall survive the expiration or earlier termination of this agreement. Notwiths t anding the foregoing, any party to this Agreement may seek to obtain an injunction or other appropriate relief from a court to preserve or protect trademarks, trade names, co pyri ghts, patents, trade secrets or other intellectual property or proprietary information or to preserve the status quo with respect to any matter pending conclusion of the arbitration proceeding, but no such application to a court shall in any way be permitted to stay or otherwise impede the progress of the arbitration proceeding. In the event of any arbitration or litigation being filed or insti tuted between the parties concerning this Agreement, the prevailing party will be entitled to rece ive from the other party or parties its attorneys' fees, witness fees, costs and expenses, court costs and other reasonable expenses, whether or not such controversy, claim or action is prosecuted t o judgment or other forms ofrelief. The "prevailing party" is that party which is awarded judgment or other legal or equitable relief as a result of trial or arbitration, or who receives a payment of money from the other party in settlement of claims asserted by such party. If both parties receive a judgment, settlement payment or other award or relief, the court or the arbitrator shall determine which party is the prevailing party, taking into consideration the merits of the claims asserted by each party, the relative values of the judgments, settlements or other forms of relief received by each party, and the relative equities between the parties. 19 IN WITNESS WHEREOF, this Agreement is executed as of the day and year first above written. CITY OF ENGLEWOOD Mayor Attest: City Clerk N:\PUBL\DGH\DOCl169!33 .WPD 6119100 2:37 PM 20 CENTENNIAL WATER AND SANITATION DISTRICT Attest: '·