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TC Res. No. 2009-23 APPROVING A SUPPLEMENTAL WATER LEASE AGREEMENTTOWN OF AVON, COLORADO RESOLUTION NO. 09-23 Series of 2009 A RESOLUTION APPROVING A SUPPLEMENTAL WATER LEASE AGREEMENT WITH THE UPPER EAGLE REGIONAL WATER AUTHORITY WHEREAS, the Upper Eagle Regional Water Authority ( "Authority ") is a quasi - municipal corporation established pursuant to an Intergovernmental Agreement dated September 18, 1984, among the Arrowhead Metropolitan District, the Town of Avon as successor to the Avon Metropolitan District ( "Avon "), the Beaver Creek Metropolitan District, the Berry Creek Metropolitan District, the Eagle -Vail Metropolitan District, and the Edwards Metropolitan District (collectively the "Member Districts "), and the Authority is the owner or lessee of the water rights and facilities that provide water service by contract to existing and projected developments within the service area of its Member Districts; and WHEREAS, pursuant to the Amended and Restated Water Lease dated effective as of January 1, 1998, between the Authority and the Town, the Town leased to the Authority certain water and water rights, ditches and ditch rights, wells and groundwater rights, springs and spring rights, and reservoirs and storage rights described as an undivided 77.7% interest in the water rights described on Exhibit A attached to the Restated Water Lease; and WHEREAS, pursuant to the Supplemental Water Lease dated July 14, 2005, the Town leased to the Authority the remaining 22.3% undivided interest in and to the subject water rights and the Supplemental Water Lease states that the entire interest in the subject water rights leased to the Authority by virtue of the Restated Water Lease and the Supplemental Water Lease are adequate to replace depletions associated with lake evaporation (42.30 acre feet), non - potable irrigation in the amount of 19.58 acre feet, and potable water service for up to 4,984 equivalent residential units single family equivalents (SFE); and WHEREAS, subsequent to the Supplemental Water Lease, the Authority and East West Resort Development XIV L.P., L.L.L.P. (the "Company ") entered into that certain Water Service Agreement dated April 27, 2006, whereby the Company sought water service for redeveloped property within the Town known as the Confluence Project which at full build out will consist of 458.15 SFE, which is 255.55 SFEs greater than the projected density of the property contemplated by the Restated Water Lease and Supplemental Water Lease; and therefore the Authority agreed to service these additional 255.55 SFEs at the Confluence Project provided certain contingencies were met, including the dedication of additional water rights; and WHEREAS, the contingencies contemplated in the Water Service Agreement have been satisfied, and as a result, the Authority and the Town desire to enter into this Agreement whereby the Authority agrees to increase the number of SFEs that it will serve in the Town by 255.55, to a total of 5,239.55 SFEs; and Resolution No. 09 -23 Supplemental Water Lease Agreement Page 1 WHEREAS, the Town and the Company entered into an Agreement for Dedication of Augmentation Water and Related Water Rights for the Confluence Project dated May 9, 2006, under which the Company was obligated to dedicate and convey to the Authority certain water rights and a payment was made for a pipeline relocation, subject to the Town's approval and acceptance, and said agreement contemplated that should the Authority fail to provide water service to the Confluence Project for any reason, any right of the Company to require the Authority to reconvey all or any portion of the dedicated water rights and other consideration should be assigned to the Town; and WHEREAS, Recital I on page 3 of the May 9, 2006 Agreement for Dedication of Augmentation Water and Related Water Rights indicated that the Town and the Authority had entered into an Amendment to the Restated Water Lease and Supplemental Water Lease effective as of April 27, 2006; however, through oversight, no such amendment was executed at that time, and it is the intent and purpose of this Supplemental Water Service Agreement to correct that oversight by increasing the maximum number of SFEs to which the Authority will provide water service within the Town from 4,984 SFEs to 5,239.55 SFEs. NOW, THEREFORE BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF AVON, that the SUPPLEMENTAL WATER LEASE AGREEMENT WITH THE UPPER EAGLE REGIONAL WATER AUTHORITY as hereto attached as Exhibit A is hereby approved by the Town of Avon. ADOPTED THIS DAY OF 92009. ATTEST: P ty cKenny T °n Jerk TOWN COUNCIL TOWN OF AVON, COLORADO CA-, Ronald C. Wolfe, Mayor Resolution No. 09 -23 Supplemental Water Lease Agreement Page 2 TOWN OF AVON, COLORADO RESOLUTION NO. 09 -23 Series of 2009 A RESOLUTION APPROVING A SUPPLEMENTAL WATER LEASE AGREEMENT WITH THE UPPER EAGLE REGIONAL WATER AUTHORITY WHEREAS, the Upper Eagle Regional Water Authority ( "Authority ") is a quasi - municipal corporation established pursuant to an Intergovernmental Agreement dated September 18, 1984, among the Arrowhead Metropolitan District, the Town of Avon as successor to the Avon Metropolitan District ( "Avon "), the Beaver Creek Metropolitan District, the Berry Creek Metropolitan District, the Eagle -Vail Metropolitan District, and the Edwards Metropolitan District (collectively the "Member Districts "), and the Authority is the owner or lessee of the water rights and facilities that provide water service by contract to existing and projected developments within the service area of its Member Districts; and WHEREAS, pursuant to the Amended and Restated Water Lease dated effective as of January 1, 1998, between the Authority and the Town, the Town leased to the Authority certain water and water rights, ditches and ditch rights, wells and groundwater rights, springs and spring rights, and reservoirs and storage rights described as an undivided 77.7% interest in the water rights described on Exhibit A attached to the Restated Water Lease; and WHEREAS, pursuant to the Supplemental Water Lease dated July 14, 2005, the Town leased to the Authority the remaining 22.3% undivided interest in and to the subject water rights and the Supplemental Water Lease states that the entire interest in the subject water rights leased to the Authority by virtue of the Restated Water Lease and the Supplemental Water Lease are adequate to replace depletions associated with lake evaporation (42.30 acre feet), non - potable irrigation in the amount of 19.58 acre feet, and potable water service for up to 4,984 equivalent residential units single family equivalents (SFE); and WHEREAS, subsequent to the Supplemental Water Lease, the Authority and East West Resort Development XIV L.P., L.L.L.P. (the "Company ") entered into that certain Water Service Agreement dated April 27, 2006, whereby the Company sought water service for redeveloped property within the Town known as the Confluence Project which at full build out will consist of 458.15 SFE, which is 255.55 SFEs greater than the projected density of the property contemplated by the Restated Water Lease and Supplemental Water Lease; and therefore the Authority agreed to service these additional 255.55 SFEs at the Confluence Project provided certain contingencies were met, including the dedication of additional water rights; and WHEREAS, the contingencies contemplated in the Water Service Agreement have been satisfied, and as a result, the Authority and the Town desire to enter into this Agreement whereby the Authority agrees to increase the number of SFEs that it will serve in the Town by 255.55, to a total of 5,239.55 SFEs; and Resolution No. 09 -23 Supplemental Water Lease Agreement Page 1 WHEREAS, the Town and the Company entered into an Agreement for Dedication of Augmentation Water and Related Water Rights for the Confluence Project dated May 9, 2006, under which the Company was obligated to dedicate and convey to the Authority certain water rights and a payment was made for a pipeline relocation, subject to the Town's approval and acceptance, and said agreement contemplated that should the Authority fail to provide water service to the Confluence Project for any reason, any right of the Company to require the Authority to reconvey all or any portion of the dedicated water rights and other consideration should be assigned to the Town; and WHEREAS, Recital I on page 3 of the May 9, 2006 Agreement for Dedication of Augmentation Water and Related Water Rights indicated that the Town and the Authority had entered into an Amendment to the Restated Water Lease and Supplemental Water Lease effective as of April 27, 2006; however, through oversight, no such amendment was executed at that time, and it is the intent and purpose of this Supplemental Water Service Agreement to correct that oversight by increasing the maximum number of SFEs to which the Authority will provide water service within the Town from 4,984 SFEs to 5,239.55 SFEs. NOW, THEREFORE BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF AVON, that the SUPPLEMENTAL WATER LEASE AGREEMENT WITH THE UPPER EAGLE REGIONAL WATER AUTHORITY as hereto attached as Exhibit A is hereby approved by the Town of Avon. ADOPTED THIS ATTEST: T, 1q, Pqfiy *Kenny / T n Jerk DAY OF , 2009. o 0� A��� TOWN COUNCIL TOWN OF AVON, COLORADO C Ronald C. Wolfe, Mayor Resolution No. 09 -23 Supplemental Water Lease Agreement Page 2 SUPPLEMENTAL WATER SERVICE AGREEMENT fti This Agreement dated this 2S day of June 2009, is between the Upper Eagle Regional Water Authority, a quasi - municipal corporation and political subdivision of the State of Colorado (the "Authority "), and the Town of Avon (the "Town "). RECITALS A. The Authority is a quasi - municipal corporation established pursuant to an Intergovernmental Agreement dated September 18, 1984, among the Arrowhead Metropolitan District, the Town of Avon as successor to the Avon Metropolitan District ( "Avon'), the Beaver Creek Metropolitan District, the Berry Creek Metropolitan District, the Eagle -Vail Metropolitan District, and the Edwards Metropolitan District (collectively the "Member Districts "). The Authority is the owner or lessee of the water rights and facilities that provide water service by contract to existing and projected developments within the service area of its Member Districts. B. Pursuant to the Amended and Restated Water Lease dated effective as of the 1s` day of January 1998, between the Authority and the Town, the Town leased to the Authority certain water and water rights, ditches and ditch rights, wells and groundwater rights, springs and spring rights, and reservoirs and storage rights described as an undivided 77.7% interest in the water rights described on Exhibit A attached to the Restated Water Lease. C. Pursuant to the Supplemental Water Lease dated July 14, 2005, the Town leased to the Authority the remaining 22.3% undivided interest in and to the subject water rights. The Supplemental Water Lease states that the entire interest in the subject water rights leased to the Authority by virtue of the Restated Water Lease and the Supplemental Water Lease are adequate to replace depletions associated with lake evaporation (42.30 acre feet), non - potable irrigation in the amount of 19.58 acre feet, and potable water service for up to 4,984 SFEs. D. Subsequent to the Supplemental Water Lease, the Authority and East West Resort Development X1V L.P., L.L.L.P. (the "Company ") entered into that certain Water Service Agreement dated April 27, 2006. Pursuant to the Water Service Agreement, the Company sought water service for redeveloped property within the Town known as the Confluence Project. The proposed development of the Confluence Project at full build out will consist of 458.15 single family equivalent residential units ( "SFEs "), which is 255.55 SFEs greater than the projected density of the property contemplated by the Restated Water Lease and Supplemental Water Lease. The Authority agreed to service these additional 255.55 SFEs at the Confluence Project provided certain contingencies were met, including the dedication of additional water rights. E. The contingencies contemplated in the Water Service Agreement have been satisfied. As a result, the Authority and the Town desire to enter into this Agreement whereby the Authority agrees to increase the number of SFEs that it will serve in the Town by 255.55, to a total of 5,239.55 SFEs. 30527 F. The Town and the Company entered into an Agreement for Dedication of Augmentation Water and Related Water Rights for the Confluence Project dated May 9, 2006, under which the Company was obligated to dedicate and convey to the Authority certain water rights and a payment was made for a pipeline relocation, subject to the Town's approval and acceptance. Said agreement contemplated that, should the Authority fail to provide water service to the Confluence Project for any reason, any right of the Company to require the Authority to reconvey all or any portion of the dedicated water rights and other consideration should be assigned to the Town. G. Recital I on page 3 of the May 9, 2006 Agreement for Dedication of Augmentation Water and Related Water Rights indicated that the Town and the Authority had entered into an Amendment to Restated Water Lease and Supplemental Water Lease effective as of the 27th day of April, 2006. However, through oversight, no such amendment had been executed at that time. It is the intent and purpose of this Supplemental Water Service Agreement to correct that oversight by increasing the maximum number of SFEs to which the Authority will provide water service within the Town from 4,984 SFEs to 5,239.55 SFEs. NOW, THEREFORE, in consideration of premises and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Authority and the Town agree as follows: 1. Additional Water Service Commitment. The Authority agrees that it will serve an additional 255.55 SFEs in the Town in addition to the 4,984 SFEs that were contemplated in the Supplemental Water Lease. These additional 255.55 SFEs will be available to the Confluence Project on the same basis as other users within the Authority's service area to meet the construction, residential, municipal, irrigation, recreation and other incidental water demands of the Confluence Project. The total number of SFEs in the Town that the Authority agrees to serve now totals 5,239.55 SFEs. The January 1, 1998 Amended and Restated Water Lease and the July 14, 2005 Supplemental Water Lease remain in full force and effect as supplemented by this Agreement. 2. Customer Charges. Currently all customers within the Town pay directly to the Authority plant investment fees and finished water storage fees at the time of hook up, and the monthly service charges of the Authority. Nothing contained in this Agreement shall modify this arrangement and all customers within the Town shall continue to be directly responsible for the payment of such fees and charges. 3. Conveyance upon Dissolution. As a condition of water service, the developer of the Confluence Project dedicated certain water rights to the Authority and also agreed to pay certain costs of a pipeline to relocate the return point of effluent from the Avon wastewater treatment plant, which had the effect of reducing the amount of water rights the developer otherwise would have been required to dedicate for its development. Should the Authority fail to provide water service to the Confluence Project or should the Authority cease to exist as a water service entity whether by reason of dissolution, termination or other reason, the Authority shall 30527 2 convey to Avon the following water rights that were dedicated to the Authority by the developer of the Confluence Project: 5.47 of the 43.75 acre -feet of consumptive use water, at a flow rate not to exceed 0.623 cfs (plus an additional flow of 0.623 cfs when not needed by the Beaver Creek Metropolitan District for domestic water supply purposes within its service area) from the Townsend Ditch water rights decreed by the District Court in and for Water Division No. 5 in Case Nos. W -2746, 85CW26 and 85CW608 for domestic, commercial and municipal purposes and, four shares of Class B Series 2 stock in Eagle Park Reservoir Company amounting to 4.0 acre -feet of water from Homestake Reservoir. The intent of this provision is that, in addition to the specified water rights, Avon would receive the benefit of the effluent pipeline relocation described above to serve the Confluence Project at full buildout. 4. Miscellaneous: (a) This Agreement may not be amended nor any rights hereunder waived except by an instrument in writing signed by the parties sought to be charged with such amendment or waiver. (b) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Colorado. The forum for resolution of any and all disputes arising hereunder shall be the District Court in and for Eagle County, State of Colorado. (c) The paragraph headings herein are inserted for convenience of reference only and do not define, limit or prescribe the scope of this Agreement. (d) The parties agree to execute such additional documents as may be reasonably required to implement the terms of this Agreement. (e) The terms of this Agreement shall be binding on the parties' successors and assigns. (f) Notwithstanding any interpretation of any term or condition to the contrary, water service to any customer or property within Avon shall be subject to all other rules, regulations, fees and requirements of the Authority. EXECUTED as of the date first set forth above. UPPER EAGLE REGIONAL WATER AUTHORITY, a quasi- municipal corporation of the State of Colorado By: et � Name: J,6dT CAI Title: 30527 TOWN OF AVON , By: Name: la LG� C • �� Title: �ORAG STATE OF COLORADO ) / ) ss. COUNTY OF The foregoing instrument was acknowledged before me thisv?5 day of u n e— , 2009, by o - i S 2Q,.A v n as �' a ; / ' of the Upper Eagle Regional Water Authority, a quasi - municipal corporation and political subdivision of the State of Colorado . Wit official seal dP ow P ' V :' �pTARy -_ - = �DU81.\t' CF CQ�'.�` IIIII STATE OF COLORADO ) ss. COUNTY OF�.- ) My commission expires`o t �_ Notary The foregoing instrument was �ac ow edged before me this d I day of 2009, by a as of the Town of Avon Witness my hand and official seal. My commission expires O1OLMO WdX3 UOPSPWOO LW 30527 No y P blic 11_� 0 91 0 Memo To: Honorable Mayor and Town Council Thru: Larry Brooks, Town Manager From: Justin Hildreth, P.E., Town Engineer Date: July 9, 2009 Re: Resolution 09.23 Supplemental Water Lease Agreement with the Upper Eagle River Water Authority to Include the Riverfront PUD (aka Confluence) Summary: In 2005, the Town of Avon (TOA) and the Upper Eagle River Water Authority (UERWA) updated the water lease agreement in which TOA leases its water rights to UERWA in exchange for the UERWA providing water service to TOA. In 2006, the TOA approved the Riverfront PUD which requires a total of 455.15 Single Family Equivalents (SFE) of domestic water service. When the PUD was approved TOA, UERWA and East West Resort Development Company XIV L.P., L.L.L.P. (East - West) entered into an agreement for Dedication of Augmentation Water and Related Water Rights for the project. As part of that agreement, the Water Lease Agreement was supposed to be updated to include the Riverfront PUD but due to oversight was not. This agreement will update the Water Lease Agreement to include Riverfront PUD. The UERWA approved this agreement on their June 25, 2009 meeting. Previous Council Action: • January 1, 1998: The Avon Town Council and UERWA entered in to an Amended and Restated Water Lease • July 15, 2005: The Avon Town Council approved the Supplemental Water Lease with the Upper Eagle Regional Water Authority. • January 24, 2006: The Avon Town Council approved Ordinance 06-03, An Ordinance Approving an Amendment to the Confluence Planned Unit Development. • April 27, 2006: The Avon Town Council, UERWA and East West entered into an Agreement for Dedication of Augmentation Water and Related Water Rights for the Confluence Project. Background: Single Family Equivalents, or SFEs, are the measurement of water consumption used by the Town of Avon and the UERWA. One SFE is equal to any residential living unit with a kitchen, whether it is a single - family home, townhome, condominium, or apartment, provided that the unit is below 3,000 square feet. Additional square footage is calculated as pro -rated additional SFEs. An accommodation unit with an efficiency kitchen is counted as 0.5 SFEs, and a hotel room without any cooking facilities includes 0.35 SFEs. Commercial properties are separately metered and the SFEs are based on service line size. Service line sizes are derived from building heights, square footage, usage, and fire requirements. Discussion: in 2005, the Town of Avon renegotiated the lease agreement for the administration of all Avon water rights with the Upper Eagle Regional Water Authority (UERWA). The scope of the lease agreement includes all areas previously served by Avon Metropolitan District water service, generally consisting of the Town of Avon boundaries and excluding the Eaglebend Subdivision, Gates and Folson parcels, and the Village at Avon. During the negotiation process, Town Staff completed an analysis of water consumption, existing zoning, and future water demand. During this analysis, the Town reached an agreement with UERWA resulting in the total water available for the Town of Avon to total 386.03 consumptive acre -feet. This volume of water will serve up to 4,984 Single Family Equivalents (SFE's) of domestic water service, of which 4,793 SFEs are allocated to existing subdivided lots and 191 reserved for future municipal services. At the time, town staff determined that the Town could supply water to new developments up to the maximum underlying zoning, as well as redevelopment up to existing zoning. Resolution 09 -23: Supplemental Water Service Agreement with UERWA Page 2 of 2 July 9, 2009 Since then, Town Staff has required all large developments involving upzoning to provide additional water rights above those provided by Avon under existing zoning. Providing adequate and acceptable water rights is a condition of final plat approval per Avon Municipal Code Section 16.24.140 (7). On April 27, 2006, TOA, UERWA and East West Resort Development XIV L.P., L.L.L.P. (East West) entered into a Water Service Agreement to provide water service for the development of the Riverfront PUD, also called the Confluence project, for up to 458.15 SFEs. This is 255.55 more SFEs than were allocated based on historical zoning. East West met its obligation to provide for additional water by a combination of paying for a wastewater pump back project so minimum stream flows in the Eagle River could be met and dedicating an appropriate amount of water rights and storage. This agreement will update the existing water lease agreement between the TOA and UERWA to include the additional 255.55 SFEs that are required to serve the Riverfront PUD. Financial Implications: There are not financial implications. Recommendation: Approve Resolution 09 -23, A Resolution Approving the Supplemental Water Service Agreement between the Town of Avon and the Upper Eagle River Water Authority. Proposed Motion: I Move to Approve Resolution 09 -23, Series 2009, A Resolution Approving the Supplemental Water Service Agreement between the Town of Avon and the Upper Eagle River Water Authority Town Manager Comments: Attachments: Exhibit A — 2009 Supplemental Water Lease 0 Page 2 L' EXHIBIT A 0 SUPPLEMENTAL WATER SERVICE AGREEMENT This Agreement dated this day of June 2009, is between the Upper Eagle Regional Water Authority, a quasi - municipal corporation and political subdivision of the State of Colorado (the "Authority "), and the Town of Avon (the "Town "). RECITALS A. The Authority is a quasi - municipal corporation established pursuant to an Intergovernmental Agreement dated September 18, 1984, among the Arrowhead Metropolitan District, the Town of Avon as successor to the Avon Metropolitan District ( "Avon "), the Beaver Creek Metropolitan District, the Berry Creek Metropolitan District, the Eagle -Vail Metropolitan District, and the Edwards Metropolitan District (collectively the "Member Districts "). The Authority is the owner or lessee of the water rights and facilities that provide water service by contract to existing and projected developments within the service area of its Member Districts. B. Pursuant to the Amended and Restated Water Lease dated effective as of the 1 st day of January 1998, between the Authority and the Town, the Town leased to the Authority certain water and water rights, ditches and ditch rights, wells and groundwater rights, springs and spring rights, and reservoirs and storage rights described as an undivided 77.7% interest in the water rights described on Exhibit A attached to the Restated Water Lease. C. Pursuant to the Supplemental Water Lease dated July 14, 2005, the Town leased to the Authority the remaining 22.3% undivided interest in and to the subject water rights. The Supplemental Water Lease states that the entire interest in the subject water rights leased to the Authority by virtue of the Restated Water Lease and the Supplemental Water Lease are adequate to replace depletions associated with lake evaporation (42.30 acre feet), non - potable irrigation in the amount of 19.58 acre feet, and potable water service for up to 4,984 SFEs. D. Subsequent to the Supplemental Water Lease, the Authority and East West Resort Development XIV L.P., L.L.L.P. (the "Company ") entered into that certain Water Service Agreement dated April 27, 2006. Pursuant to the Water Service Agreement, the Company sought water service for redeveloped property within the Town known as the Confluence Project. The proposed development of the Confluence Project at full build out will consist of 458.15 single family equivalent residential units ( "SFEs "), which is 255.55 SFEs greater than the projected density of the property contemplated by the Restated Water Lease and Supplemental Water Lease. The Authority agreed to service these additional 255.55 SFEs at the Confluence Project provided certain contingencies were met, including the dedication of additional water rights. E. The contingencies contemplated in the Water Service Agreement have been satisfied. As a result, the Authority and the Town desire to enter into this Agreement whereby the Authority agrees to increase the number of SFEs that it will serve in the Town by 255.55, to a total of 5,239.55 SFEs. 30527 1 F. The Town and the Company entered into an Agreement for Dedication of Augmentation Water and Related Water Rights for the Confluence Project dated May 9, 2006, under which the Company was obligated to dedicate and convey to the Authority certain water rights and a payment was made for a pipeline relocation, subject to the Town's approval and acceptance. Said agreement contemplated that, should the Authority fail to provide water service to the Confluence Project for any reason, any right of the Company to require the Authority to reconvey all or any portion of the dedicated water rights and other consideration should be assigned to the Town. G. Recital I on page 3 of the May 9, 2006 Agreement for Dedication of Augmentation Water and Related Water Rights indicated that the Town and the Authority had entered into an Amendment to Restated Water Lease and Supplemental Water Lease effective as of the 27th day of April, 2006. However, through oversight, no such amendment had been executed at that time. It is the intent and purpose of this Supplemental Water Service Agreement to correct that oversight by increasing the maximum number of SFEs to which the Authority will provide water service within the Town from 4,984 SFEs to 5,239.55 SFEs. NOW, THEREFORE, in consideration of premises and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Authority and the Town agree as follows: 1. Additional Water Service Commitment. The Authority agrees that it will serve an additional 255.55 SFEs in the Town in addition to the 4,984 SFEs that were contemplated in the Supplemental Water Lease. These additional 255.55 SFEs will be available to the Confluence Project on the same basis as other users within the Authority's service area to meet the construction, residential, municipal, irrigation, recreation and other incidental water demands of the Confluence Project. The total number of SFEs in the Town that the Authority agrees to serve now totals 5,239.55 SFEs. The January 1, 1998 Amended and Restated Water Lease and the July 14, 2005 Supplemental Water Lease remain in full force and effect as supplemented by this Agreement. 2. Customer Charges. Currently all customers within the Town pay directly to the Authority plant investment fees and finished water storage fees at the time of hook up, and the monthly service charges of the Authority. Nothing contained in this Agreement shall modify this arrangement and all customers within the Town shall continue to be directly responsible for the payment of such fees and charges. 3. Conveyance upon Dissolution. As a condition of water service, the developer of the Confluence Project dedicated certain water rights to the Authority and also agreed to pay certain costs of a pipeline to relocate the return point of effluent from the Avon wastewater treatment plant, which had the effect of reducing the amount of water rights the developer otherwise would have been required to dedicate for its development. Should the Authority fail to provide water service to the Confluence Project or should the Authority cease to exist as a water service entity whether by reason of dissolution, termination or other reason, the Authority shall 2 30527 I& convey to Avon the following water rights that were dedicated to the Authority by the developer of the Confluence Project: 5.47 of the 43.75 acre -feet of consumptive use water, at a flow rate not to exceed 0.623 cfs (plus an additional flow of 0.623 cfs when not needed by the Beaver Creek Metropolitan District for domestic water supply purposes within its service area) from the Townsend Ditch water rights decreed by the District Court in and for Water Division No. 5 in Case Nos. W -2746, 85CW26 and 85CW608 for domestic, commercial and municipal purposes and, four shares of Class B Series 2 stock in Eagle Park Reservoir Company amounting to 4.0 acre -feet of water from Homestake Reservoir. The intent of this provision is that, in addition to the specified water rights, Avon would receive the benefit of the effluent pipeline relocation described above to serve the Confluence Project at full buildout. 4. Miscellaneous: (a) This Agreement may not be amended nor any rights hereunder waived except by an instrument in writing signed by the parties sought to be charged with such amendment or waiver. (b) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Colorado. The forum for resolution of any and all disputes arising hereunder shall be the District Court in and for Eagle County, State of Colorado. (c) The paragraph headings herein are inserted for convenience of reference only and do not define, limit or prescribe the scope of this Agreement. (d) The parties agree to execute such additional documents as may be reasonably required to implement the terms of this Agreement. (e) The terms of this Agreement shall be binding on the parties' successors and assigns. (f) Notwithstanding any interpretation of any term or condition to the contrary, water service to any customer or property within Avon shall be subject to all other rules, regulations, fees and requirements of the Authority. EXECUTED as of the date first set forth above. UPPER EAGLE REGIONAL WATER AUTHORITY, a quasi - municipal corporation of the State of Colorado By: Name: Title: 3 30527 TOWN OF AVON By: Name: Title: STATE OF COLORADO ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2009, by as of the Upper Eagle Regional Water Authority, a quasi- municipal corporation and political subdivision of the State of Colorado . Witness my hand and official seal. My commission expires Notary STATE OF COLORADO ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this , 2009, by as of Avon Witness my hand and official seal. My commission expires Notary Public 30527 4 day of of the Town