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Exhibit 10.2

 

SOUTH METRO WISE AUTHORITY
FORMATION AND ORGANIZATIONAL
INTERGOVERNMENTAL AGREEMENT
 
    THESOUTH METRO WISE AUTHORITY FORMATION AND ORGANIZATIONAL INTERGOVERNMENTAL
AGREEMENT ("Agreement") is made, entered into and effective on the day set forth
in Section 20 of this Agreement by and between the political subdivisions listed
on Exhibit A, which is attached hereto and incorporated herein ("Members") to
form the "South Metro WISE Authority."
 
RECITALS
 
    WHEREAS, the Members, individually and collectively, hereby find and
declare:
 
 
        (a)    Water is essential to the economy of the State of
Colorado,  Douglas County, Arapahoe County, and the Members; and 
 
        (b)        The naturally-occurring water in the Denver Basin aquifers is
a limited resource; and
 
        (c)          Concerns about the continued availability of water have
severe and adverse impacts on the economy of the south Denver metropolitan
community, region, and state; and
 
    WHEREAS, Denver Water and Aurora Water (both defined below) have been
negotiating with the Members for  the delivery of water pursuant to the WISE
Delivery Agreement (defined below); and
 
    WHEREAS, the Members, Denver Water, and Aurora Water have reached an
agreement that would provide 7,225 acre-feet per year, on average, to the
Members; and
 
    WHEREAS, the WISE Project (defined below) is a regional project with broad
support from elected officials, water providers, and the general public; and
 
    WHEREAS, the WISE Project allows for regional cooperation to help maximize
the use of the water resources available to the Members; and
 
    WHEREAS, the Members executed that
certain "South Metro Water Supply Authority ­ WISE Negotiations and Cost Sharing Participation Agreement" dated effective January 1, 2012, as amended ("Cost Sharing PA"); and
 
    WHEREAS, the Members desire to form the Authority (defined below) as a
necessary step to implementation of the WISE Project; and
 
    WHEREAS, the Members shall have rights in and obligations to the South Metro
WISE Authority and the WISE Project as set forth herein; and
 
 
 
 

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   WHEREAS, the First Amended and Restated South Metro Water Supply Authority
Intergovernmental Agreement ("SMW IGA") dated effective January 1, 2006, is the
governing intergovernmental agreement of the South Metro Water Supply Authority;
and
 
   WHEREAS, Section 110 of the SMW IGA anticipates the creation of Participation
Agreements used to pursue specific projects and that such Participation
Agreements may create separate legal entities; and
 
   WHEREAS, the Members desire that Douglas County and/or other eligible
entities have the opportunity to join the South Metro WISE Authority and to be
eligible to receive water from the WISE Project, when, inter alia, water in
excess of the Delivery Obligation is available or a portion of the Delivery
Obligation becomes available pursuant to this Agreement; and
 
   WHEREAS, the Members intend that the benefits  and obligations set forth in
this Agreement shall be perpetual, shall not be subject to annual appropriation,
shall not be a "multiple-fiscal year direct or indirect ... debt or other
financial obligation" subject to TABOR, and shall not be "general obligation"
debt subject to Section 6 of Article XII of the Colorado Constitution. The
Members further intend that they shall each be bound by and subject to the
provisions of this Agreement without the need for further or subsequent
approval; and
 
   WHEREAS, the Members enter into this Agreement on the belief that it is in
the best interests of their respective customers and constituents.
 
   NOW THEREFORE, in consideration of the terms and conditions of this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members agree as follows:
 
SECTION 1. CREATION OF AUTHORITY
 

 
A.
There is hereby created the South Metro WISE Authority for the purpose of
implementing the WISE Project. The Authority shall be a body corporate and
politic and a political subdivision of the state, separate from the Members. The
Authority is a water  authority as defined in section 29-1-204.2, C.R.S. The
Authority shall be an enterprise as defined in sections 24-77-102(3) and
37-45.1- 101 et seq., C.R.S. and the Executive Board shall take such actions as
may be required to prevent disqualification as an enterprise.

 
 
B.
The Authority has all of the powers authorized in Section 29-1-204.2, C.R.S.
(specifically including subsections (5) and (7) thereof) and granted to such
authorities by Colorado law. A copy of Section 29-1-204.2, C.R.S. as it exists
on the effective date of this Agreement is attached as Exhibit B hereto.
Amendments to such section adopted after the effective date of this Agreement
shall apply to the Authority only if the governing bodies of the Members approve
an amendment to this Agreement allowing such application or if required by state
law.

 
 
 

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C.
Except as specifically provided herein, nothing in this Agreement shall preclude
any Member from undertaking any other water project.

 
 
D.
With full execution of this Agreement by the Members, the Executive Board is
authorized and empowered to execute the WISE Delivery Agreement on behalf of the
Authority and to take any necessary action on behalf of the Authority to remain
in good standing under the WISE Delivery Agreement. This authorization shall not
be impaired by any other provision, term or condition of this Agreement.

 
SECTION 2. DEFINITIONS
 

 
A.
Aurora Water shall mean the City of Aurora, Colorado, acting by and through its
Utility Enterprise.

 
 
B.
Authority shall mean the South Metro WISE Authority formed pursuant to this
Agreement.

 
 
C.
Binney Plant Connection shall mean the connection between the Binney Plant and
the Westem Line, as described in the WISE Delivery Agreement.

 
 
D.
Capacity shall mean a Member's right, pursuant to this Agreement, to receive a
certain portion of pipeline capacity through the WISE Project, measured in
million gallons per day (MGD).

 
 
E.
Colorado River Cooperative Agreement shall mean the agreement dated May 15, 2012
between Denver Water and various governmental and non-governmental entities
located west of the Continental Divide, including, but not limited to, Board of
County Commissioners for the Counties of Eagle, Grand and Summit, the Colorado
River Water Conservation District, and the Cities of Glenwood Springs and Rifle.

 
 
F.
Delivery Volume shall mean a specific volume of water measured in terms of
acre-feet or million gallons delivered over a specified time period such as a
day, a month or a year.

 
 
G.
Denver Water shall mean the City and County of Denver, Colorado, acting by and
through its Board of Water Commissioners.

 
 
H.
Executive Board shall mean the Executive Board of the Authority as determined
pursuant to this Agreement.

 

  I. Executive Director shall mean the Executive Director of the Authority.

 
 
J.
Infrastructure shall be divided into two separate terms:

 
 
 
 

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1.
Core   WISE   Project   Infrastructure shall  mean  infrastructure  that   is
necessary for the functioning of the WISE Project and is defined as such by the
Members. For example, Core WISE Project Infrastructure  shall include the
Temporary Interconnect, the Binney Plant Connection, and the Western Line. Core
WISE Project Infrastructure shall be  constructed or purchased pursuant to this
Agreement, the Western Pipeline Agreement or other agreement.

 
 
2.
Local Infrastructure shall mean infrastructure, not defined as Core WISE Project
Infrastructure, that is necessary for one or more Members to receive water from
the WISE Project. For example, the Chambers Pipeline is Local Infrastructure, as
are connections by Members to the Core WISE Project Infrastructure. Local
Infrastructure may be constructed in coordination with Core WISE Project
Infrastructure or may be constructed or purchased pursuant to agreement between
the Members interested in such infrastructure.

 

  K.
Member's Pro Rata Share shall be the fraction (displayed as a percentage) shown
in Exhibit C, the numerator of which is the Member's annual Subscription Amount
and the denominator of which is the total of all annual Subscription Amounts
(i.e., 7,225 acre-feet/year). By way of example, if a Member has a 1,445
acre-foot annual Subscription Amount, then any Member's Pro Rata Share would be
20%. The Member's Pro Rata Share shall be recalculated when there is a change in
the Member's annual Subscription Amount or the addition of new Members. While a
Member's Pro Rata Share may change as described herein, a Member's Subscription
Amount and Delivery Volume shall not be changed without such Member's consent
unless such Member is in breach of this Agreement. Additionally, a Member's Pro
Rata Share shall be adjusted based upon changes in the denominator (i.e., the
total of all annual Subscriptions Amounts).

 

  L.
Minimum Payment shall mean the required payments by the Authority pursuant to
Paragraph 3.5.3 of the WISE Delivery Agreement. Each Member is obligated to pay
its Pro Rata Share of the Minimum Payment.

 

  M.
Minimum Payment Commitment shall mean the annual commitment by a Member to pay
for a certain percentage of the Minimum Payment due pursuant to the WISE
Delivery Agreement. The Minimum Payment commitment is equal to each Member's Pro
Rata Share times the WISE raw water rate, as defined in the WISE Delivery
Agreement.
O&M shall mean operations and maintenance.

 

  N.
MGD shall mean millions of gallons of water per day and is a measure of flow
rate.

 

  O. O&M shall mean operations and maintenance.

 
 
 

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P.
Offered Delivery Amount shall mean the volume and flow rate of water offered by
Denver Water and Aurora to the Authority at the Delivery Location(s) subject to
the delivery volume and flow rate parameters set forth in  WISE Delivery
Agreement.

 
 
Q.
Operational Costs shall mean the actual operational costs associated with the
operation of the Core WISE Project Infrastructure, including, but not limited
to, electricity, periodic maintenance, personnel, chemicals, etc. as determined
by the Executive Board.

 
 
R.
Overhead Costs shall mean the actual overhead costs associated with the WISE
Project incurred by the Authority that include, but are not limited to, the
costs of insurance, accounting, legal and administration, as determined by the
Executive Board. The Authority shall provide or cause any or all of said
services to be provided by employees or independent contractor(s).

 
 
S.
South Metro Water Supply Authority shall mean the authority formed pursuant the
First Amended and Restated South Metro Water Supply Authority Intergovernmental
Agreement dated January 1, 2006.

 
 
T.
Subscription Amounts means the amount of water that a Member has subscribed to
pursuant to this Agreement and for which the Member is obligated to pay its Pro
Rata Share of the Minimum Payments pursuant to this  Agreement. Subscription
Amounts are shown in Exhibit C.

 

 
U.
TABOR shall mean the Taxpayer Bill of Rights as set forth in Section 20, Article
X of the Colorado Constitution.

 
 
V.
Temporary Interconnect shall mean the initial connection to the Aurora Water
treated water system as described in Section 3.2.2 of the WISE Delivery
Agreement.

 
 
W.
Western Pipeline shall mean a pipeline from the Temporary Interconnect (and
ultimately the Binney Plant Connection) southerly and then westerly through
Douglas County that is anticipated to be either the ECCV Western Pipeline or an
alternate western pipeline.

 
 
X.
WISE Delivery Agreement
shall mean the "WISE Partnership - Water Delivery Agreement between Denver Water, the City of Aurora, acting by and through its Utility Enterprise, and the South Metro WISE
 Authority"
 dated contemporaneously herewith, a copy of which is attached hereto as Exhibit D and incorporated herein.

 
 
Y.
WISE Project shall mean the project described in the WISE Delivery Agreement and
the Core WISE Project Infrastructure.

 
 
 

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    Capitalized terms not defined herein shall have the meaning and definition
as set forth in the WISE Delivery Agreement.
 
SECTION 3. MEMBERSHIP - INCLUSION
 

 
A.
The  initial  Members  of  the  Authority  shall  be  those  parties  executing  this
Agreement.

 
 
B.
Additional  Members  may  be  included  into  the  Authority  upon  satisfying  the
following requirements and procedures:

 
 
1.
To be considered for membership, a prospective member must be (i) a municipal or
quasi-municipal water provider or political subdivision of the state of
Colorado; and (ii) an enterprise as defined in TABOR.

 
 
2.
To be considered for membership, a political subdivision must file a written
request, approved by the governing body of the political subdivision, with the
authority to be included as a Member of the Authority.

 
 
3.
The Members of the Authority shall hold a hearing on the request at a publicly
noticed meeting of the Members.

 
 
4.
The Members of the Authority may approve, modify, or deny the request and may
impose such terms and conditions as the Members deem appropriate to further the
Authority=s purposes. The Members shall determine what, if any, contribution
will be  required  to  equitably reimburse the Authority for prior costs.
Material modifications to the request made by the Members shall be subject to
the approval of the requesting political subdivision.

 
 
5.
To approve the request as filed or as modified, the Members must find that there
exists or will exist in the foreseeable future an interrelationship between the
Authority and the political  subdivision  requesting membership, that the
inclusion of the political subdivision requesting membership will contribute to
the fulfillment of the Authority's purposes and such other findings as the
Members deem appropriate.

 
 
6.
Decisions by the Members in this Section 3.B. shall be by weighted majority of
Member present at an annual or special meeting of the Members. Each Member shall
have one (1) vote for each 100 acre-feet of Subscription Amount (rounded to the
nearest whole number).

 
 
C.
If a Member is dissolved or otherwise ceases to exist, then either (i) the plan
for dissolution  shall contain adequate provisions  acceptable to the Authority
for the
performance of all of such Member=s obligations to the Authority, or (ii) all
such obligations shall be fully paid prior to the effective date of dissolution.

 
 
 
 

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SECTION 4. MANAGEMENT / VOTING / DECISION MAKING
 

 
A.
Meetings  of  the  Members  of  the  Authority.  At  least  annually, but  as
often  as necessary to address items required  under this Agreement  or as
desired by  the Members, there shall be a meeting of all Members. At meetings of
the Members, each Member shall have one (1) vote. The annual meeting shall
be  called by the Executive Director. Special meetings of
the  Members  may  be  called by  the Executive  Director  of the
Authority,  the President  of the  Executive Board, or three Members and shall
be held following no less than 72 hour written notice to all Members. Two-thirds
of the Members shall be a quorum for the Members to conduct business. Members
shall appoint an  individual and alternate to act as a representative of the
Member at such meetings. Representatives of Members shall not  be  required  to
be  employees  of  a Member. In the event that there is any question about who
is an authorized  representative or alternate of a Member; the Executive
Director may require such designation to be in writing.

 

 
B.
Executive Board. There shall be created an Executive Board for the Authority.
The Executive Board shall be made up of five (5) Executive Board Members who
each serve two-year terms, except as noted below for initial terms of one-year
for two of the Executive Board Members. Terms shall run from annual meeting date
to annual meeting date. There shall be no limit on the number of terms that may
be served. Candidates for the Executive Board shall be representatives of the
Members. No Member shall have more than one Executive Board Member on the
Executive Board. Three (3) members of the Executive Board ("Large Executive
Board Members") shall be elected from representatives of the three (3) largest
Members plus ties ("Large Members"), measured by Subscription Amount.   Two 2)
members of the Executive Board ("Small Executive Board Members") shall be
elected from representatives of the remaining Members of the Authority who are
not Large Members plus ties ("Small Members"). Large Executive Board Members
shall be elected at-large by weighted vote of the Large Members present at the
annual meeting of the Members. Small Executive Board Members shall be elected
at-large by a weighted vote of the Small Members present at the annual meeting
of the Members. Each Member shall have one vote for each 100 acre­ feet of
Subscription Amount (rounded to the nearest whole number). Each Member shall
have its respective weighted vote for each Executive Board position on which
they are authorized to vote.
 
At the first meeting of the Authority immediately following the execution of
this Agreement, members of the Executive Board shall be elected as follows:
 
Position 1 - Large Member Representative (Two-Year Term)
Position 2 -Large Member Representative (Two-Year Term)
Position 3 -Large Member Representative (One-Year Term)
Position 4 - Small Member Representative {Two-Year Term)
Position 5 - Small Member Representative (One-Year Term)
 
 
Following the end of the first one-year terms, such positions shall thereafter
be elected to two-year terms so that in odd numbered years, three positions
shall be subject to regular election and in even numbered years, two positions
shall be subject to regular election.
 
 
Members of the Executive Board shall receive no compensation but may be
reimbursed for reasonable and necessary actual expenses incurred in the
performance of their official duties as members of the Executive Board.

 
 
 

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C.
Officers. The Executive Board shall elect a President, Vice President, and
Secretary-Treasurer who shall have the duties set forth in the Bylaws, if any
have been adopted.

 

 
D.
Administration.
 
 
1
Meetings. Meetings of the Executive Board may be called by the Executive
Director, any officer or any two members of the Executive Board
 
 
2
Quorum. A majority of the Executive Board shall be a quorum and will allow the
Executive Board to take action or make decisions.
 
 
3
Subcommittees. The Executive Board may appoint subcommittees made up of Members
as appropriate for carrying out WISE Project objectives.
 
 
4
Financial Records. The financial records of the Authority shall be kept by the
Executive Director.
 
 
5
Distribution of Information. Information sent or provided to one Member shall be
provided to all Members.
 
       
E.
Approval of Each Member Required. The following actions shall require the
approval of each Member:
 
 
1
Incurrence of any financial obligation for which a Member will be directly
responsible, except for the costs, fees, payments, and obligations set forth in
Section 6;
 
 
2
Sale or lease of Core WISE Project Infrastructure; and
 
 
3
Approval of the Western Line Agreement; and
 
             
4
Approval of the permit by the U.S. Army Corps of Engineers (Corps) allowing
water delivered under the WISE Delivery Agreement to be stored in Rueter-Hess
Reservoir; and
 
 
5
Amendments to the WISE Delivery Agreement; and
 
 
6
Amendments to this Agreement.
 
 
F.
Majority Approval Required. The following actions shall require majority
approval of all Members present at a meeting of the Members:
 
 
1
Assignments of a Member's Pro Rata Share not expressly permitted by Section 14;
and
 
 
2
Admission of new Members (pursuant to weighted voting as described in Section
3.B.).
 
 
G.
Executive Board Approval. Except for those actions set forth in Sections 4.E.,
4.F. and 5.D, all other actions or decisions shall be made by majority approval
of a quorum of the Executive Board.
 
 
H.
Meeting Attendance. Members of the Authority and of the Executive Board may
attend and participate in meetings in person, electronically, by
videoconference, telephonically and in any other manner permitted by Colorado
law and authorized by the Executive Board.
 
SECTION 5. POWERS OF THE AUTHORITY
       
A.
In addition to the general and broad powers specifically granted to the
Executive Board in this Agreement, including all of the powers set forth in
Section 29-1- 204.2, C.R.S. and Colorado law, the South Metro WISE Authority,
acting by and though its Executive Board, shall have the following authority,
powers, and duties:
 
 
1
To borrow money and contract to borrow money for the purpose of issuing revenue
Bonds, notes, Bond anticipation notes, or other obligations for any of the
Authority's corporate purposes and to fund or refund such obligations as
provided by statute;
 
 
2
To enter into contracts and agreements affecting the affairs of the Authority
including, but not limited to, contracts with the United States and the state of
Colorado and any of their agencies or instrumentalities, political subdivisions
of the state of Colorado, corporations, limited liability companies,
partnerships, limited partnerships, associations, organizations, or other legal
entities and individuals;
 
 
3
To open and utilize banking and checking accounts;
     

 
 
 

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4.
To provide for utilities and related services for the Authority, including but
not limited to potable water, and non-potable water;

 
 
5.
To make and pass resolutions and rules and regulations which are necessary for
the governance and management of the affairs of the Authority, for the execution
of the powers vested in the Authority, and for carrying out the provisions of
this Agreement;

 
 
6.
To prescribe a system of business administration, to create any and all
necessary offices, to establish the powers, duties, and compensation of all
employees, and to require and set the amount of all official bonds, if
necessary, for the protection of the funds and property of the Authority and to
pay for such bonds;

 
 
7.
The Authority may appoint and retain employees, agents, engineers, accountants,
attorneys and consultants  to make recommendations, coordinate Authority
activities, conduct business of the Authority, and act on behalf of the
Authority under such conditions and restrictions as shall be fixed by the
Executive Board;

 
 
8.
To adopt, implement and manage plans for the development of projects necessary
to implement the WISE Project;

 
 
9.
To cooperate with and exchange services, personnel, and information with any
federal, state, or local governmental agency;

 
 
10.
To procure insurance against any loss in connection with its property and other
assets including loans and loan notes in such amounts and from such insurers as
it may determine;

 
 
11.
To procure insurance or guarantees from any public or private entity, including
any department, agency, or instrumentality of the United States, for payment of
any Bonds issued by the Authority, including the power to pay premiums on any
such insurance;

 
 
12.
To receive and accept from any source gifts or contributions of money, property,
labor, or other things of value to be held, used, and applied to carry out the
purposes of this Agreement, including but not limited to gifts or grants from
any department, agency, or instrumentality of the United States for any purpose
consistent with the provisions of this Agreement;

 
 
13.
To operate its water systems, utilities, and other services related to the
purposes of the Authority as are necessary to serve customers of the Authority
and promote water conservation, reuse, and development. By execution of this
Agreement, the Members consent to the Authority's operation of a wholesale water
system within their respective service area. Notwithstanding  the foregoing, the
Authority shall not operate a retail water delivery system within the service
area of any Member without the prior consent of such Member;

 
 

 
 
 

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14.
To adopt and revise bylaws relating to the operation and business of the
Authority;

 
 
15.
To develop funding mechanisms that provide for meeting the costs of constructing
projects and other financial obligations related to the WISE Project and allow
for incl!vidual Members to determine how they meet their portion of those
obligations, including participation in common funding. Any funding mechanism
that obligates the Authority shall be approved by unanimous consent of the
Executive Board;

 
 
16.
To prepare an annual budget substantially in the form required by the Local
Government Budget Law of Colorado;

 
 
17.
To make surveys and conduct investigations to determine the best manner of
utilizing water within and without the Authority and to determine the amount of
such water supply, and to locate ditches, works, and reservoirs to store or
utilize water for municipal, domestic, irrigation, manufacturing, and all other
lawful purposes, and to make filings upon water and initiate appropriations for
the use and benefit of the Authority, and to perform all acts and things
necessary or advisable to adjudicate water rights or to secure an adequate
supply of water, present and future, for municipal, domestic, irrigation,
manufacturing, and other lawful purposes;

 
 
18.
Notwithstanding any provision hereof to the contrary, the Authority shall not
impose a tap fee or service charge on a retail customer without the consent of
the Member, if any, in which the retail customer is located;

 
 
19.
To generate and dispose of electric energy for water works purposes or any other
purpose of the Authority, and to lease water facilities or the flow of water for
generation of electric energy and may sell surplus energy, provided that nothing
herein shall be construed as permitting the Authority to distribute electric
energy to the general public;

 
 
20.
To establish and disband, from time to time, standing committees and ad hoc
committees as the Executive Board deems appropriate;

 
21.
To take positions on and advocate regarding the activities of other governmental
agencies and private entities  as such activities may be related to the purposes
of the Authority;

 
 
22.
To plan, organize, coordinate, and hold public meetings, forums, surveys, and
conferences for the purpose of education, providing information, and gathering
data and input as such may be related to the purposes of the Authority;

 
 

 
 
 

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23.
To have and exercise all rights and powers necessary to carry out the purposes
and intent of this Agreement, including any rights and powers incidental to or
implied from the specific powers granted to the Authority by this Agreement and
state law.

 
 
D.
Issuance of bonds or other debt by the Authority shall require unanimous
approval of all five (5) members of the Executive Board.

 
 
E.
The Authority has no power to levy a general ad valorem tax.

 
 
F.
The Executive Board shall comply with the provisions of Parts (1), (5), and
(6) of Section 29-1-204.2, C.R.S.

 
 
G.
The Members acknowledge that each Member enjoys the protections offered by the
Colorado Governmental Immunity Act. The Members understand and agree that each
is relying on and does not waive or intend to waive by this Agreement or any
provision hereof, the monetary limitations or any other rights, immunities, and
protections provided by the Colorado Governmental Immunity Act, C.R.S. Section
24-10-101, et seq., as from time to time amended, or otherwise available to the
Members.

 
SECTION 6. COSTS.
 
 
A.
Minimum Payment Obligations.

 
 
1.
Each Member shall be obligated to pay for the greater of:
(i) all water that it receives from the WISE Delivery Agreement pursuant to the terms of this Agreement; or (ii) its Pro Rata Share of the Minimum Payment set forth
in Exhibit C.

 
 
2.
Each Member shall deposit thirty-five percent (35%) of the Member's annual Pro
Rata Share of the Minimum Payment on 7,225 acre-feet with the Authority to be an
operational reserve ("Operational Reserve") as follows: each Member shall
deposit five percent (5%) of its Pro Rata Share of the Minimum Payment on  7,225
acre-feet  twenty-four (24) months following effective date of this Agreement
and (ii) each Member shall also make three (3) additional  installments equal to
ten percent (10%) of its Pro Rata Share of the Minimum Payment on 7,225
acre-feet beginning thirty-six months following the effective date of this
Agreement and annually thereafter until fully paid.

 
 
3.
The Operational Reserve shall be the  collective deposits of all other Members
and accounted for in such a way as to track amount deposited by the individual
Members.

 
 

 
 
 
 

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4.
The amount of the Operational Reserve may be increased or decreased at the
discretion of the Executive Board and it shall be utilized in the discretion of
the Executive Board.

 
 
5.
In the event that the Authority draws upon the Operational Reserve due to a
Member's failure to make timely payments due for water deliveries or its Pro
Rata Share of the Minimum Payment, the Member for which the withdrawal was made
shall be obligated to replenish the amount of the Operational Reserve used for
such purpose within thirty (30) days following notice of such withdrawal.
Withdrawals from the Operational Reserve shall be first from the amounts
deposited by the defaulting Member and then from the remaining Operational
Reserve funded by each Member's contribution on a pro-rata basis. Reimbursements
to the Operational Reserve shall be to each non-defaulting Member's contribution
on a pro-rata basis and then to the defaulting Member's contribution.

 

   B. DIA Connection Fees. Each Member shall pay its Pro-Rata Share of the DIA
Connection Fee to the Authority upon invoice by the Authority.          C.
Interconnect Payment. Each Member shall pay its Pro-Rata Share of the costs of
the Temporary Interconnect, as provided in Section 3.2.2 of the WDA, upon
invoice by the Authority.          D. Western Pipeline. The Members acknowledge
that additional infrastructure will include the Western Pipeline. Pursuant to
Paragraph 3.2.1 of the WISE Delivery Agreement, Denver Water and the Authority
shall cooperate and coordinate the planning, design, cost-sharing, construction
and operation of the Western Pipeline under the terms of a separate agreement
("Western Pipeline Agreement").          E. Binney Plant Connection. The costs
of the Binney Plant Connection, as described in the WISE Delivery Agreement,
shall be allocated by separate agreement among those Members using the line
generally in proportion to each Member's Pro-Rata Share.          F. Future
Treatment Costs. The costs of additional treatment, reverse-osmosis or
otherwise, as described in the WISE Delivery Agreement, shall be allocated by
separate agreement among those Members using such additional treatment generally
in proportion to each Member's Pro-Rata Share.          G. Non-reusable Water
Costs and Allocation. In the event that non-reusable water is delivered under
the WISE Delivery Agreement, such non-reusable water shall be allocated among
the Members based upon each Member's Pro-Rata Share.          H. Engineering and
Construction Costs.

 
 
 
 
 
 

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1.
Contemporaneously with the approval of a contract to provide the engineering for
the construction of any Core WISE Project Infrastructure, each Member shall
deposit its share of the engineering costs in an account established for that
purpose.

 
 
2.
Contemporaneously with the approval of a contract to construct any Core WISE
Project Infrastructure, each Member shall deposit its share of the construction
costs in an account established for that purpose.

 
 
3.
Upon approval by the Executive Board, Members may substitute other forms of
security (e.g., performance bond or Letter of Credit) in place of the deposit of
the Member's share.

 
 
4.
Engineering and Construction costs for Local Infrastructure may be addressed
along with Core WISE Project Infrastructure or may be addressed in a separate
agreement(s) between those Members using or having an ownership interest in such
infrastructure.

 

 
I.
Operational Costs - Fixed. For fixed Operational Costs (e.g., personnel costs
and periodic maintenance), as determined by the Executive Board, not included in
the rate charged under the WISE Delivery Agreement, the Members having the right
to use the infrastructure shall be billed based upon the Member's proportional
right to use the infrastructure. For example, if a Member has the right to
convey 1 MGD of water through a pipeline and all Members have the right to
convey 20 MGD of water through the pipeline, the Member is obligated to pay 5%
of the fixed Operational Costs associated with the pipeline.

 

 
J.
Operational  Costs  -  Variable. For variable Operational  Costs
(e.g.,  electricity, chemicals, etc.), as determined by the Executive Board, not
included  in the rate charged
under  the  WISE  Delivery  Agreement,  the  Members   using the infrastructure
shall be billed based upon the Member's proportional  use of the infrastructure.
For example, if a Member conveys 30 ac-ft of water  through a pipeline in one
month and a total of 300 ac-ft of water is conveyed  through that pipeline in
the same month, the Member is obligated to pay 10% of the Variable Operational
Costs.

 
 
K.
Overhead. The Overhead Costs shall be paid by the Members as set forth herein.

 

   1.  The Overhead Costs for the each succeeding fiscal year shall be estimated
by the Executive Board annually as part of its budgeting process.          2. As
a part of the annual budgeting process, the Executive Board shall submit to each
Member a statement of the Member's Pro Rata Share of the Overhead Costs as
determined by the Executive Board for the next fiscal year. Member's Pro Rata
Share of the Overhead Costs payment shall be due and payable in four (4) equal
installments on the first day of each calendar quarter (January 1, April I, July
1, October 1).

 
 
 

--------------------------------------------------------------------------------

 
 

 
3.
 By May 31st of each year the Executive Board shall give each Member a statement
showing the total Overhead Costs actually incurred by the Authority for the
prior year and each Member's Pro Rata Share thereof. In the event the total
payments which Member made for the prior year are less than Member's Pro Rata
Share of that fiscal year's Overhead Costs, then Member shall pay the difference
to the Authority in  a lump sum within sixty (60) days after receipt of such
statement from the Executive Board. Ifthe total of such quarterly payments is in
excess of Member's Pro Rata Share of such Overhead Costs, any such overpayment
shall be credited to the next quarterly payment(s) of Member's Pro Rata Share of
the Overhead Costs.

 
 
L.
Replacement Reserves. The Executive Board may establish replacement reserves and
require Members to contribute thereto in accordance with a Member's Pro­ Rata
Share or other equitable pro ration.

 

 
M.
 Miscellaneous Costs. Costs not otherwise covered in the foregoing and generally
applicable to the activities  of the Authority in furthering the WISE Project,
as reasonably determined by the Executive Board, shall be shared based upon each
Members Pro Rata Share.

 
SECTION 7. EXCESS AND ADDITIONAL DELIVERIES
 

 
A 
In the event that  additional  Offered  Delivery  Amounts  are
available  from  the WISE Project in excess of those set forth in 3.4.3a of the
WISE Delivery Agreement ("Excess Deliveries"), current Members shall have a
right but not the obligation to take their Pro-Rata Share of Excess Deliveries.

 
 
B.
If not all Members desire to take their full Pro-Rata Share of the Excess
Deliveries, the rights of those Members' desiring to take Excess Deliveries
shall be adjusted based on the ratio of their Pro-Rata Shares to  one another.
Additionally, a Member may take less than its Pro Rata Share, and in such event,
the lower percentage such Member desires to take shall be considered its Pro
Rata Share for purposes of determining the rights of the Members to the Excess
Deliveries. For example, if three Members desire to take Excess Deliveries and
Member 1 has a 10% Pro Rata Share, Member 2 has a 20% Pro Rata Share, and Member
3 has a 10% Pro Rata Share but only desires to use half of its Pro Rata Share,
their Pro Rata Shares for purposes of obtaining Excess Deliveries shall be
adjusted so that Member 1 has a 10/351h share (28.57%), Member 2 has a 20/35th
share (57.14%), and Member 3 has a 5;35th (14.29%) share. For purposes of this
paragraph, no Member may allocate any portion of its Pro Rata Share to another
Member.

 
 
C.
In the event that additional water is made available on a continuing basis under
the WISE Delivery Agreement thereby increasing the amount of water for which
Denver Water and Aurora Water commit to deliver to the Authority during each
Ten-Year  Block  ("Additional  Water"),  such  Additional  Water  will  be  made
available to the Members in a manner substantially similar to Excess Deliveries
as described above.

 
 

 
 
 

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SECTION 8. BILLING
 
    The Authority will invoice the Members for amounts due under this Agreement.
Members shall pay the Authority the amounts due within thirty (30)  days of
the  date of the invoice from the Authority. Member's Pro Rata Share of the
Overhead Costs will be billed annually and due quarterly pursuant to Section
6.K., above. Failure of a Member to pay the amounts due under this Agreement
shall be a breach of this Agreement.
 
SECTION 9. DEFAULT I REMEDIES
 

 
A.
In the event the Authority or any Party alleges that  either the Authority or
any Party is in breach or default of this Agreement, the non-defaulting party
shall first notify such defaulting party, the Authority, and other Members in
writing of such default and specify the exact nature of the default in such
notice ("Default Notice"). Following a Default Notice, the following shall
constitute an "Event of Default" under this Agreement:

 
 
1.
In the case of non-payment of any amounts due under this Agreement, the failure
of the defaulting party to pay all amounts due as specified in the Default
Notice within five (5) calendar days from receipt of the Default Notice; and

 
 
2.
Except in the case of non-payment of amounts due under this Agreement, the
failure of the defaulting party to cure any non-monetary default described in
the Default Notice within thirty (30) calendar days  from receipt of
the  Default Notice. Provided, however, (i) if such default is capable of being
cured, (ii) the defaulting party commences such cure within said thirty (30)
calendar day period,  and (iii) the defaulting party diligently prosecutes such
cure to completion, then the defaulting party shall have an additional period of
time as is reasonably necessary to cure such non-monetary default; however, in
no event shall the period to cure exceed ninety (90) calendar days from the
defaulting party's receipt of the Default Notice, unless approved by the
Executive Board.

 
 
B.
Without the need for a Default Notice, the following shall also be deemed an
immediate Event of Default: the Member (i) becomes insolvent; (ii) files a
voluntary petition in bankruptcy; (iii) is adjudicated bankrupt pursuant to an
involuntary petition in bankruptcy; or (iv) has a receiver appointed for it.

 
 
C.
If an Event of Default occurs under this Agreement, the defaulting party shall
be subject to the following:

 
 
1.
In the event of the failure of a Member to pay amounts due hereunder and for
which a deposit is held (e.g., Minimum Payments), the Authority may use the
funds held in deposit by the Member to pay the amounts due by that Member. Such
payment from deposits by the Authority shall not constitute a cure by the
defaulting party;

 
 

 
 

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2.
The Executive Board may, in its discretion, interrupt  the Defaulting Party's
deliveries from or use of the WISE Project; provided such use shall be
reinstated upon a complete cure of the Event of Default if the Defaulting Party
retains its rights to its Pro-Rata Share at the time of such cure;

 
 
3.
A one time late fee of 5% (the "Late Fee") of the amount due shall be imposed
upon each monetary Event of Default;

 
 
4.
Upon a monetary Event of Default, in addition to the Late Fee, all amounts due
but unpaid shall be subject to interest at 1.5% per month which amount shall
accrue from the date that the payment was originally due;

 
 
5.
All late fees, additional costs, and other fees imposed on the Members or
Authority pursuant to the WISE Delivery Agreement, as the result of a Member's
breach of this Agreement, shall be paid by the defaulting Member. The Executive
Board may develop and adopt terms for imposing additional fees for breach of
this Agreement in the Bylaws.

 
 
6.
Each Member agrees that the amounts due, but unpaid, under this Agreement shall
be deemed a  consensual lien upon each respective Member's rights in the WISE
Project and rights under this Agreement. Ifa Member fails to cure amounts due
under this Agreement within 180 days from the date at which the amounts were
due, then the Authority may (i) foreclose on the Member's rights under this
Agreement in the same manner as the foreclosure of a mechanic's lien; (ii)
foreclose on the Member's rights under this Agreement pursuant to judicial
foreclosure; or (iii) file for declaratory judgment in District Court seeking an
assignment and transfer of all rights and interests of the Member under this
Agreement to the Authority and/or the other Members and such other relief as may
be appropriate.

 
 
7.
If the amounts due to the Authority are not paid within sixty (60) days of the
date of the Default Notice, the Member in default agrees to impose a fee upon
all of its customers sufficient to pay the amounts due pursuant to this
Agreement. In the event that said Member refuses to impose such fee, the
Authority may initiate a District Court action for declaratory judgment and
injunction or specific performance imposing such fee upon said Member's
customers. The Members agree to cooperate with the Authority in the use of this
remedy.

 
 

 
 
 

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8.
The Authority may file suit in the Douglas or Arapahoe County District Court to
recover amounts due and seek damages for breach of this Agreement by any Member.
By execution of this Agreement, upon service of process of a suit to recover
amounts due and seek damages for a breach of this Agreement, each Member shall
be deemed to have confessed judgment in favor of the Authority for all amounts
due pursuant to the Minimum Payment Obligations provisions in Section 6.A.1. of
the Agreement. Such confession of judgment shall include  reasonable attorney's
fees and costs seeking entry of this judgment and pre- and post­
judgment  interest on the amounts due at the rates set forth herein.

 
 
9.
In the event of a breach of any provision of this Agreement, in addition to all
contractual remedies, any non-defaulting Party to this Agreement may seek, from
the Douglas or Arapahoe County District Court, temporary and/or permanent
restraining orders, orders of  specific performance, or other equitable relief
to compel the defaulting Party to perform in accordance with the terms and
obligations set forth under this Agreement.

 
 
10.
Any defaulting Member shall remain obligated to pay its Pro Rata Share of the
Minimum Payment despite any temporary reduction in the Minimum Payment
under  the  WISE  Delivery  Agreement. Notwithstanding the foregoing, the
Executive Board may, but is not obligated to, agree to an equitable adjustment
of amounts due pursuant to the defaulting Member's Pro Rata Share of the Minimum
Payment.

 
 
11.
All remedies set forth in this Agreement shall be cumulative and not exclusive.

 
 
D.
The pursuit or non-pursuit of the various remedies provided herein  shall  not
relieve any Member from making payments required in  this  Agreement, including,
but not limited to, the Subscription Fee, Take-or-Pay Payments, Core WISE
Infrastructure costs, etc.

 
 
E.
In the event that a defaulting Member does not or can not be required to cure
its default under this Agreement and the defaulting Member is relieved of any or
all of its obligations hereunder by a court of competent jurisdiction, then the
defaulting Member shall forfeit to the Authority all of its rights, title,
interest, and capacity as a Member in the WISE Project under this Agreement.

 
SECTION 10. DISPUTE RESOLUTION
 
    Without relieving Members of the obligation to pay amounts billed as part of
ongoing operations hereunder and without limiting the Executive Board's and/or
the Authority's right to pursue remedies under Section 9, in the event of a
dispute about the amounts due or over any provisions of this Agreement, any
Member or the Authority may file a written appeal concerning such dispute to the
Executive Board. Within thirty (30) calendar days following the receipt of a
written appeal and after written notice to the parties in dispute, the Executive
Board shall hold a hearing and provide the parties in dispute with an
opportunity to be heard. The Executive Board member(s) representing any party in
dispute shall not participate. The Executive Board, by majority vote of all
eligible members, shall provide a written decision within 15 days following the
hearing. If,after the decision by the Executive Board, the dispute is not
resolved, the decision may be appealed to a neutral mediator (e.g., AAA, JAG, or
other entity providing non-judicial resolution) in non-binding mediation.
Non-binding mediation shall take place within forty-five (45) calendar days
following the decision of the Executive Board. If, after a decision by the
neutral mediator or expiration of the forty-five (45) calendar days, the dispute
is not resolved, any of the parties may seek judicial resolution by filing an
action in the Douglas or Arapahoe County District Court.
 
 
 

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SECTION 11. OWNERSHIP OF EASEMENTS, PIPELINE AND INFRASTRUCTURE
 
    Core WISE Project Infrastructure and Local Infrastructure and associated
real property interests may be held in the name of the Authority or in one or
more Members. The Executive Board shall determine ownership with respect to Core
WISE Project Infrastructure and the participating Members shall determine
ownership with respect to Local Infrastructure pursuant to separate agreement.
Notwithstanding the foregoing, this Section does not address right of use or
ownership of capacity in Core WISE Project Infrastructure and Local
Infrastructure each of which shall be addressed inone or more separate
agreements.
 
SECTION 12. OPERATIONS AND MAINTENANCE
 
 
A.
The Executive Board shall operate and maintain the WISE Project in the manner
that it decides is in the best interests of the Members and in coordination with
Aurora and Denver Water pursuant to the WISE Delivery Agreement.

 
 
B.
The Executive Board shall maintain the WISE Project in a manner that will protect the investment of the Members and in accordance with the generally accepted practices within the industry.

 

 
C.
The Members acknowledge that the water delivered through the WISE Project is
currently chloraminated. Each Member shall be obligated to take such action as
it deems necessary, at each Member's own cost, to take deliveries of
chloraminated water.

 
 
D.
Nothing herein shall prevent or restrict any Member from providing wholesale or retail water service consistent with the terms hereof and Colorado law.

SECTION 13. WISE DELIVERY AGREEMENT AND CRCA PROVISIONS
 
    Pursuant to the WISE Delivery Agreement, the Members acknowledge: (i) that
they can not rely upon the WISE Deliveries as their sole source of water; (ii)
that the water being made available under the WISE Delivery Agreement is
permanent, variable, and interruptible pursuant to the terms of the WISE
Delivery Agreement; and (iii) the need to maintain existing water supplies,
develop new water supplies, or have adequate storage available to meet their
demands when WISE deliveries are interrupted under the terms of the WISE
Delivery Agreement. The Members further acknowledge and agree to abide by the
following provisions of the CRCA.
 
 
 

--------------------------------------------------------------------------------

 

 
A.
West Slope Charge. Pursuant to the WISE Delivery Agreement, the Authority and
the Members are obligated to pay amounts set forth in the West Slope Charge
Agreement. The West Slope Charge is included in the rates described in and set
pursuant to the WISE Delivery Agreement.

 
 
B.
All Members also agree to:

 
 
1.
Abstain permanently from pursuing or participating in any project that would
result in any new depletion from the Colorado River and its tributaries
above  the confluence with the Gunnison River, including without limitation the
Eagle River (with the exception of the Eagle River MOU for Aurora and the Upper
Colorado Cooperative Project). Pursuing or participating in a project means
seeking formal approval of any aspect of a project in a regulatory or judicial
forum, but does not include conducting various planning activities such as
feasibility studies.

 
 
2.
Abstain from pursuing or participating in any project that would result in
diversions from the Colorado River Basin within Water Divisions Nos. 4 and 6, or
downstream from the confluence of the Gunnison and Colorado Rivers in Water
Division No. 5 for a period of 25 years. Pursuing or participating in a project
means seeking formal approval of any aspect of a project in a regulatory or
judicial forum, but does not include conducting various planning activities such
as feasibility studies. This abstention period would be reduced to 15 years if,
within the first 10 years following execution of this agreement, the NEPA
permitting process for the Upper Colorado Cooperative Project has not been
initiated. If construction of a cooperative project commences within  20 years
from the date of this agreement, then the abstention period under this paragraph
would be extended for an additional IO years (a total of 35 years).

 
 
3.
No later than June 1, 2016, Members agree to adopt and implement a conservation
plan that would achieve results similar or proportionately the same as Denver
Water's.

 
    It is also acknowledged that upon withdrawal  of a Member,  as set forth
herein, the provisions of the CRCA shall no longer apply to such Member.
 
SECTION 14. ASSIGNMENT AND SALE OF RIGHTS
 
 
 
A.
 A Member's rights under this Agreement may be assigned and/or sold, but only
according the provisions of this Section.

 
 
B.
In no event shall a Member sell, assign, or convey its rights in the WISE
Project to an entity that is not (i) a municipal  or quasi-municipal water
provider  or political subdivision of the state of Colorado; and (ii) an
enterprise as defmed in TABOR. Notwithstanding the following, a Member may
assign its right in the WISE Project and rights under this Agreement, in whole
or in part, to one or more Members without restriction.

 
 
 

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C.
If at any time during the term of this Agreement, any Member ("Selling Member")
desires to assign or sell its Pro-Rata Share under this Agreement to a
non-Member, or any portion thereof, ("Selling Member's Pro-Rata Share") and
receives a bona fide offer therefor acceptable to the Selling Member ("Offer"),
the other Members, and the Authority itself shall be given written notice of
such offer and the terms thereof, together with a copy of the Offer ("Offer
Notice"). The other Members, or Authority may each have an opportunity to
purchase the Selling Member's Pro-Rata Share, to the extent rights remain
available, in the order and on the terms set forth herein.

 
 
1.
Members: Upon receipt of the Offer Notice, each Member shall have the right to
purchase some or all of the Selling Member's Pro-Rata Share described in the
Offer Notice upon terms and conditions that are the same as described in the
Offer Notice ("Member's Right of First Refusal"). The Members desiring to
purchase the Selling Member's Pro-Rata Share shall provide written notice of
such desire to the Selling Member, other Members, and the Authority within
thirty (30) days receipt of the Offer Notice.
 
If more than one Member desires to purchase some or all the Selling Member's
Pro-Rata Share, the amount of Pro-Rata Share to be purchased by each Member
shall be divided between them in any way they mutually agree. Ifthe Members
desiring to purchase the Selling Member's Pro-Rata Share cannot mutually agree
on the rights to be purchased by each Member within fifteen (15) days following
the expiration of the thirty (30) days following the Offer Notice, each Member
shall be entitled to purchase that proportion of the Selling Member's Pro-Rata
Share which that Member's Pro-Rata Share bears to the total of Pro-Rata Share
then owned by the other Members desiring to purchase the Selling Member's
Pro-Rata Share.

 
 
2.
The Authority: Ifthe other Members elect to purchase either none or less than
all of the Selling Member's Pro-Rata Share described in the Offer Notice, then
the Authority shall have the right to purchase some or all of the Selling
Member's Pro-Rata Share not to be purchased by the Other Members upon terms and
conditions which are the same as described in the Offer Notice (the "Authority
Right of First Refusal"). Within thirty (30) days following the expiration of
Other Members Right of First Refusal, the Authority shall give notice to the
Selling Member, Members, and Other Members indicating the amount of Pro-Rata
Share that the Authority desires to purchase.

 
 
 

--------------------------------------------------------------------------------

 
 
3.
Non-Member: If the other Members elect to purchase either none or less than all
of the Selling Member's Pro-Rata Share described in the Offer Notice; and (ii)
the Authority elects to purchase either none or less than all of the remaining
Selling Member's Pro-Rata Share described in the Offer Notice, the Selling
Member giving the Offer Notice may consummate a third-party transaction for the
transfer of the Selling Member's Pro-Rata Share not to be purchased by the
entities with Rights of First Refusal, as described above, within one hundred
twenty (120) days after expiration of the Authority's Right of First Refusal at
a price and on terms and conditions not more favorable than set forth in the
Offer Notice. Any proposed transfer of any of the Selling Member Pro-Rata Share
which is to close after one (1) calendar year from the expiration of the Other
Members Right of First Refusal, shall again be subject to the Right of First
Refusal of all of the entities described in this Section and shall require
compliance by the Selling Member with the procedures described in this Section.

 
 
D.
The exercise or non-exercise of the other Members or Authority of their
respective Rights of First Refusal pursuant to this Section  shall
not  adversely affect any Right of First Refusal with respect to subsequent
sales of any Selling Member's Pro-Rata Share.

 
 
E.
Any party purchasing the Selling Member's Pro-Rata Share shall become a Member,
if they are not already a Member, and shall execute this Agreement and be bound
by its terms.

 
 
F.
In the event that a Member merges into or consolidates with another Member or
non-Member, the Pro-Rata Share owned by the Member shall remain with the Member
and then be owned by the merged or consolidated entity, who shall be bound by
the terms of this Agreement. Notwithstanding the foregoing, non­ Members shall
have no vote in the affairs of the Authority.

 
 
G.
Notwithstanding the provisions of this Section, all Members shall have the
absolute right to assign their respective Pro-Rata Share and rights under this
Agreement to a financing entity at any time after this Agreement is in effect.
After such assignment the assignor may continue to discharge any financial
obligations under this Agreement on behalf of their respective financing entity.
Except for the limited right to obtain a direct assignment of the assignor's
interest and the other provisions of this paragraph, the financing entities
shall be subject to all rights and obligations of the respective Member under
this Agreement. In no event shall the assignment to the financing entity trigger
application of the provisions  of the Right of First Refusal set forth in this
Section. No financing entity shall have Right of First Refusal, as described in
this Section. Notwithstanding the foregoing, financing entities shall have no
vote in the affairs of the Authority.

 
 

 
 
 
 

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SECTION 15. SUPERCESSION
 
    Upon execution, this Agreement shall supersede and replace the Cost Sharing
PA and the Cost Sharing PA shall have no further force or effect.
 
SECTION 16. WITHDRAWALff ERMINATION BY A MEMBER
 
    Any Member shall be deemed to have withdrawn from this Agreement and to have
terminated its obligations hereunder only upon sale or assignment of all of its
Pro-Rata Share and rights under this Agreement.
 
SECTION 17. DEADLOCK
 
 
A.
Except as applied to any Member(s) in breach of this  Agreement, it is the
intention of the Members and the Authority that the provisions of this Agreement
shall not be interpreted in such a way to limit or interrupt the use of the WISE
Project for its intended purposes.

 
 
B.
A "deadlock" of the Members, for purposes of this Section, is hereby defined as
being a situation in which the Members are so divided respecting decision making
under and the management of the WISE Project that the votes required for action
by the Members cannot be obtained for a continuous period equal to or exceeding
ninety (90) days ("Deadlock Period"). A Deadlock shall be deemed a breach of
this Agreement.

 
 
C.
Upon a Deadlock of the Members, as defmed in this Section 17, each Member shall
have the right to file an action with the Douglas or Arapahoe County District
Court to (i) ensure that the WISE Project can be used for its intended purposes;
(ii) to resolve the issue(s) that have caused the deadlock; and (iii) to seek
such other relief as is deemed appropriate by the Court, which may include the
appointment of a receiver.

 
SECTION 18. WISE DELIVERY AGREEMENT
 
    The Members agree that they shall not take any action or fail to take any
action that would be a violation of the terms of the WISE Delivery Agreement or
cause the Authority to be in breach of the terms of the WISE Delivery Agreement.
Use of all water received by Members (or their assignees or Lessees) shall
conform with the limitations and obligations set forth in the WISE Delivery
Agreement.
 
SECTION 19. MISCELLANEOUS
 
A.           Term: The term of this Agreement shall be perpetual.
 
 
B.
Enterprise. By executing this Agreement, each Member represents and warrants
that it is acting as an enterprise, as defmed in TABOR. Each Member further
affirms and agrees to maintain its enterprise status for the term of this
Agreement.

 
 

 
 
 
 

--------------------------------------------------------------------------------

 
 
 
C.
Interpretation. To
the greatest extent possible, the terms of this Agreement shall be interpreted so that they do not conflict with the provisions -of the WISE Delivery Agreement.

 
 
D.
Prevailing Party: In the event of any Gudicial or non-judicial) action or
proceeding between Members and/or the Authority to enforce any provision of this
Agreement, the losing party, shall pay to the prevailing party all costs and
expenses, including without limitations, reasonable attorneys' fees and
expenses, incurred in such action or proceeding and in any appeal in connection
by such prevailing party. The "prevailing party" shall mean the party who
substantially obtains or defeats the relief sought, as the case may be, whether
by compromise, settlement or judgment. This Section is intended to be severable
from the other provisions of this Agreement, and the prevailing party's rights
under this Section shall not merge into any judgment and any judgment shall
survive until all such fees and costs have been paid.

 
 
E.
Notices: All notices, correspondence and other communications required or
permitted by this Agreement shall be in writing and may be delivered by one of
the following means:

 
 
1.
In person (by hand delivery or professional messenger service).

 
 
2.
By first class mail. Any such notice sent by mail shall be deemed to have been
duly given and received five (5) business days after the same is mailed within
the continental United States.

 
 
3.
By Express Mail of the U.S. Postal Service or Federal Express or any other
courier service guaranteeing overnight delivery. Notices delivered by overnight
service shall be deemed to have been given one (1) business day after delivery
of the same to the U.S. Postal Service or private courier.

 
 
4.
By facsimile transmission. If any notice is transmitted by facsimile
transmission or similar means, the same shall be deemed given upon confirmation
of transmission thereof.

 
 
5.
By e-mail. Ifany notice is transmitted by e-mail, the same shall be deemed given
upon confirmation of receipt thereof.

All notices shall be addressed as set forth in Exhibit A or at other such
addresses as the Members/Authority may hereafter or from time to time designate
by written notice to the other Members/Authority.
 
 
F.
Not  Subject  to  Annual  Appropriation:  This Agreement shall not be
subject  to annual appropriation.

 
 

 
 
 

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G.
Relationship of Members. This Agreement does not and shall not be construed as
creating a relationship of joint venturers, agency, partners, or
employer-employee between the Members.

 
 
H.
Liability of Members. No provision, covenant or agreement contained in this
Agreement, nor any obligations herein imposed upon each Member nor the breach
thereof, nor the issuance and sale of any bonds by a Member, shall constitute or
create an indebtedness of the other Members within the meaning of any Colorado
constitutional or statutory provision. Unless otherwise agreed in writing
between any of the Members, no Member shall have any obligation whatsoever to
repay any debt or liability of the other Member.

 

 
I.
Assignment. Except as provided in Sections 14, neither this Agreement, nor any
of a Member's rights, obligations, duties or authority hereunder may be assigned
in whole or in part by such Member without the prior written consent of a
majority of all Members. Any such attempt of assignment shall be deemed void and
of no force and effect. Consent to one assignment shall not be deemed to be
consent to any subsequent assignment, nor the waiver of any right to consent to
such subsequent assignment.

 

 
J.
New  Entity  Assignment. Notwithstanding the foregoing paragraph, in the  event
that all of the Members believe that it is in the best interests of the Members
and the Authority to terminate this Agreement and form a new Title 29 or Title
32 governmental entity and for the new governmental entity to enter into the
WISE
Delivery   Agreement,   the  Authority   agrees  to  fully   cooperate  with  such
termination and assignment.

 
 
K.
Modification. This Agreement may be modified, amended, changed or terminated, in
whole or in part, only by an agreement in writing duly authorized by the
Authority and all of the Members. No consent of any third party shall be
required for the negotiation and execution of any such agreement.

 
 
L.
Waiver. The waiver of a breach of any of the provisions of this Agreement by a
Member or the Authority shall not constitute a continuing waiver or a waiver of
any subsequent breach of the same or another provision of this Agreement.

 
 
M.
Integration. This Agreement contains the entire agreement between and among the
Members and the Authority and no statement, promise or inducement made by a
Member, the Authority or their employees or agents that are not contained in
this Agreement shall be valid or binding.

 
 
N.
Severability. Invalidation of any of the provisions of this Agreement or of any
paragraph, sentence, clause, phrase, or word herein, or the application thereof
in any given circumstance, shall not affect the validity of any other provision
of this Agreement.

 
 

 
 
 

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O.
Headings   for   Convenience   Only.  The  headings,   captions  and  titles  contained
herein are intended for convenience and reference only and are not  intended to
define, limit
or  describe  the  scope  or  intent  of  any  of  the  provisions  of  this
Agreement.

 
 
P.
No  Third  Party
 Beneficiaries.  There  are  no  express  or  implied  third  party
beneficiaries  of this Agreement. No third party has any right to  enforce this
Agreement.

 
 
Q.
Amounts   Remain  Due.  In the  event  that  this  Agreement  is
terminated  for  any reason, all amounts due by Members pursuant to this
Agreement shall remain due and payable and shall survive the termination of this
Agreement.

 

 
R.
Counterparts. This Agreement  may be executed in counterparts,  each of which,
when combined, shall be deemed to be an original. Facsimile or scanned
signatures shall be an acceptable form of execution of this Agreement.

 

 
S.
Expansions   of   the   WISE   Project.  No  Member  shall  have  any  obligation  to
participate  in  expansions  of  the  WISE  Project  beyond  the  amount  of  water
committed to under this Agreement.

 
SECTION 20. CONTINGENCIES
 
 
A.
Pending satisfactiOn of the conditions outlined in Section 20.B., the Authority,
Members and Executive Board shall not exercise any of the powers granted under
Sections 5 and 6, other than the following expenses incurred by the Authority
and approved by the Executive Board shall be assessed to the Members based on
each Member's Pro Rata Share:

 
 
1.
administrative and overhead expenses of  the Authority as described in Section
6.K.; and

 
 
2.
expenses incurred in the ongoing due diligence on the WISE Project, including
the satisfaction of the conditions under the WISE Delivery Agreement and this
Agreement such as the Western Pipeline Agreement and Condition 52.

 
 
B.
Except as set forth in Section 20.A., Sections 5 and 6 of this Agreement shall
not effective until the following conditions have been met:

 
 
1.
Westem Pipeline. The execution of the Western Pipeline agreement which shall
include provisions ensuring the financing thereof, referenced in Section 6.D. of
this Agreement;

 
 
2.
Condition 52. The issuance of a permit satisfactory to all Members by the U.S.
Army Corps of Engineers (Corps) allowing water delivered under the WISE Delivery
Agreement to be stored in Rueter-Hess Reservoir; and

 
 
3.
CRCA. The complete execution (not contingent upon the approval of any additional
parties) of the CRCA.

 
 
 

--------------------------------------------------------------------------------

 
    Sections 5 and 6 shall be effective and fully enforceable on the date when
last of the foregoing contingencies has been met. If the foregoing contingencies
have not been satisfied as of December 31, 2013, this Agreement shall terminate
unless the dates set forth in the Agreement are extended by the Members. Any
extension shall be an amendment to this Agreement and approved as required
herein.
 
EXHIBITS
 
A -Name, address, and contact information for each Member
B - Section 29-1-204.2, C.R.S.
C - Members' Pro Rata Share and Subscription Amount
D -WISE Delivery Agreement

 
[SIGNATURE PAGE(S) TO FOLLOW]
 
 
 
 
 
 
 
 
 
 
 
 

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EXHIBIT A
LIST OF MEMBERS AND CONTACT INFORMATION
 
Centennial Water & Sanitation District
62 West Plaza Drive
Highlands Ranch, CO 80126-2304
Attn: John Hendrick
Facsimile: 303-791-0437
E-mail: jhendrick@highlandsranch.org
Town of Castle Rock
175 Kellogg Court
Castle Rock, CO 80109
Attn: Heather Beasley
Facsimile: 303-688-0437
E-mail: hbeasely@crgov.com
   
Denver Southeast Suburban Water & Sanitation District
(dba Pinery Water and Wastewater District)
PO Box 1660
Parker, CO 80134
Attn: Charlie Krogh
Facsimile: 303-841-2123
E-mail: ckrogh@pinerywater.com
Cottonwood Water and Sanitation District
c/o Mulhern MRE, Inc.
Inverness Drive East, Suite 200
Inglewood, CO 80112
Attn: Patrick F. Mulhern
Facsimile: 303-414-0671
E-mail: pat@mulhernmre.com
    Inverness Water & Sanitation District
c/o Mulhern MRE, Inc.
2 Inverness Drive East, Suite 200
Inglewood, CO 80112
Attn: Patrick F. Mulhern
Facsimile: 303-414-0671
E-mail:  pat@mulhernmre.com
Dominion Water & Sanitation District
1805 Shea Center Drive, Suite 210
Highlands Ranch, CO 80129
Attn: Harold Smethills
Facsimile: 303-232-9088
E-mail:   harolds@sterlingranchcolorado.com
   
Parker Water and Sanitation District
19801 East Mainstreet
Parker, CO 80138
Attn: Ron Redd
Facsimile: (303) 901-0175
E-mail: rredd@pwsd.org
Meridian Metropolitan District
5750 DTC Parkway, Suite 200
Greenwood Village, CO 80111
Attn: Doug Scott
Facsimile: 303-740-6954
E-mail:  doug.scott@sheaproperties.com
    Stonegate Village Metropolitan District
c/o Mulhern MRE, Inc.
Inverness Drive East, Suite 200
Inglewood, CO 80112
Attn: Mitch Chambers
Facsimile: 303-414-0671
E-mail:  mitch@mulhernmre.com
Rangeview Metropolitan District
1490 Lafayette Street, Ste 203
Denver, CO 80218
Attn: Mark Harding
Facsimile: (303) 292-3475
E-mail:  mharding@purecyclewater.com

 
 
 
 
 
 

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West's Colorado Revised Statutes Annotated Title 29. Government--Local
General Provisions
Article 1. Budget and Services
Part 2. Intergovernmental Relationships (Refs & Annos)
 
C.R.SA. § 29-1-204.2
 
§ 29-1-204.2. Establishment of separate governmental entity to develop water
resources, systems, facilities, and drainage facilities

(1)            Any combination of municipalities, special districts, or other
political subdivisions of this state that are authorized to own and operate
water systems or facilities or drainage facilities may establish, by contract
with each other, a separate governmental entity, to be known as a water or
drainage authority, to be used by such contracting parties to effect the
development of water resources, systems, or facilities or of drainage facilities
in whole or in part for the benefit of the inhabitants of such contracting
parties or others at the discretion of the board of directors of the water or
drainage authority.
 
(2)
Any contract establishing such separate governmental entity shall specify:

 
(a)
The name and purpose of such entity and the functions or services to be provided
by such entity;

 
(b)
The establishment and organization of a governing body of the entity, which
shall be a board of directors in which all legislative power of the entity is
vested, including:

 
{I) The number  of directors, their manner of appointment, their terms of
office, their compensation, if any, and the procedure for filling vacancies on
the board;
 
{II) The officers of the entity, the manner of their selection, and their
duties;
 
{III) The voting requirements for action by the board; except that, unless
specifically provided otherwise, a majority of directors shall constitute a
quorum, and a majority of the quorum shall be necessary for any action taken by
the board;
 
{IV) The duties .of the board, which shall include the obligation to comply with the provisions of parts 1, 5, and 6 of this article;
 
(c)
 
Provisions for the disposition, division, or distribution of any property or
assets of the entity;

 
(d)            The term of the contract, which may be continued for a definite
term or until rescinded or terminated, and the method, if any, by which it may
be rescinded or terminated; except that such contract may not be rescinded or
terminated so long as the entity has bonds, notes, or other obligations
outstanding, unless provision for full payment of such obligations, by escrow or
otherwise, has been made pursuant to the terms of such obligations;
 
(e)            The conditions or requirements to be fulfilled for adding or
deleting parties to the contract in the future or for providing water services
and drainage facilities to others outside the boundaries of the contracting
parties.
 
(3)
The general powers of such entity shall include the following powers:

 
 
 
 
 
 

--------------------------------------------------------------------------------

 

EXHIBIT B
Section 29-1-204.2, C.R.S
As it exists on the effective date of this Agreement
 
(a)  To develop water resources, systems, or facilities or drainage facilities
in whole or in part for the benefit of the inhabitants of the contracting
parties or others, at the discretion of the board ofdirectors, subject to
fulfilling any conditions or requirements set forth in the contract establishing
the entity;
 
(b) To make and enter into contracts;
 
(c)            To employ agents and employees;
 
(d)      To acquire, construct, manage, maintain, or operate water systems,
facilities, works, or improvements, or drainage facilities, or any interest
therein;
 
(e)            To acquire, hold, lease (as lessor or lessee), sell, or otherwise
dispose of any real or personal property utilized only for the purposes of water
treatment, distribution, and wastewater disposal, or of drainage;
 
(f)            To condemn property for use as rights-of-way only if such
property is not owned by any public utility and devoted to such public use
pursuant to state authority;
 
(g)
To incur debts, liabilities, or obligations;

 
(h)
To sue and be sued in its own name;

 
(i)
To have and use a corporate seal;

 
G)              To fix, maintain, and revise fees, rates, and charges for
functions, services, or facilities provided by the entity;
 
(k)
To adopt, by resolution, regulations respecting the exercise of its powers and
the carrying out of its purpose;

 
(1)            To exercise any other powers which are essential to the provision
of functions, services, or facilities by the entity and which are specified in
the contract;
 
(m)            To do and perform any acts and things authorized by this section
under, through, or by means of an agent or by contracts with any person, firm,
or corporation;
 
(n)            To permit other municipalities, special districts, or political
subdivisions of this state that are authorized to supply water or to provide
drainage facilities to enter the contract at the discretion of the board of
directors, subject to fulfilling any and all conditions or requirements of the
contract establishing the entity; except that rates need not be uniform between
the authority and the contracting parties;
 
(o)
To provide for the rehabilitation  of any surfaces adversely affected by the
construction of water pipelines, facilities, or systems or of drainage
facilities through the rehabilitation of plant cover, soil stability, and other
measures appropriate to the subsequent beneficial use of such lands;

 
(p)            To justly indemnify property owners or others affected for any
losses or damages incurred, including reasonable attorney fees, or that may
subsequently be caused by or which result from actions of such corporations.
 
(4)            The separate governmental entity established by such contracting
parties shall be a political subdivision and a public corporation of the state,
separate from the parties to the contract. It shall have the duties, privileges,
immunities, rights, liabilities, and disabilities of a public body politic and
corporate. The provisions of articles 10.5 and 47 of title 11, C.R.S., shall
apply to moneys of the entity.
 
(5)
The bonds, notes, and other obligations of a water or drainage authority formed
under the proVIs1ons of this section shall not be the debts, liabilities, or
obligations of the original contracting parties or parties that may enter the
establishing contract in the future.

 

 
 
 

--------------------------------------------------------------------------------

 
EXHIBIT B
Section 29-1-204.2, C.R.S
As it exists on the effective date of this Agreement
 
 

 
(6) The contracting parties may provide in the contract for payment to the
separate governmental entity of funds from proprietary revenues for services
rendered by the entity, from proprietary revenues or other public funds as
contributions to defray the cost of any purpose set forth in the contract, and
from proprietary revenues or other public funds as advances for any purpose
subject to repayment by the entity.
 
 
(7)(a) To carry out the purposes for which the separate governmental entity was
established, the entity is authorized to issue bonds, notes, or other
obligations payable solely from the revenues derived from the function, service,
system, or facility or the combined functions, services, systems, or facilities
of the entity or from any other available funds of the entity. The terms,
conditions, and details of said bonds, notes, and other obligations, the
procedures related thereto, and the refunding thereof shall be set forth in the
resolution authorizing said bonds, notes, or other obligations and, as nearly as
may be practicable, shall be substantially the same as those provided in part 4
of article 35 of title 31, C.R.S., relating to water and sewer revenue bonds;
except that the purposes for which the same may be issued shall not be so
limited and except that said bonds, notes, and other obligations may be sold at
public or private sale.  Bonds, notes, or other obligations issued under this
subsection (7) shall not constitute an indebtedness of the entity or the
cooperating or contracting parties within the meaning of any constitutional or
statutory limitations or other provision. Each bond, note, or other obligation
issued under this subsection (7) shall recite in substance that said bond, note,
or other obligation, including the interest thereon, is payable solely from the
revenues and other available funds of the entity pledged for the payment thereof
and that said bond, note, or other obligation does not constitute a debt  of the
entity or the cooperating or contracting parties within the meaning of any
constitutional or statutory limitation or provision. Notwithstanding anything in
this section to the contrary, such bonds, notes, and other obligations may be
issued to mature at such times not beyond forty years from their respective
issue dates, shall bear interest at such rates, and shall be sold at, above, or
below the principal amount thereof, all as shall be determined by the board of
directors of the entity.
 
(b) The resolution, trust indenture, or other security agreement under which any
bonds, notes, or other obligations are issued shall constitute a contract with
the holders thereof, and it may contain such provisions as shall be determined
by the board of directors of the entity to be appropriate and necessary in
connection with the issuance thereof and to provide security for the payment
thereof, including, without limitation, any mortgage or other security interest
in any revenues, funds, rights, or properties of the entity. The bonds, notes,
and other obligations of the entity and the income therefrom shall be exempt
from taxation by this state, except inheritance, estate, and transfer taxes.
 
(8)            A separate governmental entity established by contract, if the
contract so provides, shall be the successor to any nonprofit corporation,
agency, or other entity theretofore organized by the contracting parties to
provide the same function, service, system, or facility, and such separate
governmental entity shall be entitled to all rights and privileges and shall
assume all obligations and liabilities of such other entity under existing
contracts to which such other entity is a party.
 
(9)      The authority granted pursuant to this section shall in no manner limit
the powers of governments to enter into intergovernmental cooperation or
contracts or to establish separate legal entities pursuant to the provisions of
section 29-1-203 or any other applicable law or otherwise to carry out their
powers under applicable statutory or charter provisions, nor shall such
authority limit the powers reserved to cities and towns by section 2 of article
XI of the state constitution. Nothing in this part 2 constitutes a legislative
declaration of preference for water systems or facilities or for drainage
facilities owned by separate governmental entities over water systems or
facilities or over drainage facilities owned by other or different entities.
 
 

 
 

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EXHIBIT B
Section 29-1-204.2, C.R.S
As it exists on the effective date of this Agreement

 
Credits
Formerly § 29-1-203.2. Added by Laws 1977, H.B.1211, § 1, eff. June 21, 1977.
Renumbered §
29-1-204.2. Amended by Laws 1982, H.B.1148, § 2, eff. March 17, 1982; Laws 2001,
Ch. 30, § 1,
eff. Aug. 8, 2001.
 

     C. R. S. A. § 29-1-204.2, CO ST § 29-1-204.2

 
 
Current through the Second Regular Session and
First Extraordinary Session of the 68th General
Assembly (2012)
 (C) 2013 Thomson Reuters. No claim to original U.S. Government Works.

 
 
 
 
 
 
 

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EXHIBIT C
MEMBERS' SUBSCRIPTION AMOUNTS
AND PRO RATA SHARE
[Revised*]
 

Member
Subscription Amount
 
Pro-Rata Share
 
Town of Castle Rock
1,000 ac-ft
    13.84 %
Centennial Water & Sanitation District
1,000 ac-ft
    13.84 %
Cottonwood Water & Sanitation District
400 ac-ft
    5.54 %
Denver Southeast Suburban Water and Sanitation District d/b/a Pinery Water and
Wastewater District
500 ac-ft
    6.92 %
Dominion Water & Sanitation District
1,325 ac-ft
    18.34 %
Inverness Water & Sanitation District
500 ac-ft
    6.92 %
Meridian Metropolitan District
300 ac-ft
    4.15 %
Parker Water & Sanitation District
1,200 ac-ft
    16.61 %
Rangeview Metropolitan District
500 ac-ft
    6.92 %
Stonegate Village Metropolitan District
500 ac-ft
    6.92 %
TOTAL
7,225 ac-ft
    100 %

 
 
* Amended 6/25/13 to reflect the withdrawal of Castle Pines North Metropolitan
District and determination of final subscription amounts by Dominion Water
& Sanitation District and Parker Water & Sanitation District.

 
 
 
 
 

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EXHIBIT D
WISE Delivery Agreement

 
 
 
 
 
 
 
 

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WISE Partnership - Water Delivery Agreement between
Denver Water, the City of Aurora, acting by and through its Utility Enterprise,
and the
South Metro WISE Authority
 
This Water Delivery Agreement ("Agreement") is entered into by the City and
County of Denver, acting by and through its Board of Water Commissioners
("Denver Water"), the City of Aurora acting by and through its Utility
Enterprise ("Aurora"), and the South Metro WISE Authority ("Authority'')
(individually, a "Party" and collectively, the "Parties").
 
Recitals
 
A.           Denver Water owns and operates a municipal water supply system that
provides water to the inhabitants of the City and County of Denver and by
contract to certain areas outside the boundaries of the City and County of
Denver.
 
B.           Aurora owns and operates a municipal water supply system that
provides water for inhabitants of the City of Aurora and by contract to certain
areas outside the City of Aurora.
 
C.           The Authority is comprise of ten (10) governmental or
quasi-governmental water providers seeking to develop through cooperation
between its Members new surface water supplies that will decrease reliance on
nontributary groundwater supplies. The Authority Members are also members of the
South Metro Water Supply Authority ("SMWSA").
 
D.           Denver Water and SMWSA entered into an agreement in 1999 to
investigate the feasibility of potential future cooperative water operations
between the Board and the SMWSA.
 
E.           Denver Water and Aurora entered into an Intergovernmental Agreement
dated April 12, 2006, committing to explore opportunities for mutually
beneficial arrangements that could include shared use of water resources and
water facilities.

F.           Denver Water and SMWSA entered into the Pilot Project Agreement
dated February 14, 2007, committing to investigate the feasibility of potential
future cooperative water operations, water efficiency, and delivery of water to
SMWSA.
 
G.           Denver Water, Aurora, and SMWSA previously executed a Memorandum of
Understanding (MOU) dated November 20, 2008, as amended by that certain
amendment dated July of 2009, to implement a cooperative study to identify water
resources, including infrastructure, that might be available for a joint water
supply project to facilitate efficient and cost-effective delivery of water.
 
H.           These combined investigations have shown the potential for regional
water resource operations that may significantly benefit all members of the
Partnership.
 
I.           These combined investigations have identified both periodic
available capacity in Aurora's existing Prairie Waters Project (PWP) and
periodic available water supplies that can be utilized by the Authority and
Denver Water.
 
 
 

--------------------------------------------------------------------------------

 
J.           Denver Water and Aurora entered into an Intergovernmental Agreement
dated August 16, 2012 that governs their operations under the WISE Project.
 
K.           Denver Water's participation in this Agreement includes providing
water from reusable return flows, which originate on the West Slope. To resolve
longstanding disputes with the West Slope, Denver Water has entered into the
Colorado River Cooperative Agreement (CRCA), which authorizes use of Denver
Water's reusable return flows in the WISE Partnership under certain terms and
conditions.
 
L.           The Authority and its Members have entered into the SM WISE IGA
defining the Members' participation in the WISE Project.
 
M.           Colorado law, C.R.S. § 29-1-201 et seq., authorizes and encourages
local governments to contract with one another to provide any function, service,
or facility, including the sharing of costs. Governments are specifically
authorized by C.R.S. § 31-35-402(1)(h) to enter into agreements for planning,
construction and operation of water facilities. All the Parties to this
Agreement are political subdivisions of the State of Colorado, and each is
authorized to acquire infrastructure and to operate water facilities.
 
N.           The Parties now wish to enter into this Agreement for water
deliveries pursuant to the WISE Partnership.  The Parties' intend that this
Agreement result in a permanent supply of water to the Authority, subject to
this Agreement's terms and conditions. This Agreement
should be construed in such a manner as to further the Parties' intent.

O.           Engineering studies based on historic hydrology have suggested that
in the future additional water may be available under the WISE Partnership,
assuming significant new infrastructure, and significant additional unused
return flows resulting from growth in Denver Water's and Aurora's customer
base.  While changes in future hydrology, demands, or water administration will
affect the volume of potential future deliveries, the Parties intend to
cooperate with each other to determine if increased WISE deliveries would be
feasible.   Ifthe Parties decide that increased WISE Deliveries are in their
collective interests, that additional water would be subject to a separate
agreement.

P.           The Parties are currently negotiating a Memorandum of Understanding
with Douglas County, Colorado that would create an option for the County to
acquire additional deliveries of water under the WISE Project in an amount up to
27,750 AF over a Ten-Year Block, as defined below. Such deliveries would be
provided under terms substantially similar to the terms of this Agreement, and
for the purpose of reducing reliance on nonrenewable groundwater by current and
future customers within existing service areas in Douglas County.
 
NOW, THEREFORE, Denver Water, Aurora, and the Authority agree as follows:
 
Article 1
Intent of the WISE Partnership
 
1.1           The Parties have been engaged in the development of a regional
water supply project, now known as the WISE Partnership (WISE). A fundamental
concept of WISE is to reduce the reliance of Authority Members on nonrenewable
groundwater and to create a dependable, albeit interruptible, surface water
supply for Authority Members. WISE would accomplish these goals by utilizing the
periodic unused or underused capacity in Aurora's PWP, and the construction or
acquisition of additional infrastructure, combined with the beneficial use by
the Authority of water supplies to be made available by Aurora and Denver Water.
Engineering studies conducted by the Parties have demonstrated a potential for a
dependable supply of water for the Authority utilizing such periodic unused
capacity and available water supplies.
 
 
 

--------------------------------------------------------------------------------

 
1.2           The Parties have determined that the joint use of infrastructure,
the delivery of water, and the financial arrangements in this Agreement will
benefit the health, safety and welfare of their respective citizens and
customers, enhancing water supplies while minimizing costs.
 
1.3           Denver Water and Aurora acknowledge that the Members of the
Authority will depend upon the water deliveries provided under this Agreement to
partially meet their future long-term water demands. The Members of the
Authority acknowledge that they cannot rely upon WISE deliveries as their sole
source of water supply. The water supply being made available to the Authority
by Aurora and Denver Water is permanent, variable, and interruptible under the
conditions described in this Agreement. The Authority agrees to require the
Members to acknowledge in the SM Wise IGA the need to maintain existing water
supplies, develop new water supplies, or have adequate storage available to meet
their demands when WISE deliveries are interrupted under the terms of this
Agreement.
 
Article 2
Definitions
 
"Abstention Provisions" shall mean those restrictions on the acquisition of new
supplies of water from the Colorado River Basin by the Authority and the Members
as set forth in the Colorado River Cooperative Agreement, effective as of the
date of this Agreement.
 
"AF" means acre-feet.
 
"Authority Service Area" means the aggregate water delivery service area within
Douglas County and Arapahoe County to which the Members are authorized to
provide water service.  The Authority Service Area within Douglas County and
Arapahoe County may be modified through inclusion, annexation, or contract in
the future. Any expansion of the Authority Service Area beyond Douglas County
and/or Arapahoe County is subject to the prior written approval of the Parties.
 
"Binney Plant" shall mean the Binney Water Purification Facility located north
of the Aurora Reservoir.
 
"Binney Plant Connection" shall have the meaning set forth in Paragraph 3.3.4.
 
"Colorado River Cooperative Agreement" or "CRCA" shall have the meaning set
forth in Recital K of this Agreement.
 
"Corps" shall mean the United States Army Corps of Engineers.

 
 

--------------------------------------------------------------------------------

 
"Delivery Location" shall have the meaning set forth in Paragraph 4.1.1.
 
"Delivery Obligation" shall mean a minimum delivery of 72,250 AF of water over
each Ten­ Year Block.
 
"Delivery Year" means each 12-month period beginning June 1 and ending the
following May 31.
 
"DIA Connection" means that interconnection between Denver Water's treated
distribution system near the Denver International Airport and Aurora's PWP as
described in Attachment B.
 
"DIA Connection Fee" means the payment made by the Authority to Denver Water
pursuant to Paragraph 3.3.1.
 
"Dominion Agreement" means that certain Intergovernmental  Agreement for
Temporary Lease of Water between Aurora and Dominion Water & Sanitation District
dated July 30, 2012 or any subsequent agreement(s) for delivery to Dominion at
an alternative point of delivery.
 
"ECCV" means the East Cherry Creek Valley Water and Sanitation District.
 
"ECCV Western Line" means the 48"-54" pipeline owned by ECCV that runs from the
vicinity of E-470 and Smoky Hill Road south and west along E-470/C-470 to the
vicinity of E-470 and University  Boulevard.
 
"Effective Date" shall have the meaning set forth in Paragraph 5.30.
 
"Joint Advisory Committee" shall mean that certain advisory committee formed by
the Parties pursuant to Paragraph 5 .1.
 
"Member" means a member of the Authority.  At the time of execution of this
Agreement, the Members are as follows:
    Town of Castle Rock
    Dominion Water & Sanitation District
    Stonegate Village Metropolitan District
    Cottonwood Water & Sanitation District
    Denver Southeast Suburban Water & Sanitation District (a/k/a Pinery Water
and Wastewater District)
    Centennial Water & Sanitation District Rangeview Metropolitan District
    Parker Water & Sanitation District
    Meridian Metropolitan District
    Inverness Water & Sanitation District

"MGD" means million gallons per day.
 
"Master Meter" shall refer to the primary meter through which deliveries are
made to the Authority; during the Phase In Period, through the Temporary
Interconnect and thereafter through the Binney Plant Connection.

 
 

--------------------------------------------------------------------------------

 

 
"Minimum Payment" shall have the meaning set forth in Paragraph 3.5.3.
 
"Offered Delivery Amount" means the volume and flow rate of water offered by
Denver Water and Aurora to the Authority at the Delivery Location(s) subject to
the delivery volume and flow rate parameters set forth in Paragraph 3.4.
 
"Phase In Period" means the period between the completion of the Temporary
Interconnect and May 31, 2020.
 
"Prairie Waters Project" or "PWP" means the water collection, conveyance,
storage and treatment system owned and operated by Aurora that delivers water
from the South Platte River north of Denver to and including the Binney Plant.
 
"SM WISE IGA" means the "South Metro WISE Authority Formation and Organizational
Intergovernmental Agreement" executed by the Members.
 
    "Temporary Interconnect" shall mean the connection between the Aurora
treated distribution system and the Western Pipeline as described in Paragraph
3.2.2.
 
"TDS" means ''Total Dissolved Solids" as set forth in Paragraph 3.6.2. "
 
TDS Commitment" shall have the meaning set forth in Paragraph 3.6.2.
 
"Ten-Year Block" means successive ten-year periods, starting with the ten-year
period of June 1, 2020 through May 31, 2030, and continuing for subsequent
consecutive ten-year periods.
 
 
"Total Actual Cost" means the total cost of the land acquisition, design,
permitting, construction, and related expenses of the DIA Connection.

 
"Water Infrastructure and Supply Efficiency Partnership" or "WISE Partnership"
or "WISE Project" or "WISE", as identified under Article 1, refers to the
cooperative water supply effort by Aurora, Denver Water, and the Authority to
develop efficient and cost effective water pursuant
to this Agreement.

"Western Pipeline" means a pipeline capable of delivering water from the Master
Meter to the Authority.
 
"West Slope Charge Agreement" shall mean an agreement between the Authority and
the Colorado River Water Conservation District in substantially the form of
Attachment D, the purpose of which is set forth in Paragraph 4.4.1.
 
Article 3
Water Supply
 
 
 

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3.1 Volume of Water. Aurora and Denver Water agree to make available for
delivery to the Authority a minimum amount of 72,250 acre-feet (AF) of water
over each Ten-Year Block, an average of 7,225 AF per year ("Delivery
Obligation"). Delivery of the full 7,225 AF on an annual average will be phased
in over the Phase In Period, as described in Paragraph 3.4. Water deliveries in
a particular Delivery Year will be governed by the parameters in Paragraph 3.4.
 
3.2 Infrastructure Necessary to Commence Deliveries. In order for any water to
be delivered from the PWP to the Authority additional infrastructure must be
constructed or acquired by the Parties.
 
3.2.1 Western Pipeline. Additional infrastructure will include either the ECCV
Western Pipeline or an alternate Western Pipeline. Denver Water and the
Authority shall cooperate and coordinate the planning, design, cost-sharing,
construction and operation of the Western Pipeline under the terms of a separate
agreement.
 
3.2.2 Construction of the Temporary Interconnect. The Authority is responsible,
at its own cost and expense, for the design and construction of the Temporary
Interconnect including acquiring all necessary permits and third party
approvals. The Authority's design and construction of the Temporary Interconnect
and the location of the same shall be subject to the specifications, approval
and acceptance of Aurora. Upon completion and Aurora's acceptance of the
Temporary Interconnect, the Authority shall convey to Aurora those portions of
the Temporary Interconnect (and easements as necessary) upstream of the
isolation valve (downstream of the meter vault) free of all liens and
encumbrances that impair the maintenance, operation or control of the Temporary
Interconnect and with a one year warranty. Aurora will thereafter own, maintain,
operate and control those portions of the Temporary Interconnect conveyed by the
Authority with associated maintenance or replacement costs to be borne by
Aurora.
 
3.2.3 Authority Infrastructure. Any additional infrastructure necessary for
Authority Members to take delivery of water from the Western Pipeline is the
responsibility of the Authority and shall not be included as WISE Facilities
described in Attachment C.

3.3 DIA Connection. In order for Denver Water and Aurora to begin delivery of
the full annual average of 7,225 AF, the DIA Connection will be required. Denver
Water agrees to complete construction of the DIA Connection on or before May 31,
2020, unless the Parties mutually agree to a different date. Denver Water shall
provide to the Authority updates on construction progress on an annual basis.
Denver Water will own and operate the DIA Connection.
 
 
 
 

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3.3.1 Payment of DIA Connection Fee. The Authority will pay to Denver Water the
fee described below for the construction of the DIA Connection. The first
payment of $352,821 will be due sixty days after the Effective Date of this
Agreement, as defined in Paragraph 5.30.
 

    Date Due         Payment Due    
see above
$              352,821
1/15/2014
$              529,231
1/15/2015
$              705,642
1/15/2016
$              882,052
1/15/2017
$           1,146,668
1/15/2018
$           1,146,668
1/15/2019
$           1,146,668
1/15/2020
$         .  1,146,668

 
 
The DIA Connection Fee payments are based on the current estimated cost of
constructing the DIA Connection. The infrastructure costs include all design,
engineering, permitting, land acquisition, and related expenses. In the event of
termination of this Agreement due to a default by the Authority, there shall be
no return of any DIA Connection Fee payments made prior to such default.

3.3.2 Reconciliation of the DIA Connection Fee Payments. The DIA Connection Fee
payments identified in Paragraph 3.3.1 represent the Authority's share of the
estimated cost of the DIA Connection. Should the Total Actual Cost of
construction of the DIA connection by Denver Water be greater than the DIA
Connection Fee, the Authority shall pay the remainder due on or before July 1,
2020, as provided for under Attachment B. Should the Total Actual Cost of the
DIA Connection be less than the DIA Connection Fee, the Authority shall be
 
refunded the overpayment by Denver on or before July 1, 2020.  In any event, the
Authority shall be provided copies of all invoices associated with the DIA
Connection construction and any calculations performed by Denver Water
in determining the respective balances or credits due.
 
3.3.3 Permits. Easements and Approvals. The Parties agree to cooperate to obtain
such easements, approvals and permits as are necessary for: (i) the construction
of the DIA
 
Connection and the Temporary Interconnect; (ii) any other infrastructure
reasonably necessary to fulfill the terms of this Agreement, and (iii) the
storage of WISE water in Rueter-Hess Reservoir.
 
3.3.4 Future Connection to the Binney Plant. The Authority is responsible for
the construction by May 31, 2020, of any infrastructure necessary to convey and
use water delivered from the Binney Plant to the Western Pipeline ("Binney Plant
Connection"). Use of this Binney Plant Connection for water deliveries to the
Authority is governed by this Agreement. The Authority's design and construction
of the Binney Plant Connection will be subject to the same terms and conditions
controlling its design and construction of the Temporary Interconnect except
that the portion of the Binney Plan Connection that will be conveyed to Aurora
shall consist of all components upstream of the Master Meter. When water
deliveries are interrupted due to Denver Water's need to make use of its
supplies, Denver Water will need to use the Binney Plant Connection.  On such
occasions, and subject to all delivery terms in this
 
 
 
 

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Agreement, Denver Water will have the first use of the Binney Plant Connection,
and will compensate the Authority for its costs, including O&M and a capital
recovery charge, based upon AWWA utility rate setting and cost-of-service
principles.

 
3.4  
Water Deliveries.

 
3.4.1 Delivery Phase-in. During the Phase In Period, Aurora and Denver Water
will make available 5,000 AF annually as a guaranteed minimum delivery.
Deliveries in excess of the 5,000 AF will be offered on an as-available basis.
The Authority, subject to the Minimum Payment obligations under Paragraph 3.5.3,
will determine, at its sole discretion, whether to take such deliveries.

3.4.2  
Post May 31, 2020 Deliveries. Beginning June 1, 2020, Aurora and Denver

 
Water will offer for delivery to the Authority a minimum of 72,250 AF of water
over a Ten-Year Block. The Offered Delivery Amount will be calculated
retrospectively on the basis of the daily offered flow rate and will be credited
towards the Delivery Obligation.
 
3.4.3 Maximum and Minimum Offered Delivery Amount. Inany particular year, the
Offered Delivery Amount will depend on hydrology and infrastructure constraints.
However, the Offered Delivery Amount volume shall not be required to be more
than in Paragraph 3.4.3(a) nor less than the minimums in Paragraph 3.4.3(b).

 
(a) Maximum Offered Delivery Amount. Beginning June 1, 2020, the maximum Offered
Delivery Amount shall be as follows:
 

•  
no more than 18,063 AF of water in any single Delivery Year,

 
•  
no more than 32,513 AF of water in any two Delivery Year period,

 
•  
no more than 43,350 AF in any three Delivery Year period,

 
•  
no more than 54,188 AF in any four Delivery Year period, and

 
•  
no more than 65,025 AF in any five Delivery Year period.

(b) Minimum Offered Delivery Amount. Beginning June 1, 2020, the minimum Offered
Delivery Amount will be as follows, without regard to Ten-Year Blocks (i.e.,
within or between Ten-Year Blocks):
 

•  
no minimum delivery for any single year,

 
•  
no more than 24 consecutive months with no deliveries,

 
•  
no less than 1,806 AF in any consecutive 36 month period,

 
•  
no less than 3,613 AF in any consecutive 48 month period,

 
•  
no less than 7,225 AF in any consecutive 60 month period,

 
•  
no less than 21,675 AF in any consecutive 120 month period.

 
3.4.4 Available Delivery Flow Rate. Aurora will determine the available delivery
flow rate in coordination with Denver Water and the Authority. Absent agreement
by the Authority, the maximum available delivery rate during the Phase InPeriod
will be 15 MGD. Thereafter the maximum available delivery rate will be 22 MGD.
Absent agreement by the Authority, Aurora may change the available delivery rate
by no more than 7 MGD (5 MGD during the Phase In Period) and no more often than
once per 24 hour period. Aurora shall provide 24 hour notice to the Authority
for any delivery rate change, unless the change is caused by a power outage or
other unforeseen operational upset, in which case Aurora will notify the
Authority as soon as possible.

 
 

--------------------------------------------------------------------------------

 
 
3.4.5 Excess Deliveries. Water in excess of the Maximum Offered Delivery Amount
in Paragraph 3.4.3a or in excess of 22 MGD will be offered for delivery on an as
available basis. The Authority will determine, at its sole discretion, whether
to take such excess deliveries. Any such excess deliveries shall not be credited
towards the Delivery Obligation or the Offered Delivery Amounts set forth in
Paragraph 3.4.3.
 
3.4.6 Modifications of Offered Delivery Amounts. The above minimum and maximum
Offered Delivery Amounts from Denver Water and Aurora may be modified upon
agreement, in writing, of all the Parties based upon future hydrologic
determinations, infrastructure decisions, or other pertinent factors, without
the need to modify the remainder of this Agreement or execute a new agreement.
 
3.4.7           Distribution of the Offered Delivery Amount Over the Delivery Year.
Aurora will determine the monthly timing, volume, and flow rate of deliveries in
coordination with Denver Water and the Authority. Subject to the provisions of
this Agreement, Aurora shall maintain the Offered Delivery Amount in any given
year within the parameters of the table below, with the actual Offered Delivery
Amount based on water availability, subject to the minimum deliveries in
Paragraph 3.4.3(b). While deliveries are being made, Aurora shall provide the
following to the Authority on a daily basis (or other interval agreed to by the
Parties' operating representatives):
 

  (i) Notice of changes to the Offered Delivery Amount, if any;         (ii) The
amount of the Offered Delivery Amount taken;         (iii) The amount of excess
deliveries to the Authority pursuant to Paragraph 3.4.5, if any.            

 
The above information shall be provided to the Authority via e-mail or other
mutually acceptable means of communication.
 
(a) Phase-In Distribution. During the Phase In Period the distribution of the
Offered Delivery Amount over any Delivery Year will be made within the following
parameters (unless otherwise agreed to by all Parties):
 
 

 
Jun-Sep
Oct-Jan
Feb-May
Maximum
50.0%
65.0%
65.0%
Minimum
10.0%
25.0%
25.0%

 
 
 

--------------------------------------------------------------------------------

 
(b) Distribution Above 7,225 AF. Commencing on June 1, 2020, in years where the
Offered Delivery Amount over any Delivery Year is at or above 7,225 AF, the
distribution of the Offered Delivery Amount over any Delivery Year will be made
within the following parameters (unless otherwise agreed to by all Parties):
 

   
Jun-Sep
Oct-Jan
Feb-May
 
Maximum
75.0%
60.0%
50.0%
Minimum
10.0%
10.0%
5.0%

 
(c) Distribution Below 7.225 AF. Commencing on June 1, 2020, in years where the
Offered Delivery Amount over any Delivery Year is less than 7,225 AF, the
maximum amount of the Offered Delivery Amount in any seasonal period is as
follows (unless agreed to by all Parties):
 

 
Jun-Sep
Oct-Jan
Feb-May
Maximum
    5,419 AF
4,335 AF
3,613 AF                  

 

 
3.4.8           Good Faith. Though the bullets in Paragraph 3.4.3 and the charts
in Paragraph
 
3.4.7 represent the minimum and maximum allowable distribution of the Offered
Delivery Amount, the Parties acknowledge that hydrologic conditions and
infrastructure capacity will dictate the amount of water actually made available
within the identified range of possible annual deliveries, subject to the
minimums in Paragraph 3.4.3(b). Denver Water and Aurora agree to act in good
faith to make water available to the Authority on a schedule which accommodates
the Authority's needs subject to such constraints.  The Parties further
acknowledge that storage developed by the Authority, either surface or
sub-surface, can be utilized to manage seasonal distributions in a more
beneficial manner.
 

3.5  
Charges for Water.

 

3.5.1 Basis for Charges.  Pricing for water provided under this Agreement shall
be based upon Attachment C and this Paragraph.  The pricing methodology in
Attachment C takes into account the cost of water and infrastructure contributed
by each Party and the actual cost of system operation to a specified delivery
location.  The rate for water delivered under this Agreement shall be calculated
for delivery at the Binney Plant (the "Delivery Rate").  The Delivery Rate for
2013 is $5.50 per thousand gallons of water and shall apply to all water
regardless of the Delivery Location.  In addition to the Delivery Rate, Aurora
will charge and the Authority shall pay a conveyance fee for water provided
under this Agreement delivered to the Temporary Interconnect.   (the "Conveyance
Fee").  The Conveyance Fee is the sum of the incremental energy costs incurred
by Aurora associated with the conveyance of water delivered under this Agreement
between the Binney Plant and the Temporary Interconnect.  The Conveyance Fee
shall be payable on the same terms and conditions as the Delivery Rate charge.
 

3.5.2 Modification of Charges. Charges may be increased based on the WISE Raw
Water Rate and/or on an update to the cost of service model, incorporating
capital and operational costs following the utility basis for ratemaking
prescribed in Attachment C. Aurora shall provide notice to the Authority of any
proposed rate adjustment prior to October 1, and the Authority shall have the
opportunity to comment on the proposal prior to the effective date of the rate
on January 1 of the following year.
 

 
 

--------------------------------------------------------------------------------

 
 
3.5.3 Minimum Payment. In recognition that Aurora and Denver Water will reserve
for the Authority the volumes of water described in this Article 3, the
Authority agrees to make minimum payments (each a "Minimum Payment") as
described in this Paragraph 3.5.3. Aurora shall bill the Authority for the
Minimum Payment at the end of each applicable Delivery Year, and the Authority
shall pay such invoices in the manner described in Paragraph 4.7.

(a)           Phase In Period Deliveries.   Beginning with the 2016-2017
Delivery Year, regardless of whether the Phase In Period has commenced, if the
Authority takes delivery of less than the amount of water listed in the
following table, the Authority shall pay a Minimum Payment equivalent to the
then-current rate established under Paragraph 3.5.1 times the difference between
the amount listed in the table and the amount delivered to the Authority during
the Delivery Year.
 
6/11/2016-5/31/2017

 
 

   Minimum Payment  Delivery Year  Amount (AF/yr)  6/11/2016-5/31/2017  1,500
 6/11/2017-5/31/2018  2,500  6/11/2018-5/31/2019  3,500  6/1/2019-5/31/2020
 5,000    

 
(b) Full Deliveries.  Beginning with full deliveries after June 1, 2020, as
described in Paragraph 3.4.2, the Minimum Payment will be calculated based on
7,225 AF of water, or the Offered Delivery Amount in the applicable Delivery
Year, whichever is less. The Authority shall pay a Minimum Payment equivalent to
the then-current rate established under Paragraph 3.5.1 times the difference
between the amount of water delivered to the Authority during the Delivery Year
and: (1) 7,225 AF; or (2) the Offered Delivery Amount, whichever is less. Once
the Authority has paid for 72,250 AF during any Ten-Year Block, no further
Minimum Payment will be required for that Ten-Year Block.
 
(c) Exceptions to Minimum Payment. The Minimum Payment shall not apply to: (i)
any amount of the Offered Delivery Amount not delivered due to an outage of
infrastructure necessary to deliver water to one or more Members, if such outage
is caused by a factor outside the reasonable control of the Authority or
Members; (ii) any water made available for delivery at a flow rate in excess of
maximum delivery rates defined in Paragraph 3.4.4 that is declined by the
Authority; and (iii) prior to June 1, 2030, any water containing TDS levels
higher than 500 mg/I that is declined by the Authority under Paragraph 3.6.2
 
3.6  
Water Quality.

 
3.6.1 Compliance with Drinking Water Standards. Aurora will supply to the
Authority at the Master Meter water that meets all state and federal safe
drinking water regulatory requirements as such may exist now or in the future,
subject to the qualification on TDS provided in Paragraph 3.6.2. The Authority
is solely responsible for maintaining compliance with drinking water standards
beyond the Master Meter and requiring the Members to ensure that water delivered
under this Agreement is compatible with the other water supplied by the Members.

 
 
 

--------------------------------------------------------------------------------

 
 

3.6.2 Total Dissolved Solids.  Primary drinking water standards have not been
established for TDS; the current secondary standard is 500 mg/I.  Unless the
Authority agrees otherwise, for the period through May 31, 2030, Aurora will
provide to the Authority water at the Master Meter that has a TDS level no
greater than that provided to Aurora's own customers from the Binney Plant (the
"TDS Commitment").   If the TDS level at the Master Meter exceeds the secondary
standard of 500 mg/I, Aurora will notify the Authority and the Authority may
decline deliveries.  Until May 31, 2030, any declined water above 500 mg/I TDS
will not count toward the Delivery Obligation described in Paragraph 3.1. There
is no guarantee of a maximum TDS concentration beyond May 31, 2030, regardless
of whether a primary TDS drinking water standard has been established, and
accordingly, the TDS Commitment expires on May 31, 2030.

3.6.3 Disinfection.  Currently, the water to be supplied to the Authority at the
Master Meter is disinfected with Chloramines. Aurora agrees to consult with the
other Parties prior to a change in the disinfection method. The Authority is
solely responsible for making this water compatible with the other water
supplies of its Members.
 
3.6.4 Master Meter Deliveries. The water quality standards and the TDS
Commitment set forth in this Agreement apply only to water delivered at the
Master Meter and shall not apply to water delivered at any Delivery Location
that is not a Master Meter.
 
3.6.5 Future TDS Management. The Parties acknowledge that at some point in the
future, currently estimated to be 2030, Denver Water and Aurora's own demands
for more capacity and more blend water will result in an inability to offer
deliveries at the TDS concentrations in Paragraph 3.6.2, once the TDS Commitment
has expired. The resolution to this TDS issue could involve: (a) reverse osmosis
(RO) or other equivalent treatment technologies; (b) the development of
additional blending water supplies; or (c) acceptance of
deliveries of unblended, higher TDS water. In an attempt to maintain TDS levels
at the limits set in Paragraph 3.6.2, and to increase deliveries in future
phases, the Parties agree to evaluate the resolution of this TDS issue at the
bi-annual delivery meetings established in Paragraph 4.1.5, beginning in 2022.
Unless the Authority chooses to receive unblended water once the aforementioned
capacities are reached and the TDS Commitment has expired, the Authority shall
develop and implement a schedule for the timely construction of any facilities
and/or acquisition of any blend water supplies determined to be necessary in
order to maintain the TDS levels in Paragraph 3.6.2, for the Delivery Obligation
or for any expanded deliveries beyond that amount that may be available.
 
3.6.6 Implementation of TDS Management Solution. The details governing the
implementation of the agreed upon TDS management solution will be the subject of
a separate supplemental agreement. Absent the execution of such a supplemental
agreement, the provisions of Paragraph 3.6.2 and 3.5.3(c)(iii) will no longer be
effective and unblended water will be provided under Article 3.
 

 
 

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Article 4
Operations
 

 
4.1 Deliveries to the Authority.
 

4.1.1 Delivery Location.  The "Delivery Location" shall mean, collectively, the
Master Meter and any other points of delivery of water to the Authority under
this Agreement as provided for under this Paragraph.  The initial primary point
of delivery to the Authority for purposes of delivery under Paragraph 3.4.1 will
be through a Master Meter to be installed at the Temporary
Interconnect.   Commencing June 1, 2020, the point of delivery to the Authority
will be through a Master Meter at the Binney Plant Connection.  Alternative
points of delivery may be used with the mutual consent of the Parties.

(a) The Parties acknowledge that, due to geographic considerations, Member
Rangeview Metropolitan District ("Rangeview") may receive water deliveries at an
alternate location at or near the Binney Plant and on terms mutually acceptable
to Rangeview, Aurora and Denver Water.

(b) The Parties further acknowledge that due to geographic considerations and
the timing of infrastructure construction, Member Dominion Water and Sanitation
District ("Dominion") may receive water deliveries at an alternate location
pursuant to the terms of the Dominion Agreement.  Water delivered under the
Dominion Agreement shall not be assignable to any other Member.

4.1.2 Use of Third Party Infrastructure.  Water supplies owned by Denver Water
and Aurora will not be delivered to the Authority through any third party
infrastructure located upstream of the Master Meter absent mutual agreement by
the Parties.
 
4.1.3 Other Water Owned by the Authority.  Upon written request, Aurora may, at
its sole discretion, agree to collect, transport, and treat other water owned by
the Authority or its Members, based on the terms of a separate agreement.
 
4.1.4 Reusable Supplies.  Denver Water and Aurora intend to provide potable
water from reusable supplies.  In the event that Denver Water or Aurora provides
any single-use water due to an adverse judicial or administrative determination,
the Parties agree to negotiate a mutually agreeable solution to the Authority's
use of non-reusable supplies.

4.1.5 Delivery Year Schedule.  The Parties will meet no later than May 1 of each
year to discuss the tentative volumes and anticipated delivery amounts and flow
rates that may be available in the upcoming Delivery Year, and to schedule
estimated deliveries for June through August, and meet in August to discuss the
tentative schedule for September through May estimated deliveries, with
additional meetings on an as needed basis.  The Authority may provide a desired
delivery schedule in advance of any such meetings for consideration and
discussion.

4.2 Deliveries to Authority Members.  The Authority is responsible for
deliveries to individual Members beyond the Master Meter, including the
construction of any additional infrastructure, as necessary.   Members are
responsible to develop whatever individual.infrastructure and connections are
necessary to take delivery from the Authority's infrastructure and any other
Delivery Locations, and are responsible for maintenance of such individual
infrastructure.  It will be the sole obligation of the Authority to identify and
respond to the individual water demands of the Members. The Authority will
determine in its sole discretion the allocation of water delivered by Denver
Water and Aurora through the Master Meter. The Authority will provide annual
accounting to Aurora and Denver Water of water deliveries to the Members.
 

 
 

--------------------------------------------------------------------------------

 
4.3 Use and Reuse of Water. The Authority and the Members shall be entitled to
use and reuse to extinction the return flows from reusable supplies; provided,
however, that should the Authority or the Members be unable to reuse such
supplies or voluntarily choose not to do so, the Authority or the Members may
contract for other Members to do so. Nothing herein shall preclude the ability
of Denver Water or Aurora to lawfully recapture and reuse water not reused and
recaptured by the Authority or the Members. The Authority will make best efforts
to notify Denver Water and Aurora in a timely manner when unused return flows
from WISE deliveries
are available.
 
4.4 As a condition of using Denver Water's reusable water, the Authority and the
Members receiving water must comply with the following provisions in the CRCA.
These provisions of the CRCA apply only to Members of the Authority.
 
4.4.1 West Slope Charge. The Authority, on behalf of the Members, shall enter
into a West Slope Charge Agreement containing the provisions described in
Attachment D. The WISE Raw Water Rate, as defined in Attachment C, includes a
charge sufficient to satisfy the Authority's obligation under the West Slope
Charge Agreement.
 
(a) Denver will transmit West Slope Charge payments to the Colorado River Water
Conservation District on behalf of the Authority in accordance with the West
Slope Charge Agreement, and will provide regular statements of such payments to
the Authority.

(b) Aurora shall be entitled to retain the entirety of the WISE Raw Water Rate
attributable to water delivered by Aurora under this Agreement, notwithstanding
that such water is not subject to the West Slope Charge Agreement.
 
4.4.2 Restriction on Seeking New Supplies from the Colorado River Basin. Members
must comply with the following Abstention Provisions, which are defined in
Article VIII of the CRCA. The Abstention Provisions, by their terms, do not
apply to any potential project whose diversions would occur only outside the
State of Colorado.
 
(a) Abstain permanently from pursuing or participating in any project that would
result in any new depletion from the Colorado River and its tributaries above
the confluence with the Gunnison River, including without limitation the Eagle
River (with the exception of the
Eagle River MOU for Aurora and the Upper Colorado Cooperative Project). Pursuing
or participating in a project means seeking formal approval of any aspect of a
project in a regulatory or judicial forum, but does not include conducting
various planning activities such as feasibility studies.

 
 
 

--------------------------------------------------------------------------------

 
(b) Abstain from pursuing or participating in any project that would result in
diversions from the Colorado River Basin within Water Divisions Nos. 4 and 6, or
downstream from the confluence of the Gunnison and Colorado Rivers in Water
Division No. 5 for a period of 25 years. Pursuing or participating in a project
means seeking formal approval of any aspect of a project in a regulatory or
judicial forum, but does not include conducting various planning activities such
as feasibility studies. This abstention period would be reduced to 15 years if,
within the first ten (10) years following execution of this Agreement, the NEPA
permitting process for the Upper Colorado Cooperative Project has not been
initiated. If construction of a cooperative project commences within 20 years
from the date of this Agreement, then the
 
abstention period under this Paragraph would be extended for an additional ten
(10) years (a total of 35 years).
 
4.4.3 Conservation and Reuse. The Authority and Members must comply with the
following provisions of the CRCA, Articles l.B.4(c) and l.B.4(d), respectively.
 
(a) Reuse of Water. The Members receiving WISE water must maximize, using best
efforts, the reuse or successive use of the reusable water provided to them.
 
(b) Conservation Plan. The Members receiving WISE water must adopt and implement
a conservation plan that would achieve results similar or proportionately the
same as Denver Water's.

4.4.4 Expectations.  As contemplated by Paragraphs 4.1.4 and 4.4, the Parties
expect that reusable water will be delivered under this Agreement and that the
water will be used and reused to extinction using best economically feasible
efforts.  The Parties believe that Members who are implementing a State-approved
conservation plan will satisfy the conservation plan requirement.
 
4.5 Use of Water.  Water delivered to the Authority under this Agreement shall
be decreed for municipal use.  The Authority agrees to use the water delivered
in a manner consistent with Denver Water's and Aurora's water right
decrees.  Denver and Aurora represent that they have no knowledge of any
restrictions on any of their water rights decrees that would prohibit or limit
the use of the water delivered for municipal uses within the Authority Service
Area.  Deliveries from Denver Water and Aurora may not be used for agricultural
uses.
 
4.6 Location of Use. Use of water provided to the Authority pursuant to this
Agreement shall be limited to the Authority Service Area. Use of the water
supplied under this Agreement  outside of the Authority Service Area is
prohibited.
 

4.7  
Billing and Payment.

 
4.7.1 Aurora shall bill the Authority each month for any water delivered under
this Agreement during the preceding month. Each monthly invoice shall establish
the actual amount of water delivered during such period and the Offered Delivery
Amount for the same period.

4.7.2 Aurora shall bill the Authority at the end of each Delivery Year for the
applicable Minimum Payment, if any, owing with respect to such Delivery Year.
 

 
 
 

--------------------------------------------------------------------------------

 

 
4.7.3 The Authority shall pay all such invoices within forty-five (45) days of
receipt. All late payments shall be subject to a late fee of 5% of the amount
due per month, up to a maximum of 25%.
 
 
4.8
Operating Representatives.
For purposes of this Agreement the Parties' representatives shall be:

 

 

   For Denver Water:  Director of Planning      Denver Water Department    
 1600 W. 12th Avenue      Denver, CO 80204-3412          For Aurora:  Deputy
Director, Water Resources      Aurora Water      15151 E. Alameda Parkway, #3600
     Aurora, CO 80012          For the Authority:  Executive Director      South
Metro WISE Authority      8400 East Prentice Avenue, Suite 1500      Greenwood
Village, CO 80111

 
 
Article 5
General Provisions
 
5.1 Joint Advisory Committee. Each Party shall appoint one or two members to a
Joint Advisory Committee, which shall meet as often as determined necessary, but
no less than two times a year, in order to discuss any issues or concerns
arising in the implementation of this Agreement.
 
5.2 Assignment. Following prior written notice to and approval by Denver Water
and Aurora, which approval shall not be unreasonably withheld or denied, the
Authority may assign this Agreement to another newly created Title 29 or Tile 32
governmental entity that is made up of all or substantially all of the
Members.  With the exception of the foregoing, no right hereunder shall be
assigned by any of the Parties, without prior written consent from all Parties.
 
5.3 No Operating Obligation. Nothing in this Agreement shall be deemed or
construed as creating any obligation on Aurora or Denver Water to operate its
facilities in any particular manner, so long as Aurora and Denver Water comply
with the express terms of this Agreement.

5.4 Indemnity. To the extent it lawfully may, the Authority shall defend,
indemnify, and hold harmless, Aurora and Denver Water, their officers, agents,
and employees against any liability, loss, damage, demand, action, or cause of
action by a third party which may occur as a result of the physical delivery of
water, commencing at the Delivery Location, by Aurora and Denver Water under
this Agreement, except as to any portion of negligence judicially determined to
be caused by Aurora or Denver Water. This includes but is not limited to, any
damages, including any special, indirect, consequential and punitive damages
which may result from the transportation of water under this Agreement by means
of any water carriage facilities after the Delivery Location. No provision of
this Agreement shall be construed as a waiver or release of the immunities,
limitations, or defenses afforded to the Authority, Aurora or Denver Water under
the Colorado Governmental Immunity Act.
 
 
 
 

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5.5 Amendments.   Amendments to this Agreement shall only be effective if
entered into with the same formality as this Agreement and approved by all
Parties.
 
5.6 Denver Charter. This Agreement is made under and conforms to the provisions
of Article X of the Charter of the City and County of Denver, which controls the
operation of the Denver Municipal Water System. This Agreement involves the use
of water outside the territorial limits of the City and County of Denver. The
Denver Charter provides that "the Board shall have power to lease water and
water rights for use outside the territorial limits of the City and County of
Denver, but such leases shall provide for limitation of delivery of water to
whatever extent may be necessary to enable the Board to provide an adequate
supply of water to the people of Denver..." The extent to which limitation of
water delivery outside Denver may be necessary to enable the Board to provide an
adequate supply of water to the people of Denver is a fact to be determined by
the Denver Water Board in the exercise of its reasonable discretion.   The Board
has determined that the interruptible nature of the water deliveries under this
Agreement and the other terms and conditions of this Agreement is sufficient to
ensure an adequate supply of water inside Denver. This Agreement shall not be
construed or implemented in such a way as to impair Denver Water's obligations
to provide water within its Combined Service Area.

5.7 Sole Obligation of Aurora Utility Enterprise.  This Agreement is made
pursuant and conforms to the provisions of the Charter of the City of Aurora,
Colorado, which controls the operations of the Utility Enterprise for the City
of Aurora. The obligations of Aurora under this Agreement are the sole
obligations of the City of Aurora acting by and through its Utility Enterprise
and, as such, shall not constitute a general obligation or other indebtedness of
the City of Aurora or a multiple fiscal year direct or indirect debt or other
financial obligation whatsoever of the City of Aurora within the meaning of any
constitutional, statutory, or charter limitation.   In the event of default by
Aurora or failure to meet any of its obligations under the terms of this
Agreement, the other Parties hereto shall have no recourse to any revenues of
the City of Aurora except for the net revenues of the water utility system
available therefore in the City of Aurora Utility Enterprise water fund, or any
successor enterprise fund, and remaining after payment of all expenses relating
to the operation and maintenance and periodic payments on bonds, loans and other
obligations of the City acting by and through it Utility
Enterprise.  Notwithstanding anything herein to the contrary, nothing in this
Agreement shall be construed as creating a lien upon any revenues of the Utility
Enterprise or the City.  Aurora has determined that the interruptible nature of
the water deliveries under this Agreement and the other terms and conditions of
this Agreement are sufficient to ensure an adequate supply of water inside
Aurora.
 

5.8 Joint and Several Obligations. The obligations by Denver Water and Aurora
under this Agreement shall be joint and several.

 
 
 
 

--------------------------------------------------------------------------------

 
 
5.9  
No Remedy Against non-Parties. Except as provided in Paragraph 5.17, the Parties
to this Agreement may seek remedies under this Agreement only against each
other, and not against third parties.

 
5.10 Venue and Governing Law. Venue for resolution of any dispute resulting in
litigation shall be the Colorado District Court for the county in which any
defendant resides. This Agreement shall be governed by and construed under the
laws of the State of Colorado.

5.11 Waiver of Rights. The failure of any Party to exercise any right under this
Agreement shall not be deemed a waiver of such Party's right and shall not
affect the right of such Party to exercise at some future time the right or
rights or any other right it may have under this Agreement.
 
5.12 Captions. The captions in this Agreement are for convenience of reference
only, are not part of this Agreement and shall not define or limit any of its
terms or provisions.
 
5.13 Failure to Perform Due to Force Majeure.  No Party to this Agreement shall
be liable for any delay or failure to perform due solely to conditions or events
of force majeure, as that term is defined  in this Paragraph; provided that: (i)
the non-performing Party gives each other Party prompt written notice describing
the particulars of the force majeure; (ii) the suspension of performance is of
no greater scope and of no longer duration than required by the force majeure
event or condition; and (iii) the non-performing Party proceeds with reasonable
diligence to remedy its inability to perform and provides weekly progress
reports to the other Parties describing the remedial actions taken.  In the case
of a force majeure event, the Parties shall meet and agree, in writing, upon an
appropriate modification of obligations identified herein, with specific
reference to water delivery obligations, so as to address the unanticipated
conditions associated with such event.  As used in this Paragraph, force majeure
shall mean any delay or failure of a Party to perform its obligations under this
Agreement caused by events beyond the Party's reasonable control and without the
fault or negligence of the Party, including, without limitation (a) acts of God,
(b) sudden actions of the elements such as floods, earthquakes, hurricanes, or
tornadoes, (c) sabotage, (d) vandalism beyond that which can be reasonably
prevented by the Party, (e) terrorism, (f) war, (g) riots, (h) fire, (i)
explosion, (j) blockades,  (k) insurrection, or (1) strike, slow down or labor
disruptions (even if such difficulties could be resolved by conceding to the
demands of a labor group). Provided that hydrological change is addressed in
5.14.
 
5.13.1 Subordination Clause. In the event of a force majeure event or condition as described above in Paragraph 5.13, until the event or condition is resolved, this Agreement
shall  be made expressly subordinate to any present or future use of water supply for municipal purposes within the service territories
of Aurora or Denver Water or to meet contracted
water delivery obligations of Aurora
or Denver Water existing prior to the execution of this
Agreement.
 
5.13.2 Cooperation under Force Majeure. Should there be evidence of force
majeure that may affect, or has affected, the ability of any of the Parties to
meet their obligations under this Agreement, the Parties agree to meet and
negotiate in good faith any modifications to this Agreement to ensure a
reasonable and coordinated response to such force majeure with the goal of
forestalling the need for a force majeure declaration.
 

 
 

--------------------------------------------------------------------------------

 
 
 
 
5.14 Hydrologic Change. The Parties acknowledge that the WISE Project, and
deliveries under this Agreement, are based on surface water supplies that are
variable to the extent described in this Agreement. The Parties have undertaken
engineering studies based on observed historical hydrology that suggest these
supplies will continue, and may increase in the future. Should future hydrology
change such that there are demonstrably and significantly less water supplies
available than expected at the time of the execution of this Agreement, the
Parties agree to cooperate in the identification and development of additional
supplies designed to assist Aurora and Denver Water in meeting the delivery
obligations identified in this Agreement. Demonstration of changing hydrology
may include persistent water use restrictions imposed on customers of Denver
Water and Aurora or a Colorado River compact call or water management efforts to
mitigate a Colorado River compact call. Provided, however, that nothing in this
5.14 shall relieve Denver Water or Aurora from meeting the Delivery Obligation
then in effect, nor shall it modify the "basis for charges" (including the
calculation of the WISE Raw Water Rate) relative to the cost of such deliveries
as identified in 3.5.1 and Attachment C.

5.15 Enforcement.   Subject to the provisions of Paragraphs 5.16 and 5.17, this
Agreement may be enforced in law or equity, damages, or such other legal and
equitable relief as may be available to a Party.  Except as otherwise provided
herein, each party waives any right to special, indirect, consequential and
punitive damages, including lost revenue.  Should Denver Water or Aurora fail to
treat or deliver water in accordance with the terms of this Agreement, the
Authority shall have recourse against either or both of these parties based upon
the factual cause of the default.
 
5.16  
Remedies for Monetary Defaults.

 
5.16.1 Suspension of Deliveries.  If the Authority does not timely satisfy any
of its payment obligations under this Agreement, Aurora may give the Authority a
notice of default. If the Authority does not cure the default by making full
payment within seven (7) business days from receipt of the default notice,
Denver Water and/or Aurora, in addition to pursuing any other remedies available
to them at law or in equity, may suspend deliveries of water to the Authority.
 
5.16.2 Termination of Agreement.   If the Authority fails to cure the default
within 180 days from receipt of the default notice described in Paragraph
5.16.1, then Denver Water and/or Aurora, in addition to pursuing any other
remedies available to them at law or in equity, may terminate this Agreement.
 
5.17  
Delivery Obligation and Minimum Payment Adjustment.

 
5.17.1 With respect to any Delivery Year after June 1, 2016, if any Member fails
to pay to the Authority the sums required of such Member under the SM WISE IGA
(''Non-paying Member") towards the Minimum Payment required by Paragraph
3.5.3(b), then the Authority may seek an adjustment of the Minimum Payment in
future Delivery Years pursuant to the terms of this Paragraph, under the
following conditions:
 
 
 

--------------------------------------------------------------------------------

 

 
(a)  
the Authority pays the full Minimum Payment required by Paragraph 3.5.3(b) for
the subject Delivery Year (Delivery Year 1);

(b)  
the Authority provides written notice to Denver Water and Aurora identifying the
Non-paying Member and the Non-paying Member's pro-rata share of the Minimum
Payment and reasonable evidence of such non-payment;

(c)  
the Authority terminates both deliveries under this Agreement and deliveries of
any other water through the Western Pipeline to the Non-paying Member;

(d)  
the Authority uses commercially reasonable efforts to ensure compliance by the
Non-paying Member, including pursuing all applicable available remedies set
forth in the SM WISE IGA; and

(e)  
the Authority provides regular written notice to Denver Water and Aurora of the
remedies undertaken and the status of those remedies;

 

5.17.2 If the Authority continues to satisfy these conditions during Delivery
Year 2 and requests an adjustment, then the basis for calculating the Minimum
Payment for Delivery Year 2 shall be reduced ("Temporary Reduction") by the
amount of water attributable to the Non-paying Member's share of the Minimum
Payment required by Paragraph 3.5.3(b) for Delivery Year 2. The Temporary
Reduction shall not exceed 30% of the Minimum Payment for Delivery Year 2,
subject to the limitations in Paragraph 5.17.5. The Delivery Obligation for the
applicable Ten- year Block shall be reduced by the same amount as the basis for
the Temporary Reduction for Delivery Year 2.
 
5.17.3 The same procedure will be followed for Delivery Years 3-5, if the
Authority continues to satisfy the conditions for a Temporary Reduction. A
Temporary Reduction shall not be available for more than four Delivery Years.

5.17.4 At the end of Delivery Year 3 but in no event after Delivery Year 5, the
Authority may request, the Delivery Obligation will be reduced by the amount of
water that formed the basis for the Temporary Reduction ("Permanent Reduction"),
provided that the Authority demonstrates that the Non-paying Member is no longer
a Member under the SM Authority IGA and is permanently excluded from receiving
any water under this Agreement and any other water through the Western Pipeline.
To effectuate a Permanent Reduction, the Parties shall enter into an amendment
to this Agreement that: (i) reduces the Delivery Obligation by the Permanent
Reduction; (ii) makes other necessary conforming changes, including reductions
to maximum and minimum deliveries in Paragraph 3.4.3 in the same proportion as
the Permanent Reduction
bears to the prior Delivery Obligation and the Minimum Payment in 3.5.3; and
(iii) removes the Non-paying Member as a Member under this Agreement.  Ifa
Permanent Reduction is to be effectuated during any Delivery Year other than the
first Delivery Year of a Ten-Year Block, the reduction of the Delivery
Obligation for that Ten-Year Block shall be one-tenth of the Permanent Reduction
multiplied by the number of years remaining in the Ten-Year Block.
 
5.17.5 The aggregate amount of all Permanent Reductions, or of all
contemporaneous Permanent and Temporary Reductions, shall not exceed 30% of the
Minimum Payment (i.e. 2,168 AF per year or a reduction in the Delivery
Obligation of more than 21,675 AF.)
 

 
 

--------------------------------------------------------------------------------

 
 
   5.18 Defense against Third Parties. In the event of litigation by any third
party concerning this Agreement, and to the extent permitted by law, the Parties
agree to jointly defend any such third party action.
 
5.19  
No Third Party Beneficiaries. There are no third party beneficiaries of this
Agreement.

 
5.20  
Water Rights Peace Pact.

 

5.20.1   Diligence Proceedings. As stated in Recital 0, the Parties may agree to
work to increase WISE deliveries. With regard to all conditional water rights
presently owned by Denver Water and/or Aurora, the Parties agree to withdraw any
statements of opposition in each other's pending diligence filings and not to
oppose each other's pending or future diligence applications, including pending
or future applications to make conditional rights, existing on the date of this
Agreement, absolute. However, the Parties may file statements of opposition in
such proceedings for the limited purpose of ensuring compliance with the
obligations of this Agreement.·

 
5.20.2 Other Proceedings. The Parties also agree to negotiate in good faith the
stipulated resolution of any pending or future water right and administrative or
judicial proceedings that may be necessary: (a) for Denver Water and Aurora to
meet their delivery obligation for the provision of reusable water supplies
under this Agreement or (b) for the Authority or its Members to use and reuse
water delivered under this Agreement. To that end, the Parties shall timely
share all relevant factual information concerning the existence or absence of
injury to the respective decreed water rights of each party as a consequence of
the administrative or judicial approvals being sought.
 
5.20.3 SM WISE IGA. The Authority shall include in the SM WISE IGA an obligation
to comply with the provisions of this Paragraph 5.20. Failure of a Member to
comply with this Paragraph shall constitute a breach of this Agreement by the
Authority. However, in actions other than diligence proceedings, nothing in this
paragraph 5.20 or in the SM WISE IGA is intended or shall be interpreted to
prevent any Member from taking any actions it deems necessary to protect its
water rights from injury, consistent with the intent of Paragraph 1.3.
 
5.21 Infrastructure Ownership. Nothing in this Agreement shall constitute or be
interpreted as constituting the transfer of any ownership interests in the
infrastructure assets of the Parties.
 
Each Party shall remain individually responsible for the operation, maintenance,
repair and replacement of their infrastructure absent express written agreement
to the contrary.
 
5.22 Separate Water Supply Agreements. Any separate water supply agreement
between a Member and either Aurora or Denver Water, executed after the effective
date of this Agreement, shall be contingent upon the Member being in full
compliance with its WISE-related obligations. Denver Water and Aurora agree to
suspend deliveries immediately under any separate water supply agreement if the
Member becomes a Non-paying Member as defined in paragraph 5.17. Any separate
water supply agreement shall contain a provision requiring suspension of
deliveries during any period in which the Member is in default of any of its
obligations under the SM
WISE IGA.
 
 
 

--------------------------------------------------------------------------------

 
5.23 New Participating Members of Authority. The Parties acknowledge that at
times additional entities may request to join the Authority and become a Member.
Any new Member must be an entity in existence and delivering water to customers
as of the effective date of this Agreement, unless the parties agree otherwise
in writing. Acceptance of qualified Members and the nature of their financial
obligations, if any, to the Authority, shall be within the sole discretion of
the Authority; provided, however, that such change in the Members shall not in
any manner affect the obligations of Denver Water and Aurora under this
Agreement nor modify the terms of any existing agreement between either Denver
Water or Aurora and any current or future Members. New Members shall be bound by
the terms of this Agreement and shall enjoy such benefits as determined at the
discretion of the Authority.
 
5.24 Authority of the Parties. The Parties each affirm and represent that they
have the full power and authority to execute this Agreement and thereafter
perform all of the terms and conditions set forth herein.

5.25 No Agency Created. This Agreement is not intended and shall not be
construed to create any joint venture, agency relationship or partnership
between the Parties. None of the Parties shall have any right or authority to
act on behalf of or bind any other Party.
 
5.26 Dispute Resolution.   If a dispute relating to this Agreement arises among
the Parties, the Parties shall first consider any proposed resolution of the
matter.   If the matter is not resolved, the Parties shall promptly convene a
meeting to be attended by persons with decision-making authority regarding the
subject matter of the dispute.  The meeting attendees shall attempt in good
faith to negotiate a resolution of the dispute.  If the dispute is still not
resolved within 20 days after the meeting, the Parties shall be free to pursue
any other legal remedy.
 
5.26.1 In the event of legal proceedings, the Parties agree to seek a prompt
resolution, and that each Party shall pay its own costs and expenses, including
attorney fees.
 
5.27 Effect on Prior Agreements. This Agreement supersedes the Pilot Project
Agreement between Denver Water and the Authority dated February 14, 2007. All
other agreements between any of the Parties shall remain in full force and
effect. In the event of a conflict between the terms of a prior agreement
between any of the Parties and this Agreement, the terms  of this Agreement
shall prevail.
 
5.28 Counterparts and Facsimiles. This Agreement may be executed in
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument. Facsimile signatures bind the Parties.
 
5.29  
Notices.

 
Any notice or other communication required or permitted under this Agreement
shall be sufficient if in writing and delivered to the addresses provided below
or such other addresses as designated by any Party by one of the following
means: (a) in person (by hand delivery or professional messenger service); (b)
by U.S. Mail, postage prepaid; (c) by overnight service (Express Mail of the
U.S. Postal Service, Federal Express) or any other courier service guaranteeing
overnight delivery), addressed to each of the following:

 
 

--------------------------------------------------------------------------------

 
 

  For Aurora:     Deputy Director of Water Resources of Aurora Water      15151
E. Alameda Parkway, #3600     Aurora, CO 80012           Copy to:     City
Attorney    
15151 East Alameda Parkway, Suite 5300
    Aurora, CO 80012

 
 

  For Denver Water:     Director of Planning     Denver Water Department    
1600 W. 12th Avenue     Denver, CO 80204-3412         For the Authority:    
Executive Director     South Metro WISE Authority     8400 East Prentice Avenue,
Suite 1500     Greenwood Village, CO 80111            Copy to:      Spencer Fane
& Grimshaw LLP      ATIN: James M. Hunsaker      1700 Lincoln Street, Suite 3800
     Denver, CO 80203

 
or at such other address as any Party hereto may hereafter or from time to time
designate by written notice to the other Parties given in accordance herewith.
 
Any notice delivered (a) in person shall be effective upon delivery; (b) by
first class U. S. Mail shall be effective three (3) business days after the
mailing; (c) by overnight service shall be effective one (1) business day after
delivery to the overnight service provider.
 
5.30  
Agreement Contingencies and Effective Date. This Agreement is contingent upon:

 
(a) the execution of the Western Pipeline Agreement which shall include
provisions ensuring the financing thereof, referenced in paragraph 3.2.1;

(b) issuance of a permit satisfactory to the Parties by the U.S. Army Corps of
Engineers (Corps) allowing water delivered under this Agreement to be stored in
Rueter-Hess Reservoir; and
 
(c) complete execution (not contingent upon the approval of any additional
parties) of the CRCA.
 

 
 
 

--------------------------------------------------------------------------------

 
The "Effective Date" of this Agreement shall be the date when the last of the
foregoing contingencies has been met.  If these contingencies have not been
satisfied as of December 31, 2013, the Parties agree to terminate this Agreement
or extend the dates set forth in this Agreement.

 

[signatures start on following page]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

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IN WITNESS WHEREOF, Denver Water, the Authority and Aurora have executed this
Agreement.
 

 

   CITY AND COUNTY OF DENVER    acting by and through its  ATTEST:  BOARD OF
WATER COMMISSIONERS          By:_____________________________  By:
_____________________________  Secretary         _____________________________  
 President        Date: _____________________________        REGISTERED AND
COUNTERSIGNED: APPROVED:  Dennis Gallagher, Auditor    CITY AND COUNTY OF DENVER
         By: _____________________________  By: _____________________________
 Planning Division      Date: _____________________________      APPROVED AS TO
FORM:             By: _____________________________    Legal Division          

 

 

 
 

--------------------------------------------------------------------------------

 

 
 

   South Metro WISE Authority            By: _____________________________  
        President        Date: _____________________________            

 

 
 

 
 

--------------------------------------------------------------------------------

 
 
 
 
CITY OF AURORA, COLORADO,
ACTING BY AND THROUGH ITS
UTILITY  ENTERPRISE

 
 

 ___________________________________________  _________________  Stephen D.
Hogan, Mayor  Date

 

ATTEST:

 
 

 ___________________________________________  _________________  Janice Napper,
City Clerk  Date

 
 
 
APPROVED AS TO FORM FOR AURORA:

 

 

 ___________________________________________  _________________
 _________________ Christine McKenney, Assistant City Attorney  Date ACS#

 
 
 

 

STATE OF COLORADO        )
 
            )      SS
 
COUNTY OF ARAPAHOE   )
 

The foregoing instrument was acknowledged before me this _____ day
of________________________________________________ 2013, by Stephen D. Hogan,
Mayor, acting on behalf of the Utility Enterprise of the City of Aurora,
Colorado.
 

Witness my hand and official seal. ___________________________________     
                                                                        Notary
Public
 
My commission expires: _______________________________

 

(SEAL)

 
 

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LIST OF EXHIBITS AND ATTACHMENTS
 
Attachment A -Major WISE Partnership Facilities
Attachment B -DIA Connection Infrastructure
Attachment C -Water Delivery Pricing
Attachment D -West Slope Charge Agreement

 
 
 
 
 
 

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Attachment A -Major WISE Partnership Facilities

Image [image1.jpg]

 
 

--------------------------------------------------------------------------------

 

 
 
ATTACHMENT  B
 

DIA CONNECTION  INFRASTRUCTURE

 

1.           Connection from Denver Water's distribution system at DIA to Aurora Water's Pump
Station #2
 

The connection from DIA to Aurora's PWP will provide blend water for Authority
WISE deliveries. The current estimate for design, permitting, construction and
all other costs for the DIA connection is $8.7 million. Authority will pay 85%
of the total costs, based on estimated usage of the connection. Authority's 85%
of the $8.7 million total estimated cost is included in the DIA Connection Fee.
 

1.1  Description:  A 24" pipeline, approximately six (6) miles in length, from
the north end of DIA at East 114th Avenue and Newbern Street to the PWP Pump
Station #2 near 96th Avenue and E-470, and meters at a location to be
determined.

 
 
 

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ATTACHMENT C
WATER DELIVERY PRICING
 

1.  
General. Pricing for water deliveries to the Authority under this Agreement (the
"Delivery Rate") is intended to be based on the principles of cost-of-service
utility rate setting. However, it is understood by the Parties that specific
circumstances defined under this Agreement require advanced understanding and
application of those principles and that the Parties have adapted in some cases
an application of rate setting principles that are particular to this Agreement,
the characteristics of the services provided, and the purpose and intent of the
Parties themselves. In cases where generally accepted principles of utility rate
setting may appear to differ from the pricing of water deliveries under this
Agreement, the terms defined in this Attachment C of the Agreement will prevail.
Ifa term or condition necessary for the pricing of water deliveries under this
Agreement is missing from this Attachment, that term and condition will be
established by mutual agreement of the Parties.

 

2.  
Overall Principles. The Delivery Rate incorporates the following overarching
principles:

 

2.1.  
Appropriate Return on Investment.  The Delivery Rate will allow those who own
Facilities ("Owner") to receive an appropriate return on historical and new
investments in the Facilities as defined in this Attachment.

 

2.2.  
Consistent with Owners' Internal Ratemaking and Financial Practices.  The
Delivery Rate will be consistent with the financial requirements and internal
ratemaking practices of the Owner.

 

2.3.  
Equitable and Transparent Allocation of Costs. The costs incurred to provide
deliveries under this Agreement include the operating and maintenance costs in
addition to various capital components. Equitable pricing means that these costs
will be allocated to those receiving water deliveries from the project each in
accordance with their particular demand characteristics and their contractually
defined delivery requirements. Transparency exists when the process for such an
allocation can occur within a framework that is visible, understood by all the
Parties, and repeatable over time with consistent and predictable results.

 

3.  
Facilities. The WISE Facilities include all tangible assets, and intangible real
property rights (e.g. water rights), that are used and useful in providing the
water deliveries under this Agreement.  A listing of the current Facilities is
included in Table I. The listing of Facilities may change from time to time. No
changes to the Facilities listed in Table 1 will be made without the consent of
the Parties which consent shall not be unreasonably withheld or denied. All
Facilities, current and future, include the following overall characteristics:

 

3.1.  
Facilities are Used. To be considered a Facility, the asset must be physically
used for delivery of water under this Agreement with measurable flows of water
occurring on a regular and recurring basis. Any Facility included in the
Delivery Rate is either: a) currently used with measurable flows, or b) will be
used in the year immediately following Owner's budget year as part of the normal
operations of the Facilities.

  
 

 
 

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3.2.  
Facilities are Useful. A Facility must provide a specific function that enables
the delivery of water as described in this Agreement.  Facilities, or parts of
Facilities, that do not enable the deliveries under this Agreement are not
included in the Delivery Rate. Facilities that are only used by the Facilities'
Owner are not included in the Delivery Rate.

 

3.3.  
Exceptions. Additional Facilities will be required in the future to maintain
current deliveries and provide increased deliveries to the Authority in excess
of an average of 72,250 acre feet in a Ten-Year period, or 7,225 acre feet per
year on average.  In some cases, those Facilities may need to be constructed
ahead of the Owners' planned schedules.  Exceptions to Paragraphs 3.1 and 3.2
may be required to address the additional costs, if any, incurred in
accelerating construction of planned Facilities. Facilities may be added to the
Delivery Rate in anticipation of future construction under the following
conditions:

 

3.3.1.  
Conditions for Exception:

 

3.3.1.1.  
Acceleration of planned Facilities.  The Owners need to accelerate planned
infrastructure to maintain the current delivery commitment.

 

3.3.1.2.  
Increased Delivery Requested. The Authority has requested increased delivery
from a previous commitment level, and the Owners are willing and able to meet
the requested deliveries.

 

3.3.1.3.  
Additional Facilities Required. The Owners cannot meet the requested increased
delivery without additional Facilities. The Facilities required are either newly
identified and were not part of the Owners' prior plans, or must be constructed
ahead of the Owners' plans.

 

3.3.1.4.  
Owner Investment Required. The Owners pay for the additional Facilities and
incur an Owner Investment consistent with Paragraph 5.2.1 below.

 

3.3.2.  
Allowances in Pricing. If the conditions in Paragraphs 3.3 and 3.3.1 are met,
then the pricing for the next determination of the Delivery Rate will include
the reasonably estimated costs for the identified Facilities.

 

3.3.2.1.  
Capital Costs. The capital costs calculated under this provision will include a
return to the Owners as described in Paragraph 5.2 based on the reasonably
estimated construction cost of the Facilities in question. The pricing will not
include any depreciation expense as described in Paragraph 5.1 or working
capital as described in Paragraph 5.2.1.3, however, until the Facilities are
constructed and placed into service and used and useful for delivery of water
under this Agreement. All other provisions of Section 5.2 will apply.

 
 

 
 

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3.3.2.2.  
Operating Costs. Operating and maintenance expenses as described in Paragraph 6,
below, will not be included in the pricing analysis until such time as the
Facility is placed into service for the delivery of water under this Agreement.

 

4.  
Ownership. Each of the Facilities has at least one Owner. The Owner(s) will be
identified for each of the Facilities by name and by percentage of ownership.

 

5.  
Capital Costs. Capital costs include the depreciation expense on the Facilities,
plus a return to the Owner of the Facilities.

 

5.1.  
Depreciation Expense. Depreciation expense has the same meaning as is normally
applied by the Government Accounting Standards Board. All depreciation is to be
determined using the Straight-Line method based on the initial term of the
Facility's life. Determination of salvage value, if any, is at the discretion of
the Facility Owner.

 

5.2.  
Return. Owner(s) will be compensated for their investment in the Facilities in
an amount equal to the Owner(s) weighted average cost of capital (WACC) times
the Owner(s) investment in the Facilities.

 
5.2.1.  
Measuring Owner Investment.  Owner investment is also referred to as "Rate
Base." The Rate Base is meant to accurately measure the Owner(s) actual
investments in the Facilities. It includes the following components:

 
5.2.1.1.  
Net Book Value of Facilities. This is equal to the actual original cost of the
Facility less accumulated depreciation. The book value may be increased by
additions or improvements to the Facilities; it decreases with asset deletions,
retirements, and accumulated depreciation.

 
5.2.1.2.  
Construction Work in Process. Future Facility investments may be included in the
Rate Base if the Facility meets the definitions in Paragraph 3 above.

 
5.2.1.3.  
Working Capital. Owners are allowed to include an allowance for working capital
equal to 90 days of their operating & maintenance expenses incurred at the
Facilities. The working capital allowance for each Facility shall be calculated
as the annual operating and maintenance expense, divided by 365 days, times 90
days.

 
5.2.1.4.  
(Less) Contributions Received. Any capital payments or assets in kind paid by
the Authority to the Owner(s) to defray the Owner(s) Investment shall be
accounted for as capital contributions and credited to the Authority as a
reduction in the Owner(s) Investment. Contributions reduce both the Return and
depreciation expenses related to the Facilities.  All contributions will be
amortized at a rate equal to the rate of depreciation for the Facility in
question.

 

 
 

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5.2.2.  
Measuring the Weighted Average Cost of Capital.  The weighted average cost of
capital is the sum of the weighted debt cost and weighted equity cost; it will
be used as the rate of return described in section 5.2.

 
5.2.2.1.  
Total Cost of Capital. The cost of capital will include an allowance for the
Owner(s) actual cost of debt financing, as well as a return for the Owner(s)
equity.

 
 
5.2.2.1.1.Cost of Debt -The cost of debt is the average annual interest rate
paid on the Owner(s) portfolio of outstanding long-term debt. For the purposes
of this Agreement, the cost of debt shall be calculated as follows:

 
 
5.2.2.1.1.1.Determine the total amount of long-term debt issued and outstanding
as measured from the Owner(s) most recently audited and publicly available
financial statements. Total long-term debt outstanding shall include all
portions of long-term debt due and payable within one year, also called the
"current portion", together with those amounts payable at any time after one
year, also called the "long-term portion."

 
 
5.2.2.1.1.2.Determine the net interest payment due on each component of the
long-term debt during the 12-month period in which the Delivery Rate will be
determined. Interest payments due shall reflect the total of scheduled interest
payments, net of any discounts, premiums, grants, state/federal subsidization,
or other reductions.

 
 
5.2.2.1.3.Divide the total amount of interest due by the total amount of
long-term debt outstanding to derive the annual effective interest rate.

 
 
5.2.2.1.2.Cost of Equity -the cost of equity is the interest rate to be paid on
the use of the Owner(s) equity capital.  For the purposes of this Agreement, the
cost of the Owner(s) equity shall be calculated as follows:

 
 
5.2.2.1.2.1.Determine the cost of equity using the Build-Up Method (BUM)
expressed as the following formula: Cost of Equity (Ke) = Risk Free Rate (Rf) + Market
Risk Premium (MRP) + Industry Risk Premium {IRP) + Size Premium (SP).

 
 
5.2.2.1.2.2.Risk Free Rate (Rf). The risk-free rate is equal to the yield on a
20-year US Treasury bond. For the purposes of this Agreement, the yield shall be
the average calculated for the 12 months immediately preceding the determination
of the Delivery Rate.

 
 
5.2.2.1.2.3.Market Risk Premium (MRP). The MRP represents the additional return
required by equity holders over debt holders in general. For the purposes of
this Agreement, the MRP will be taken from
Ibbotsons Stocks, Bonds, Bills, and Inflation Valuation Yearbook. The MRP shall
be the historical long-term horizon expected equity risk premium as published in
the Ibbotson SBBI Valuation Yearbook, and not the supply side equity risk
premium.

 

 
5.2.2.1.2.3.Industry Risk Premium (IRP). The IRP represents the additional or
reduced return required by equity holders in the same industry as the Owner(s).
For the purposes of this Agreement, the Owner(s) industry is Water Supply,
classified under the Standard Industrial Code of 494, or the NAICS code of
221310. The IRP will be taken from the then current edition of
Ibbotsons Stocks, Bonds, Bills, and Inflation Valuation Yearbook.

 

 
 

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5.2.2.1.2.4.  
Size Premium (SP). The SP represents the additional or reduced return required
by equity holders as a result of the size of the Owner(s) specific enterprise.
For the purposes of this Agreement, the SP will be taken from
Ibbotsons Stocks, Bonds, Bills, and Inflation Valuation Yearbook for the
appropriate decile (the text provides an appropriate SP for different enterprise
sizes grouped into deciles). For the purposes of this Agreement, the Owner(s)
size shall be determined as the book value of its equity. Book value of the
Owner(s) equity shall be determined based on the most recently audited and
publicly available financial statements;  book value is equal to total assets
less total liabilities with no further adjustments whatsoever.

 
 
5.2.2.1.2.6.
In the event that Ibbotsons Stocks, Bonds, Bills,
and Inflation Valuation Yearbook is no longer published in its current form, the
parties agree to negotiate in good faith to identify a comparable substitute
publication for the purposes of this Attachment C.

 
5.2.2.2.  
Weightings. The weighted average cost of capital is affected by the relative
percentage of debt and equity financing used by the Owner(s) in the Owner(s)
overall water utility enterprise.

 
 
5.2.2.2.1.Total Invested Capital.  An Owner's total invested capital is equal to
the sum of: (a) total long-term debt as described in 5.2.2.1.1; and (b) his
total equity as measured from the most recently published,  publicly available,
audited financial statements as the Owner(s) total assets less total
liabilities.

 

 
5.2.2.2.2Determine the Weight of Debt as a Portion of Invested Capital. The
total long-term debt divided by Total Invested Capital is the debt weighting.

 
 
 

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5.2.2.2.3Determine the Weight of Equity as a Portion of Invested Capital.
The equity weighting shall be determined as 100% minus
the debt weighting described in 5.2.2.2.2.

 
 
5.2.2.3.
Calculate the WACC.
The WACC for the Owner(s) shall be calculated using the formula: WACC = Wd(Kd) + We(Ke). Where Wd = weight of debt as described in 5.2.2.2.2;
Kd = cost of debt as described in 5.2.2.1.1;
We = weight of equity as described in 5.2.2.2.3;
and Ke = cost of equity as described in 5.2.2.1.2

 
6.  
Operating & Maintenance Costs. The costs of operating and maintaining the
Facilities will be properly budgeted and accounted for on a regular basis.
Whether or not operating and maintenance costs are incurred, and the level, if
any, of those costs is determined at the sole discretion of the Owner(s) of the
Facilities. Only the operating and maintenance costs incurred in the operation
of the Facilities are included in the basis for the Delivery Rate.

 

6.1.  
Direct Operating and Maintenance Costs. The direct expenses in operating and
maintaining the Facilities are to be included in the Delivery Rate determined
under this Agreement. Direct operating and maintenance costs include the fixed
and variable costs of operating the Facilities. Capital repairs and replacements
are not to be included as operating and maintenance costs. Any expenditure
meeting the Owner(s) then existing capitalization policy should be recorded as
an asset and included in the determination of Rate Base as described above.

 

7.  
WISE Raw Water Rate. The "WISE Raw Water Rate" shall be determined as the then
published rate established by Denver Water for non-reusable nonpotable water
service charged to its Outside Combined Service Area customers times 1.625 for
all reusable water supplied under this Agreement.

 

8.  
Direct Overhead and Administration.  Administrative costs directly incurred in
the management of this Agreement are to be included in the Delivery Rate. Owners
are responsible for accounting for any direct overhead and administrative costs,
both fixed and variable.

 

9.  
Indirect Overhead and Administration.  Costs that are not directly attributable
to the performance of this Agreement are not included in the Delivery Rate.

 
 
 

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10.  
Ratemaking Process. Except as noted in Paragraph 10.1, the Owners will at their
expense, prior to proposing to increase the Delivery Rate for any year, prepare
a cost-of-service allocation for the Facilities' costs in accordance with this
Attachment C. The cost-of-service allocation will be based on the Owners'
budgeted expenditures for the forthcoming year, and the capital costs will be
based on the expected Rate Base for the same forthcoming year. The WISE Pricing
Summary results of the Rate Model for 2013 are attached hereto as Exhibit 1. A
full model print-out has been provided to the Parties for 2013. The Owners will
provide reasonable back-up documentation with similar detail when proposing
future Delivery Rate increases.

 
10.1.  
Water Supply Rate Adjustments.  The rate may be increased annually to reflect
changes to the WISE Raw Water Rate as determined in accordance with paragraph
7.  If the Owner is increasing the Delivery Rate solely as a result of an
increase in the WISE Raw Water Rate, then the Owner is not required to prepare a
new cost-of-service allocation but can incorporate the updated WISE Raw Water
Rate into the Delivery Rate.

 
10.2.  
Annual Period. Except for Delivery Rate changes pursuant to 10.1, the Delivery
Rate will be prepared for the forthcoming year in which a new Delivery Rate is
to take effect. For the purposes of rate administration, all changes to the
Delivery Rate charged under this Agreement will be prepared and placed into
effect on January 1 of each year.

 
10.3.  
Information Requirements.  Using the average annual delivery amount to the
Authority of 7,225 AF (5,00_0 AF until 2020), to be adjusted in the future if additional commitments are agreed to, the Owner will then take the following
steps:

 
10.3.1.  
Determine Water Demand at Each Facility. The Owner will prepare an estimate of
the average water through each Facility for each month. The estimate will show
for each Facility: (i) the total amount of water sent through the Facility in
each month, and (ii) the total water delivered to each Party for each month. The
amount of water delivered to the Authority through each Facility may be adjusted
to account for "trade" water. Trade water is a TDS management approach where the
Authority will receive treated Aurora Mountain Water in exchange for Aurora
taking water from Brighton that would have been delivered to the Authority, but
for the TDS concentration.  The "trade water" approach for pricing will have the
effect of increasing the amount of flow accounted for in the PWP Treatment Train
for the Authority and will allow Aurora Water to recover the additional costs,
if any, it incurs to produce water for delivery.

10.3.2.  
Determine the Operating and Maintenance Costs for Each Facility.  The Owners
will prepare, at their expense, a detailed budget of operating and maintenance
expenses anticipated for each Facility for the Delivery Year. Operating and
maintenance expenses shall not include any provision for capital expenditures of
any kind. All capitalized asset purchases should be reported as additions to the
fixed assets as described in Paragraph 10.3.3, below.

 
 
 

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10.3.3.  
Update Fixed Asset Register. The Owner will provide, at their expense, a
detailed listing of fixed assets for each Facility that will be updated,
current, and audited as of the end of the Owner's financial reporting year
immediately preceding the Delivery Year. The fixed asset register will detail
the following information for each Facility and will be reported in accordance
with generally accepted accounting principles of the Government Accounting
Standards Board, except in no case will the fixed assets be reported for the
purposes of this Agreement using the so-called "Modified Approach" as described
under GASB Rule No. 34: (i) Name and description of the asset, (ii) the original
acquisition cost of the asset, (iii) the month and year the asset was acquired
and physically placed into service, (iv) the estimated useful life of the asset
as estimated for accounting purposes using straight line depreciation methods,
and (v) the accumulated depreciation for the asset.

 

10.3.4.  
Determine the Owners' Rates of Return.  The Owners' rates of return shall be
determined each year based on the provisions of Paragraph 5.

 

10.3.5.  
Determine the WISE Raw Water Rate. The WISE Raw Water Rate shall be determined
in accordance with Paragraph 7.

 

10.3.6.  
Allocate the Costs of Service. The cost-of-service Delivery Rate will be
determined as follows:

 

 
10.3.6.1.
Standard Method. The Delivery Rate will be determined by allocating the total
costs of the Facilities to the Parties based on the water demands as described
in Section 10.3.1; provided, however, that the following adjustment for water
deliveries characterized as less-than-firm or interruptible under this Agreement
shall be made: the total costs of the Facilities will be limited to the total
costs of providing the average daily demand (ADD) and will exclude any costs
associated with the capacity in the Facilities above and beyond that necessary
to provide for the ADD (i.e., Parties with interruptible deliveries will be
allocated 0% of the "Share of Facility Capacity" as that term is used in the
Rate Model Report).

 
 
10.3.6.2.
Exceptions. Changes in delivery characteristics, addition of new Facilities, and
the ownership structure of new and/or existing Facilities dictate a change in
cost allocation methods. Aurora reserves the right to modify the cost allocation
methods under such circumstances to reflect the actual delivery characteristics.
No changes to the cost allocation methods shall be made without the consent of
the Authority which consent shall not be unreasonably withheld, conditioned or
delayed.

 
10.3.7.  
Determine Rates. The Delivery Rate will be specific for each Party based on each
Party's particular usage of the Facilities.  Rates may include a charge for
volume of water delivered, charges for reservations of capacity, or any
combination of these based on specific circumstances and characteristics of
demand for each Party.

 

 
 
 

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Table 1
 

Facility Name
Description
 
PWP -North Campus
Riverbank filtration wells, aquifer recharge and recovery system, and associated
piping
 
PWP -Pumping Stations
Three pump stations along the pipeline from
Brighton to the Binney Water Purification
Facility (Binney)
 
PWP -Pipeline(s)
Pipeline from Brighton to Binney
 
PWP -Treatment (PWP Train)
Binney treatment process for water from Brighton
 
PWP -Treatment (Mountain Train)
Binney treatment process for water from Strontia Springs
 

 
** Infrastructure no longer used to provide WISE Water deliveries shall be
deleted.

 

 
 

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ATTACHMENT D
 
WEST SLOPE CHARGE AGREEMENT
[WISE agreement with Authority]

 

Agreement between Authority, River District and Denver Water.
 
 
1.    Authority agrees to pay into the West Slope Fund the West Slope Charge for
each acre­ foot of water provided by Denver Water, as provided in Authority's
water supply contract with Denver Water.
 

•  
The West Slope Charge will be 12.5% of the standard nonpotable or potable water
rate, as applicable, charged by Denver Water to customers outside its Service
Area.

 
•  
Authority agrees that payment of the West Slope Charge is a contractual
obligation to the River District, established at the defined percentage. Parties
agree that the West Slope Charge is not a cost-based rate, but a contractual
obligation, and is not governed by rate provisions in Denver Water's water
supply contracts and leases.

 
•  
Authority agrees that nonpayment of the West Slope Charge may constitute breach
of this contract and may result in suspension of water deliveries.

 

2.  
Billing and payment

 

•  
Denver Water agrees to be responsible for collection of the West Slope Charge on
behalf of the River District.

 
•  
Whenever Denver Water adjusts the rates charged to Authority [usually annually],
it will notify the River District in the same manner as it notifies its
customers. The River District will respond in writing, requesting that Denver
Water be responsible for billing and collection of the specified revised West
Slope Charge based on the adjusted rate.

 
•  
Authority will pay the West Slope Charge as part of its payment for water
provided.

 
•  
Denver Water will follow its normal procedures for providing notice of
nonpayment.

 
•  
Denver Water will transmit the collected West Slope Charge payments to the River
District on a regular schedule determined by the payment schedule.

 

3.  
Default for nonpayment

 

•  
If Authority fails to pay the West Slope Charge within the period allowed by
Denver Water's normal collection procedures, Denver Water will send a written
notice to the River District.

 
•  
The River District will send written notice to Authority, with a copy to Denver
Water, of breach of contract for failure to pay the West Slope Charge. The
notice of breach shall include a reasonable period during which the Authority
may cure the breach.

 
•  
The River District will undertake such measures as it deems necessary to collect
the unpaid West Slope Charge.

 

 
 

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 •   If other efforts fail and the River District deems it necessary, the River
District will send a notice of proposed suspension of water delivery to the
Authority and a notice_ of default to Denver Water requesting that Denver Water
suspend delivery of water on a proposed date of suspension, which shall be no
less than ten (10) days following the date of the notice.
 

 
•  
If payment is not received prior to the end of the noticed period, Denver Water
agrees to suspend deliveries of water as requested by the River District, until
such time as the West Slope Charge is paid and the River District requests
Denver Water to resume deliveries.

 
•  
Denver Water will not suspend deliveries of water to the Authority unless the
written notice of default includes a certification from the River District that
it will take full responsibility for any damages to the Authority resulting from
suspension of service requested by River District that is later determined to be
unlawful or to be invalid by reason of an error committed by the River District,
and to hold Denver Water harmless for any such damages and costs incurred by
Denver Water, if any, in defending itself. The River District will assume no
responsibility for an error committed by Denver Water.

 
4.    Agree to Abstention Provisions and agree to enforce Abstention Provisions
against WISE Members, as required in the SM WISE IGA between the Authority and
the Members, relevant portions of which are attached.
 
 
 
 

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