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HomeMy WebLinkAbout21-33 St. Vrain Water Authority Member IGA 02-24-2021RESOLUTION N0.21-33 A RESOLUTION OF THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO, APPROVING THE ST. VRAIN WATER AUTHORITY MEMBER INTERGOVERNMENTAL AGREEMENT WHEREAS, the Town of Firestone, acting by and through the Town of Firestone Water Activity Enterprise ("Firestone") and Little Thompson Water District ("Little Thompson") entered into the St. Vrain Water Authority Establishing Contract, dated April 24, 2019 ("Establishing Contract"), which established the ("Authority"); and WHEREAS, the Authority was established for the purpose of developing potable water treatment systems and facilities that are capable of furnishing a potable water supply for the benefit of the Authority's Members and their constituents and end users; and WHEREAS, in furtherance of that purpose, the parties intend for Firestone to finance, design, and construct a reverse osmosis water treatment plant, deep injection well, and related facilities ("Water Treatment Facilities") having an initial capacity of treating up to 1.5 million gallons per day ("Phase I") and having the capability of being expanded in phases, in future years, to a capacity of at least 5 million gallons per day; and WHEREAS, Article V, Section 5.2 of the Establishing Contract provides that each Member shall each enter into a separate intergovernmental agreement with the Authority that defines, among other things, the obligations of the Member for: (i) the delivery of raw water to the Authority for treatment; (ii) the delivery of treated water back to the Member by the Authority; and (iii) payment by the Member of Subscription and Plant Investment Fees; and WHEREAS, for the purpose of satisfying their respective obligations under the Establishing Contract the Town of Firestone and the St. Vrain Water Authority, desire to enter into the St. Vrain Water Authority Member Intergovernmental Agreement ("Member IGA"). NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO: The St. Vrain Water Authority Member Intergovernmental Agreement is approved in substantially the same form as the copy attached hereto and made a part of this resolution and the Mayor is authorized to execute the Intergovernmental Agreement on behalf of the Town. INTRODUCED, READ AND ADOPTED this lay of 2021. /_UYIYDf: l�li TOWN OFF STO//NECOLORADO bi SindelaY Mayor APPROVED AS TO William ST. VRAIN WATER AUTHORITY MEMBER INTERGOVERNMENTAL AGREEMENT This Member Intergovernmental Agreement ("Member IGA" or "Member Agreement") is made and entered into, to be effective as of the a +'jam day of 'FqJprLAAAA 2021 ("Effective Date"), by and between the TOWN OF FIRESTONE, YColorado municipal corporation, acting by and through the Town of Firestone Water Activity Enterprise, organized and existing as a "Water Activity Enterprise" under C.R.S. 37-4.1-101, et. seq. ("Firestone"), and the ST. VRAIN WATER AUTHORITY, a political subdivision of the State of Colorado (the "Authority"), acting by and through the Authority's Water Activity Enterprise organized and existing as a "Water Activity Enterprise" under C.R.S. 37-45.1-101, et. seq. The parties hereto are individually referred to herein as a "Party" and collectively as the "Parties." RECITALS WHEREAS, Firestone and Little Thompson Water District ("Little Thompson") entered into the St. Wain Water Authority Establishing Contract dated April 24, 2019 ("Establishing Contract"), as more particularly described in Section 1.13 below, which established the Authority; and WHEREAS, the Authority was established for the purpose of developing potable water treatment systems and facilities that are capable of furnishing a potable water supply for the benefit of the Authority's Members and their constituents and end users; and WHEREAS, in furtherance of that purpose, the Parties intend for Firestone to finance, design, and construct a reverse osmosis water treatment plant, deep injection well, and related facilities ("Water Treatment Facilities") having an initial capacity of treating up to 1.5 million gallons per day ("Phase I") and having the capability of being expanded in phases, in future years, to a capacity of at least 5 million gallons per day ("MGD"); and WHEREAS, the Parties further intend that once constructed, the Water Treatment Facilities and the land upon which such Facilities are located will be conveyed, or an interest therein will be conveyed to the Authority, and the Authority will thereafter own, operate, maintain, repair, replace, and expand the Water Treatment Facilities, as necessary to meet the needs of its Members; and (00740281.DOCX / 14 1 WHEREAS, at the time Firestone pays or is credited by the Authority as having paid a Subscription Fee, the Authority will reserve for Firestone capacity in the Water Treatment Facilities as hereinafter provided; and WHEREAS, at the time Little Thompson pays or is credited by the Authority as having paid a Subscription Fee, the Authority will reserve for Little Thompson capacity in the Water Treatment Facilities as more particularly provided in the Little Thompson Member Agreement; and WHEREAS, Article V, Section 5.2 of the Establishing Contract provides that each Member shall each enter into a separate intergovernmental agreement with the Authority that defines, among other things, the obligations of the Member for: (i) the delivery of raw water to the Authority for treatment; (ii) the delivery of treated water back to the Member by the Authority; and (iii) payment by the Member of Subscription and Plant Investment Fees; and WHEREAS, for the purpose of satisfying their respective obligations under Article V, Section 5.2, of the Establishing Contract, the Parties desire to enter into this Member IGA; and WHEREAS, as Members of the Authority, Firestone and Little Thompson shall each execute a separate Intergovernmental Agreement with the Authority. AGREEMENT NOW, THEREFORE, for and in consideration of the foregoing Recitals, which are incorporated herein, the premises and the promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: ARTICLE I. DEFINITIONS 1.1 Design System Capacity. Design System Capacity means the maximum rate of water flow allowed by the Colorado Department of Public Health and Environment (CDPHE) for the Water Treatment Facilities as set forth in the permit issued by the CDPHE for the Water Treatment Facilities, as the same may be amended or modified from time to time, and as certified to by the design engineer, usually expressed in terms of millions of gallons of flow per day. 1.2 Subscription Fee. Subscription Fee means the fee each Member must pay to reserve capacity in the Water Treatment Facilities, as more particularly described in the Establishing Contract and in Article II. (00740281.DOCX / 14 ) 2 1.3 Plant Investment Fee. Plant Investment Fee means the fee each Member must pay in order to use its Design System Capacity and Operating System Capacity in the Water Treatment Facilities, as more particularly described in the Establishing Contract and in Article IV. 1.4 Operating Budget. Operating Budget means with respect to a given calendar year, the budget of the Authority prepared in accordance with Article VIII hereof, for such calendar year, or in the case of an amended Operating Budget, for the remainder of such calendar year. 1.5 Operation and Maintenance Expense. Operation and Maintenance Expense means all expenses incurred in the operation and maintenance of the Water Treatment Facilities and normally reoccurring expenses incurred by the Authority in the conduct of its activities which are properly allocated to the Water Treatment Facilities under generally accepted accounting principles as applied to governmental entities. Such term does not include depreciation or charges for reserves, interest charges and charges for the payment of principal or amortization of bonds or other obligations of the Authority. 1.6 Operating System Capacity. Operating System Capacity means the maximum rate of flow determined by the Authority for operating the Water Treatment Facilities in any given year as more particularly defined and described in Article III, Section 3.2 below. 1.7 Non -Construction Costs. Non -Construction Costs means, for any construction phase ("Construction Phase") of the Water Treatment Facilities, any and all costs, fees and expenses paid by any one or more of the Members, and which the Authority in the reasonable exercise of its discretion, and with the concurrence of its Members, determines reasonable and necessary for obtaining 100% design and contract documents for the applicable Construction Phase of the Water Treatment Facilities, as referred to in the Establishing Contract. Non -Construction costs include, but are not limited to, administrative and professional fees and costs for establishing the Authority and for designing each applicable phase of the Water Treatment Facilities, including any water quality testing costs and permitting fees paid in connection with such design. 1.8 Construction Costs. Construction Costs means, with respect to any Construction Phase of the Water Treatment Facilities, any and all costs, fees and expenses paid by the Authority, or any one or more of the Members, which the Authority, in the reasonable exercise of its discretion and with the concurrence of its Members, determines reasonable and necessary for the applicable Construction Phase of the Water Treatment Facilities, EXCEPT that Construction Costs shall not include any Non - Construction Costs as defined in Section 1.7 above. Construction Costs shall include the fair market value of the land, or any interest therein that a Member conveys to the Authority for the Water Treatment Facilities or applicable Construction Phase thereof, based upon an appraisal acceptable to the Authority and its Members. (0074028I.DOCX / 14 ) 3 1.9 Water Treatment Facilities. Water Treatment Facilities means the reverse osmosis water treatment plant, deep injection well, and related facilities that Firestone will construct and which will have an initial capacity for treating up to 1.5 million gallons per day, with the capability of being expanded to a capacity of at least 5 million gallons per day. 1.10 Phase I Water Treatment Facilities. Phase I or Phase I Water Treatment Facilities means the Initial Construction Phase of the Water Treatment Facilities that will have a capacity of treating up to 1.5 million gallons per day. 1.11 Little Thompson Member Agreement. Little Thompson Member Agreement means the Member IGA entered into between Little Thompson and the Authority as required by Article V, Section 5.2 of the Establishing Contract. 1.12 Firestone Member Agreement. Firestone Member Agreement means this Member IGA entered into between Firestone and the Authority as required by Article V, Section 5.2 of the Establishing Contract. 1.13 Establishing Contract. Establishing Contract means that certain Intergovernmental Agreement entered into between the Town of Firestone, acting by and through its Water Activity Enterprise and Little Thompson Water District, acting by and through its Water Activity Enterprise dated effective April 24, 2019. 1.14 Phase I Water Treatment Facilities Construction Costs. Phase I Water Treatment Facilities Construction Costs means those costs as more particularly set forth on Exhibit B, as attached hereto and incorporated herein by this reference and as generally described in Article IV, Section 4.2 and Article V, Section 5.6. 1.15 Construction Phase. Construction Phase shall mean, based upon the context in which the term is used, either the initial Construction Phase or a subsequent expansion phase of the Water Treatment Facilities. ARTICLE II. SUBSCRIPTION FEE & NON -CONSTRUCTION COSTS 2.1 Subscription Fee. Before the Authority reserves for any Member, capacity in a Construction Phase of the Water Treatment Facilities, including Phase I, the Member must pay to the Authority, or be given credit by the Authority for the subscription fee that corresponds to the percentage of Design System Capacity that will be reserved to the Member in the applicable Construction Phase of the Water Treatment Facilities ("Subscription Fee"). A Member's Subscription Fee may be paid in cash or a Member may receive a credit that is applied to the Member's Subscription Fee for Non - Construction Costs previously paid by the Member on the Authority's behalf. The (0074028I.DOCx / 14 ) 4 amount of each Member's Subscription Fee shall be determined in accordance with the provisions of Section 2.4 below. 2.2 Purpose of Subscription Fee. The Subscription Fee is intended to recover from the Member, or recognize that the Member has already paid, a dollar amount that is equal to the percentage of Non -Construction Costs, as hereinafter defined, that corresponds to the percentage share of the Design System Capacity of the Water Treatment Facilities that is being reserved by the Authority for the Member. As the Water Treatment Facilities are expanded, each Member will be expected to pay an additional Subscription Fee. 2.3 Determining Non -Construction Costs. For purposes of determining each Member's Subscription Fee, the Authority shall first determine the cumulative Non - Construction Costs for the Construction Phase of the Water Treatment Facilities that is being subscribed to by one or more of the Members. This determination shall be made by the Authority as soon as is reasonably practical, after the Authority has received invoices and other documentation that describes in detail, acceptable to the Authority, the cost paid by the Authority and/or its Member(s) with respect to the Construction Phase of the Water Treatment Facilities that is being subscribed to by one or more of the Members. In determining Non -Construction Costs, the Authority shall utilize the Subscription Fee Spreadsheet attached hereto as Exhibit A, which shall be updated within 30 days following the final completion of each Construction Phase of the Water Treatment Facilities. 2.4 Method for Determining Subscription Fee. The amount of each Member's Subscription Fee shall be determined by multiplying Non -Construction Costs, for the applicable Construction Phase of the Water Treatment Facilities, by the percentage of the Design System Capacity of the applicable Construction Phase of the Water Treatment Facilities that the Authority and Member agree the Authority will reserve for the Member ("Reserved Capacity"). The product of that multiplication less any portion previously paid by the Member, shall be the Member's Subscription Fee for the applicable Construction Phase of the Water Treatment Facilities. For example, if a Member wants a Reserved Capacity of 0.50 MGD of the 1.0 MGD Water Treatment Facilities (50%), and the cumulative Non -Construction Costs for the Reserved Capacity in the applicable Construction Phase are $300,000, the Member's Subscription Fee will be $150,000. 2.5 Payment of Subscription Fee. That portion or all of any Member's Subscription Fee that the Member is not credited by the Authority as having paid, shall be paid by the Member within ninety (90) days after the Authority determines the cumulative Non -Construction Costs for the applicable Construction Phase of the Water Treatment Facilities to which the Member is subscribing. If the Member is credited by the Authority with paying Non -Construction Costs in excess of the Member's Subscription Fee, the amount of the excess shall be applied as agreed to by the Authority and the Member. {0074025 LDOCX / 14 } 5 ARTICLE IIl. DESIGN SYSTEM CAPACITY/OPERATING SYSTEM CAPACITY 3.1 Design System Capacity of Water Treatment Facilities. The Water Treatment Facilities shall be designed to have an initial treatment capacity of up to 1.5 million gallons of water per day ("MGD") with an ultimate capacity of up to 5 MGD. The Water Treatment Facilities shall be constructed in phases (each a Construction Phase). At such time as each Construction Phase of the Water Treatment Facilities is completed and is ready for delivery to the Authority, the engineer of record who designed the then completed Construction Phase shall certify to the Authority the Design System Capacity of the Water Treatment Facilities as then constructed. 3.2 Operating System Capacity. The Water Treatment Facilities will be constructed as a reverse osmosis water treatment plant and related appurtenances, including a deep injection well for storage of the waste products from the treatment process. The annual Operating System Capacity of the Water Treatment Facilities shall depend in part on the number of treatment modules that are physically installed and operational in any given year. The number of treatment modules will depend, in part, on each Member's projected demand for treated water and the Authority's budget and other operational considerations. Accordingly, the Authority will annually determine the operating system capacity of the Water Treatment Facilities for the upcoming calendar year ("Operating System Capacity"), which determination shall be provided to the Members on or before September 30 of each year. The term Operating System Capacity as used herein shall have the same meaning as the term "Defined System Capacity," as used in the Establishing Contract. 3.3 Firestone's Reserved Capacity. Firestone and the Authority agree that initially Firestone shall be entitled to reserve up to 5/6th of the Design System Capacity and up to 5/6th of the annual Operating System Capacity of the Water Treatment Facilities. At such time as Firestone pays or is credited as paying the Firestone Subscription Fee, with respect to the initial Construction Phase, the Authority shall reserve for Firestone 5/6th of the Design System Capacity and 5/6th of the Operating System Capacity in the applicable Construction Phase of the Water Treatment Facilities ("Firestone's Reserved Capacity"). Notwithstanding the foregoing, Firestone shall not be entitled to use any of Firestone's Reserved Capacity until such time as Firestone has paid to the Authority or is credited by the Authority as having paid a Plant Investment Fee as provided in Article IV below. Firestone's Reserved Capacity is subject to amendment, as approved by the Authority and its Members through either Water Treatment Facilities' expansion per Article XI, or by agreements for the transfer of a Member's capacity in the Water Treatment Facilities as provided in Article XIII. 3.4 Little Thompson's Reserved Capacity. Firestone and the Authority agree that initially the remaining 1/6th of the Design System Capacity and 1/6th of the annual Operating System Capacity of the Water Treatment Facilities shall be made available by {0o74028 1DOCx / 14 } 6 the Authority for Little Thompson. Such capacity shall be reserved by the Authority for Little Thompson upon the payment by Little Thompson of a Subscription Fee as calculated in accordance with Section 2.5 above. Little Thompson's Reserved Capacity is subject to amendment as approved by the Authority and its Members through either Water Treatment Facilities' expansion per Article XI, or by agreements for the transfer of a Member's capacity interest in the Water Treatment Facilities as provided in Article XIII. ARTICLE IV. PLANT INVESTMENT FEE 4.1 Plant Investment Fee. Before any Member may deliver water to the Authority for treatment or otherwise use any portion of the Member's Reserved Capacity in a Construction Phase of the Water Treatment Facilities, the Member must pay to the Authority, or be credited by the Authority, as paying a plant investment fee ("Plant Investment Fee") attributable to the capacity in the Water Treatment Facilities the Member has reserved through the payment of the Member's Subscription Fee. A Member's Plant Investment Fee may be paid in cash or a Member may receive credit that is applied to the Member's Plant Investment Fee for Water Treatment Facility Construction Costs previously paid by the Member on the Authority's behalf. The amount of each Member's Plant Investment Fee shall be determined in accordance with the provisions of Section 4.4 below. 4.2 Purpose of Plant Investment Fee. The Plant Investment Fee is intended to recover from the Member the Member's share of Construction Costs for the Water Treatment Facilities that were not previously paid by the Member, or where the Member previously paid such costs, the Plant Investment Fee is intended to recognize and represent the share of Construction Costs that are allocated to the share of the Design System Capacity of the Water Treatment Facilities that the Member will be authorized to use. 4.3 Determinine Construction Costs. For purposes of determining each Member's Plant Investment Fee, the Authority shall first determine cumulative Construction Costs for the applicable Construction Phase of the Water Treatment Facilities. This determination shall be made by the Authority as soon as is reasonably practical after the applicable Construction Phase of the Water Treatment Facilities has been completed, but in all events, before the applicable Construction Phase of the Water Treatment Facilities is conveyed to and accepted by the Authority. In determining Construction Costs, the Authority shall utilize the Construction Costs Allocation Spreadsheet, attached hereto as Exhibit B, which shall be updated within 30 days following the final completion of each Construction Phase of the Water Treatment Facilities. 10074028I DOCx / 14 1 7 4.4 Method for Determining Plant Investment Fee. The amount of each Member's Plant Investment Fee shall be determined by multiplying the cumulative Construction Costs for each of the Construction Phases by the percentage of the Design System Capacity of the Water Treatment Facilities that the Authority has reserved for the Member, less any previous Plant Investment Fee payments or credits assigned for previously completed Construction Phases. The product of the multiplication shall be the Member's Plant Investment Fee. Exhibit B to this Member Agreement provides an example of how the Plant Investment Fee would be calculated for three phases of Design System Capacity expansion. Exhibit B shall be amended from time to time as construction phases are completed to show actual Plant Investment Fee calculations. 4.5 Pavment of Plant Investment Fee. That portion of any Member's Plant Investment Fee that the Member is not credited by the Authority as having paid, shall be paid by the Member at least thirty (30) days before the Member delivers any water to the Authority for treatment by the Water Treatment Facilities. If the Member is credited by the Authority with paying Construction Costs in excess of the Member's Plant Investment Fee, the amount of the excess shall be applied by the Authority to the Members proportionate share of any future Water Treatment Facilities expansion cost, to the Member's portion of the Water Treatment Facilities Replacement Fund identified in Article XII, Section 12.2, or at the election of the Member, shall be refunded to the Member, out of the Plant Investment Fee paid by the other Member or as the Authority and Member agree. 4.6 Reimbursement of Costs. Any Construction Costs and any Non - Construction Costs paid by or credited to a Member that the Member does not elect to have applied to future Subscription Fees, future Plant Investment Fees, or the Water Treatment Facility Replacement Fund shall be reimbursed to the Member out of funds available to the Authority from the Plant Investment or Subscription Fees paid to the Authority in cash, or as otherwise agreed to by the Authority and Member. ARTICLE V. DESIGN AND CONSTRUCTION OF PHASE I 5.1 Engineering Plans and Specifications. Firestone shall cause plans and technical specifications for Phase I of the Water Treatment Facilities ("Plans and Specifications"), to be completed. Phase I shall be designed so that the Water Treatment Facilities can thereafter be expanded in phases. Phase I shall have a water treatment capacity of up to 1.5 MGD. 5.2 Permits. Firestone shall acquire any and all permits needed for the construction and operation of the Phase I Water Treatment Facilities. These shall include, but are not be limited to, building permits, permits from the Colorado Department of Public Health and Environment related to the treatment process, and permits from the US Environmental Protection Agency related to the deep injection well {00740281.DOCx / 14 } 8 for storage of treatment process wastewater. All permits will be closed out or transferred to the Authority as a condition of acceptance of the Phase I Water Treatment Facilities. 5.3 Construction Documents. Firestone shall prepare all documents necessary to contract for the construction of the Phase I Water Treatment Facilities and to provide for construction, observation and oversight of the same ("Contract Documents"). The Contract Documents shall require the Contractor to post payment and performance bonds as required by law. The Plans and Specifications and all Contract Documents, including any change orders, approved by Firestone's Board of Trustees, shall be made available to the Authority and the Authority's Members by Firestone. 5.4 Bidding and Construction Process. Firestone shall be the owner of the Phase I Water Treatment Facilities for all construction contract purposes, including but not limited to, the bid documents, advertising for bids, receipt of proposals, opening of bids, and entering into a contract or contracts for the completion and construction, and for all construction warranties of the Phase I Water Treatment Facilities. 5.5 Substantial Completion of the Work. Firestone shall notify the Authority when the Phase I Water Treatment Facilities are substantially complete, and upon concurrence by a representative of the Authority prepare and deliver a notice of substantial completion to the Authority and to the Construction Contractor or Contractors. 5.6 Payment of Construction Costs. Firestone shall pay all reasonable and necessary costs for constructing the Phase I Water Treatment Facilities and will use the costs to update the Construction Costs identified in Exhibit B. ARTICLE VI. CONVEYANCE OF PHASE I WATER TREATMENT FACILITIES 6.1 Conveyance of Improvements and Real Property. Before Firestone may deliver water to the Authority for treatment or otherwise use any portion of its Reserved Capacity in the Phase I Water Treatment Facilities, Firestone shall convey or assign to the Authority, by instrument of conveyance acceptable to the Authority, free and clear of all liens and encumbrances, all of Firestone's right, title and interest in and to the Phase I Water Treatment Facilities and the deep injection well, including but not limited to, all regulatory permits and licenses therefore, as well as, equipment manuals and warranties, and all related pipes, facilities and equipment located within the boundaries of the Water Treatment Facilities site and the deep injection well site, together with any piping, or other equipment or facilities that connect the Water Treatment Facilities to the deep injection well, all as more particularly described on Exhibit C, as attached hereto and incorporated herein by this reference. Any pipes, equipment or other facilities located within the above -referenced sites, or that connect the Water Treatment Facilities to the deep injection well and which are not going to be transferred to the Authority, shall be {0o74028 LDOCx / 14 } 9 specifically identified on Exhibit C and reserved by Firestone in connection with such conveyance. In addition to conveying the Phase 1 Water Treatment Facilities, deep injection well and related pipes, facilities, equipment, permits and licenses, Firestone shall convey to the Authority a property interest in said sites be it a lease or easement, as agreed upon by the Parties. Notwithstanding the foregoing, however, Firestone shall not transfer or assign to the Authority, and shall reserve unto itself, all construction Contractor warranties for the Phase I Water Treatment Facilities. 6.2 Final Costs and Documentation. At the time Firestone conveys the Water Treatment Facilities to the Authority, it shall also deliver to the Authority: (i) all design documents, drawings, plans, specifications, operating manuals, regulatory permits and licenses, etc., relating to the Water Treatment Facilities needed or useful in connection with the Water Treatment Facilities operation, maintenance, repair and replacement, together with an assignment of all warranties, permits, licenses relating to the Water Treatment Facilities and deep injection well and any equipment incorporated therein or which is used in connection therewith, except for any and all construction warranties, which as set forth in Section 6.1 above, shall not be assignable by Firestone and shall be administered by Firestone on and for the benefit of the Authority; and (ii) an itemization of all costs incurred by Firestone in constructing the Phase I Water Facilities, including but not limited to all costs paid to construction contractors, costs for construction management, construction observation, surveys, easement acquisition, bond issuance costs, insurance costs, and the cost of constructing the Deep Injection Well and all of the associated facilities and equipment needed for the Deep Injection Well and the cost of all associated equipment needed for the Operation of the Water Treatment Facilities. ARTICLE VII. OWNERSHIP, OPERATION, MANAGEMENT, AND MAINTENANCE OF WATER TREATMENT FACILITIES 7.1 Calendar Year Operation. The Water Treatment Facilities shall be managed, operated and maintained by the Authority on a calendar year basis. 7.2 Ownership for All P oses. Upon the Authority's acceptance of each Construction Phase of the Water Treatment Facilities, the Authority shall own the same and be responsible for the operation, management, maintenance, repair, replacement and expansion thereof as more particularly provided for in Article XI and Article XII below. The Authority shall at all times operate, maintain, repair, replace and expand, when applicable (hereinafter "Operate"), the Water Treatment Facilities in a prudent, sound and economical manner and shall keep the same or cause the same to be in good repair, order and condition, ordinary wear and tear excepted, except for any contractual warranty work that is performed by the Contractors. (0074028 LDOCx / 14 ) 10 7.2.1 Operating Expenses. All costs, expenses, compensation, salaries, fees, and wages paid by the Authority to Operate the Water Treatment Facilities shall, to the extent practical, be reasonable and comparable to those paid by other municipal or other public bodies for substantially similar services and facilities. 7.3 Rules and Regulations. The Authority may establish, and thereafter modify from time to time as necessary, rules and regulations governing the Operation and use of the Water Treatment Facilities without causing any Member a loss of right or capacity in the Water Treatment Facilities, or otherwise agreed to in their Member Agreement. The Authority shall observe and perform all of the terms, conditions and requirements set forth in State law or in any rules, regulations, orders and directions of any legislative, executive, administrative or judicial body that are applicable to the Water Treatment Facilities and/or the Authority. 7.4 Insurance. The Authority shall at all times maintain with insurers acceptable to the Authority and its Members, such insurance coverages as are customarily maintained with respect to similar water treatment facilities insuring the Water Treatment Facilities and the Authority, where applicable, against loss or damage to the Water Treatment Facilities, against loss of revenue, and against public official and general liability to the extent reasonably necessary to protect the Authority and its Members. By way of explanation and not limitation, the Authority shall obtain and keep in full force and effect property insurance, commercial general liability insurance, automobile liability insurance, and if and when the Authority has employees, workers compensation and employer's liability insurance. 7.5 Records, Accounts and Audits. The Authority shall keep accurate records and accounts of the Operation of the Water Treatment Facilities and of the transactions relating thereto, as well as of the operations of the Authority in accordance with generally accepted accounting principles as applied to governmental entities. Within one -hundred and eighty (180) days after the close of each calendar year, the Authority shall cause such records and accounts and all transactions of the Authority relating to the Water Treatment Facilities, with respect to such calendar year, to be audited by an independent certified public accountant as required by State law. A copy of each such audit shall be sent by the Authority to each Member and to the State auditor. 7.6 Exchange of Operating and Water Quality Information. Because the Water Treatment Facilities and each Member's water distribution system are interconnected and operate as part of consecutive water systems, the Authority and each Member, shall to the extent permitted by law, freely exchange operating and water quality information regarding their respective water facilities, including but not limited to: (i) the rate, volume, and quality of water delivered to the Water Treatment Facilities by the Member, as well as the rate, volume and quality of water delivered by the Authority to that Member; (ii) the Authority's and each Member's short and long-range supply and demand projections; (iii) any information that the Authority and each Member has {om4028 i.nocx i 141 11 concerning any chemicals or other additives that are a part of the Authority's and each Member's water treatment or water pre-treatment process, if applicable; (iv) whatever information the Authority and each Member has concerning the age and chemical make- up of treated water in the Member's distribution system, including any storage that is a part of that system; and (v) all information that the Authority and each Member has concerning their respective SCADA systems and other forms of data sharing. The Authority and Member understand and agree that in order for a Party to respond ("Responding Party") to inquiries or requests for information from either State or Federal regulatory agencies or any request under the Colorado Open Records Act, as the same may be received from time to time, it will be necessary for the Responding Party to obtain information in the possession of or under the control of the other Party, including but not limited to, the information described in subsections (i)-(v) above. Accordingly, each Party, without further consideration, agrees to provide all information that is in its possession or under its control, and that is relevant or in any way relates to any such required response by the Responding Party, as soon as is reasonably practicable. When a request is made by a Responding Party, the other Party shall, within two business days, acknowledge receipt of the request and provide an estimate as to when the requested information will be available, but in no event longer than seven (7) business days from the date the information request is received. ARTICLE VIII. ANNUAL BUDGET 8.1 Annual Budget. Annually, the Authority shall prepare, or cause to be prepared, a proposed budget for the ensuing calendar year that will include all items of revenue and expense necessary to operate, maintain, repair, replace and expand, when applicable, the Water Treatment Facilities and to operate the Authority during the ensuing calendar year. The annual budget shall be prepared and thereafter adopted in accordance with all applicable budget laws. It is recognized that the Authority's Members must also comply with applicable budget laws, and that a portion of each Member's budgeted expenditures will be derived from the Authority's annual budget. Accordingly, as part of the Authority's annual budget process, the Authority will, in a timely manner, considering the budgetary timeline of the Members: (i) forward a copy of the proposed annual budget to each of the Members; and (ii) meet, at the request of any Member upon due notice to all the Members, to respond to questions and consider comments from the Members on the proposed budget. 8.2 Hearing on Proposed Budget. The Authority shall hold a public hearing on each proposed annual budget in accordance with applicable budget law at which any Member or other party may appear in person or by agent or other representative and present objections or comments to the proposed budget for the ensuing calendar year. Notice of the time, date and place of each hearing shall be published at least once in a newspaper of general circulation within the Authority's service area, in accordance with {0074028 LDocx / 14 ) 12 State law. The Authority shall, also prior to the hearing, cause a copy of the notice of the budget hearing to be delivered to each Member. 8.3 Adoption of Annual Budget. The Authority shall adopt the annual budget for such calendar year (hereinafter referred to as the "Annual Budget") in a manner and time frame in accordance with State law, but shall attempt to do so on or before the tenth day of November, next preceding each calendar year. A copy of the Annual Budget shall be filed with each Member and with the Division of Local Government within the Department of Local Affairs, State of Colorado. 8.4 Amendment of Annual Budget. If necessary, the Authority may at any time adopt an amended or supplemental Budget. 8.5 Failure to Adopt Annual Budget. In the event a budget for the ensuing calendar year has not been adopted on or before December 31 of the prior calendar year, Ninety Percent (90%) of the total amount appropriated for operation and maintenance expenses for the preceding calendar year shall be the total amount of the temporary budget for such purposes for the ensuing calendar year. Such temporary budget shall be effective only until such time as a budget has been finally adopted and approved. ARTICLE IX. RATES, FEES AND CHARGES 9.1 Establishment of Rates. Fees and Charges. The Board shall establish rates, fees and charges sufficient to defray all costs of operating the Authority and operating, maintaining, repairing, replacing and expanding the Water Treatment Facilities, including providing for debt service, depreciation, charges for reserves, and any other financial obligations of the Authority. 9.1.1. Rates to Remain in Effect Until Changed. Once established, the rates, fees and charges provided for in this Article, shall remain in full force and effect until the revenues resulting from the collection of such charges becomes inadequate to defray the Authority's costs as described above, or until the Board shall determine it necessary to raise or lower the charges for the treatment and delivery of water, subject to the provisions of Section 9.2. below. 9.1.2 Classifications for Rate Purposes. The Board may establish reasonable classifications between Members and non -Members for various purposes, including but not limited to rate making. The schedule of charges shall be uniformly applied to any similar users. Under the Establishing Contract, the Authority and Member agree that the Authority's Board shall adopt water service rates and other charges to fully recover the Authority's costs of treating and delivering water as determined by the Authority in the reasonable exercise of its discretion, together with such additional costs including, but not limited to, contingencies and reserve funds. 10074028 LDOCx / 14 } 13 9.2 Rate Increases. The Authority and Member agree that the duration of this Member IGA is such that the passage of time will require changes in the charges to be made for the treatment and delivery of water hereunder. Accordingly, the Board may modify the schedule of charges for the treatment and delivery of water hereunder from time to time in its discretion provided that: (i) the Board shall notify each Member of the potential for an increase in water service rates and the projected increase at least thirty- five (35) calendar days prior to any formal Board action on any such increase; (ii) the Board shall notify each Member of any proposal for an increase in water service rates or other charges at least ten (10) business days prior to the Board meeting at which formal action on such proposal is scheduled; (iii) the new water service rates shall not become effective sooner than forty-five (45) calendar days after they have been adopted and shall not apply to water delivered by the Authority on or before the date of their adoption by the Board; (iv) the Board shall notify each Member of the new water service rates within ten (10) business days after they have been adopted by the Board; and (v) each Member may attend and participate in any rates workshop or public meeting held to discuss rates and may have access to rate information during the Authority's regular business hours. 9.3 Rate Methodology. Rates for delivery of water will be assessed to Members and non -Members that receive deliveries of water from the Authority in a manner which reasonably recovers the cost to serve each Member and non -Member. Costs recovered through other fees or charges, such as connection or system development charges, participation charges, or reimbursements are not included in the calculation of the revenue requirements for rates, but instead will be credited to the Member or non - Member depending upon the source of the payment. Generally the rate setting process will include: (i) a determination of the total amount of revenue required to be generated from rates ("Revenue Requirements from Rates"); (ii) allocation of the Revenue Requirements from Rates between the Members and any Non -Members, based on relative water demands and capacity needs of such Members and Non -Members; (iii) the design of water rates may include but is not limited to a fixed service charge and a volumetric charge per thousand gallons of water delivered. These charges will be designed to recover from each Member and non -Member within practical limits, the cost to serve the same. 9.3.1 Fixed Service Charge. The fixed service charge shall be designed to recover that portion of the Authority's annual fixed costs which the Board determines appropriate to recover from a fixed charge imposed monthly to provide sufficient cash flow to operate the Water Treatment Facilities, even if no water is produced, such as administrative costs, insurance, employee compensation, contract service costs, etc. 9.3.2 Volumetric Charge. The charge with respect to water treated and delivered by the Authority shall at all times be uniform as to all Members for the same type, classification and amount of water service, and shall give effect to the quantity differentials in the water delivered to the Authority and treated and delivered back by the (00740281.DOCX / 14 ) 14 Authority to the Member. The volumetric charge shall be a fee per thousand gallons of potable water delivered to the Member. 9.4 Billing and Payment. 9.4.1. Fixed Service Charge. Each Member and Non -Member shall pay its fixed charge in equal monthly installments, in accordance with the schedule of rates and charges adopted by the Authority for the calendar year in accordance with this Member IGA. 9.4.2. Volumetric Charge. The Authority will bill each Member for the water delivered to the Member monthly, in arrears, based upon the metered volume of treated water delivered by the Authority to the Member and in accordance with the schedule of rates and charges adopted by the Authority for the calendar year in accordance with this Member IGA. ARTICLE X. TERMS OF SERVICE 10.1 Points of Connection. Each Member shall be entitled to one point of connection to the Water Treatment Facilities through which raw water may be delivered to the Water Treatment Facilities and one point of connection through which treated water will be delivered by the Authority back to the Member (collectively, "Points of Connection"). The location of each Point of Connection shall be determined by the Authority in the reasonable exercise of its discretion. The Points of Connection for each Member shall be sized to accommodate the Member's Reserved Capacity in the Water Treatment Facilities based upon the engineering standards and operating procedures established by the Authority for the Water Treatment Facilities, but in no instance shall such connections be of a size that would exceed the 5,000,000 gallon per day capacity of the Water Treatment Facilities, unless specifically agreed to in writing by the Authority. Each Member shall submit engineering design plans to the Authority for the Member's Points of Connection for review and approval by the Authority before the Points of Connection are constructed. The Points of Connection shall be constructed either by the Member or the Authority and in accordance with a construction schedule, all of which shall be determined by the Authority in the reasonable exercise of its discretion, provided 100% of the design and construction costs for each Point of Connection shall be paid for by the Member. Each Point of Connection shall be equipped with metering and sampling equipment acceptable to the Authority for monitoring the volume of flow and the quality of water that is delivered to and from the Water Treatment Facilities. 10.2 Determination of Operating System Capacity. On or before September 30th of each calendar year, and based upon each Member's raw water delivery notification provided for below, the Authority shall determine the Operating System Capacity of the Water Treatment Facilities for the ensuing calendar year, and shall notify (0074028I.DDCX / 14 1 15 each Member of its determination in writing. Such notification shall state the estimated minimum and maximum volume of water the Authority anticipates treating during the ensuing calendar year stated in terms of the annual acre feet of treated water that will be delivered in the aggregate by the Authority to all Members and to each Member separately, as well as the anticipated average daily and maximum daily peak flow of such deliveries. 10.2.1 Member Raw Water Delivery Notification. On or before September 15th of each calendar year, each Member that is entitled to receive treated water from the Authority shall advise the Authority in writing ("Member's Raw Water Delivery Notification") as to the minimum and maximum aggregate volumes of water the Member anticipates delivering to the Authority during the ensuing calendar year stated in terms of annual acre feet of water as well as in terms of the average daily and maximum daily peak flow. 10.2.2 Conditions on Members Raw Water Deliveries. Each Member shall deliver raw water to the Water Treatment Facilities at a pressure and rate of flow acceptable to the Authority so that the Authority can sustain reasonable operating conditions in the Water Treatment Facilities. The pressure and rate of flow for water deliveries to the Authority shall be determined by the Authority based upon engineering standards and such other requirements as are applicable to the Operation of the Water Treatment Facilities. Backflow prevention devices, if necessary, and water quality measuring devices, required for use of the Member's capacity in the Water Treatment Facilities shall be approved by the Authority and shall be installed by the Member at the Member's expense and thereafter owned and maintained by the Authority. 10.2.3 Modification of Raw Water Deliveries. Any Member's Raw Water Delivery Notification may be modified in writing upon mutual agreement of the Authority and the Member, at any time before the beginning of the calendar year for which the Member's Raw Water Delivery Notification was made, based upon water supply conditions, available capacity in the Water Treatment Facilities, infrastructure operating conditions, and any other factors determined pertinent by the Member and the Authority. In addition, a Member may deliver raw water to the Authority in excess of the amount stated in its Member's Raw Water Delivery Notification, provided the Member has given written notice to the Authority of the Member's intent to deliver excess raw water ("Excess Deliveries") and the Authority has agreed to accept such Excess Deliveries and treat the same on the Member's behalf. The Authority will determine in its sole discretion, whether to accept Excess Deliveries, or not. 10.3 Authority Control of Treated Water Deliveries. The Authority will control and determine the timing, rate of flow and volume of treated water deliveries to the Members on a daily and hourly basis. Operating protocols and procedures for communications between the Authority and its Members and in particular, their respective operators in responsible charge, shall be established by the Authority in {00740281.DOCX / 14 } 16 cooperation and with input from the Members. Subject to its statement of Operating System Capacity, the terms and provisions of this Member Agreement, and any circumstances beyond the control of the Authority, the Authority will maintain water deliveries each year to its Members in accordance with the determination of Operating System Capacity referred to in paragraph 10.2 above. 10.4 Water Quality. All water delivered to the Water Treatment Facilities by a Member, must meet or exceed the reasonable water quality standards as established from time to time by the Authority ("Water Quality Standards"). The Authority shall set or reaffirm the Water Quality Standards applicable to the Water Treatment Facilities at the time the Authority provides each Member with notice of the Operating System Capacity in the Water Treatment Facilities for the ensuing calendar year. Water Quality Standards may be changed by the Authority from time to time based upon governmental regulations, changes in a Member's water quality, or because the mixture of water delivered to the Water Treatment Facilities has an undesirable impact on the quality of the water that can be delivered by the Authority to its Members. 10.4.1 Member Responsibility for Water Quality. Each Member shall be solely responsible for causing the raw water it delivers to the Water Treatment Facilities to meet the Authority's Water Quality Standards, prior to delivering such water to the Water Treatment Facilities. Each Member shall monitor the water it delivers to the Water Treatment Facilities for compliance with the Water Quality Standards. The Authority shall have access to all Member monitoring devices and records. Any violation of the Authority's Water Quality Standards shall be immediately reported by the Member to the Authority and all other Members. Any violation of the Water Quality Standards that continues for more than 24 hours or for more than seven (7) days in any three-month period may, in the Authority's sole determination be grounds for suspending the Member's right to deliver raw water to and receive treated water from the Authority. Upon the Member's cure of the violation as evidenced through testing provided to the Authority by the Member, the Member's deliveries of raw water to the Authority may resume. Each Member shall furnish records of the raw water quality delivered to the Water Treatment Facilities and deliver the same to the Authority on a schedule as determined by the Authority in the reasonable exercise of its discretion. 10.4.2 Authority Responsibility for Water Quality. The Authority shall be responsible for causing all water delivered by the Authority to a Member to meet or exceed all applicable Water Quality Standards as established by Federal or State law or regulation or as established by the Authority, whichever standard is more restrictive and protective of water quality. 10.5 No Obligation to Develop a Water Supply. The Authority shall have no obligation and assumes no liability to furnish or develop a source of water for the Water Treatment Facilities or to satisfy augmentation of water delivered to the Water Treatment Facilities for treatment. (0074028I.DOCx / 14 ) 17 10.6 Water Rights. The Authority shall make no claim to and shall have no ownership interest in any of the water rights used to support deliveries of untreated water to the Water Treatment Facilities or in or to any of the treated water that is delivered back by the Authority to the Members. All water delivered to the Authority by a Member shall remain under the dominion and control of the Authority. 10.7 Right to Terminate Service. The Authority shall have the right to terminate service to any Member for non-payment of the Authority's rates, fees, tolls or charges, for any other violation of this Member Agreement, or for any other violation of the Authority's rules and regulations concerning the Operation of the Water Treatment Facilities and/or the delivery of raw water to and delivery of treated water from the Water Treatment Facilities. Shut off shall occur no sooner than 7 days after delivery of written notice to Member, and only if to the Authority's reasonable satisfaction, the violation is not cured or diligent action taken to cure the violation within a reasonable period of time as deemed by the Authority. Notwithstanding any other provision of this Member Agreement to the contrary, the Authority shall not be required to give prior notice of any shut-off necessitated by an emergency as determined by the Authority. The Authority shall give any Member notice of such emergency shut-off concurrent with the shut-off or as soon as is reasonably practical following such emergency shut-off. ARTICLE XI. EXPANSION OF WATER TREATMENT FACILITIES 11.1 Expansion -Engineering Report. The Authority, subject to availability of funds, shall take timely steps to ensure that the Water Treatment Facilities have adequate treatment capacity to meet the needs of the Members and non -Member users herein provided for. At such time as the Authority, based on generally accepted engineering principles and the growth and demand projections of the Members, determines that it is appropriate to expand the Water Treatment Facilities, be it the Phase II or Phase III expansions contemplated herein, or any other expansion of the Water Treatment Facilities, the Authority shall authorize the preparation of an engineering report. The engineering report, among other things, shall show the nature and extent of the proposed expansion, the projected costs thereof, including the projected share of such costs to be borne by each of the Members, and an initial estimated start and completion date of the expansion. The engineering report shall also calculate the then current Design System Capacity of the Water Treatment Facilities in terms of millions of gallons per day and what the Design System Capacity of the Water Treatment Facilities, shall be after completion of the expansion, all stated in terms of millions of gallons per day. When the engineering report has been received, the Authority shall give written notification to all Members of the date, time and location of a meeting of the Members to review the report, such meeting to be held within sixty (60) calendar days of the Authority's receipt of the report. A copy of the engineering report shall also be made available to each Member along with the notification of such meeting. f00740281.DOCX 114 1 18 11.2 Member's Review. Each Member may submit comments and provide other input regarding the engineering report and any proposed expansion at any time, and in particular, at the meeting that will be held to review the report. The Authority shall take all comments into consideration and incorporate them into the final design of any expansion as the Authority determines appropriate. 11.3 Allocation of Expansion Costs. Unless the Authority provides service to a non -Member in accordance with an agreement approved by the Authority and all existing Members, each Member's share of the cost of any Water Treatment Facilities expansion shall be based upon and shall be in the same proportion as the Member's desired capacity of the Water Treatment Facilities expansion. For example, if the cumulative Construction Costs of a proposed expansion is $6 million, and a Member's desired share of the proposed 4 MGD Water Treatment Facilities' Design System Capacity is 1.0 MGD (25%) that Member's estimated cost of the proposed expansion will be $1,500, 000 calculated as follows: $6,000,000 x 1.0 MGD/4.0 MGD = $1,500,000. If the Authority allocates capacity to a non -Member, then the above -referenced formula shall be modified based upon the proportionate share of the design capacity of the Water Treatment Facilities that is allocated to the Members and any non -Member. 11.4 Payment of Estimated Expansion Costs. The Authority shall not award a contract for the construction of any expansion phase of the Water Treatment Facilities, or for the design of any such expansion without having a deposit from each Member sufficient to fund the Member's contractual obligations relating thereto, or having evidence satisfactory to the Authority that each Member has made arrangements for financing the Member's share of the estimated projected construction and/or design costs. 11.5 Non -Participating Member. Any Member not requiring additional capacity in the Water Treatment Facilities shall have the right not to participate in any proposed expansion or in the alternative, may participate to the extent the Member determines appropriate. In the event a Member elects not to participate in a proposed expansion of the Water Treatment Facilities, or does not arrange for the financing for its share thereof, the other Member shall have the option to complete the expansion by paying for the costs that the non -participating Member would otherwise have paid. Once a proposed expansion has been completed, each Member's share of the Design System Capacity of the Water Treatment Facilities shall be recalculated based upon the percentage of the actual construction costs for the expansion that each Member has paid, and Exhibit A and Exhibit B shall be updated appropriately. 11.6 Under Subscribed Expansion. If the Authority proposes to expand the Water Treatment Facilities pursuant to this Article XI and the proposed expansion is not 100% subscribed by the Members, the Authority in accordance with the procedures set {0074028I DOCX / 14 } 19 forth in Article XIII may offer the unsubscribed portion of the additional capacity to a Non -Member upon such terms and conditions as agreed to by the Authority and Members. ARTICLE XII. REPLACEMENT AND REHABILITATION COSTS 12.1 Purpose. The Members agree that the cost for the replacement and rehabilitation of the Water Treatment Facilities, including the cost of changes or improvements to such Facilities required by law or regulation, can be considered either a capital cost or an operation and maintenance expense. The Members recognize that such replacements, rehabilitations and/or changes and improvements are not likely to result in increased water treatment capacity. This section of the Member IGA is intended to provide the basis for appropriately categorizing such costs and the method for their payment. 12.2 Water Treatment Facility Replacement Fund. The Authority will, using accepted methods of accounting, establish a Water Treatment Facility Replacement Fund for the purpose of accumulating the funds necessary to replace and rehabilitate the Water Treatment Facilities, as needed. The Water Treatment Facilities Replacement Fund will be segregated into two fund categories — one for the Water Treatment Plant and the other for the Deep Injection Well, due to their markedly different depreciation schedules. The Authority will determine the level to which the Water Facility Replacement Fund shall be funded each year out of the Authority's revenues. The Authority shall also determine a target level or aggregate amount of funds that shall be kept in the Water Treatment Facility Replacement Fund. No part of Water Treatment Facility Replacement Fund shall be used to defray any operation or maintenance expenses. The Authority will provide to all participants an annual accounting of the Water Treatment Facilities Replacement Fund that shall show the revenues and expenditures from the Fund on an annual basis. 12.3 Records. The Authority shall keep complete records of all Replacement and Rehabilitation Costs incurred by the Authority. Any Member may examine and audit the Authority's records during regular business hours at any time upon three (3) days' advance written notice. 12.4 Replacement and Rehabilitation Costs. As used in this Member IGA, the term "Replacement" and/or "Rehabilitation Costs" shall mean any repair to or replacement of any portion of the Water Treatment Facilities that does not provide for a planned increase in the capacity of the Water Treatment Facilities, but which costs $25,000 or more and which extends the useful life of the Water Treatment Facilities by more than five (5) years. Any rehabilitation and replacement expenditures that are less than $25,000 or which do not extend the useful life of the Water Treatment Facilities by more than five (5) years shall be treated as an operation and maintenance expense. Replacement and/or Rehabilitation shall include, but shall not be limited to, all {00740281.DOCX / 14 } 20 reasonable engineering, design, inspection and other consultant costs such as geotechnical engineers, contractor costs, material costs, labor costs and equipment costs. 12.5 Unplanned Design System Capacity Increase. Any unintended increase in the Design System Capacity resulting from a repair or replacement expenditure caused by such things as, but not limited to, capacity increases resulting from technological changes, shall be assigned to Member's pro rata based upon each Member's reserved capacity. 12.6 Authority to Incur Debt. The Authority shall have authority to incur revenue debt for the purpose of paying Replacement and Rehabilitation Costs to the extent such costs cannot be funded from the Water Replacement Reserve Fund. ARTICLE XIII. RESTRICTION ON TRANSFER OF CAPACITY 13.1 General Restriction on Transfer. Except as permitted in accordance with this Article XIII, no Member shall transfer all or any portion of its capacity in the Water Treatment Facilities. 13.2 Prohibited Transfer is Void. Any transfer or attempt to transfer any capacity in the Water Treatment Facilities in violation of this Member Agreement, shall be null and void, and the purported transferee of any such capacity shall not be treated as the owner or beneficiary of any such capacity for any purpose. 13.3 Right of First Refusal. Each Member and the Authority shall have a continuing right of first refusal ("ROFR") with respect to any proposed transfer of capacity in the Water Treatment Facilities by a Member. The right of first refusal vests first with the Members and then with Authority. 13.3.1 Notice of Offer to Sell. If a Member decides to offer for sale, all or any portion of such Member's capacity in the Water Treatment Facilities ("Offering Member"), such Offering Member shall notify the Authority and the other Member(s) of its decision in writing ("Notice of Offer to Sell"). The Notice of Offer to Sell shall include the capacity being made available for sale and the relative Subscription Fee and Plant Investment Fee paid by the Offering Member based on the costs allocated in Exhibit A and Exhibit B, respectively, with no interest or additional value added. 13.4 Authority and Other Member's Right to Purchase. Within forty (40) working days of receiving the Notice of Offer to Sell ("Notice Period") the other Member shall either elect to purchase the Offering Member's capacity in writing (Notice to Exercise ROFR) or to decline (Notice to Decline ROFR). At the conclusion of the Notice Period or upon receipt of the Notice to Decline ROFR, whichever occurs first, the Authority shall have a Notice Period in which to elect or decline the ROFR. {00740281.D0CX / 14 1 21 13.5 Notice to Exercise ROFR is Not Delivered. If no Member or the Authority elect to purchase the Offering Member's capacity in accordance with the provisions of this Article XIII, the Selling Member may sell its offered capacity in the Water Treatment Facilities to a third -party upon such terms and conditions as the Selling Member and the third -party agree; provided, the third -party enters into an agreement acceptable to the Authority and the Members concerning the third-party's use of the purchased capacity. ARTICLE XIV. MISCELLANEOUS PROVISIONS 14.1 Further Assurance. From time to time, at the request of a Member or the Authority, each Member shall, without further consideration, execute and deliver such further instruments, and shall take such further action as may be reasonably required to fully effectuate the purposes of this Member Agreement including the providing of operational and water quality information as more particularly provided in Article VII, Section 7.6. 14.2 Entire Agreement. This Member Agreement embodies the entire Agreement and understanding between the Parties hereto with respect to the subject matter hereof, and supersedes all previous agreements and understandings relating to the Membership in the Authority. 14.3 Assignment, Sale or Transfer. No Member shall have the right to sell, transfer or assign its interests in this Member Agreement, or any portion thereof, or any capacity in the Water Treatment Facilities without strict compliance with this Agreement, or the prior written consent of all Members. 14.4 Binding on Successors. This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the Members hereto. Any assignment of this Agreement shall be subject to the approval of the Authority and its Members and any such assignment without that approval, shall be null and void. 14.5 Severability. In case any one or more of the provisions contained in this Member Agreement, shall be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 14.6 Headings. The Article, Section, and Subsection headings contained in this Member Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Member Agreement. 14.7 Force Majeure. No Party hereto shall be considered in default in its performance of its obligations under this Member Agreement, to the extent that the perfonnance of any such obligation is prevented or delayed by any cause, now existing or {00740281 DOCX / 14 } 22 in the future, which is beyond the reasonable control of the affected Party, including, but not limited to, acts of god, earthquakes, labor disputes, civil commotion, war events beyond the reasonable control of the Parties, such as regulatory restrictions or requirements, permit issuance, and the like. In the event a Party claims that the performance of its obligations is prevented or delayed by any such cause, the Party shall promptly notify the other Party of that fact and of the circumstance preventing or delaying performance. Such Party so claiming a cause or delayed performance shall endeavor to the extent reasonable, to remove the obstacles which preclude performance. 14.8 Damages. Firestone shall not be liable to Little Thompson, to the Authority, or to any other Member that may be admitted pursuant to the terms of this Member IGA or the Establishing Contract for consequential, indirect, punitive or special damages. 14.9 Most Favored Party. The terms and provisions of the Member intergovernmental agreements for each of the St. Vrain Water Authority Members shall be substantially similar and in no event shall the Authority offer a Member IGA to another St. Vrain Water Authority Member with more favorable provisions based upon all the terms and conditions of this Member IGA as a whole, without first offering to Firestone the opportunity to amend this Member IGA to contain such favorable provisions. 14.10 No Third -Party Beneficiaries. The Parties hereto are the only parties to this Member Agreement, and the only persons or entities entitled to enforce its terms. 14.11 Non -Waiver of Immunity. This Member Agreement shall not be construed to waive any of the privileges or immunities the Parties or their respective officers, employees, successors, and/or assigns are lawfully to pursuant to law, including, but not limited to, the Colorado Governmental Immunity Act, C.R.S. 24-10-101 et seq., as amended and any other privilege or immunity of the Parties. 14.12 Authority Financial Obligations. None of the Authority's financial obligations shall be binding upon or in any way be deemed to be a financial obligation of either Firestone or Little Thompson. {0074028i.uocx i 141 23 In witness whereof, the Parties have executed this Member Agreement as of the effective date set forth above. TOWN OF FIRESTONE FA 10 .r. IR ,..�� s o - Attest: ST. VRAIN WATER AUTHORITY By: - t i, resit t Attest: (00740281.DOCX / 14 ) 24 EXHIBIT A SUBSCRIPTION FEE Phase 1 Subscription Fee: Non -Construction Costs Item Phase 1 1.5 MGD Firestone Phase 1 Fee (1.25 MGD) LTWD Phase 1 Fee (0.25 MGD) Land Purchase $ 406,667 $ 338,889 $ 67,778 Water Quality Sampling $ 49,000 $ 40,833 $ 8,167 Legal $ 50,000 $ 41,667 $ 8,333 Other professional $ 50,000 $ 41,667 $ 8,333 Design/Permitting $ 862,100 $ 718,417 $ 143,683 CMAR Contract (Design) $ 17,400 $ 14,500 $ 2,900 Injection Well Permitting and Design $ 340,000 $ 283,333 $ 56,667 Total Non -Construction Cost $ 1,775,167 $ 1,479,306 1 $ 295,861 Member's Capacity MGD % Little Thompson Water District 0.25 16.7% Town of Firestone 1.25 83.3% Total 1.50 100.0% {00740281.DOCX / 14 } \§\.....,} ).}}.. ..! �!; ! `,!! ƒ) A HN (\)(§![) SME \� \\\ \\\\\ E.