GREY EAGLE ESTATES - WATER FACILITY & REIMBURSEMENT AGMT

4. Reservoir. The City agrees to construct on the reservoir site described in Section 2 above an approximate 1.8 million gallon reservoir at such time as City deems appropriate. The City will use its best efforts to accomplish this work as soon as funding permits . 5. Connection Fee Surcharge. The City agrees to establish as soon as possible a water connection fee surcharge of at least $1,050 per connection for all new connections to the City water system in the study area in the Bon de zone or higher elevations (the area benefitted by the proposed reservoir). This fee will not apply to the Grey Eagle development (Tract 5189) or the R & W Ranch development (Tract 5188). Upon recommendation of the City Engineer and approval of the City Counci 1, this fee may be reduced for connections above the Bonde zone upon a showing of exceptional water system improvement costs that make the full fee inequitable. If for any reason the City's authority to inpose the water connec- tion fee surcharge is impaired by changes in State law, City will pursue alternate methods of obtaining contributions from future developers, including its power to acquire subdivision exactions. 6. Reimbursement. A. Amount of Reimbursement In recognition that the Subdivider's initial contribution of $112,000 exceeds his proportionate share of $29,400., the City agrees to reimburse the difference of $82,600,._ subject to receipt of surcharge connection fee as described above. B. Method of Reimbursement The City will annually on approximately the 1st of February pay the Subdivider 28/67 times the total surcharge fees, as described in Section 5 above, collected during the preceding calendar year. Reimbursement will continue in this fashion until Subdivider has been reimbursed the full $82,600,1_ increased annually by 12~ per annum interest on the remaining balance. However, the City's obligation to reimburse Subdivider pursuant to this section terminates as of January 1, 2000. 7. Security. The performance of this Agreement shall be secured by security to be approved by the City Attorney and which may include any of the forms of security permitted by the Subdivision ~iap Act. 8. Related Contracts and Proceedincrs. Any prior contracts between City and Subdivider and any prior approvals by Boards, Commissions or Council of City shall not be affected by the provisions of this Agreement unless specific modification is set forth herein. 9. Time of Essence. Time is of the essence in the performance of this Agreement. - 3-