ARTICLE 16 Town Utilities

The Council shall from time to time by resolution fix, establish, maintain, enforce and provide for the collection of rates, fees and charges for water, sanitary sewer, storm and water drainage, gas and/or electric, any power sources, and all other utilities and services furnished by the Town.

Such rates, fees and charges shall be sufficient in the Council's judgment to provide services to customers; pay all securities and bonded indebtedness; pay legally required refunds; cover the cost of operations, maintenance, additions, extensions, betterments, and improvements; provide a reasonable return on the Town's investment in utility properties and capital investments, including by illustration only, reimbursement to the Town for the utilities' use of the Town's rights-of-way and reimburse the Town for administrative services and overhead provided and incurred by the Town on behalf of all utilities; and any other consideration reasonably determined by the Council to be in the best interest of the Town.

All monies derived from Town utilities shall be accounted for separately from other monies of the Town.

Any loan of money derived from Town utilities to any other Town utility, or to any other Town fund, shall be approved by ordinance.

Any person, legal entity or political body who seeks an extension of water service, annexation of land to the Town or a change in land use, if such change in use will increase the demand for water service, shall dedicate a sufficient amount of acceptable raw water necessary for the increase of water usage to the Town; except that, for good cause shown, as determined by the Town Council, the Town may accept cash-in-lieu of the required raw water dedication in an amount at least equal to the fair market value of the water at the time of the sale.

The Town shall protect the Town's water rights by, when warranted and economically feasible, filing water court actions to change the decreed use of such water to allow for municipal uses and participating in third party cases to protect the Town's water portfolio.

The Town may provide more raw water credit for the dedication of water rights that, at the time of dedication, allow for municipal uses than water rights that do not allow for municipal uses; except that the Town shall not provide more credit for water rights dedicated to the Town than the water court has previously provided for such, or a similar, water right.

The Town shall not transfer or exchange the Town's water rights unless the Town receives, at a minimum, an equivalent yield on the water transfer or exchange.

The Town may sell water rights for use within the Town boundaries in an amount at least equal to the fair market value at the time of the sale to fund capital improvement projects related to the treatment or distribution of water.

The Town shall endeavor to retain sufficient treatment water resources above the Town's annual water demands to ensure that the Town will have adequate water supplies in times of extended drought.

The Town shall endeavor to maintain a water portfolio greater than or equal to 1.2 times the acre-foot volume that is committed to be supplied by the Town to serve existing customers and satisfy water bank and contractual obligations. By the affirmative vote of at least five members of the Entire Council, the Town may maintain a water portfolio below 1.2 times the committed acre-foot volume; except that the Town shall, at all times, maintain a water portfolio that is at least equal to 1.1 times the committed acre-foot volume. Water dedicated at the time of annexation without a contractual obligation for the delivery of such water shall not be counted against the total. The Town Council shall by ordinance define the amount of yield of the Town's water portfolio by which to base the calculations above, based on climatological factors and any other items deemed relevant to the long-term water supply.

The Town may create a strategic water reserve to help facilitate major economic development or similar such purposes in the Town. This reserve would be separate from the portfolio referenced in Paragraph G.