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C. City's Use of Allocated Surface Water. The City agrees that the allocation <br />of surface water rights by Texas State shall be for the purpose of preserving and enhancing <br />stream flows through identified endangered species areas along the San Marcos River and <br />that the water, if withdrawn by the City, may only be withdrawn downstream of I1-1-35. <br />For example, the water may be withdrawn at the wastewater treatment plant to be pumped <br />as reuse water or be allowed to flow to a withdrawal point for treatment to potable water <br />quality and used in the water system such as the CRWA plant in Martindale. The decision <br />as to amounts withdrawn of the allocated amount shall be at the sole discretion of the City. <br />d. City to Provide Reclaimed Water. Beginning with the first date delivery <br />of reclaimed water to Texas State as provided above, the City shall make available and <br />deliver to Texas State up to 400 acre feet of reclaimed water per year from the City's <br />reclaimed water system. Delivery of reclaimed water in excess of 400 acre feet per year <br />will be subject to the availability of unallocated reclaimed water from the City's reclaimed <br />water supplies. <br />e. Charges for Reclaimed Water. The City shall install such meters as are <br />reasonable and customary for measuring the volume of reclaimed water consumed by <br />Texas State. Texas State shall be charged for reclaimed water delivered from the City at <br />the City's then applicable reclaimed water rate. The initial current rate in effect as of the <br />Effective Date of this Agreement is $1.35 per 1,000 gallons of water or $439.90 per acre <br />foot. The City shall bill Texas State in accordance with the usual and customary utility <br />billing practices between the City and Texas State, provided that the billing for the first <br />cycle under this Agreement may be prorated if the delivery of reclaimed water begins <br />during the middle of the normal billing cycle, e.g., monthly, quarterly, yearly, as applicable. <br />3 <br />