HomeMy WebLinkAbout9B SMSC Cooperative Water Agreement PresentationWater Purchase and Facility
Expansion Agreement with the
SMSC
November 20, 2017
Background
•The City does not currently have the water supply available to meet our
existing Max Day Demand.
•To address this we have an existing agreement with the SMSC to purchase up
to 1.2 Million Gallons per Day (MGD).
•To meet future demand as the City continues to develop within our existing
limits as well as the Orderly Annexation Area, additional water supply will be
required.
Background
•Both the City and the SMSC have a need for a water treatment plant in the
same general vicinity near the intersection of CR82 and Stemmer Ridge
Road
•In 2016 the City Council directed staff to study the potential for a joint
facility with the SMSC. Based on the results of that study on July 11, 2016
the City Council adopted a resolution authorizing staff to begin negotiating
an agreement for a new joint WTP.
Background
•The new WTP will be connected into the same water system network as the
SMSC’s northern WTP which is connected to the City’s water system. There
will be no way to differentiate if water is being delivered to the City from
either SMSC’s plants once the new one is on line.
•It is therefore necessary to have one agreement that address both the
construction of the new WTP as well as our existing and future water
purchases with the SMSC.
Agreement Details
•City paying for construction of two filter cells now that will be
needed for future expansion. City will fund the construction of
the second half of the WTP when it is needed.
•City will extend watermain from Well #6 to the new WTP in
2019.
•Water purchase increases to 2.2 MGD initially and reduces down
to 1.5 MGD as SMSC demand increases.
Costs -Water Treatment Plan
•Stand alone WTP would cost approximately $14,900,000
•City’s share of joint WTP is estimated to be $8,700,000
•This is a cost savings of approximately $6,200,000 for the City.
•Initial cost is capped at $2.5 million for the construction of the
two filter cells.
Costs –Watermain Extension
•The cost estimate to extend the watermain from Well No. 6 to the
new WTP is $1,000,000.
Benefits
(Public Works)
•Capacity added without excessive upfront capital investment.
•Hedge against slowed or reduced demand in the annexation area.
•Future water appropriation permits from DNR more likely.
•Facilitates the use of our existing Well #6.
•Provides both communities with redundancy.
Benefits
(Financial)
•Purchase protections for the City
•Financial transparency for water rate calculation methodology
•The price for water/1000 gallons from the SMSC is competitive.
•This agreement significantly delays/possibly eliminates the need to drill
Well #10. The cost for a new well (in today’s $) is approximately $1
Million.
Benefits
(Legal)
•The City will hold an escrow amount of $250,000 that can be
used if there is a default by the SMSC under the agreement.
•The SMSC has provided a limited waiver of sovereign immunity.
•The agreement can only be terminated if both parties agree.