HomeMy WebLinkAboutIR 7174 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7174
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February 17, 1987
To the Mayor and Members of the City Council
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X Subject: PROPOSED AMENDMENTS TO SOUTHLAKE WHOLESALE
+07' WATER CONVR_A__CT--
The Fort Worth City Council approved a wholesale water contract with the City of Southlake
on March 20, 1984. The contract term is for 17 years, expiring in the year 2001. While
the contract is similar to other wholesale water contracts Fort Worth has executed, it
does establish a 2.8 million gallon per day (MGD) ceiling on Southlake's rate of withdrawal.
This ceiling was put into place due to limitations on the total available storage in the Beach
Street Ground Storage reservoir. This tank is the storage site for water delivered to not
only Southlake, but Keller, Haltom City, Trophy Club, and the Surnmerfields development
and other retail customers in Fort Worth. This past summer, both Southlake and Keller
began to exceed the maximum rate of withdrawal limits imposed by the contracts.
However, cities in northern Tarrant County had previously recognized the possibility of
exceeding these ceilings. By mid-summer, 1985, each of Fort Worth's wholesale customers
in northeast Tarrant County (Southlake, Keller, and Trophy Club) as well as several cities
interested in long-term water contracts (Haslet, Roanoke, and Westlake) had begun to discuss
future treated water demands in the area. With the onset of the large IBM development
and other future development scenarios, questions arose when the sum of these cities'
demands were compared to the total deliverable water supply from the Beach Street site.
While these cities estimated a total future demand of 31.7 M.G.D. the current contract
demands on the Beach Street site total only 9.3 M.G.D. The current system cannot
reasonably meet such demands in the near future. Southlake's and the other cities, major
concerns are with the impact of these limitations on future economic development.
A series of meetings with Water Department staff followed, from which a proposal emerged
that would satisfy most of the concerns expressed by Southlake and the adjacent cities.
The proposal was to amend the existing contracts in line with the following provisions:
1. Remove "maximum rate of withdrawal" ceilings;
2. Add (if not already present) a "take-or-pay" or "ratchet" clause
which requires the wholesale customer to annually pay for the highest
volume and peak established in past fiscal years, whether or not
the same demand occurred in the current fiscal year.
3. If demand problems are experienced, rationing to the wholesale
customers would be based on the immediate previous year's expressed
demand.
4. Prohibit any new resale or "facility-sharing" agreements between
or among existing wholesale customers or future wholesale customers,
unless approved by the City of Fort Worth.
5. Wholesale customers would agree to assist Fort Worth in obtaining
financial assistance for the construction of a water treatment plant
Owl, on Eagle Mountain Lake.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7174 - D.2
February 17, 1987
a4 faar To the Mayor and Members of the City Council
Subject: PROPOSED AMENDMENTS TO SOUTHLAKE WHOLESALE
WATER CONTRACT
6. Fort Worth would not enter into any new wholesale water contracts
in northern Tarrant County until an engineering study is performed,
demonstrating the incremental water demand can be met without
endangering the supply to the existing northeastern wholesale
customers.
The Water Department began negotiations with Southlake on these points in early 1986,
with the aim of constructing a revised wholesale contract. Agreement on the wording
for all the changes listed above was reached in late 1986, and Southlake has asked that
the revised contract be submitted to the Fort Worth City Council for review and approval.
Officials from Southlake will be available at Tuesday's Pre-Council Meeting to discuss
their request.
Under the revised contract, each of the six points listed earlier are covered under the
changes. In addition, expiration of the contract will still be scheduled for 2001.
City Council direction on this matter is requested. As always, staff is available to answer
any questions that may arise.
b&v)Douglas Harman
City Manager
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ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS