Title
Resolution - A Resolution Approving an Agreement for the Sale and Delivery of Treated Water to a Wholesale Customer - Mountain Peak Special Utility District
Requested Action
Consider the Resolution authorizing the City Manager to execute an Agreement for the Sale and Delivery of Treated Water to Mountain Peak Special Utility District.
Recommendation
Staff recommends approval of the Resolution.
Description/History
A wholesale water contract with MPSUD was first presented to the council on October 14th of, 2019. Council directed us to begin negotiating contract terms with MPSUD. Over the past several years, MPSUD has needed resources faster than a wholesale agreement with Mansfield could provide, leading them to acquire some capacity by improving their current wells and through a separate wholesale agreement with Johnson County Special Utility District.
Utilizing the same agreement structure and rate methodology with JCSUD and GP, MPSUD has agreed to contract terms to include 1 million gallons of water per day initially. During the 20-year term of the agreement, MPSUD and Mansfield would plan for up to 10 MGD. The 1 MGD initial take has minimal impact on our current system capacity and will not change our current Capital Improvement Plan. The growth in demand to 10 MGD will be planned through our water master plan, and the cost will be programmed into our CIP and MPSUD's cost of service.
Justification
Expansive growth is taking place in the Dallas-Fort Worth Metroplex and the service areas of Mansfield and neighboring communities. This growth is driving the need for additional water supply. Mansfield is uniquely positioned with water resource availability and our water treatment plant. We have built and are expanding our treatment plant to meet the max day demand. Our max day demand generally occurs in or around August and is primarily driven by single-family residential irrigation use. Our peaking factor is over two times our average daily flow. What this means is that we generally have treatment capacity sitting idle and not producing water or revenue.
In 2006 the City began negotiating wholesale agreements with the Johnson County Special Utility District and the City of Grand Prairie. In 2014 we started to see the value of wholesale water as our wholesale customer’s flows began increasing. Since then, we have experienced an increase in our average daily consumption and no net effect on our max day demand. This tells us that we are selling water that would have sat idle in unused capacity at the plant. Since 2014 wholesale water has generated over twenty-five million dollars in revenue.
Funding Source
N/A
Prepared By
Jeff Price, Executive Director of Public Works
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