DUD and City to Share in Water Cost Study

January 8, 2013
by: 
Dwayne Page
Roger Turney

The City of Smithville and DeKalb Utility District are expected to share in the cost of conducting a study of the city's water production operation as the two sides look toward possibly making a deal on a new water contract.

But even if the parties do reach an agreement, the DUD still intends on proceeding with the construction of its own water treatment plant.

City officials last week received a letter from Roger Turney, Chairman of the DUD board of directors addressing the city's request for a face to face meeting on proposed contract discussions.

In the letter Turney wrote that the DUD is willing to share one-half of the cost of an independent entity to conduct the cost study but that no meaningful contract discussions can be held between the city and DUD until that study is performed since it would address the rate to be included in any such new contract for the purchase of water by the DUD.

During Monday night's city council meeting, Alderman Tim Stribling said the city should proceed with plans for the cost study. "All of us got a letter from DUD. We need to get on with a cost study," said Alderman Stribling.

"I got a price quote today on that," said Secretary-Treasurer Hunter Hendrixson. "They said to budget up to $7500. DUD is going to pay half of that. I'll confirm it but that's what the letter says," said Hendrixson.

"To sit down with them, we need to all find out what it cost to make our water," added Alderman Stribling.

"I've already said from day one, since I've been in office, I'm open," said Mayor Jimmy Poss. "I'm willing to sit down and talk to them. But this is the first response we've had back (from DUD). We're ready to go ahead," said the mayor.

"We've finally got somewhere in the last week or so," added Hendrixson. " They've given me a cost and we're budgeted for it, especially for fifty percent of it. I just need to get them some information,' he said.

In his letter to Mayor Poss, Turney wrote that "While I appreciate your interest in meeting in order to discuss a proposed contract between the City of Smithville and DeKalb Utility District for the purchase of water, as we have pointed out before there does not appear to be any significant information that could be discussed until such time that a cost study is done," he wrote.

"As we have earlier stated, DUD is interested in entering into a long term water purchase agreement with the City of Smithville. We have earlier provided to you a rather standard agreement for your review and consideration and have heard no response as to whether the terms set forth therein are agreeable or not or of any proposed changes to the agreement. As we had earlier set out, DUD is willing to share one-half of the cost of an independent entity to conduct a cost study of the city's water production operation but have received no input as to whether that offer is acceptable and if there is any action currently being taken to accomplish such a study. It would seem that there can be no meaningful discussion until such a study is performed since that would address the rate that would be included in any such contract for the purchase of water by DUD. We understand that cost studies are commonly recognized in this industry to establish an appropriate rate."

"Please be advised that DUD still intends on proceeding with the construction of a water treatment plant but will no doubt still need to purchase water or have the ability to purchase water from the City of Smithville. Therefore, we await word on the progression of a cost study so that we can then meaningfully sit down and further discuss the completion of an agreement between the DUD and the city," wrote Turney.

The City of Smithville currently sells water to the DeKalb Utility District for $2.05 per thousand gallons and under terms of the contract, the rate increases by five cents per thousand gallons in January of each year. The two parties entered into the contract in 2004 and it expires in 2014.

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