The Pretreatment Service Agreement with ExxonMobil Corporation was approved at the December 19, 2016 Council meeting.  The agreement identifies the terms and conditions to permit the ExxonMobil Corporation's refinery industrial wastewater discharge into the City's wastewater collection system for treatment.  The ExxonMobil Corporation will utilize the Lockwood sewer system to convey this discharge to the City for treatment.  In general, the Agreement includes insuring compliance with City, State and Federal requirements, fee and rate methodology, limits on industrial loadings, and indemnification conditions.  This Agreement states that the ExxonMobil Corporation acknowledges and accepts a maximum daily discharge of 2.0 million gallons per day (2 MGD) and that they may request a variance to the 2 MGD if they anticipate the flow limit might be exceeded.  ExxonMobil Corporation is requesting an increase in the maximum  daily discharge from 2 MGD to 2.5 MGD and understands that this change also results in a larger System Development Fee (SDF) that ExxonMobil Corporation must pay prior to connection to the City.  Staff has determined that the wastewater treatment plant has the capacity to treat this additional .5 MGD of industrial wastewater.  The amendment to the Pretreatment Service Agreement with ExxonMobil Corporation is attached and includes the change to increase the maximum daily discharge from 2 MGD to 2.5 MGD.

Council may:

• Approve the amendment to the Pretreatment Service Agreement with ExxonMobil Corporation; or
• Not approve the amendment.  Not approving the amendment to the Pretreatment Service Agreement will require ExxonMobil Corporation to meet the requirements of the current Agreement to not exceed the maximum daily flow of 2 MGD unless a variance is requested by ExxonMobil 48 hours prior to the day on which the flow is expected to exceed 2 MGD and ExxonMobil's SDF will be based on the max flow of 2 MGD.

If the amendment to the Pretreatment Service Agreement is approved, the one-time System Development Fee will increase by $712,561. 

Staff recommends that the City Council approve the amendment to the Pretreatment Service Agreement between the City of Billings and ExxonMobil Corporation.