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AI# 11914  Regular City Council Meeting 5.21. 09/26/2023:

Information

Agenda Item

Resolution - Water Utilities: Consider a resolution authorizing the Mayor to execute an Interlocal Wholesale Water Sales Contract with the Lubbock Reese Redevelopment Authority, to continue supplying potable water from the City’s water system.

Item Summary

In 2003, the City began negotiations with the Lubbock Reese Redevelopment Authority (LRRA) to supply potable water to LRRA to help facilitate the redevelopment and renovation of the former Reese Air Force Base.  On May 22, 2003, the City of Lubbock entered into a 10-year water supply contract with LRRA.  The original contract, as may be amended from time to time, provided that LRRA would pay the same commercial water rates as other entities within the city limits,   On April 23, 2013, and September 13, 2018, the City entered into successive 5-year contracts with the LRRA to continue supplying potable water from the City’s water system. Wholesale water customers are required by ordinance to pay wholesale water rates adopted by the City Council in Section 22.03.085(6) of the City of Lubbock Code of Ordinances.  Wholesale customers pay 50% more for their water than commercial customers within the city limits, since Lubbock citizens have paid for expensive water supply projects necessary to continue meeting Lubbock’s water demand. For the 2013 water supply contract with LRRA, the City Council amended Section 22.03.091 of the Code of Ordinances, by adding 22.03.091(h), which specifies that LRRA shall pay the water volume rates as all other commercial customers in the City, rather than the wholesale rate multiplier.    This new 5-year contract with the LRRA includes similar terms to past contracts. However, the City Council is removing 22.03.091(h) of the City of Lubbock Code of Ordinances which exempts LRRA from paying the water wholesale rate multiplier.  This ordinance change will place LRRA on a wholesale water rate multiplier.      The LRRA used 30 million gallons of Lubbock’s water in FY 2021-22.  The City used a total of 13.3 billion gallons of during this same time period. The amount of water that the LRRA used in FY 2021-22 represents less than 0.2% of Lubbock’s total water usage.

Fiscal Impact

This contract will provide the Water/Wastewater Enterprise Fund approximately $275,000 each year in revenue.

Staff/Board Recommending

Lubbock Water Advisory Commission Erik Rejino, Assistant City Manager L. Wood Franklin, Division Director of Public Works

Attachments LRRA - Resolution-WaterSupply LRRA - Contract- Water Supply

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