City and DUD Adopt Agreement to Supply Water to Each Other in Times of Need

September 12, 2017
by: 
Dwayne Page
Smithville Mayor and Aldermen
DeKalb Utility District Board of Commissioners

The relationship between the City of Smithville and the DeKalb Utility District has been strained in recent years over the DUD’s new water treatment plant but the two sides are trying to put aside past differences and work together with passage of an agreement which will allow each utility to sell water to the other in times of need.

Under the water purchase agreement adopted Monday night 4-1 by the Smithville Aldermen and 5-0 by the DUD Board of Commissioners last Thursday, the City of Smithville and the DeKalb Utility District will sell water to each other, if needed, at the rate of $2.67 per 1,000 gallons. That’s the rate the city had been charging the DeKalb Utility District before the DUD cut ties with the city as a customer and started producing water for its own customers during the summer.

The city will maintain eight existing master meters that can service both utilities and the DUD will reimburse the city for one half of the servicing and maintenance costs.

“Last Thursday the DUD Board met and passed a water purchase agreement between DUD and the City of Smithville. Our city attorney Vester Parsley looked this over as well as Greg Davenport from Wauford Engineering. We changed a couple of things and sent it back to DUD. They were fine with the small changes. It was more or less just some wording. Their board approved it unanimously,” said City Administrator Hunter Hendrixson.

“Now that they (DUD) have their own plant up and going, if they need to use us, we can use our master meters to provide them water and if something happens in our distribution system we can turn our meters around and use the DUD water for our customers. Its just a mutual aid agreement. It basically says we will support each other one way or the other. The $2.67 per 1,000 rate can change years down the road but both parties have to be in agreement,” Hendrixson said.

Alderman Shawn Jacobs, who voted against the agreement, expressed concern about the rate. “We’re still selling water to them (DUD) cheaper than we can produce it ourselves,” he said.

“It sticks in my craw that we’re charging our customers $5.00 per 1,000 gallons and we’re letting non taxpaying residents get it cheaper than that,” Alderman Jacobs continued.

“Its based on a wholesale number versus a retail price,” replied Hendrixson.

“It’s the same price for both sides,” added City Attorney Vester Parsley.

“Have they (DUD) given any figures on what it cost to produce their water?,” asked Alderman Danny Washer

“Not that I am aware of. I suspect its more than $2.67 per 1,000 gallons,” Parsley responded.

“I’ll sign it (vote for it) but I don’t like it,” said Alderman Washer.

The agreement states:

SALE OF WATER FROM SMITHVILLE TO DUD:

“In times of special need or as circumstances require, Smithville will sell DUD a quantity of safe, potable water under terms of this agreement. DUD will pay for the purchase of this water in a manner consistent with the lowest 1,000 gallon wholesale rate charged by Smithville at the time of purchase, which rate at the date of this agreement is $2.67 per 1,000 gallons,” the agreement states.

“Smithville will bill DUD on a monthly basis with payment being due under the same terms and conditions as any other Smithville customer”.

“Smithville will furnish as much water as practicable to address DUD’s needs. The parties do, however, acknowledge that Smithville owes a primary duty to its citizens and, therefore, that Smithville does not guarantee any specific amount or quantity of water to be available at any time and reserves the right to limit the amount of water furnished to DUD”.

“Smithville agrees to supply water to DUD in the same condition of purity and fitness for consumption to all the other customers of Smithville. Smithville does not guarantee and will not be liable for any obligation, liability, responsibility, or cause of action arising out of the furnishing of water to DUD, whether concerning the quality or quantity of water furnished.”

“DUD hereby agrees to indemnify and hold Smithville harmless from any cause of action arising out of lack of water pressure or availability of pressure which might be brought by any DUD customer or user. This indemnification shall extend to the reasonable attorneys’ fees incurred by Smithville.”

SALE OF WATER FROM DUD TO SMITHVILLE:

“In times of special need or as circumstances require, DUD will sell Smithville a quantity of safe, potable water under terms of this agreement. Smithville will pay for the purchase of this water the same rate that Smithville proposes to charge DUD in the event of the sale of water to DUD by Smithville. The rate in effect as of the date of this agreement is $2.67 per 1,000 gallons,” the agreement states.

“DUD will bill Smithville on a monthly basis with payment being due under the same terms and conditions as any other DUD customer”.

“DUD will furnish as much water as practicable to address Smithville’s needs. The parties do, however, acknowledge that DUD’s primary purpose is to serve its customers within its service area and, therefore, that DUD does not guarantee any specific amount or quantity of water to be available at any time and reserves the right to limit the amount of water furnished to Smithville”.

“DUD agrees to supply water to Smithville in the same condition of purity and fitness for consumption as to all the other customers of DUD. DUD does not guarantee and will not be liable for any obligation, liability, responsibility, or cause of action arising out of its furnishing water to Smithville, whether concerning the quality or quantity of water furnished.”

“Smithville hereby agrees to indemnify and hold DUD harmless from any cause of action arising out of lack of water pressure or availability of pressure which might be brought by any Smithville customer or user. This indemnification shall extend to the reasonable attorneys’ fees incurred by DUD.”

MAINTENANCE, UPKEEP, AND REPAIR OF EQUIPMENT AND CONNECTIONS:

“Smithville shall continue to service and maintain the metering equipment located at Evins Mill master meter, Highway 70 West master meter, South College Street master meter, South Mountain Street master meter, Midway Community master meter, Cookeville Highway master meter, Hobson Street master meter, and Shiroki master meter. DUD Shall reimburse Smithville one half of any costs associated in servicing and maintaining said meters. Such service and maintenance includes, but is not limited to, routine maintenance, annual testing and calibration, and repositioning, if necessary. Before performing any such service or maintenance, the parties will confer concerning the work to be performed, the party responsible for overseeing the work, and the anticipated cost of such work.”

“Except for (previous paragraph), each party will be responsible for the upkeep, maintenance, and service of lines and equipment on its respective side of these meters,” the agreement concluded.

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