R-00-09-28-9C10 - 9/28/2000RESOLUTION NO. R- 00- 09- 28 -9C10
WHEREAS, the City of Round Rock desires to acquire water from the
Brazos River Authority, and
WHEREAS, the City Council wishes to express its intent to enter
into a contract with the Brazos River Authority for 10,000 acre -feet of
water per year, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute a
letter of intent declaring the City of Round Rock's intention to enter
into a contract with the Brazos River Authority for 10,000 acre -feet of
water per year, a copy of said letter of intent being attached hereto
and incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended, and the Act.
ATTEST:
RESOLVED this 28th day of Sep 2000. I
1.
ROE °T A. STLUKA, J Mayor
JO E LAND, City Secretary
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City of Round Rock, Texas
Mayor
Robert A. Stlaka. Jr.
Mayor Pro-tem
Earl M. Hairson
Coundl Members
Tom Nielson
Carrie Pitt
Earl Palmer
Isabel Callahan
Jimmy Joseph
City Manager
Robert L Bennett, Jr.
City Attorney
Stephan L Sheets
CITY OF ROUND ROCK
September 28, 2000
Mr. Gary Gwyn
General Manager
Brazos River Authority
P.O. Box 7555
Waco, Texas 76714
Re: Request for 10,000 acre -feet of water per year from water to be acquired from the
Lower Colorado River Authority
Dear Mr. Gwyn:
The purpose of this letter is to indicate the City of Round Rock's intent to enter into a
contract with the Brazos River Authority under the terms as generally presented to
interested Williamson County entities at the August 4, 2000 meeting in Georgetown. I have
also enclosed a copy of the resolution authorizing this letter of intent.
The City looks forward to completing this contract with the BRA in the near future.
ly,
d
r.S/i' 414P /0
. St uka, r.
Mayor
Fax: 512.218 -7097
1-800 - 735 -2989 TDD 1- 800 -735 -2988 Voice
www.cisound- rock.tx.us
221 East Main Street
Round Rock, Texas 78664
512.218 -5400
Brazos River Authority
September 7, 2000
Mr. Bob Bennett
City Manager
City of Round Rock
221 East Main Street
Round Rock, Texas 78664
Dear Ve
Sincejely,
Gary Gwyn
General Manager
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w:\cort\gwyn \hb 1437 kr to cust.doc
?FrPlt' - rt
4400 Cobbs Drive • P.O. Box 7555 • Waco, Tex
254-776 -1441 • FAX 254- 772 -578
QUALITY • CONSERVATION • SERVICE
Thank you for your letter requesting 10,000 acre -feet of water per year to be
initially provided from a 25,000 acre -feet supply of raw water Brazos River
Authority will acquire from the Lower Colorado River Authority pursuant to HB
1437.
Brazos River Authority is in the final stages of negotiating the terms of the
acquisition contract with LCRA. To date, we have received letters requesting in
excess of the 25,000 acre -feet of water per year to be acquired.
In order to expedite the negotiation process and ensure your request is official,
please provide us with a letter of intent to enter into a contract with the Authority
under the terms as generally presented to interested Williamson County entities
at the August 4, 2000 meeting in Georgetown for 10,000 acre -feet of water per
year authorized by your City Council. Please attach a copy of the resolution
authorizing such letter of intent.
Thank you for the opportunity to serve your water needs. I look forward to
completing this mutually advantageous project with the City of Round Rock in the
near future.
ej u.r '1 tans.
—
Q
par7
Revenues
Contracts $ 1.230 5 1,292 $ 1,354 $ 1,415 $ 1,477 5 1,758 $ 1,789 $ 1,969 $ 2,177 $ 2,415
System Rate - (shared costs from
existing system rate units) 380 400 420 454 541 645 732 733 733 735
Net Increase - conversion
from two to system rate 242 239 429 542 980 85.Z 1R83 1.3p3 1.584 1210
Total Revenues 1,857 2,022 2203 2,418 2,704 3,260 3,584 4,005 4,494 5,060
Cost from LCRA (1,641) (1,723) (1,805) (1,887) 1,969 (2. 344) (2.344) (2,344) (2,344) (2.344)
Net Revenues $ 218 $ 299 f 398 $ 529 $ 735 $ 918 $ 1,240 $ 1.661 $ 2,150 $ 2,716
Cumulative Impact $ 216 $ 515 5 913 $ 1,442 $ 2,177 5 3,093 5 4 $ 5,994 $ 8,144 510,860
Brazos River Authority
LCRA Water Purchase - Revenue Impact
Year. Ynr 2 Data Year 4 Year1 Years Year/ )(earl Years Yearly
(in 000's)
0 Cost • Revenue I
Cumulative t
net revenue
$6 1 million
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
DATE: September 22, 2000
SUBJECT: City Council Meeting — 7:00 p.m.
ITEM: 9.C.10. Consider a resolution authorizing the Mayor to execute a letter of
intent declaring the City's intent to enter into a contract with
Brazos River Authority for 10,000 acre-feet of water per year.
This will initially be provided from a 25,000 acre -feet supply of raw
water. The Brazos River Authority will acquire this from the Lower
Colorado River Authority pursuant to HB 1437. Staff recommends
approval. Staff Resource Person: Jim Nuse, Public Works Director.
This letter was sent to all BRA long -term water supply customers.
Brazos River Authority
September 6, 2000
«Title» «FirstName» «LastName»
«JobTitle»
«Company»
«Address»
«City» «State» «Zip»
RECEIVED P9 1 1 ?on
QUALI1Y • CONSERVATION • SERVICE
Re: Brazos River Authority purchase of water supply from the
Lower Colorado River Authority
Dear «Title» « LastName»:
On August 18, 2000, the Brazos River Authority's Board of Directors authorized the
acquisition of 25,000 acre -feet of water per year from the Lower Colorado River
Authority for use in Williamson County. The water purchased from the LCRA will be
resold by the Brazos River Authority to cities and other public water suppliers in
Williamson County under a modified System Water Availability Agreement. The LCRA
price for water sold in Williamson County is substantially higher than the BRA System
Rate. As a result, the Williamson County customers will pay significantly more than the
BRA System Rate. However, the cost of the LCRA water supply will be incorporated
into the total cost of the BRA water supply. As discussed below, the result is positive for
both the Williamson County users and the BRA System.
The Williamson County users were prepared to contract directly with LCRA, which
would not have benefited the BRA System. The Board's action provided the incentive
needed for the Williamson County customers to convert fixed -price contracts to System
contracts. This is not a subsidy of Williamson County, but a transaction that has
financial benefits both for the BRA System and for the Williamson County customers.
Also, by meeting a significant portion of the long -term water demands for Williamson
County with LCRA supplies, BRA will be better positioned to have any new water
supplies available for other areas of the Brazos River basin. Since the transaction is
unique, involving Colorado River water being purchased by the BRA, and because
conversion of fixed -price contracts to System contracts is essential to providing future
financial benefits to the BRA System, I wanted to provide each BRA water customer
with an explanation of the pending transaction.
The Brazos River Authority has many long -term water customers in Williamson County.
It has contracted with the Corps of Engineers to serve as the local sponsor for Lakes
Granger and Georgetown. These Williamson County customers continue to look to the
BRA to satisfy their future water needs. To do this, the Brazos River Authority staff
proposed, and the Authority's Board of Directors approved, purchase of the 25,000
4400 Cobbs Drive • P.O. Box 7555 • Waco, Texas 76714 -7555
254 - 776 -1441 • FAX 254 - 772 -5780
•
«Title» «FirstName» «LastName» September 6, 2000
Page 2
acre -feet of LCRA water and also approved incorporating the cost of acquiring that
water into the Authority's System Rate under the following terms:
• the Brazos River Authority would be solely responsible for the
allocation and marketing of the water in Williamson County;
• the BRA will pay the full cost of the LCRA water, which is priced at
$65.62 per acre -foot for reserve water ($52.50 per acre -foot plus a
25% surcharge of $13.12 per acre -foot) or $131.25 per acre -foot for
activated water ($105 per acre -foot for activated water plus a 25%
surcharge of $26.25 per acre - foot);
▪ Williamson County customers would pay the Authority's current
System Rate ($26.00 per acre -foot) plus a Cost Recovery Fee equal to
the LCRA price Tess the current System Rate;
• the current price to the Williamson County customers will be $49.22
per acre -foot for reserved water and $98.44 per acre -foot for activated
water, which is significantly higher than the current BRA System Rate
of $26 per acre -foot;
• the Authority would apply a 25% credit for System Rate recovery of
costs; and
• any current Authority customer who wishes to contract with the
Authority for water made available through the Authority's purchase of
the LCRA water will be required to convert all of the customer's
existing contracts to the Authority's System Water Availability
Agreement. The potential Williamson County customers for the LCRA
water have some 28,761 acre -feet of water committed to them under
older contracts which will be subject to this conversion provision. The
effective rate for water committed under those older contracts is
$17.40 an acre -foot.
The 25% System credit makes the LCRA water more affordable to the Williamson
County customers. It also provides an incentive for the customers to convert their older,
fixed -price contracts to the System Water Availability Agreement, which is the only form
of long -term contract now being offered by the Authority. Over a 10 -year period,
assuming a 10 percent annual increase in the Authority's System Rate, the net financial
impact of these transactions will be an increase of slightly more than $6 million in net
revenues to the System. The annual net revenue increase over time and the
cumulative financial impact are shown in the attached table and graph.
. ' «Title» «FirstName» «LastName» September 6, 2000
Page 3
At this time, Brazos River Authority staff is in final negotiations with the LCRA on the
terms of the water agreement. Staff is also preparing the resale agreements for the
Williamson County customers.
The future holds many challenges for meeting the water needs of a growing area with
the diversity of needs of the Brazos River basin, but these are challenges the Brazos
River Authority is willing to face. I believe this resale of LCRA water is an example of
how the flexibility of the Authority's System can produce benefits not only to Williamson
County in the form of more affordable water but also to every Brazos River Authority
water customer in the form of increased revenues. These increased revenues will in
turn allow the Brazos River Authority to continue its long tradition of providing
affordable, reliable water supply to all its customers.
Sincerely
Gary Gwyn
General Manager
GG:rw
Attachments
cc: Each Member
Board of Directors
Brazos River Authority
bcc: Williamson County Water Customers
q:FlleslprojectslAlliancel LCRA water sale -SWSA holders- 25Aug00 -short version
Mayor
Robert A. Stboho. Jr.
Mayor Pro-tens
Earl M. Hairston
Council Members
Tom Nelson
Carrie Pitt
Earl Palmer
Isabel Gallahun
Jimmy Joseph
City Manager
Robert L Bennet4 Jr
City Attorney
Stepp L Sheets
CITY OF ROUND ROCK
September 28, 2000
Mr. Gary Gwyn
General Manager
Brazos River Authority
P.O. Box 7555
Waco, Texas 76714
Re: Request for 10,000 acre -feet of water per year from water to be acquired from the
Lower Colorado River Authority
Dear Mr. Gwyn:
The purpose of this letter is to indicate the City of Round Rock's intent to enter into a
contract with the Brazos River Authority under the terms as generally presented to
interested Williamson County entities at the August 4, 2000 meeting in Georgetown. I have
also enclosed a copy of the resolution authorizing this letter of intent.
The City looks forward to completing this contract with the BRA in the near future.
ly
• , * t uka r.
Mayor
Fax: 512-218-7097
1-800-735-2989 TDD 1- 800 -735 -2988 Voice
www.dsound- todc.tx.m
221 East Main sheet
Round Rock, Texas 78664
512 -218 -5400
Mayor
Robert A. Stluka, Jr.
Mayor Pro-tem
Puri M. Hairston
Coundl Members
Tom Nielson
Carrie Pitt
Earl Palmer
Isabel Callahan
Timmy Joseph
aty Manager
Robert L Bennet, Jr.
City Attorney
Stephan L Sheets
CITY OF ROUND ROCK
October 26, 2000
Mr. Gary Gwyn
General Manager
Brazos River Authority
P.O. Box 7555
Waco, Texas 76714
Dear Mr. Gwyn:
221 East Main Street
Round Rock, Texas 78664
512 -218 -5400
The Round Rock City Council approved Resolution No. R- 00- 09- 28 -9C10 at their
regularly scheduled meeting on September 28, 2000. This resolution approves the Letter
of Intent to enter into a contract with the Brazos River Authority for 10,000 acre -feet of
water per year.
Enclosed is a copy of the resolution and letter of intent for your files. If you have any
questions, please do not hesitate to contact Jim Nuse at 218 -5560.
Sincerely,
Joanne Land
City Secretary
Enclosures
Fax: 512- 218 -7097
iouncU
1-800- 735 -2989 TDD - 1- 800 - 735 -2988 Voice
www.ci.round- rock.tx.us