East Texas

By CINDY MALLETTE and ADAM RUSSELL
Staff Writers

Whitehouse city leaders decided Monday to table any action on new 10- and 25-year contracts with Tyler Water Utilities to supply potable water to their town.

City Council members discussed the newly negotiated contracts Monday during a scheduled budget workshop. Greg Morgan, Tyler Water Utilities manager, laid out the details for them.

In both contracts, Tyler offered a demand rate of $18,056, significantly less than the last negotiated amount of $50,000, said Mayor Barbara Bass. The demand rate would be divided among the 2,576 meters within Whitehouse.

"We basically re-figured the amount of water they would use and based the demand rate on that," Ms. Bass said.

In previous negotiations, Tyler put forward a demand rate based on a higher number of gallons of water they anticipated Whitehouse would use on a monthly basis. Ms. Bass said the city looked at updated usage figures and decided they could lower the demand rate to the proposed level.

"When you adjust the amounts, I think this is a fair offer," she said. "We want to be good neighbors, and we want to work with the communities around Tyler in any way we can. We need to work as a region, not just as 'us' and 'them.'"

The effective rate — the amount charged in addition to the demand rate, based on usage — is $1.87. In the past, the effective rate has been as high as $3.72 for Whitehouse residents, and in the most recent negotiations, Tyler officials proposed a rate of $2.28.

The contracts also include a maximum daily demand multiplier of 1, meaning Tyler promises it will never increase Whitehouse's demand rate more than 1 percent of Tyler's. If Tyler's demand rate goes up by 5 percent, the city cannot increase Whitehouse's demand rate by more than 6 percent.

The major difference between the 10-year contract and the 25-year contract, besides the length of time, is an "early out" option. Under the 25-year contract, Whitehouse would have the chance to opt out early, without a penalty, if they can provide the town with potable water on their own.

If Whitehouse can get water from Lake Striker, and it's treated, they can cancel their water contract with Tyler without paying a penalty.

The "early out" option isn't offered on the 10-year contract.

Whitehouse City Manager Ronny Fite said projects to make Whitehouse self-sufficient for water have been considered for years and that in the past year and a half the city has made strides to make it a reality. With water well projects complete and ongoing and a plan to create a system capable of delivering drinkable water from Lake Striker, Fite said, he hopes Whitehouse's long-term water needs will be met and maintained on its own terms.

The previous 20-year contract between the city and Whitehouse ended in late 2005 but the city remained on the Tyler system until November 2007 while the cities were negotiating a new deal. On May 7, Whitehouse rejected 10- and 25-year contracts with the city.

Whitehouse has invested more than $5.5 million in a five-well system that has supported the city since ending water purchasing with Tyler.

The five wells, of which four are currently pumping water, will bring the city near the 3,000,000-gallon-a-day production level, Fite said.

Whitehouse officials had hoped the wells would support the city until long-term surface water projects, such as Lake Striker, ensured the city's water needs would be met.

However, water consumption levels during the summer months strained the city's water capabilities and reserves, leading to watering restrictions.

Whitehouse Mayor Danny Hogden said the new contracts are the best he has seen so far and that the city has addressed three major concerns regarding the water contracts.

He said the demand rate has been lowered, as well as the effective rate and that Tyler has paved a way for Whitehouse to opt out of the 25-year contract if they begin production from Lake Striker.

The concern, however, of the council members is that accepting either contract would inhibit Whitehouse from realizing the Lake Striker project because of the burden it would place on their customers.

All of the members and city staff agree that self-sufficiency is the goal for their city.
Council member Charles Parker called the contracts with Tyler an "expensive security blanket" but added that restrictions in future summers are of great concern.

"I don't ever want to see us go through another period like we just went through," he said.

The council determined it would continue to negotiate with Tyler as it investigates potential average well water outputs and an updated cost estimate on the Lake Striker treatment plant, pump station and transmission line.

Council members plan to revisit the issue during their regular meeting on Aug. 26.

"It is the best piece of paper I have seen so far," Hogden said. "The trick is can we afford it (without jeopardizing Lake Striker)."

Ms. Bass said she is committed to constructive dialogue with Whitehouse and other neighboring communities in the area.

"It's important that we work as a region, and it concerns me that they've had such issues this summer. So, if we can get this worked through with both communities, then I would be really excited. I think this is a great step in the right direction," she said. "We look forward to them reviewing the offer and to us working together to
accomplish what's good for the area."