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Consent

Brentwood City Commission Agenda

Meeting Date:	01/12/2021
Resolution 2021-08 - Approval of Amendment to Metro Water Supply Agreement.
Submitted by:	Chris Milton, Water & Sewer
Department:	Water & Sewer

Information

Subject

Resolution 2021-08 - Approval of Amendment to Metro Water Supply Agreement

Background

The City of Brentwood purchases treated drinking and irrigation water from two wholesale water providers, the Harpeth Valley Utility District located on the Cumberland River in the Bellevue area and Metro/Nashville Water Services located in downtown Nashville. The City has long-term purchase agreements with each provider outlining the terms and conditions for delivery of water. On average, the City purchases approximately 5.6 million gallons (mg) per day (combined) from both providers. Peak summer usage typically averages around 10 mg and drier summer months can exceed 12 mg. Conversely, it’s not uncommon during the winter for usage in a given day to drop below 3.0 mg. In a typical year, the City purchases about 88% (4.9 mg) of its water from Harpeth Valley and 12% (0.70 mg) from Metro.

The City first began purchasing water from MWS around 1985. In 2000, the City entered into a water purchase agreement to continue providing water for a period of 20 years, terminating in March 2021. For about 24 months, City staff and the City's consultant have been discussing terms for a contract extension with Metro personnel. Much of the focus of discussion has centered around evaluating options to increase capacity. At the onset of the discussions, Metro’s water rate charged to Brentwood was about 5% less than that of Harpeth Valley, which provided the basis for discussions to increase purchase capacity. However, in 2019 Metro announced significant rate increases would be needed as a result of a State audit and water system financial shortfalls. As a result, beginning January 2020, Metro increased their water rates approximately 50% from 2.44/1,000 gallons to $3.68/1,000 for their larger commercial customers, which includes Brentwood. The increased rate structure along with new infrastructure charges has made the prospect of increasing capacity with Metro much less attractive.

However, in November of this year Metro presented to Brentwood staff the results of their preliminary expansion analysis that included evaluating what new or upgraded system infrastructure would be required to expand capacity to Brentwood. During this meeting Metro also proposed extending the existing agreement for a one-year period. The one-year extension was presented to give each utility additional time to separately evaluate impacts. Staff and our consultant wish to further consider Metro's proposed costs and the budget impacts. More specifically, we’ll need to update the water supply master plan and evaluate proposed possible changes including performing some water system hydraulic modeling scenarios with both Metro’s proposed increased capacity and a scenario for extending the Metro agreement without increased capacity.

Accordingly, staff is recommending approval of the First Amendment to the water supply agreement with Metro Nashville for a one-year extension with all terms, provisions and conditions of the agreement remaining unchanged from that which is in effect currently.

Please direct any questions to the Water Services Director.

Staff Recommendation

Staff recommends approval.

Previous Commission Action

Approval of Water Purchase Agreement, 12/18/2000.

Fiscal Impact

Amount :	0.00
Source of Funds:
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Fiscal Impact:

The proposed one-year amendment does not change the rate structure or other terms and conditions of the existing agreement between Brentwood and Metro Nashville.

Attachments
Resolution 2021-08
Amendment No. 1 to Contract No. 2000-001
Signed Resolution
Signed Amd1 to COB 2000-001