17-Deliberate and act on a Resolution approving an Agreement between the COP and Lamar County Water Service District for release of Daisy Farms property

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CITY COUNCIL AGENDA ITEM BRIEFING SHEET Submittal Date: Originating Department: Presented By: Agenda Item No.: 04/22/10 Council Date: Legal Kent McIlyar 17. 04/26/ 10 RECOMMENDED MOTION: Move to approve a Resolution authorizing the execution of an agreement between Lamar County Water Supply District and the City of Paris concerning release of the Daisy Fartns acreage from the Certificated Service Area of LCWSD to allow the City of Paris to provide a supply of treated water to the Daisy Farms commercial dairy; and authorizing the City Manager to negotiate and execute all necessary documents. POLICY ISSUE(S): Economic Development The City provides retail water utility service to its customers and further is a wholesale supplier of water to the Lamar County Water Supply District (LCWSD). The District is a Conservation and Reclamation District and political subdivision of the State of Texas owning and operating a water distribution system and the District purchases water from the City under an agreement entitled "Wholesale Treated Water Contract" (hereinafter, "the Contract,) executed May 8, 2006. Subject to the Contract, the District possesses all rights granted by State law to a person holding a water utility Certificate of Convenience and Necessity (CCN) to provide retail water utility service to customers within its certificated service area. Daisy Farms, LLC ("Daisy Farms") acquired approximately 5,299 acres in Lamar County near the intersection of State Highway 19/24 and FM 2036 to develop a commercial dairy farm being more particularly described in the attached Agreement. The dairy lies outside the City's current CCN and within the LCWSD's CCN. In order for the City to be able to sell treated water directly to Daisy Farms, LCWSD must release the dairy farm acreage from its CCN and obtain approval of this release from the Texas Commission on Environmental Quality (TCEQ) in Austin, Texas. Once the City Council approves this Agreement, LCWSD will make application to TCEQ to decertify the Daisy Farms acreage. In consideration of the District's release of the Daisy Farms acreage from their CCN, the City has agreed to extend the term of the Wholesale Treated Water Contract with LCWSD until such time that the District can pay off their 2009 TWD Revenue Bonds and to take over operation and maintenance of an 8" water line that runs along FM 195 from approximately 1200' north of Loop 286 to the Re-pressuring Station just north of the Hills Subdivision. BOARD/COMMISSION RECOMMENDATION: EXHIBITS: Resolution and Agreement City of Paris Revised 2/04/08 179