R2014-120 AUTHORIZING THE AMENDED AND RESTATED RAW WATER SUPPLY AGREEMENT

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�001q- f a-V DEPARTMENT OF WATER MANAGEMENT Memorandum No. 2014-19 September 23, 2014 TO: Mayor Michael T. McElroy and City Council FROM: Ryan P. McCrady, City Manager Keith D. Alexander, Director of Water Management SUBJECT: Amended and Restated Raw Water Supply Agreement with Archer-Daniels-Midland Company. SUMMARY RECOMMENDATION: Council adopt the attached Resolution authorizing an Amended and Restated Raw Water Supply Agreement between the City and the Archer-Daniels-Midland Company(ADM). BACKGROUND: In 1999 the City and ADM entered into an agreement for the sale of the North Water Treatment Plant from the City to ADM. In 2001 the City and ADM entered into an agreement for the sale of raw water (Lake Decatur water) from the City to ADM to supply the North Water Treatment Plant. In 2013 the Raw Water Supply Agreement was amended and restated by the City Council and ADM to allow ADM to construct and operate additional groundwater wells that have greatly enhanced our community's water supply. Recently it was noticed that the current agreement could be interpreted to provide an unintended incentive for ADM to pump well water during normal precipitation periods instead of conserving well water for dry weather conditions as was intended in the 2013 agreement revision. Therefore, in order to correct this anomaly, these amendments are proposed: Section 4(g) Limitation on Take—Removes text that is no longer needed. Section 8 Rates — Amends text to remove the unintended financial incentive for ADM to pump well water during normal precipitation periods. Also updates the number of wells that ADM owns and operates. Section 9 Lake Improvement — Adds ADM's wells to the lake improvement pro rata share calculation. This is necessary due to the significant amount of well water that ADM is now capable of using on an annual basis. Section 10 Wells—Updates the number of wells that ADM owns and operates. 1