Agenda

Return

City Council Regular Meeting

Meeting Date:

07/23/2019

BACKGROUND

BACKGROUND
The City of Schertz is permitted for 1,768.08 acre/ ft of water from the Edwards Aquifer Authority at a rate of $84.00 per acre/foot. This water capacity is what the City had available when we were strictly on the Edwards Aquifer using our Edwards wells. Since then we began using water from the Carrizo Aquifer from SSLGC and our Edwards wells are kept for back-up capacity or in case of emergencies. The City also utilizes these Edwards rights to provide water to the City’s soccer fields for irrigation purposes instead of using water from SSLGC. Since the City started using water from SSLGC we typically use between 80-150 acre/ft of Edwards water a year including the soccer field usage. Since SSLGC came on-line, the City of Schertz reserves a minimum of 1,000 acre/ft a year for the City’s needs and makes the rest available to lease to other entities, both public and private on one-year leases. In the past the Edwards Aquifer Authority had a program that gave a rebate back to permit holders for unused water. This program is no longer offered, and the permit holders pay for all that is permitted. To recover this cost, the City has made our excess permitted water available to other entities that make requests for water leases and to the soccer fields.

When leasing our water rights to other users, there are several prescribed fees from the Edwards Aquifer Authority that we pass along to the water lease. The Water Lease Transfer fee is a rate that was based off the Edwards Aquifer market value of water being leased. The EAA Management fee is a pass-through fee that the permit holder is charged per acre/ft. The administration fee is a fee charged for administering the permit lease and the application by water department personal. The EAA Transfer Fee is another pass-through fee charged by the Edwards Aquifer for the application. These fees are estimated as revenue in the water department budget each year on the possibility of proposed leases.
Hanson Aggregates LLC, LEASED EDWARDS AQUIFER WATER

Proposed Lease Quote:      # Acre/ft            Unit Price          Total Price
Water Lease Transfer                    200                $138.50       $ 27,700.00
EAA Management Fee                  200                $ 84.00         $   16,800.00
City of Schertz Admin. Fee 15%                     $ 3,671.25        $   3,671.25
EAA Transfer Fee                                                  $25.00                 $25.00
Total revenue from lease                                                        $   48,196.25

GOAL

GOAL
To recover revenue to help offset annual fees for the un-used permitted water from the Edwards Aquifer. The City reserves at least 1,000 acre/ft of water and attempts to lease the remainder of the water rights on one-year leases.

COMMUNITY BENEFIT

Community Benefit
To recover revenue to help offset annual fees for the un-used permitted water from the Edwards Aquifer. The City reserves at least 1,000 acre/ft of water and attempts to lease the remainder of the water rights on one-year leases.

SUMMARY OF RECOMMENDED ACTION

SUMMARY OF RECOMMENDED ACTION
Staff recommends that City Council approve Resolution 19-R-89, authorizing the City Manager to enter into an agreement with Hanson Aggregates LLC for the lease of 200 ac/ft of Edwards Aquifer water on the Amount of $48,196.25 through 4 payments as agreed on in the quote.

FISCAL IMPACT

FISCAL IMPACT
The Fiscal impact to the City of Schertz for this lease of 200 acre/ft will be additional revenue of $48,196.25.

RECOMMENDATION

RECOMMENDATION

Staff recommends that City Council approve Resolution 19-R-89, authorizing the City Manager to enter into an agreement with Hanson Aggregates for the lease of 200 acre/ft of Edwards Aquifer Water in the amount of $48,196.25 through 4 payments as agreed on in the quote.

Attachments
Resolution 19-R-89
Water Lease Application and Agreement