EARLY — The City of Early and the the Zephyr Water Supply Corp. have tentatively agreed to a 60-40 ownership split of a water pipeline that will bring treated water from the Brown County Water Improvement District and supply Early and Zephyr.
Early will own the larger share.
The Zephyr board voted to approve the agreement during a joint meeting with the Early City Council. The Early council could not take formal action Tuesday to approve the agreement but will likely do so when it meets Tuesday, city officials said.
Mayor Bob Mangrum said he hopes a proposed contract between the City of Early and the Brown County Water Improvement District, which he said is being reviewed by attorneys, will also be ready for the council’s approval Tuesday.
The agreement means the Zephyr Water Supply Corp. will pay 40 percent of the costs associated with the pipeline, expected to cost more than $6 million, officials said. Those costs include construction, maintenance and debt service.
The Brown County Water Improvement District has offered to supply the labor to build a 24-inch pipeline with a capacity of 10 million gallons a day. The City of Early will apply for a loan for its portion of the pipeline through the Texas Water Development Board.
“The good news is, we resolved (ownership) Monday night,” Mangrum said. “I was hopeful. Like I told you before, we’re not the Soviets and the Americans … I was very pleased we were able to work something out.”
Richard Gist, president of the Zephyr board, said the Zephyr district would have been paying a third of the costs associated with the pipeline if it owned capacity but not a portion of the line itself. “The debate or discussion was, if we were going to be paying a percentage, we wanted the contract to reflect it was joint ownership,” Gist said.
He said it would be an advantage for the Zephyr district to show ownership when applying for funding, likely through the U.S. Department of Agriculture and the Texas Water Development Board.
“It’s not, perhaps, absolutely necessary but the lender wants to be sure of his collateral,” Gist said.
Dennis Spinks, general manager of the Brown County Water Improvement District, said the advantage for the Zephyr district to own part of the line gives it “a say in the use of that line … from the aspect of, if someone wanted to tie into that line.”
“They feel more secure in owning a portion of the line,” Spinks said. “It is helpful in acquiring financing for it.”
Monday’s joint meeting was the result of discussion at the Early City Council’s July 8 meeting, when City Administrator Ken Thomas updated council members on the Brown County Water Improvement District’s board meeting he attended earlier that day.
Discussion at that meeting indicated the Zephyr Water Supply Corp. board was interested in owning a portion of a pipeline, Thomas said.
Previous discussions had indicated that the Zephyr Water Supply, a longtime Early water customer, wants to go in with Early on the pipeline and buy capacity.
Last month, council members opted to go with the pipeline plan rather than having the city build a new water treatment plant and continue treating its own water.