Title
Resolution to Approve the First Renewed and Amended Water Supply Agreement Between the City and Ann Arbor Charter Township
Memorandum
Attached for your review and consideration, please find a resolution to approve the First Renewed and Amended Water Supply Agreement between the City and Ann Arbor Charter Township.
The current water supply agreement between the parties was approved in March 2005, and it replaced a 1984 water supply agreement. The current 2005 agreement has a twenty-year initial term and is set to expire December 31, 2025. In late 2022, the City notified the Township of its desire to renew and amend the agreement, mainly to update it to reflect changes over the past 20 years.
In the interests of public health, safety, and welfare, the City and Township desire to renew and amend their water supply agreement to continue to provide for a reliable water service supply to the Township through connection to the City water system.
Negotiations on the renewed and amended agreement were extensive. The proposed First Renewed and Amended Water Supply Agreement is based on the 2005 agreement and generally retains the same form and substance, subject to certain revisions and updates. A summary of the changes and what remains unchanged follows.
Under the proposed agreement the City would continue to supply and sell to the Township, and the Township would continue to be allowed to take and purchase up to 1.5 million gallons of water per day (MGD) or a peak flow rate of 3.0 MGD, which is defined as the Guaranteed Capacity. The Township uses approximately 60-65% of its Guaranteed Capacity, and there is no change in the quantity of Guaranteed Capacity. The revisions to this provision involve updates to reflect use of current industry terminology such as replacing “instantaneous rate equivalent flow” with “peak flow” throughout the new agreement. This provision also provides a process through which the Township can request additional capacity and have the City enter into good faith negotiations regarding the request which is not unlike a mutual long-term planning process for continued water service.
Water supplied by the City under the agreement is delivered to the Township at or through six delivery points where the water goes into the Township’s system. Each party is responsible for its own system, and the Township’s system includes storage which is used to smooth out peak flow use and for fire service. The paragraphs on delivery points have been updated to reflect system improvements completed over the past 20 years.
The Guaranteed Capacity is allocated to various Township service areas, which are shown graphically on maps attached as Attachment A, and the allocations of capacity to each service area are shown in a chart which is Attachment B. There are no changes to the service areas or allocations.
The provision on water restrictions was revised to provide flexibility to address various circumstances that may arise.
The provision requiring the Township to provide the City notice of development proposals has been revised to better reflect the actual review process each party uses to evaluate developments in the Township that propose to use guaranteed capacity.
The payment provision is unchanged, and the Township agrees to pay for all water supplied by the City with some exceptions and credits. The rate charged to the Township for water supplied is equal to 103% of the City’s water rates charged to City customers, and the City’s water rates are set and adjusted regularly by ordinance in compliance with State law. Connection charges to the Township are the same as for City customers and are set by City ordinance.
The term of the proposed agreement is 10 years, which is shorter than the 20-year term in the 2005 agreement. Like the 2005 agreement, the proposed agreement also provides a process for notice and renewals.
Other provisions that remain unchanged pertain to the process for changing service areas and capacity allocations, storage, water pressure and quality, and backflow protection, design and construction standards, metering, and each party’s responsibilities for its own system, use of joint water mains and rights of way, service to the City’s water resource recovery facility located in the Township, water exploration, insurance, amendments, notices, etc.
Also, the proposed agreement, like the 2005 agreement, mentions and attaches the Joint Use Water Main Agreement, and it attaches the 3-way water service agreement between the City, Township, and Washtenaw Community College, which is a City water customer located within the Township.
Staff recommends that City Council approve the proposed First Renewed and Amended Water Supply Agreement between the City and Ann Arbor Charter Township.
The Township approved the proposed Agreement at its last Board of Trustees meeting.
Staff
Prepared by: Tim Wilhelm, Deputy City Attorney
Reviewed by: Jordan Roberts, Public Services Area Administrator
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The Water Supply Agreement entered into between the City of Ann Arbor and Ann Arbor Charter Township in March 2005 has an initial term of 20 years and is set to expire on December 31, 2025;
Whereas, The City notified the Township of its desire to renew the agreement and also to amend and update it;
Whereas, After lengthy negotiations the City and the Township were able to reach agreement on a proposed First Renewed and Amended Water Supply Agreement;
Whereas, In the interests of public health, safety, and welfare, the City and Township desire to renew and amend their water supply agreement to continue to provide for a reliable water service supply to the Township through connection to the City water system; and
Whereas, City Staff recommend approval of the proposed First Renewed and Amended Water Supply Agreement;
RESOLVED, That City Council approve the First Renewed and Amended Water Supply Agreement between the City of Ann Arbor and Ann Arbor Charter Township;
RESOLVED, That the Mayor and City Clerk be hereby authorized and directed to sign the agreement, subject to approvals as to substance by the City Administrator and as to form by the City Attorney; and
RESOLVED, That the City Administrator be authorized to take the necessary actions to implement this resolution.