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A RESOLUTION BY THE TROTWOOD CITY COUNCIL AUTHORIZING THE CITY MANAGER TO ENTER INTO A WATER SERVICE AGREEMENT WITH THE CITY OF DAYTON, OHIO.
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PURPOSE: Authorize City Manager to enter into Contract
DEPARTMENT: Administration and Finance Department
CONTACT INFORMATION: Quincy Pope, City Manager; Chris Peeples, Finance Director
INFORMATION: In 2009, the City entered into an agreement with the City of Dayton to provide water to the City’s water customers. The contract was for 15 years with one ten-year extension. The 15-year term expired October 31, 2024.
Rather than to activate the 10-year extension under the existing terms, the City has worked with Dayton to implement a new and more equitable method of determining the rates paid to Dayton for water.
The existing rates are calculated under the “Budget Method” of rate determination, rather than a “Utility Method” of rate determination.
The “Utility Method” is a better way to determine water rates because it eliminates ongoing capital expenses being built into the rates, and uses depreciation expense instead. This one change spreads the expense over the useful life of the assets and gives Trotwood a benefit of reducing charges from the City of Dayton.
The new contract is for a 15-year period with a one-time 10-year renewal.
FISCAL & STAFF IMPACT: By entering into a new contract under the “Utility Method” approach, the City looks to save approximately $400,000 in cost the first year of the new contract. Similar savings should be realized for several years, and will vary based on various economic factors.
RECOMMENDATION: Recommend Approval