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<br />e <br /> <br />e <br /> <br />EXECUTIVE SUMMARY <br /> <br />The City of Houston and its Consultant, Camp Dresser & McKey (CDM) have been ' <br />evaluating the expansion of the Southeast Water Pmification Plant (SEWPP) for the past <br />several months. The Study has centered on the improvements necessary to increase firm <br />. capacity from 80 MGD to 120 MGD. The proposed expansion will primarily involve the <br />upgrade of existing plant structures and equipment Additionally, the repair and upgrade <br />of the existing facility at current capacity is also planned. Our current contract with <br />Houston allows the LP A W A to participate in any proposed plant expansion based on our <br />current percentage of ownership. <br /> <br />Along with the proposed expansio~ the City of Houston is proposing new con1racts for <br />the Co-Participants, with new contract features designed to simplify administration of the <br />Contract, as well as give the Co-Participants more voice in the operation of the Southeast <br />Water Purification Plant Finally, the new contract documents any revised ownership <br />percenf!lges of the Co-Participants. <br /> <br />With additional capacity available, the La Porte Area Water Authority Board will <br />determine ~ and to what degree, the Authority will participate. The. Authority has <br />contractual rights and prior "imbedded" costs associated with the planned upgrade. <br />Therefore, should the Authority not purchase all eligible capacity, the Board must set a <br />price for these rights, so other Co-Participants may purchase additional capacity. These <br />decisions will be based on projected water demands and the historical purchase price of <br />existing capacity. <br /> <br />Because the Authority recently purchased 3 MGD from Galvesto~ we are recommending <br />only minor participation in the upgrade (0.6 MGD Production Capacity and 1.97 MGD <br />Pumping Capacity). This leaves 3 MGD in Excess Capacity available for other co- <br />participants. <br /> <br />It is recommended that the Authority set the price of this Excess Capacity at $0.759735 <br />per gallon, and authorize the General Manager to negotiate agreement(s) for the sale of 3 <br />million gallons per day. Additionally, authorize the General Manager to negotiate a new <br />contract with Houston to purchase an additional 0.6-MGD of Production Capacity and an <br />additional 1.97 MGD of Pumping Capacity. <br /> <br />The following report addresses these issues in more detail and provides the basis for our <br />recommendations. . <br /> <br />1 <br />