Friendswood to pay reduced settlement for Southeast Water Purification Plant raw‑water share; city to amortize $2.1M over 10 years
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Summary
City Manager Murad said Friendswood negotiated a settlement with Houston that reduces a long‑standing raw‑water payment obligation on the Southeast Water Purification Plant to about $2.1 million, payable over 10 years with no interest.
City officials told the council Aug. 4 that Friendswood has reached a settlement with the City of Houston resolving outstanding raw‑water cost obligations tied to the Southeast Water Purification Plant.
City Manager Murad explained the background: the city previously funded capital expansions at the regional plant but had not been billed by Houston for a long‑standing portion of ongoing raw‑water costs. Staff said the city had set aside funds for the liability for years and that, in recent negotiations, Houston agreed to a settlement at roughly 60 cents on the dollar.
Murad summarized the impact: the city’s historical share had been “roughly 3 and a half million dollars,” he said, and the settlement reduces Friendswood’s obligation to about $2.1 million. Council authorized a payment schedule that will amortize the amount over 10 years; staff noted Houston is not charging interest on the settlement. City officials said the settlement preserves roughly $1.4 million in city funds that otherwise would have been used immediately for the obligation.
Why it matters The Southeast Water Purification Plant supplies treated surface water to multiple regional participants; resolving the outstanding balance clarifies Friendswood’s long‑term water cost obligations and affects the water and sewer fund cashflow and debt planning. City staff said the result lets the city defer the next bond issuance by the amount saved through the settlement.
Related employee benefits action Separately, council acting as the City of Friendswood Employee Benefit Trust received an RFP result from the city’s benefits broker. Staff reported that the incumbent insurer, Blue Cross and Blue Shield, proposed a 2.9% decrease in medical premiums for the coming plan year; the trustees authorized staff to negotiate final contract terms and return to the board with the executed agreement.
Council action Council approved the settlement agreement and the ten-year payment schedule and authorized execution of related documents. The Employee Benefit Trust authorized negotiation of final insurance contract terms with the city’s broker and recommendation of the insurer change if terms are finalized.
