Terrell council approves amended agreement to acquire and contract Lawrence Water assets; city to own service area inside city limits

Terrell City Council on Feb. 4 approved Resolution 2208, authorizing the city manager to negotiate and execute an amendment to the 2021 purchase agreement with Lawrence Water Supply Corporation and an operating agreement that will let the city own water assets and retain Lawrence to operate the system for an initial term.

The amendment narrows the geographic area to be acquired and adjusts contract language after review by the Public Utility Commission staff and in response to an intervening interest from Rose Hill Special Utility District, John Godwin, who presented the item for staff, told the council. Godwin described the agreement as covering physical property — pipes, pumps and meters — and the portion of Lawrence’s CCN that lies inside Terrell city limits.

The amendment removes a small group of customers located south of U.S. Highway 80 — six service connections on County Road 238 — from the transfer because Rose Hill asserted an interest in that territory. The city’s objective, Godwin said, is to move only customers located inside the city limits onto the Terrell system and to avoid destabilizing the small Lawrence utility, which serves roughly 700 connections overall.

Why it matters: ownership of the CCN and infrastructure in city limits lets Terrell supply customers directly as new development occurs along US 80 and the North Spur area; keeping Lawrence as the operator is intended to preserve continuity of service while the city assumes ownership.

Council discussion and next steps

Godwin told the council staff and PUC staff had reviewed earlier versions and that the current amendment reflects PUC preferences; he said the purchase price calculation discussed previously was approximately $1.90 per connection as an estimate discussed in the presentation. The council and staff also discussed that the city will pay the purchase price on an annualized schedule (the city manager presentation described paying the total in equal payments over seven years) and that Lawrence would continue to collect and retain its existing operating revenue while operating the system under contract.

Council members asked about impacts on rates and service. Godwin said operation by Lawrence should produce no immediate change in customer billing and that in the longer term, city ownership could enable lower retail rates because of Terrell’s larger scale. He also said wholesale relationships will remain in place while the parties work through transfers.

Council action

Mayor Pro Tem Stephanie Holmes Thomas moved to approve Resolution 2208; Mayor Ronnie Velasquez seconded. The council approved the resolution by voice vote; no opposition was recorded on the public audio.

Implementation details and timeline

Staff described the operating agreement as a seven‑year contractor arrangement in which Lawrence will operate the system “as it is now,” providing the same customer service, dispatch and local response. The amendment to the 2021 purchase agreement and the operating agreement will be executed by the city manager after negotiations per the resolution. Staff said the arrangement is intended to allow a gradual, methodical transition of customers inside city limits to Terrell ownership as development occurs in the sector.

Ending

Council members who spoke framed the action as a follow‑up to a 2021 agreement and a practical step to secure water service for areas annexed into the city during the 2010s. The item carried on the council’s unanimous voice vote of those present; staff will return executed agreements and any PUC filings as the process proceeds.