City presents draft superseding water‑supply contract with Ottawa County, proposes withdrawal limits and new rate model

City staff summarized a draft, superseding water‑supply contract with Ottawa County on Sept. 8 that would replace a 1988 agreement. Aaron (city staff) told council the draft treats Ottawa County’s nine wholesale customers as individual accounting entities, introduces a peak withdrawal limit and surcharge mechanism to discourage sudden demand spikes, and adopts a cash‑basis rate model intended to be more transparent and easier to administer.

Background: The existing agreement dates to 1988 and amendments from the 1960s–1980s. Staff said the system has changed substantially and that wholesale patterns differ across the nine municipalities served through Ottawa County. Aaron said the draft contract’s primary goals are transparency, consistent rate treatment across wholesale customers and tools to reduce the need for near‑term, multi‑hundred‑million‑dollar capital expansions by managing peak withdrawal demand.

Key contract changes and policy tools: - Individual accounting for Ottawa County’s nine wholesale jurisdictions rather than treating Ottawa County as a single unit; Wyoming will still bill Ottawa County but allocates costs to each wholesale customer based on usage and projected demands. - A withdrawal‑limit concept (a “speed limit”) tied to a system optimization study now underway; customers exceeding limits would face surcharges that would be dedicated to either operational cost recovery or capital accounts to offset future system expansion costs. - Moving away from fixed contracted capacity (paper capacity) toward a model that adjusts every five years based on demand projections and an annual true‑up to reconcile actual costs and usage. - A cash‑basis rate model consistent with American Water Works Association guidance and the consultant Stantec’s recommendations; the model weights O&M on recent history and emphasizes projected demand for capital allocation.

Rates and local impact: Aaron said the draft aims to be equitable: growing jurisdictions that create long‑term new demand should bear a larger portion of future capital costs. He told council that, under the new allocation emphasis on growth and demand, Wyoming’s own rate pressure should be lower than in some prior models because Wyoming is a relatively stable customer compared with its growing neighbors. Staff said proposed rate changes would be effective starting fiscal year 2027 to give time for outreach and implementation.

Next steps: Ottawa County staff has started presenting the draft to the nine wholesale jurisdictions; county review and approval will be required. City staff plans to use the same contract approach with other wholesale customers (e.g., Grandville, Byron/Gaines) and to finalize results once the system optimization study and a five‑year demand projection are available. Aaron said the goal is to complete the wholesale contract updates within the current fiscal year and implement new rates for FY27.

Ending: Council took the presentation for discussion and asked staff to continue negotiating and to return with final documents and rate proposals after Ottawa County’s review and the completion of the optimization study.