Council approves new raw water supply contract with Colorado River Municipal Water District to reduce long-term costs and risk

The Midland City Council on July 22 approved a long-negotiated raw-water supply contract with the Colorado River Municipal Water District (CRMWD). City staff said the agreement, which becomes effective when the prior contract expires in 2030, will reduce long-term “take-or-pay” exposure, add reciprocal force‑majeure protections and give Midland audit rights and clearer procedures for capital-cost allocations.

Utilities Director Carl Craig summarized the changes as a multi-decade financial and operational improvement. The city’s current 1966 contract required a take-or-pay minimum of 17.5 million gallons per day under terms that city officials said produced financial exposure. The approved contract sets a 10 million gallon-per-day baseline for the city with options to go to 12 million gallons at the same rate and to purchase more volume under negotiated terms; staff said having a lower guaranteed minimum and clearer pricing formulas across the contract term reduces the city’s long-term procurement cost risk.

Craig and others noted the new contract includes: (1) reciprocal force‑majeure language that applies to both parties rather than leaving the city with asymmetric liability; (2) audit rights so Midland can review CRMWD billing and rate calculations; and (3) clearer capital-improvement rules that prevent Midland from being billed for projects that do not benefit the city. City staff said these changes should yield substantial savings over decades.

Financial context presented to council: Using last year’s water-production profile as the model, staff estimated the contract will save the city roughly $3.5 million in one recent 12-month period compared with the prior cost structure; extrapolated conservatively over a 30-year horizon, staff presented a savings estimate of approximately $105 million (staff emphasized that figure is illustrative and dependent on future water- and energy-market conditions). Council also noted that additional capital and redundancy planning (including tie-ins from TBAR and other sources) remains part of the city’s overall water-supply strategy.

Council action and next steps: Council approved the contract unanimously. City staff said the contract reduces Midland’s long-term cost exposure, improves its contractual remedies, and makes future planning for redundant supplies and capital projects more predictable. Utilities staff said other measures — including leak detection, valve maintenance, pressure-monitoring telemetry, and zebra-mussel mitigation — will continue as part of water-system resilience work.