Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Service Territory Transfers topic
No spam. Unsubscribe anytime.
Vermillion approves transfer of water service rights and electric territory swap to support new development
Summary
Council approved an agreement to buy service rights from Clay Rural Water for annexed Munger Tracts and approved a memorandum of understanding with Clay Union Electric to swap service territory so the city can serve a 34-unit Madison Park development; the water transfer includes a $2,400 payout and a 10-year tiered rate amendment for Clay Rural Water.
The Vermillion City Council on April 6 approved two utility actions aimed at supporting new residential development on annexed property.
Water rights: staff presented an agreement with Clay Rural Water Systems to transfer service rights for the recently annexed Munger Tracts 1—3. The purchase includes a one-time payout of $2,400 for the existing customer on the property, abandonment of obsolete on-site Clay Rural Water infrastructure at the city's expense, and amendments to the city's existing interconnection agreements. Those amendments move Clay Rural Water from a flat purchase fee to a tiered purchase rate for a 10-year term, after which the prior rate structure would revert. Staff estimated the amended rate will reduce Clay Rural Water revenue to the city by roughly $4,500 annually based on the past four years of sales. Council approved the transfer; USDA approval is required for all amendments because Clay Rural Water receives USDA funding.
Electric territory swap: staff also described a negotiated swap with Clay Union Electric so the city could provide electric service to a Madison Park development planned for Lot 1, Block 2, Madison Park Addition (34 housing units). In exchange the city would redraw a service boundary so Clay Union would fully encompass a building now split across the line in the Albers subdivision (Cypress Rail property). Clay Union presented the swap to its board on March 27 and approved moving forward; the MOU will be filed with the Public Utilities Commission after city approval. The agreement includes removal of future lost-revenue payments for transferred territories. Council approved the memorandum of understanding.
Council discussion focused on the scope of infrastructure work required to serve the annexed Munger property (a major water-main extension across Highway 19 and other crossings) and on sewer service options: staff said the development lots are large enough that developers expect septic for now but that future sewer extensions remain a possibility.
