The Clyde City Council announced during its March 27th meeting that it had entered into an option contract with Joe and Marc Walraven for surface water rights from Lake Fort Phantom Hill. This announcement is the culmination of almost a year of negotiations between the City and the water broker representing Joe and Marc Walraven. The total purchase is for 2500 acre-feet, or 814,627,500 gallons. An acre-foot is a unit of volume commonly used in the United States in reference to large-scale water resources, such as reservoirs, aqueducts, canals, sewer flow capacity, and river flows. One acre-foot equals 325,851 gallons. Ownership of 2500 acre feet means that the City may take 2500 acre feet of water from Lake Fort Phantom Hill each year. Water rights do not expire.
In April 2011, the City Council received a report from the engineering firm of Jacob and Martin that outlined the City’s options for securing a dependable water supply for the City’s future. At that time, the top three options were: securing a groundwater source, wastewater reuse and continuing to purchase treated water from the City of Abilene. The option of acquiring surface water rights from Lake Fort Phantom Hill was not considered, as the water rights were not available at that time.
In May of 2011 Clyde’s City engineer, Ken Martin, alerted the City to the potential of purchasing water from Lake Fort Phantom Hill and the City began discussions with the sellers’ broker, the City’s attorneys and financial advisors. The water source study showed the City would need 338,000,000 gallons of water a year by 2060 to cover all of its existing contractual commitments. With the proposed purchase, the City will exceed all of its water commitments well beyond 2060 and still be able to market approximately 1000 acre feet for sale.
The water rights the City is purchasing are the most senior water rights at Lake Fort Phantom Hill. In Texas, water rights are based on when the rights were secured, with the oldest rights securing the first water out of the lake. In other words, if only 2500 acre-feet are available from the lake, the water belongs to the City of Clyde. The City will be purchasing the 1928 water rights permit issued to West Texas Utilities for industrial use. The permit will have to be changed from industrial to municipal use by the Texas Commission on Environmental Quality.
The City is agreeing to pay $3700 per acre-foot for 2500 acre-feet of water and $114 per acre-foot for 6500 acre-feet of impoundment rights. The total cost of the water is $9,991,000. In order to bring the cost down, the City has already begun discussing selling some of the water rights to other communities in the area who are in need of a secure water source. In addition, the City has also been discussing the possibility of selling treated water to new wholesale customers. The combination of savings from producing its own water, selling some of the water rights and adding new wholesale customers will allow the City to acquire the new water rights and keep rates within the existing structure.
The purchase of the water is the first step, as the City will also have to construct a pipeline from Lake Fort Phantom Hill and make some improvements to the water treatment plant. The pipeline and plant projects will cost an estimated $7 million and take 12 to 24 months to complete. Once the purchase and the improvements are completed, the $2 surcharge currently in place to cover additional water costs associated with buying water from Abilene will go away as Clyde will begin treating its own water again.
In recent months, the City of Abilene and the City of Clyde have been working together to complete this purchase. In March, Clyde had to move forward alone to complete the purchase. As our plans become clearer in the coming weeks, we hope to once again work with Abilene towards a water purchase that will benefit both parties.
