Wednesday, February 08, 2012

Oconee County Commissioners Agree to Five-Year Water Contract with Walton County

Act(s) of God Included

In a split vote, the Oconee County Board of Commissioners last night approved a five-year contract to sell Walton County half a million gallons per day of water pumped from Oconee County wells.

Commissioner Chuck Horton, who had said earlier he was inclined to vote against the contract but was willing to hear arguments in its favor, said last night he was concerned because the utility department had changed its position on wells.

He said the utility department had argued against wells at the time the county entered into a contract to build the Hard Labor Creek Reservoir in Walton County but was now saying they were a good source of county water.

Commissioner Margaret Hale said she didn’t like provisions of the contract that require Oconee County to reduce water to its own customers if it is forced to reduce water sales to Walton County.

County Attorney Daniel Haygood advised the Board that Hale was correct and that, under the contract, Walton County became a customer just like Oconee County water customers.

Commission Chairman Melvin Davis said he was concerned because he wanted to keep Oconee County water for Oconee County citizens.

But Davis accepted the argument from Haygood that the contract allowed Oconee County to terminate the contract if a well fails.

When Commissioner Jim Luke made the motion to approve the contract and Commissioner John Daniell seconded it, Davis joined them to approve the contract.

The contract does not say where Oconee County will get the water it sells to Walton County, but the county cannot sell water from its primary source, the Bear Creek Reservoir, without the permission of partners Barrow, Clarke and Jackson counties. The reservoir is in Jackson County.

Because of that restriction, the only way Oconee County can sell water to Walton County is by pumping the water from one of its wells, the largest of which is on Hillcrest Drive west of Butler’s Crossing.

County Utility Department Director Chris Thomas told the Board he needed the estimated $90,000 he expects to get from the water sales this year.

That figure does not include production costs or the costs of purchasing water from Bear Creek that the county would not have to purchase if it used the water from its own wells. Based on costs figures given to me by Thomas, I calculate the actual net gain from the sales will be about $24,000.

Thomas also told the Board that using the wells was important to keep them in working condition in case the county needs the well water in the future.

The contract the Board approved will begin immediately and replace the contract from last year that contained the same stipulations on water sales and costs.

For the first year of the new contract, Walton is required to pay Oconee County at least $6,375 monthly, which is the equivalent cost of purchasing 125,000 gallons per day of water at $1.70 per thousand gallons for 30 days.

That provision will expire in 12 months, but the contract itself will run until Dec. 31, 2017. Either county can break the contract by giving notice by Nov. 30 of the year.

After the first year of the contract, Oconee County is obligated to make the 500,000 gallons per day of water available to Walton County, but Walton County is not obligated to purchase any water.

Oconee County can increase the rate it charges Walton County for the water only if the cost of treated water it receives from Bear Creek increases.

Hale objected to the following section of the contract:

“In the event of an extended shortage of water beyond the control of OCONEE, or the supply of water available to OCONEE is otherwise diminished over an extended period of time, the supply of water to WALTON’s customers shall be reduced or diminished in the same ration or proportion as the supply to OCONEE’s customers is reduced or diminished.”

The typographical error on “ration” is in the original.

A subsequent section of the contract says that Oconee County can “suspend” its service to Walton for a list of reasons.

Here’s the list (with typing errors included):

“act(s) of God, strikes, lockout(s) or other industrial disturbance(s), act(s) of a public enemy, order(s) of any kind of the Government of the united States or the State of Georgia or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrest, restraint of government and people, civil disturbances, explosions, breakage or accidents) to machines or pipelines, or any other causes) outside the party’s control which prevent performance under this agreement.”

Haygood said the clause leaves Oconee County off the hook if it needs to suspend the supply of water to Walton County.

The contract had not been made available to the public at the time of the meeting last night. I obtained a copy from County Administrative Officer Alan Theriault this morning.

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