Proposals have been sent from Smithville City Attorney Vester Parsley, Jr. to DeKalb Utility District (DUD) outlining suggested plans for a new water contract between the two. The existing agreement, a ten-year contract, will expire Dec. 31.
Parsley presented the proposals in a letter to DUD manager Jon Foutch, dated Nov. 14.
City officials said that the mayor and aldermen have been a part of the process, the city council has not voted on the proposals included in the letter. Any plan accepted by DUD would be subject to final approval by the council.
One plan proposes a new ten-year contract, with DUD paying $2.20 per 1,000 gallons for the first five years and $2.40 per 1,000 gallons for the remaining five years. The plan is valid only if the DUD purchases a minimum amount of water during the term of the agreement.
It also calls for DUD to call off its plan to construct its own water treatment plant.
The agreement would sell water to DUD  below the city's cost according to the city’s own study of water cost, performed  recently by Warren and Associates. The study concluded that the actual cost for the city to produce water is $2.67 per 1,000 gallons.
The city’s second proposal invites negotiations on a rate based on the sale of at least three  DUD metering points to the City of Smithville.
The letter to DUD management reads:
“The City of Smithville is very appreciative of the fact that you attended our workshop on Monday night, November 11 in Smithville and became aware of some possible solutions to the ongoing purchase of water issues. The Mayor and Board of Aldermen have asked me to write you a letter setting out proposals for your board to consider in an attempt to settle our differences. The Board has asked me to give you the following proposals:
•Proposal #1: The Board would reiterate our previous proposal to DUD whereby we agreed to sell DUD water for five years at the price of $2.20 per thousand gallons and an additional five years at $2.40 per thousand gallons. However, we would insist that a minimum amount of water be purchased during those ten years and further that DUD abandon their plans to build their own water treatment plant.
•Proposal#2: The city would ask of your Board whether they are willing to negotiate the sale of at least three of four metering points which were mentioned in the work session on Nov. 11. The city would like to negotiate to purchase the metering points for Evins Mill Road, Hobson Street, and the Old Sparta Pike. If your board is willing to negotiate on these metering points, we will need you to provide us with the number of customers served for each metering point and a map showing the water system served by each metering point so that we can determine the revenue that the city can derive from these points in order to make an intelligent offer. It is very possible the City will be able to offer the best deal for some variation of this proposal since it will provide Smithville with a long-term solution to the growth area problem.
If DUD feels that neither of the above proposals are satisfactory, the city sees no reason to enter into a contract with DUD and will once the contract expires, charge DUD as an outside water customer for your current needs.
The mayor and aldermen would appreciate your immediate consideration of these proposals and a response as to which proposal your board intends to take,” the letter concludes.
DUD currently pays the city $2.05 per 1,000 gallons for water. Smithville charges customers outside the city $7.50 per 1,000 gallons.
During a workshop with the mayor and aldermen on Nov. 11, J.R. Wauford, the city's utility engineer,  told the board that if the DUD would negotiate the sale of the metering points to the city it would put Smithville’s water system in a position to grow, and would put the city in a better position to negotiate a water price with DUD.
The workshop was attended by DUD Chairman Roger Turney, board members Joe Foutch and Hugh Washer, manager Jon Foutch and DUD attorney Dewey Branstetter, Jr. of Nashville.
Wauford told the assembly at the workshop that water rates for city customers would need to be increased by at least 20percent if Smithville loses DUD as a customer. He said the purchase of the DUD metering points would expand the city's service area, providing enough growth potential and income to help keep city rates steady.