Water contract saves city thousands

City councilmen approved a new wholesale water contract that will save the city thousands of dollars in the future.

The city’s present contract with Sabine River Authority was approved many years ago but officials were recently contacted by SRA with a better offer. The new rate of 10 cents per 1,000 gallons will result in a savings of more than $29,000 in the first year alone.

Originally placed on the consent agenda, councilman Harvey McClendon asked to move the item to the regular agenda because he was concerned about the 40-year contract.

Rob Schleier, city attorney, said he also questioned the long-term lease and talked with the SRA’s attorney. He told the council the present contract would expire Dec. 31, 2013, but the city has the right to terminate the contract with a one-year notice. Regarding the four-decade contract, Schleier was told most cities want long-term contracts and if Kilgore ever wants to terminate the contract the council could just vote to quit paying for the water, adding SRA could not deny the city water as long as it is available.

“The Sabine River Authority is a political animal,” Schleier said, as its board of directors includes area residents appointed by the governor and he doubted there would be few if any problems because of that fact.

According to a letter from Gerard Sala, SRA water resources coordinator, the reduction is made possible because of “increased revenues and efficiencies at SRA and should be an estimated savings of $29,280 as compared to FY 2008 usage.”

The new rate, which was offered to every SRA customer, becomes effective once the city signs the contract and returns it to the water authority.

Schleier told the council in a memo that he learned that “‘newer’ cities like Kilgore are subsidizing older contracts like Commerce, and Dallas, which buys 80 percent of their water, and as the old contracts roll off, everyone becomes more equal, and SRA’s charges are expected to gradually drop.”