Can you stand for the pledge, please?

And to the Republic for which it stands one nation under our indivisible with liberty and just evening everyone and welcome to the City of Sheridan, April 27, 2026 study session.

We're beginning at 5 30.

Fairly light agenda tonight.

We have two items to discuss, and then we have general discussion at the end.

So we'll just get rolling.

Our first discussion is uh regarding raw water service agreement with Molinax Incorporated with us to tell us all about that and more is Dan.

Says Jacob, but I got Dan's mayor and counseling it over.

Well, Jacob was so excited to be able to present to you tonight because he doesn't get to do it very often.

He got sick and had to go home.

That excited, huh?

So yeah, he wasn't doing so well.

I said I said you better go home and I'll take care of it.

So thanks.

Um he sent his best.

Um so tonight we're here to talk about an agreement that staff have put together regarding a raw water service agreement with uh Molenex.

Um just behind it, they're seeking uh water to grow um for dust suppression at their gravel mining operation uh west of town.

Um our 30-inch raw water pipeline just happens to um be adjacent to their property on its way into town, and so they are requesting uh the ability to connect to our 30-inch line and uh receive water from it.

Um so staff was put together um a an agreement for council's consideration that would allow that to occur.

Um the general terms of the agreement are um Molenex would incur all costs associated with it, the tapping of it and and uh long-term maintenance.

Um the raw water connection would be metered and maybe bill at established raw water rates.

Um and then the service they would receive from that would be subordinate to the city and saw's system demands, kind of goes without saying it has a five-year term uh with a termination clause and no automatic renewal, so it'd be renewal upon agreement of both parties.

Um this is just a general map uh showing our 30 inch as it goes up the big goose uh down the big goose valley from the intake to the Sheridan plant.

Here's a location of the gravel mining operation where they were seeking connection.

Here's kind of an up close.

So they're wanting to make a connection, their access road to the property is um shown there.

They want to connect in that general location, and they would just use it to fill basically watering um trucks as they're um spreading water over their operations to suppress the dust.

Um a uh connection to our 30 inch, so it is kind of a sacred cow to us because it does supply most of our water too that we treat for the community.

Um it is a uh metal pipe, so it is wrapped, it does have thater protection, but we don't tap it very often.

We have a lot of services on it.

Um the only other one I can think of is uh Wild Rose.

Um so Wild Rose has a tap for irrigation purposes, and they pay us a conveyance fee.

They convey water, their water, um, through our pipeline, and we charge them a conveyance fee for that.

But this would be a um kind of a second one in recent memory that would be requesting access for the same uh a similar reason.

This is what the tap looks like, it's a welded connection, um, but it is a live tap and um but uh it's done in place and active, so not a saddle, but a welded welded tie style of connection.

Rates and charges.

So in 2018 we established a raw water um rate or charge, and it's a conveyance charge.

So when we did the wild rose agreement through study, we got a recommendation from our rate consultant of 76 cents per thousand.

Um then also on top of that was a um the need to establish uh lease rate for the water.

Um in the case of Wild Rose, we're providing just the conveyance, but we need to somebody wants to use the water.

What are we leasing or selling it for?

In the case of Wild Rose, we're providing just the conveyance but we need to if somebody wants to use the water what are we leasing or selling it for it was established there at uh nine cents per thousand so since then a we've had one rate adjustment of two and a half percent um in 2021 on the water system so we actually applied that to the uh 76 cents per thousand and arrived at a total rate that will be charged for raw water delivery and use of 87 cents per thousand um I will say that's being recommended and established here and in your memo but the agreement has eighty five um eighty five cents per thousand so um like to adjust that to eighty seven so it should be eighty seven to account for that rate adjustment that we had so if it uh we would make that adjustment for before now and and you're uh when council formally approves it and considers it and on Monday uh no plan investment fees required for raw water connections again we established that um truth when we did the uh original uh analysis and and uh raw water on conveyance rate that we established so uh key points uh this agreement uh restricts is restricted use to raw water only non-potable use um we're not guaranteeing any quantity pressure or availability of water even water quality um the service will be um subordinate to the city's um needs and saws needs Monex will bear all costs um of making the connection also long-term maintenance of the downstream service itself um their water route the rate will be charged at 87 cents per thousand and um if council approves and authorizes it you'd be authorizing me to sign the sign the agreement pretty straightforward any questions for Dan yes the l the term of this contract is five years correct uh Mr.

Mayor that is correct and are we looking at any um rate adjustments during that five year period in accordance with our plans um Mr.

Mayor there will likely be our recommend rate adjustments not in in the coming fiscal year because we're in our five last year of our five year rate plan.

Correct but I will likely be recommending uh adjustments for the following five years that's correct.

Will that affect the raw water um price uh Mr.

Mayor there's language in the agreement that if uh the rate is adjusted um if council authorizes rate adjustments it will be um applied to this raw water rate as well thank you any other questions for Dan that nine cents um lease fee is that the conveyance fee or is the two synonymous or does the conveyance fee get added on top of that the lease rate is just for the water on the nine cents the conveyance fee is the 70 oh was the 76 cents so that's what um what we charge just to deliver the water and the nine cents was it's also in the the wild rose agreement they don't get charged it unless they use more than then what water they have available so they have some shares in park reservoir that we delivered to them they use more than that allotment then they get charged the additional nine cents above that.

Interesting um outside of Wild Rose and uh I guess upcoming Mullinacs um about how many do we have how many taps do we have on our 30 inch raw water line um Mr.

Mayor those are the only two that I'm aware of that are actually active and certainly the only ones that are built.

Is um isn't Don Ena the Don Ena states don't they have a an irrigation tap onto that line is that not ringing the bill isn't isn't that Wild Rose is that the same yeah okay I was like huh I'm not familiar with the Wild Rose Wild Rose is the improvement service district and Don 80 is the subdivision.

Okay.

All right thank you I appreciate that um no I think that this is going to be a good thing are they gonna they're just gonna fill up close to the road then and then truck truck it up to where they need to apply it or is or do you do you have any knowledge of like how far they plan to put their service line um Mr.

Um Mr.

Mayor in discussions with um Nathan Molenex, and it's been a little bit since his exact plans, but that was his plan.

I don't think he wants to extend a service line any farther than he would need to.

So he would it sound like he would fill them close to the point of connection and then just truck them in front of them.

And is this um like other scenarios where a person can hire who they want, but it has to be on an approved list of contractors to to perform the work?

Uh is the city gonna have any input on who actually does the tap?

Um, Mr.

Mayor, we will do the tap.