East Texas

By KELLY GOOCH and CINDY MALLETTE
Staff Writers

Whitehouse city leaders decided to accept a 25-year contract with Tyler Water Utilities to supply water to their town.

The item passed with council members Charles Parker, Mike Jeter and Tony Hill voting for the 25-year contract and Dale Moran and Gene Champion voting against it.

"We are extremely excited to be working with the city of Whitehouse as a partner for our area and we look forward to being able to work with them in the future with other endeavors," said Tyler Mayor Barbara Bass.

Whitehouse Mayor Danny Hogden made a point to mention during the meeting that he had talked to Bass and she told him Tyler was making the best offer possible.

After the decision was made, Jeter said he voted the way he did because of what he has heard from Whitehouse citizens, but pointed out that the city's water bills will increase no matter what decision they make.

Tuesday night's meeting was packed with people, some of whom voiced concern about joining Tyler.

However, after the decision was made, Whitehouse resident Randall Robinson said he thought the City Council made the right decision.

Robinson said he does not think the wells can handle the city's water needs and does not want to run out of water.

In both contracts, Tyler offered a demand rate of $18,056. That number is significantly less than the last negotiated amount of $50,000, Bass said Aug. 18.

"We basically re-figured the amount of water they would use and based the demand rate on that," Ms. Bass said.

In previous negotiations, Tyler put forward a demand rate based on a higher number of gallons of water they anticipated Whitehouse would use on a monthly basis. Ms. Bass said the city looked at updated usage figures and decided they could lower the demand rate to the proposed level.

"We've gotten updated information, and we think this is a very realistic number," she said last week. "When you adjust the amounts, I think this is a fair offer. We want to be good neighbors, and we want to work with the communities around Tyler in any way we can. We need to work as a region, not just as 'us' and "them.'"

The volumetric rate in both contracts is $1.28 cents, and the effective rate -- the amount charged in addition to the demand rate, based on usage -- is $1.87. In the past, the effective rate has been as high as $3.72 for Whitehouse residents, and in the most recent negotiations, Tyler officials proposed a rate of $2.28.

The contracts also include a maximum daily demand multiplier of 1, meaning Tyler promises it will never increase Whitehouse's demand rate more than 1 percent of Tyler's. If Tyler's demand rate goes up by 5 percent, the city cannot increase Whitehouse's demand rate by more than 6 percent.

The major difference between the 10-year contract and the 25-year contract, besides the length of time, is an "early out" option. Under the 25-year contract, Whitehouse would have the chance to opt out early, without a penalty, if city resources can sufficiently provide the town with potable water.

If Whitehouse officials can get water from Lake Striker, and it's treated, they can cancel their water contract with Tyler without paying a penalty.

The "early out" option wasn't offered on the 10-year contract.

Neal Holland, president of Stokes & Engineering in Henderson -- which did a feasibility study for Whitehouse in 2005 -- said Whitehouse currently has reserved the rights for $3.9 million gallons per day at Lake Striker.

Hank Gilbert, president of the Walnut Grove Water Supply Corporation, estimated that Whitehouse would probably spend more than $40 million on the Lake Striker treatment plant, pump station and transmission line.

Gilbert said Walnut Grove signed a 25-year water contract with Tyler last year and he called it a "tremendous contract."

Part of what persuaded Walnut Grove to go with Tyler was that Tyler offered a maximum daily demand multiplier of 1, meaning Tyler would never increase Walnut Grove's demand rate more than 1 percent of Tyler's, he said.

Tyler offered the same deal to Whitehouse.

Before the meeting, Gilbert said he believed it would be more economical for Whitehouse to have a water contract with Tyler than to solely rely on the wells and Lake Striker project.

"I never understood why they wanted to drill wells in the first place," he said.