City council gets water contract from Henning
By Chad Koenen
The Ottertail City Council discussed a new water contract from the City of Henning during a special work session last week.
The discussion about the contract between the two communities has been going on for quite some time, as both sides try to determine what the City of Ottertail should be paying for water from the City of Henning.
City attorney Sam Felix said it was reasonable to expect the City of Ottertail to pay for the actual cost to produce water, which can include the cost for chemicals and paying for someone to treat the water. However, he said the city would also like to receive an itemized listing of what those costs are for providing the water.
He said one of the hurdles during the negotiations of reworking the water contract revolved around debt.
“The reason we are having so much difficulty is it comes down to a conversation about debt and who is paying debt,” he said.
For example, should Ottertail assume part of the debt associated with Henning’s water tower if that town needed to construct a bigger water tower to produce water for the City of Ottertail? Future projects and how those costs would be split, or paid for between the two communities, was also at the heart of an hour long work session last week.
Recently, the City of Henning’s attorney sent over a new contract proposal that could replace the current agreement that has eight years still remaining on it. After reading the proposal, Ottertail Mayor Ron Grobeck said it was important to figure out whether the City of Ottertail would be a partner with Henning for future water projects, or just a retail customer.
“I think we need to define what kind of a customer we are,” said Grobeck. “Are we a wholesale customer or are we a retail customer.”
The council also expressed an interest in having a joint powers committee to meet between the two cities to discuss future water project needs and potential rate increases together; should the two sides agree to be partners in the water industry.
Councilman Judah Burlingame also said he would like to see an itemized list of future projects that could happen in the next 5-10 years, as well as the actual cost to produce water, before agreeing to a new contract. That way the council will know what potential increases in costs could be coming down the road.
As an alternative to agreeing to a new extension to the current water agreement, the City of Ottertail has briefly explored the option of building its own water plant when the current agreement ends. Without a grant to help fund the project, Felix said estimates show that the cost for producing water in the City of Ottertail could be closer to $9-12 per thousand gallons, as opposed to the $4.55 that the City of Henning residents pay today.
“Those are your choices and that’s why we keep coming back to OK let’s work something out,” he said.
Whatever happens with a future contract between the two cities, whether it be signing a new contract or building its own water plant, Felix said the Ottertail council should make sure it is a contract both sides can live with for another couple of decades.
“You are choosing between the contract you have now and a contract you want for the next 20-30 years,” he said.
Currently the City of Ottertail pays the City of Henning $2.08 per thousand gallons of water, which reportedly covers the cost of making the water and some of the employees time to treat the water in Henning. It doesn’t necessarily include debt for infrastructure the City of Henning contends is required to serve the needs of the Ottertail community, but was not included in the original contract with the City of Ottertail. The current contract is set to expire in eight years.
The City of Henning has proposed to increase the amount Ottertail pays for water to be $4.55 per thousand gallons, or what the City of Henning residents pay for a thousand gallons of water.
The water produced in Henning is delivered to Ottertail through a pipeline between the two communities, which Ottertail paid for over 20 years ago.
The Ottertail council said it would like to continue pursuing a new water contract with the City of Henning to cover the cost of producing water moving forward, but wants to make sure the deal will be fair for everyone involved.
“It’s in our best interest to try and work out a deal with Henning,” said Grobeck. “I think Myron (Lueders) said that too. If we can work out a deal then everybody wins.”