In February 2008, the City entered into a water supply contract with the Brazos River Authority (BRA), which expires in August 31, 2040, for 6,388 acre-feet of water (5.71 million gallons per day MGD) per year in order to diversify the City’s surface water supplies in anticipation of the increased groundwater regulations in 2025. The contract is a “take or pay” contract, which means the cost to the City is the same regardless of whether it takes or does not take the water.  Under the contract, the City pays $472,712 to the BRA for 6,388 acre feet of water (current BRA system rate is $74.00 per acre-foot).  Currently, the City also has a contract with the Gulf Coast Water Authority (GCWA) for 10 million gallons per day (MGD), with an optional contract for an additional 10 MGD, and a water right on Oyster Creek for approximately 18,000 acre-feet per year (16.2 MGD). 

The City currently utilizes surface water to supply the Surface Water Treatment Plant and as a source for amenity lake filling and irrigation. The City uses approximately 10.5 MGD at the Surface Water Treatment Plant, of which 10 MGD is from GCWA and 0.5 MGD is from Oyster Creek.  The City’s raw water contracts for amenity lake filling and irrigation average between 0.5 MGD and 1.5 MGD, which come from Oyster Creek.  The remainder of the Oyster Creek water right and the BRA water supply are not utilized.  However, those volumes are expected to be utilized when the Fort Bend Subsidence District groundwater conversion requirements are increased in 2025. 

Due to an increase in customers’ needs and with a limited water supply, the BRA is unable to meet all of the requests for water this year.  For this reason, the BRA is willing to allow customers to assign their unused water supplies. The BRA informed the City that Dow Chemical Company (Dow) is interested in purchasing water from any customers who may not use or need their water supply in 2018. The City does not expect to use the water from the BRA this year.

Dow agrees to purchase 6,388 acre feet of water from the City at the current BRA system rate of $74.00 per acre foot, which is a total $472,712. The Water Supply Agreement between the City and Dow requires Dow to coordinate the delivery of water directly with the BRA and must divert the water from the Brazos River by August 31, 2018, under the same terms and conditions as specified in the agreement between the City and BRA. The Water Supply Agreement does not include any future commitments by the City or Dow. The revenue from this water assignment will be returned to the Surface Water Fund.

In order to assign the City’s water right under the BRA agreement, the City must obtain written consent from the BRA. As such, the City will need to execute the Temporary Consent to Assignment between the BRA, City and Dow and submit it to the BRA for approval. Upon the receipt of the executed Temporary Consent to Assignment from the BRA, the City will then execute the Water Supply Agreement with Dow. Dow will make a lump sum payment of $472,712 to the City within thirty (30) days of the effective date of the Water Supply Agreement.

The Public Works Department recommends City Council to approve the execution of the Temporary Consent to Assignment between the Brazos River Authority, City of Sugar Land and Dow Chemical Company and approve the execution of the Water Supply Agreement between City of Sugar Land and Dow Chemical Company upon the receipt of the executed Temporary Consent to Assignment from the Brazos River Authority.