Regional Water System
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Amendment to Policy 8 Additional Delivery Points for Member Cities and Existing Customers; Resolution No. 26-19
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SUBJECT
recommendation
Adopt Resolution No. 26-19 authorizing an Amendment to Policy 8 Additional Delivery Points for Member Cities and Existing Customers (Policy 8).
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PURPOSE
The purpose is to amend Policy 8 to simplify NTMWD’s cost recovery approach for additional delivery points and to improve equity among Members and Customers.
RECOMMENDATION
The Executive Director, NTMWD staff, Lloyd Gosselink Rochelle & Townsend P. C. recommend the Board of Directors adopt Resolution No. 26-19, “A Resolution Authorizing Amendment to Policy 8 Additional Delivery Points for Member Cities and Existing Customers.”
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Consultant: |
N/A |
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Scope: |
Amendment of the current NTMWD Policy regarding new delivery points |
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Project: |
Policy 8 |
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Amount: |
N/A |
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Committee: |
This item was reviewed with the Water Committee on November 19, 2025, and February 25, 2026, and reviewed with the Policy Committee on May 13, 2026. |
DRIVER(S) FOR THIS PROJECT
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Strategic Objective: |
2.1 Efficient Business Practices |
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☐ Regulatory Compliance |
☐ Asset Condition |
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☐ Capacity |
☐ Redundancy/Resiliency |
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☐ Relocation or External Requests |
☐ Operational Efficiency |
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☐ Safety |
☒ Administrative |
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☒ Policy |
☐ Other _____________ |
BACKGROUND
• In July 1972, Policy 8 was initially created to establish a method to extend transmission pipelines, 12” or larger and provide additional delivery points at the request of Member Cities.
• On January 25, 1990, the Policy was amended to add that two or more Member Cities can request and share the cost for a pipeline extension to serve them.
• On June 23, 1994, the Policy was amended, designating “major pipeline systems” that service multiple cities to clarify when Policy 8 would not apply.
• In November 2007, the Policy was amended, adding existing Customers to the Policy.
• The current Policy 8 allows capacity replacement cost to be recovered by implementation of a new annual minimum for the additional delivery point applied through a 6-year phase-in of annual minimums associated with the new delivery point.
• In 2024, NTMWD engaged Lloyd Gosselink Rochelle & Townsend P. C. (legal counsel) and Carollo Engineering to review and provide recommendations, if warranted, for amending Policy 8 (Carollo Study).
• At the conclusion of its review, Carollo found that Policy 8 is consistent with industry standards.
• However, Carollo Study recommends several changes to simplify the cost recovery approach and improve equity among Members and Customers, including;
o revise policy language to better clarify the basis for the estimated capital cost owed by the Member or Customer requesting the additional delivery point;
o recover the estimated cost to provide the requested capacity at the additional delivery point in a lump sum or in annual installments paid over a period of 10 years or less; and
o the Policy should identify an indexed interest rate to use for payment plans.
• In addition, NTMWD staff has determined that provisions regarding pipeline extensions are no longer needed as a part of Policy 8 as those may be addressed as separate projects.
• Under the proposed amendments, Policy 8 will only recover replacement capacity cost through a lump sum or over a 10-year annual payment or less, including interest based on the U.S. 10-year Treasury Rate (Amended Policy 8).
• Existing Policy 8 was most recently applied to the Cities of Frisco (2023) and Parker (2024), and neither has achieved its 6-year phase-in of annual minimums associated with the new delivery point.
• NTMWD staff and legal counsel recommend negotiating and bringing back for Board consideration any amendments necessary to the current and as may be requested by the Cities of Parker and Frisco, implementing Amended Policy 8. Any such amendment shall use the capacity replacement cost calculated at the time of the City’s current contract.
FUNDING
No funding is requested.