AGENDA CAPTION:
Title
Consider approval of Resolution 2026-194R, approving an agreement providing for the City to sell water on a temporary basis to the City of Kyle, subject to meeting or exceeding City drought restrictions and availability of surplus water; authorizing the City Manager, or her designee, to execute the agreement on behalf of the city; and declaring an effective date.
Body
Meeting date: November 17, 2026
Department: Utilities - Ekaterina Fitos, Director
Amount & Source of Funding
Funds Required: N/A
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Fiscal Note:
Prior Council Action: 2022-277R, 2023-154R, 2024-69R authorizing a similar sale
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Background Information:
The City of Kyle anticipates the need for additional water for the Edwards Aquifer Authority (EAA) permit period 2027-2028 (calendar years). San Marcos has water supply above and beyond their current needs within its EAA permit limits and is willing to commit, and make available, from its EAA-permitted water supply 500 acre-feet in calendar year 2027 with a potential extension for 2028. The City of Kyle will meet or exceed San Marcos’ outdoor irrigation drought restrictions throughout the duration of this agreement. The 500-acre feet will be subject to EAA drought stage reductions, and the City of Kyle is responsible for any penalties. This will be based on actual restrictions as established by the EAA stage of drought. Additionally, the agreement states that San Marcos may reduce or cease the supply of water if San Marcos water supplies are reduced or if the San Marcos usage increases such that San Marcos water capacity no longer exceeds its current or near-term future water needs. The extension will only occur if the City Manager confirms that San Marcos still has surplus water. The City will increase the price to $3.79/1,000 gallon for 2027 and $3.98/1,000 gallon for calendar year 2028. The minimum monthly amount will be dependent upon the EAA drought stage in effect every month of the term of this agreement. The revenue to the City over the agreement term will range from from $370,000, to $1,200,000 depending on Kyle usage.
Council Committee, Board/Commission Action:
NA
Alternatives:
NA
Recommendation:
The Utilities Department recommends approval of the agreement.