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z <br />Mebane and Graham. Under the terms of the Orange - Alamance/ <br />Mebane /Graham agreement, Orange - Alamance would be allowed <br />to purchase water from Mebane and Graham at best - customer <br />rates. However, in the agreement Mebane and Graham <br />required that Orange - Alamance agree to abandon its plans to <br />develop the Haw Creek Reservoir. A second requirement of <br />the agreement was that Orange - Alamance had to request that <br />DEM and the NC Environmental Management Commission de- <br />classify the Haw Creek watershed from its water supply <br />watershed classification. The stated goal of de- <br />classification was to be the removal of state required <br />watershed protection requirements, including land use and <br />impervious surface restrictions, from the Haw Creek <br />watershed. The removal of these restrictions would allow <br />Mebane and Graham greater flexibility to develop this area <br />and preserve the area's maximum economic development <br />potential. <br />Another provision required by Mebane and Graham in the <br />agreement is that Orange- Alamance must consume its entire <br />Eno River withdrawal allocation specified by the Capacity <br />Use Agreement prior to being able to purchase water from <br />Mebane and Graham. This provision, along with the <br />abandonment of plans to build the Haw Creek Reservoir, <br />effectively means that Orange - Alamance would forever be <br />dependent on Eno water supplies to serve their Alamance <br />customers. If these critical provisions of the water <br />sales agreement are not modified, the end result of the <br />agreement is that the development potential of Mebane, <br />Graham and Alamance County is enhanced while the water <br />supply necessary for existing demand as well as for water <br />supply - related development potential of Orange County is <br />impaired. <br />DEM is allowing other potential water suppliers the <br />opportunity to object to the declassification of the Haw <br />watershed if a potential for use of that watershed exists. <br />If the parties to the Orange- Alamance /Mebane /Graham <br />agreement do not modify the agreement so that Mebane and <br />Graham supply Orange- Alamance's Haw River basin customers <br />during the Eno's low flow times, then a County jurisdiction <br />or water purveyor may be forced to develop a proven Haw <br />Creek site as a reservoir which can be used to supply water <br />to the Eno basin. The Town of Hillsborough has recognized <br />this potential scenario and has, by authorization of the <br />Town Board, submitted a letter to DEM objecting to the <br />declassification of the Haw Creek watershed. <br />RECOMMENDATION: The Manager recommends that the Board consider the <br />attached resolution opposing the declassification of <br />the Haw reservoir, modify it to its satisfaction, <br />authorize the Chairman to sign the approved resolution, <br />and submit the resolution to DEM. <br />