SHERIDAN — The city of Sheridan finalized an agreement this week to convey water to a nearby subdivision, a unique agreement that could serve as a prototype for future partnerships.

The city will use the excess capacity in one of its water pipelines to transport water to the Don Ena Estates Subdivision, which is located just southeast of the Kendrick Municipal Golf Course, a development maintained by the Wild Rose Water Improvement and Service District.

Wild Rose has relied on the Alliance Lateral Ditch, a storage pond and series of pipes, to convey irrigation water to the subdivision, but the Alliance water system has degraded over time and will require significant improvements in the near future. That decline in the quality of the system has increased the cost of using the system and raised questions about its long-term reliability.

According to City Utilities Director Dan Roberts, those concerns led Wild Rose to approach the city about using city infrastructure to convey water to the subdivision. Because the city had significant excess capacity, Roberts said he and city staff have negotiated with Wild Rose for the past year, resulting in the agreement that was finalized this week.

The pipeline the city will use to convey the water to Wild Rose has a tremendous amount of excess capacity, which will ensure the agreement does not hinder the city’s ability to meet the demands of city residents. Roberts said the maximum capacity of the pipeline is roughly 30 million gallons per day, but at peak usage, the city generally uses 12 million gallons per day.

“We’re projecting out, based on the growth of our community, beyond 2070 in that pipeline,” Roberts said. “There’s, give or take, 50 years of capacity left in that pipeline.”

The agreement gives the city an opportunity to utilize the pipeline’s excess capacity, and gives Wild Rose a more reliable source of raw water.

Wild Rose already owns 60 shares of water in the Park Reservoir and the city will transport that water to the subdivision through its pipeline, ensuring the city will not have to draw on its existing water resources.

Further, if the city reaches or exceeds 80 percent of the pipeline’s capacity the agreement will terminate.

“Really the city would have no cost that we would incur as part of this agreement,” Roberts said.

The city will charge Wild Rose $.76 per 1,000 gallons delivered. Roberts projected the city will earn between $13,000 and $15,000 in revenues from the agreement, and said the agreement with Wild Rose could serve as a template for similar agreements in the future.

“I think there may be some interest from others who could be served by our raw-water pipeline in [an agreement] of a similar nature,” Roberts said.

Several other developments currently rely on the Alliance Lateral Ditch for their water. As the costs for upgrading that system continue to rise, those developments may look to the city’s infrastructure as an alternative.

Bernard Spielman, president of the Wild Rose Improvement District, said his organization’s agreement with the city is a promising solution for developments concerned about the future of the Alliance Lateral Ditch.

“I think this is a visionary agreement between a district entity like ourselves and the city,” Spielman said.

The agreement Sheridan’s city council approved this week has a 30-year term.