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HomeMy WebLinkAbout1989 - CorrespondenceCity of Sebastian POST OFFICE BOX 780127 ❑ SEBASTIAN, FLORIDA 32978 TELEPHONE (407) 589-5330 Date: January 25, 1989 To: Carol Carswell, Finance Director Fran: Larry W. Napier, Asst. Finance Director Re: Rate Increase Application for Sebastian _ VX - lakes Utility Company After reviewing the statements for Sebastian Iakes Utility Company as prepared by Pachlin & Cohen, Certified Public Accountants, it is apparent the utility does need a rate increase. The present rate, based on 5,000 gallons per month consumption, is $27.00. The proposed rate is $49.64 or an increase of $22.64 per month per customer for a percentage increase of 83.9%. According to section 109 of the current franchise, there is a cap of a maximmum rate adjustment for any three (3) year term not to exceed twenty percent (20%) of existing rates. Since the ordinance no. 0-85-16 was adopted Sept. 11, 1985, it would be the staff recommendation to obtain a legal opinion from the City Attorney as to when each three (3) year term begins and when it ends. It is therefore the recommendation of staff to grant the maximum increase of twenty percent (20%) of the present rate to Sebastian Ickes Utilities Ccupany, pending the interpretation of section 109 of the current franchise by the City Attorney. City of Sebastian POST OFFICE BOX 78012713 SEBASTIAN, FLORIDA 32978 TELEPHONE (407) 589-5330 MEMORANDUM DATE: January 30, 1989 TO: Carol Carswell, Finance Director FROM: Roberts. McClary RE: Sebastian Ickes Utility Franchise In response to memo of January 25, 1989, prepared by Larry Napier regarding the rate increase request, please prepare a draft letter to City Attorney,. Charles I. Nash, requesting his written legal opinion of Section 109. Pursuant to the contract with Attorney Nash, the letter should be prepared for my signature as authorizing the legal opinion. Once we receive the legal opinion, we will schedule the request for City Council action. Also, Please Send..a letter to Sebastian Lakes advising them of the status of their request.. Thank you /jmt 7 City of Sebastian POST OFFICE BOX 780127 o SEBASTIAN, FLORIDA 32978 TELEPHONE (407) 589-5330 To: Robert S. McClary, CitY Manager From: Carol Carswell, Finance Director Attached is the YecanTendation of Staff on the Sebastian lakes UtilitY Co, rate increase. If You wish to go over this in detail we are available at Your convenience. City of Sebastian .•► POST OFFICE BOX 780127 ❑ SEBASTIAN, FLORIDA 32978 TELEPHONE (407) 589-5330 MEMORANDUM DATE: January 31, 1989 TO: Richard B. Votapka, Mayor & Sebastian City Council FROM: Robert S. McClary RE: Lake Dolores Utilities On January 26, 1989, a conference was held in my office to discuss the utility franchise for Lake Dolores (Park Place). Attending the meeting were: Nelson C. Hyatt, Owner of the property and his Attorney Fred T. Gallagher, County Attorney Charles Vitunac, County Utilities Director Terry Pinto, City Attorney Charles Nash and myself. The meeting was held at my suggestion and in response to a letter from Mr. Gallagher, dated January 20, 1989. In summary, the positions of each party are outlined as follows: Nelson C. Hyatt: It is Mr. Hyatt's position that the utility franchise granted to Lake Dolores Utilities and Cable Television Systems, Inc. has transferred to Nelson C. Hyatt as a result of a foreclosure judgment in Mr. Hyatt's favor. A copy of Mr. Gallagher's letter is attached. City: It is my opinion that the territory governed under the Lake Dolores Franchise would automatically convert to Indian River County upon termination of the Lake Dolores Utilities Franchise pursuant to the terms of the franchise granted by the City of Sebastian to Indian River County. It is further my opinion, that the City Council could grant a new franchise for this territory to Nelson Hyatt only with the consent of Indian River County. Re: Lake Dolores Utilities Page #L Indian River County: The County would like any other action held in abeyance until it has an opportunity to negotiate with Mr. Hyatt in their effort to acquire the physical assets of the water and sewer system owned by Mr. Hyatt and currently being utilized to provide water and sewer services to Park Place. Mr. Hyatt indicated an interest to work with Indian River County in evaluating a sale of the utility system. Therefore, I feel it is in the best interest of the City to take a "wait and see" position to see what develops from the negotiation process between Mr. Hyatt and Indian River County. /jmt cc: Nelson C. Hyatt Charles I. Nash, City Attorney Fred T. Gallagher, Attorney At Law Charles Vitunac, Indian River County Attorney Terry Pinto, Indian River County Utilities Director • SAMUEL A. BLOCK, P.A. pArQK PLACE' �+ ATTORNEYS AT LAW_ / 2127 TENTH AVENUE L` VERO BEACH, FLORIDA 32960 f� SAMUEL A. BLOCK GTELEPFIONE SENNETT L. RABIN (407) 562-1600 HAND DELIVER February 6, 1989 Terry Pinto, Utilities Director County of Indian River 1840 25th Street Vero Beach, Florida 32960 Re: Nelson Hyatt/Village of Lake Delores Water and Wastewater System Franchise with the City of Sebastian Dear Mr. Pinto: This letter is to confirm our recent conference which was held in your office among Nelson Hyatt, you and me, wherein it was determined that both the County of Indian River and Nelson Hyatt would work toward a developer's agreement so as to set a plan for the operation of the wastewater and water systems of Village of Lake Delores, the payment of impact fees and the reimbursement of costs of the development of the systems to Nelson Hyatt. As was stated in our conference, Mr. Hyatt wants to work with the County so long as there is a reasonable approach to the County's take-over of the water and wastewater systems and so long as his initial financial investment in the project and marketing plan are reasonably protected. Having reviewed this situation thoroughly with Mr. Hyatt and drawing upon the comments which you made during our conference, we are proposing the following guideline for a developer's agreement as it relates to the water and wastewater systems located at Village of Lake Delores of Sebastian, Florida. They are as follows: i 1) As soon as the County Commission approves the developer's /agreement and the City of Sebastian cancels the existing franchise agreement, the County of Indian River shall take over the responsibility of operation of the existing water and wastewater systems in the Village of Lake Delores. / � Nelson Hyatt, or his successor, shall have seven V) years Letter to: • Terry Pinto, Utilities Director Page Two W February 6, 1989 from the effective date of the agreement to commence paying the impact fee for new hook-ups. At that time, the impact fee per unit will be paid at the time the Certificate of Occupancy or building permit based upon the existing impact fee schedule is issued. All existing units as of that date shall not be required to pay an impact fee until that particular unit is resold by the then existing owner. Once again, the rate charged for the impact fee will be the existing rate as of the date of the resale of the unit. 3) Nelson Hyatt shall be entitled to a reimbursement of his actual cost of developing the existing water and wastewater system. According to his figures the actual cost is $777,096.00. This cost would be reimbursed to Nelson Hyatt through a surcharge for a period of ten (10) years. It is understood that when the County of Indian River receives this /7 payment the amount of the surcharge would be forwarded to Nelson Hyatt at agreed-upon intervals. Mr. Hyatt was not sure from our meeting whether the surcharge would be spread across the entire users of the County system or only levied against the users within the Village of Lake Delores. This point would need to be clarified prior to the finalization of the developer's agreement. 4) The County of Indian River would not be purchasing any of the real property upon which the water or wastewater plant or system is situated. The real property would remain the property of Nelson Hyatt or his successor and at the time that /a the County of Indian River is no longer in need of the real property, Nelson Hyatt shall have a right to utilize the land as he sees fit. Mr. Hyatt is not sure as to how the relationship exists between the County and himself as the developer during the time that the County is utilizing his land as part of their water and wastewater system. His question is whether or not he will be compensated with a reasonable rental value for the use of his land during this time. 5) Prior to the finalization of the developer's agreement, there needs to be further discussion relative to the commercial property which is approximately fifteen acres located within the franchise area and is owned by Nelson Hyatt. The matter of impact fees and the method of payment of these impact fees Terry Pinto, Utilities Director February 6, 1989 Page Three needs to be addressed and possibly included in the developer's agreement. 6) The effective date of this developer's agreement would be specifically contingent upon the official action of the City of Sebastian of canceling the existing franchise. Mr. Nelson or I would be glad to provide any financial figures which the County would desire relative to the cost as set forth in this letter. He also would provide the County with any as -built drawings so that the County would be familiar with the make-up of the water and wastewater system. It is important for Mr. Hyatt to move ahead with the settlement of these issues as soon as possible, since it is his position that through the foreclosure action, he has a right to the existing franchise with the City of Sebastian. He realizes that there are quite a few divergent views concerning the existence or non-existence of this franchise; therefore, even though he is operating as if the franchise is in existence, the validity, from an administrative viewpoint has not been finalized, therefore, he cannot continue to operate his business and protect his investment on a day to day basis. We would appreciate it if you would address this issue as soon as possible and continue the discussions as rapidly as possible so that this matter can be brought to a conclusion. I would be happy to meet with you if there are further questions so that this matter could be finalized and the County and Mr. Hyatt would feel comfortable with the conclusion as set forth in the final agreement. It is our further understanding that the City of Sebastian does not intend to take any action until .it is determined that the County and Nelson Hyatt can work out a more long-range plan thereby eliminating the City from any involvement with this franchise area. Very truly yours, 106_�ZxaW10`6Z a Samuel A. Block SAB:J1 cc: Nelson Hyatt NASH & FALLACE, P.A. r� ATTORNEYS AT LAW CHARLES LAN NASH 930 S. HARBOR CITY BLVD. JAMES H. FALLACE SUITE 505 MELBOURNE. FLORIDA 32901 KAREN J. SEsBEAU (407) 984-3300 PAUL J. TCR E UZEAMP. JR. - H'A%(407) 961-3741 � HOARD CEASIPISD IN EASATS PW NINO AND PROS TA February 8, 1989 Stephen L. Cook, Esquire P.O. Box 3532 West Palm Beach, FL 33402 Re: Lake Delores Utilities & Cable Television Systems, Inc. Our File No.: 88-2870 Dear Mr. Cook: This letter will serve to expound on our telephone conference of February 7, 1989, wherein I advised you that the City of Sebastian intends to proceed with the termination of the water and sewer utility franchise previously granted to your client, Lake Delores Utilities & Cable Television Systems, Inc., pursuant to Ordinance No. 85-12 (the "Franchise"). The basis for the position of the City of Sebastian is that your client is no longer able to furnish water and sewer services pursuant to the Franchise insofar as your client no longer owns the assets comprising the water and sewer system. I would like to approach this in an amicable manner and obtain the written agreement of your client to the termination without the necessity of providing notice pursuant to Section 130 of the Franchise and proceed with a hearing if your client would otherwise take a position contrary to that of the City of Sebastian. Please advise me as to your client's position in this regard. CIN/ml cc: obert S. McClary City Manager Very truly yours, NASH & FALLACE, P.A. Charles Ian Nash City Attorney r014k City of Sebastian POST OFFICE BOX 780127 o SEBASTIAN, FLORIDA 32978 TELEPHONE (407) 589-5330 M E M O R A N D U M DATE: February 15, 1989 TO: Richard B. Votapka, Mayor & Sebastian City Council FROM: Robert S. McClary� RE. Water and Sewer JI INTRODUCTION The City of Sebastian has a vital interest in seeing that public water and sanitary sewer facilities are in place to serve every property within the City limits. A public water system can provide safe potable water, improve fire protection services and be of economic benefit to homeowners in Sebastian by reduced premiums for fire insurance. Currently, the Insurance Service Organization (ISO) has rated the City of Sebastian a fire rating of 9 except for those properties within 1,000 feet of a fire hydrant, which receive the lower and more favorable rating of 7. A sanitary sewer system can provide the obvious environmental benefits plus provide the economic and aesthetic benefits of lower lot elevations. Currently lots in Sebastian must be elevated considerably in order to meet HRS regulations for septic tanks and drain fields. BACKGROUND The City of Sebastian has franchised four (4) utilities under five (5) franchises to provide water and sewer to the City of Sebastian: General Development Utilities (GDU) Water Franchise - Ordinance 0-81-8 SH Units 1 - 17. � ?, 631 n Re: Water and Sewer Page #2 General Development Utilities (GDU) Sewer Franchise - Ordinance 0-81-9 SH Units 7, 9, 14, 15, 16, & 17 Lake Dolores Utilities - Water and Sewer Franchise - Ordinance 0-85-12 Lake Dolores Area (aka Park Place) Sebastian Lakes Utility Company - Water and Sewer Franchise - Ordinance 0-85-16 Sebastian Lakes Area Indian River County - Water and Sewer Franchise - Resolution 87 - 6 all other territory Significantly, the GDU franchises provide an option for the City to purchase the water and sewer systems located within the franchised area. Likewise, the franchise granted to Sebastian Lakes Utility Company provides a similar purchase option. Further, it appears Lake Dolores Utility Franchise may not be valid due to recent private litigation. The language of the IRC franchise is broad. However, it clearly relays the intent that the territory granted Indian River County is automatically extended to territory annexed by Sebastian or territory covered by any other franchise upon the expiration, cancellation or otherwise coming under the control of the City of the private utility franchise. I have attached a copy of the IRC franchise resolution and call your attention specifically to Sections 2 and 3. On January 16, 1989, I met with officials of General Development Utilities and General Development Corporation to discuss the representations that GDC had made to the Division of Florida Land Sales, Department of Business Regulations, State of Florida for improvements in the Sebastian Highlands. Generally, GDC has represented that public water and sewer will be provided in the areas franchised to GDU. GDU representatives further stated that extensions to the water system would be made within sixty (60) days upon demand of the City provided the City required any existing buildings along a newly constructed line to connect to the GDU system. Further, the GDU officials stated that the representations made to the Florida Division of Land Sales were done so upon the mandatory connection requirement. The City has not enforced a mandatory connection requirement since receiving a written opinion from City Attorney, Thomas C. Palmer, dated December 22, 1987. I did not ask for ( nor did GDU offer) an explanation of the lack of construction of water lines in residential neighborhoods between the time of franchise in 1981 and Mr. Palmer's opinion at the end of 1987, except to state that they had expended some $500,000.00 in constructing a main transmission line along Barber Street and that customers were not hooking on. 0 j, 03/ rao Re: Water and Sewer Page #3 I asked GDU officials at that meeting (but have not heard from them to date) to evaluate whether or not there were other practical economic reasons why home builders would not choose to utilize GDU water services. Mr. Palmer based his opinion on a court case decided in the Nineteenth Judicial Circuit in St. Lucie County, Florida. in that case, GDU served areas of the City of St. Lucie under a franchise similar to that granted by the City of Sebastian. in its final order, the Court stated: "The Court finds that Section 8 of Ordinance 61-8, rather than being a valid exercise of the City's Police power, is instead a heavy-handed, unreasonable effort to promote the economic welfare of General Development Utilities". Based on Mr. Palmer's opinion, Sebastian may not compel any property owner to mandatorily hook-up to water service of a private utility. For your information, I have attached Mr. Palmer's opinion memorandum. The additional back up documents to Mr. Palmer's opinion are available in my Office upon your request. Yet another issue faces the City of Sebastian with regard to water and sewer. In 1985 the Florida Legislature adopted the Growth Management Act mandating that municipalities develop Comprehensive Plans which detail among many other things, the level of water and sewer services to be provided to property owners and what funding vehicle is to be used to accomplish that level of service. The City's ability to attract and foster commercial and industrial development is greatly hampered by the lack of central water and sewer facilities. Recently, an HRS representative has advised us that he will no longer permit septic tanks and drain fields to be used as sanitary facilities for buildings in areas zoned "Industrial" without restrictive legal controls. SUMMARY In summary, the policy of the City of Sebastian is to allow Indian River County to be the sole provider of water and sewer services within the City of Sebastian. Given the current legal status of the Lake Dolores Utilities Franchise and the provisions for the City to purchase the facilities under franchises granted to GDU and Sebastian Lakes, we have the ability to implement this policy in the near future. In my opinion, water and sewer services in Sebastian are best placed in public hands. AOs Re: Water and Sewer Page #4 A Municipal or County government will be motivated to provide public water and sewer services for reasons other than profit. At stake is the health and safety of our citizens, the possibility of improving fire protection, protecting the environment and providing economical benefits to the homeowners. The disadvantage, in my judgment, to the Indian River County Franchise, is a basic loss of authority by the City. Unlike the other utility franchises, the franchise granted Indian River County grants the County the exclusive ability to establish rates without an approval or public hearing process by the Sebastian City Council. RECOMMENDATION Vrecommend the City enter into negotiations with Indian River County whereby the City of Sebastian would serve as the catalyst and vehicle for Indian River County to acquire the systems currently owned by the ree (3) private utility companies operating within the City. I feel the City should be mindful of the Growth Management Act nd our legitimate interest in seeing that water and sewer services are extended to all properties within the shortest period of time. Therefore, we should look to Indian River County as a part of our negotiation to develop a time table by which they would commit themselves to extending water and sewer services to all areas within the City. /jmt THOMAS C. PALMER ATTORNEY AT LAW P.O. BOX W. 1627 U.S. HWY. +1. SEBASTIAN. FLORIDA 32958 305-589-7550 December 22, 1987 TO: Bruce Cooper Building Official Re: Mandatory Connections to Water Service. (Private Utility). I enclose a copy of a judicial opinion in a case style Rodney L. and Michelle Gei.rsdorf, et al. -v- City of Port St. Lucie, Florida, No. 84 -623 -CA -25, St. Lucie County, Florida. This case makes no distinction between land owners who had water service and those who did not. The language of this case suggests very strongly to me that a City may not compel mandatory hook-ups to water service, period. This applies to persons who are just constructing their homes and who do not have any well installed. Of course, it is most often in a landowner's best interest to elect to hook up when building a new house. You can advise them in those cases where water service is "available" so they can make an intelligent election. It is generally considered that having water service from a utility improves the value of real property, especially for resale purposes. Summary: According to the attached opinion, a City may not compel any propoerty owner to mandatorily hook-up to water service unless there is a genuine health problem involved in a specific case or cases. This opinion does not address municipally owned systems or combined water and sewer service systems. Thomas C. Palmer encl: as specified. cc: L. Gene Harris, Mayor �)'., 0 31 „, PTASH & PFALLACE, P.A. 101% ATTORNEYS AT LAW CHARLES TAN NASH JAMES H. FALLACE KAREN J. SESBEAU f7ECEIV j� PAUL J. KRAUz%AMP. JR. �°”' rIAR I BOARD CSRTIFSSD IN 1 E•TAT6 Pi"NINO AND PROBATI March 10, 1989 930 S. E ARBOR CITY BLVD. SUITE 505 MELBOURNE, FLORIDA 32.901 (407) 984.3300 PAX(407)951-3741 Stephen L. Cook, Esquire P.O. Box 3532 West Palm Beach, FL 33402 Re: Lake Delores Utilities & Cable Television Systems, Inc. Our File No.: 88-2870 Dear Mr. Cook: I am writing to you in furtherance of Mr. Nash's letter of February 8, 1989 regarding the City of Sebastian's intention to proceed with the termination of the water and sewer utility franchise previously granted to your client. To date, our office has not received a response to this letter. I respectfully request that you provide a response to the February 8, 1989 correspondence on or before March 21, 1989. In the event that I do not receive a statement as to your client's position, I must assume that litigation to affect the termination will be necessary. Should a formal court proceeding be necessary to resolve this matter, I will ask the court to award the City its attorney fees and costs. I look forward to hearing from you. NASH & FALLACE, P.A., ATTORNEYS FOR THE CITY OF SEBASTIAN Paul J. Kreuzkamp, Jr. Assistant City Attorney PJK/ksl cc: Robert S. McClary,0 City Manager CRARLES IAN NASH JAMES H. FALLACE K-&RRN J. SRSBEAU PAUL J. KRE UZRAMP. JR. • DOARO CZRTIFIED IN ESTATE PIANNINO AND PROBATE Robert S. McClary, City of Sebastian P.O. Box 780127 Sebastian, Florida NAsH & FALL,AcP), P.A. ATTORNEYS AT LAW April 10, 1989 City Manager 32958 f 830 S. HARBOR CITY BLVD. SUITE 606 MELBOURNE. FLORIDA 32901 (407) 984-3300 FAX(407) 051-3741 Re: Lake Delores Utilities & Cable Television Systems, Inc. Our File No.: 88-2870 Dear Robb: Enclosed with this letter please find a copy of the correspondence we received from Stephen L. Cook, Esquire addressed to Paul J. Kreuzkamp, Jr. of our law firm dated March 16, 1989. I would recommend that we determine whether Mr. Cook's client, Lake Delores Utilities & Cable Television Systems, Inc. still has any appeals pending with the Fourth District Court of Appeal or the Florida Supreme Court relating to the foreclosure proceeding brought by Mr. Nelson Hyatt. In the event that such appeals are dismissed in favor of Mr. Hyatt and no further right of appeal exists, I would then recommend that City Council proceed to terminate the utility franchise in accordance with the due process procedures set forth in the franchise agreement due to the fact that Lake Delores Utilities & Cable Television Systems, Inc. would not possess the assets needed to conduct its franchise in accordance with the franchise agreement. I would appreciate any thoughts you have concerning this matter. Very truly yours, NASH u— FALLACE, P.A. C C es Ian Nash CIN/sdr City Attorney P.S. You may want to send a copy of this letter to Charles Vitunac, Esquire for his reference. STEPHEN L. COOK Allorne7 Ciounnn I., At Lew TEL. (407) 471.8805 POST OFFICE BOX 3532 WEST PALM BEACH, FLORIDA 33402.3532 VIA FAX (407) 951-3741 VIA CERTIFIED MAII. OP -686-•768-828 Msreh 16, 1989 Paul J. Kreuzlcamp, Jr. Assist.anl.: City Attorney (lash 8• Fallace, P. A. 930 S. Harbor City Blvd. Suite 50.5 Melbourne, Florida 32901 HE: bake Delores Utilities & Cable Television Systems, Inc. Your. File No.: 88-2870 Dear Mr. Kreuzitamp: f. 14AR 2 0 1gg9 Hy client is ameanable to a negotiated settlement, which would allow the shareholders of Lake Delores Utilities & CaL•le Television Systems, Inc., to partially recover their original invesLment in the company. It is 'lot our desire to drag the city into court. I am sure you are aware that we are vigorously litigating various issues in the Fourth District Court of Appeal that arose out of the foreclosure closure preceeding brought by Mr. Hyatt. A favorable result the 3r'pellate court will negate the basis upon which the city eoulcl seen a termination of the frannhi-o MY client: cannot walk away from its substantial investment in t.h_: utility system franchise,. particularly when Indian River County is actively purchasing private utility companies such as Laka Delores Utilities & Cable Television Systems, Inc. I believe that it would be in the economic interest of all concerned, including Indian River County and even Mr. Hyatt, to felly eplare settlement and I look forward to that opportunity before comm?ncing protracted litigation. Awaiting your reply, I remain, V_ .., t r l y y r• . I J, ' .PHE11 L. COOK, ES City of Sebastian POST OFFICE BOX 780127 o SEBASTIAN, FLORIDA 32978 TELEPHONE (407) 589-5330 March 20, 1989 Mr. James Chandler County Administrator Indian River County 1840 25th Street Vero Beach, FL 32960 Dear Mr. Chandler: The Sebastian City Council will meet in special session at 7:00 P.M., on March 29, 1989 at the Sebastian City Council Chambers. The purpose of the meeting is to review a report on water and sewer issues in the City of Sebastian which was dated February 15, 1989. You are welcome to participate in this meeting and, while this meeting is not a public hearing, I am sure that the City Council will be interested in any comments you may choose to make. I look forward to seeing you on March 29, 1989. Sincerely, Robert S. McClary City Manager RSM/jmt Attachment cc: Terry Pinto, Indian River County Utilities Director 000*\, City of Sebastian POST OFFICE BOX 780127 o SEBASTIAN, FLORIDA 32978 TELEPHONE (407) 589-5330 M E M O TO: Robert McClary City Manager FROM: Bruce Cooper Director of Community Developm t DATE: April 21, 1989 REF: North County Regional Waste Water System Indian River County has requested the City of Sebastian to respond by May 8, 1989, regarding the method of payment for the City's impact fee (ERU's) for the North County's waste water system. The City of Sebastian has voluntarily committed 14 ERU's (Equivalent Residential Units) for 6 properties the City of Sebastian owns, such as City Hall and the Golf Course. The City can either prepay the full amount of $17,500 (14 ERU x $1,250.00 per ERU) or finance an amount of $18,900.00 (14 x $1,350.00) over 10 years. The County will charge $100.00 over the prepaid amount of $1,250.00 per ERU plus 2% over their finance charge, to cover administrative costs for the financing. Indian River County anticipates the financing to be completed within 90 days, at which time the interest will start to accrue, if the City elects to finance the impact fee. Please let me know how you wish to proceed with this matter. BC:jk n FRESE, FALLACE, NASH & TORPY, P.A. GARY B. FRESE t JAMES H. FALLACE CHARLES IAN NASH VINCENT G. TORPY, JR. KAREN J. SESBEAU PAUL J. $RE UZEAMP. JR. ELISE A. SINGER RICHARD E. TORPY ATTORNEYS AT LAW RECEIVED JUL - 3 1999 June 29, 1989 Robert S. McClary City Manager City of Sebastian Post Office Box 780127 Sebastian, Florida 32978 Re: General Information Our File No.: 88-2558 Dear Robb: 930 S. HARBOR CiITY BLVD. SUITE 505 MELBOURNE, FLORIDA 32991 (407) 984-3300 PAR (407) 9613741 } BOARD CERTIFIED IN TA.GTION • BOARD CERTIFIED IN ESTATE PLANNING AND PRORATE I came across a recent appellate case that I wanted to share with you for your information. Therefore, please find enclosed with this letter a copy of the recent case involving the City of Winter Park vs. Southern States Utility, Inc. for your reference. Very truly yours, FRE r CE, NASH & TORPY, P.A. Charles Ian Nash City Attorney CIN/sr 178 Fla. 540 SOUTHERN REPORTER, 2d SERIES ' [51- Finally, we reject appellee's conten- landowners within city's exclusive sewer tion that Mullan has no cause of action service zone and that city would have 'ca - because he failed to strictly follow the pro- pacity to serve landowner's property in ap- cedural rules outlined in his contract for proximately 17 months and thus, sought the .resolution of ,disputes. Mullan peti- declaratory judgment to effect that land- tioned the local Board of Education for owners would be'required.to disconnect relief after the principal rejected his com- from utility company's sewer system and plaint. Appellee contends that the contract connect with city's sewer system at that requires submission to the Diocesan Office time. .The Circuit Court, Orange County, of Education after rejection by.the Board Volie A. Williams, Jr. J., denied city's pray - of Education, which step Mullan concededly er for declaratory judgment and city ap- did not take. However, thecontract pro - pealed. The District Codif.of Appeal, Co - .vides that the Board of Education will pro- vide its decision to'the teacher within five wart, J, held that city had no right to days after hearing the teacher's objection, prevent utility company from serving con - yet, the Board did not submit its decision to gaming public'or to require public to dis- the appellant for some five weeks after the connect from utility company now serving hearing. Having failed to follow its own it and to connect with city's system, if, and , .rules, appellee should not be. heard to com- when city got around to meeting its uty to plain that Mullan "did not strictly comply Provide service that it had undertaken to with them. provide through enactment of ordinance. Because disputed issues of fact exist, the Affirmed. summary final judgment is reversed and the cause is remanded for further proceed- mgs consistent herewith. REVERSED and REMANDED. SHARP, W.; CJ., and COBB, J., concur: . O EMY NUMBER SYSnM ". S The CITY OF WINTER PARK, j Florida, Appellant, - . _ - , V. - SOUTHERN STATES UTILITIES, INC., - et al., Appellees. - - No. 88-242. District Court of Appeal of Florida, Fifth District. c March 16, 1989. City brought action against utility com- pany and landowners alleging that utility 1'._". company was providing sewer service to 1. Public Utilities X114 All corporations which voluntarily un- dertake to engage in performing service of public nature whether governmental. agen- cy, such as municipality,: or private corpora- tion, assume obligation implied by law to render, for ,reasonable compensation and without discrimination and to all of public in area sought to be served, service reason- ably adequate to meet just requirements of those sought to be served. 2. Municipal Corporations e-712(3, 5) City had no legal right to prevent utili- ty company from serving consuming public nor did it have right to require public to disconnect from utility company„now serv- ing them and to connect with city's sewer system if and when citybecame equipped to provide service that it had undertaken to provide by enacting ordinance extending'its corporate power -over its municipal sewer service zone :outside its corporate limits; city was not permitted to extend its service franchise beyond area it was able -to serve and ,thereby prevent ;;public from being served by anyone else: « ^„ WINTER PARK v. SOUTHERN STATES UTILITIES Fla. 179 Cne x.510 So.td 178 (FIvAPp•5 DIeL 1989) Frederic B. O'Neal of Winderweedle, city sewer treatment capacity was available Haines, Ward & Woodman, P.A., Orlando, at the 'time it was needed by the land - for appellant. owners and found that there was no mate - Thomas A. Cloud, Philip H. Trees, Ste- rial issue as to the fact that the city did not phen A. Hilger, and Forrest S. Fields, Jr. of have the present ability to provide sewer Gray, Harris& Robinson, P.Ai, Orlando, 'service to the � landowners' property and for appellee Southern States Utilities, Inc. : that, accordingly, the utility company was - Terry C. Young and Matthew G.'Brenner free to contract to provide sewer service to of Lowndes; Drosdick, Doster, Kantor &' ,the landowners' property without interven- Reed, P.A.,` Orlando, for appellees Golden- tion (interference] from the city. Although - rod Partners, Ltd., Mark E. Harris and not affirmatively expressed, the-effect'of James B. Taturn. the trial court's denial of the city's prayer fora declaratory judgment that the land- COWART, Judge." `� " owners would be .required to disconnect Appellant, City of Winter Park, enacted, from the utility company's sewer system pursuant to section.180.02(3), Florida Stat- and connect with the 'city's server system utes, an ordinance extending its corporate when it became available and entry of sum; power over its municipal sewer service mary judgment against the city was that ; zone outside lts corporate limits so as to the landowners would not be required to . G require property owners outside the city -terminate their sewer service contract with but within such service zone to connect to the 'utility -company and connect to the - the city s sewer systemwhen it became city s sewer system if and when it became available." Appellee"Southern States Utili- 'available to the landowners' property. The ty, Inc., a non-governmental utility compa- city appeals. ny (public service corporation) with a certif- Interestingly, this litigation is somewhat icate`issued by the Morida-Public'SerVice of a shadow of a prior litigation as to the Commission (PSC) pursuant to section 367: same issue between the same parties that - 031, Florida Statutes, authorizing it to pro- came about asfollows: earlier, the utility vide sewer service, entered into a contract company applied to the Public Service - with appellee landowners to supply sewer .Com Mission'to amend its certificate of public service to a tract of land lying within a _ necessity to provide sewer service to the portion of the area embraced.within the Property now in question and other proper - city's ordinance where the city does not t,, � The -city objected. • The PSC,' by order presently -.have sewer'service capability. ':n numbered '18525, and dated December 9, The city filed this action against the. utili- 1987 (87 FPSC 12:125), found that the Icity ty company 'and the landowners alleging , had more demand for sewer service than it i that "the utility company was -providing had capacity and that while the city expect - sewer service to the landowners within the ed -{u' be able to provide sewer service at city's exclusive sewer service zone\and that some time in the future, the city would not the city would have capacity to serve the execute a `commitment to provide sewer land owners' property by a date about 17 service and de-sired'to place those needing months in the future from the I date the action was originally filed. complaint service on a list to wait until the city could ,The . provide service while the utility company : <- prayed for a declaratory judgment to the had existing unused sewer treatment ca - effect that the landowners would be `ie pacity and was _willing and able to serve 1 qulred to disconnect from the utility rnmpa. the public - As to the city's claim to the III ny s ,sewer system ,and connect with the exclusive it lit' ;to serve- the property' m city's sewer system when the city could question under its municipal service zone, provide sewer service. the commission noted that it is not bound The trial court held that the city under by the city's ordinance extending its corpo- its ordinance could compel the landowners rate power beyond its city limits, nor by a to connect with its sewer system only if the local comprehensive plan enacted •under i 180 Fla. 540 SOUTHERN REPORTER, 2d SERIES section 163.3161, Florida Statutes, stating serving the consuming public and no right that the test was who was in the best to require the public to disconnect from the position to provide the needed sewer ser- utility company that can now serve it and vice which the commission found to be the connect with the city's sewer system if and utility company rather, than the city. The when the city gets around to meeting its commission expressly declined the city's re- duty to, provide the service that it has un - quest that the utility company's certificate dertaken .to provide. for authority to serve this area be issued AFFIRMED. subject to the. condition requiring discon- 1 nection when the city became able, to sup- - _ DAUKSQH and DANIEL, JJ-, - ply sewer service, noting that the commis- concur. .- .. Sion had no jurisdiction over the city sewer system.'. The city appealed the Public Ser- w vice Commission's order to the First Dls-" p Enr MUM BIR SYSTEM trict Court of Appeal which affirmed. See T City of Winter Park v. Southern States -Utilities, 530 So.2d 310 (Fla. 1st DCA 1988). [1] We agree with the Public Service Muriel J. KRUEGER, Appellant, Commission and the trial court. All corpo- - , rations which voluntarily undertake to en- VI _ gage in performing a service of a public SCHOOL DISTRICT OF HERNANDO nature whether a -.governmental .agency, COUNTY, Florida, Appellee. . such as a municipality, or a private corpo- - No. 88-270. ration, assume an obligation implied by law to render, for reasonable compensation and District Court of Appeal of Florida, of. without discrimination' and to all of the Fifth . public in the area sought 'to be served a March 16, 1989. service reasonably adequate to meet the just requirements of those sought to be served? ,..Teacher appealed from order of rein - [2] A city cannot undertake to extend statement issued by county school board, its service franchise beyond an area it is pursuant to recommended order of Division able to serve and thereby prevent the pub- of .Administrative Bearings, ;challenging lie from being served by anyone else. The amount of.back pay awarded. The District public is entitled to be served and served Court of Appeal, Sharp, CJ-, held that: (1) by the entity best able to serve it. In this teacher had right to receive back pay for case, the utility company is able to provide entire time she was entitled to receive sala- the public with the service that the city is ry, and (2) teacher was entitled to back pay unable to provide. The city, has no" legal for period of leave" without pay which she right to prevent the utility company from was forced to take. " 1.: Section 367.022(2), Florida Statutes, exempts 'own the utility and are not electors in that city. .utility systems owned, operated, managed or -- Query. Who regulates the municipal utility in controlled by governmental agencies from the -the interest of those served outside the munici- 'jurisdiction of the PSC. It is said that the legis pality? - lature reasons that it is unnecessary for the PSC - to exercise regulatory power over a municipal 2 � See Woodbury v. Tampa -Waterworks Co., 57 utility.because the people own the utility and it -'Fla. 249, 49 So. 556 (1909); Hildreth v Western functions for their benefit and they have over the officials operating the tcUnion Tel. Ca, 56 Fla 387, 47 So.. 820 (1908); elective conimf utility. ,See generally 43 FlaJur2d Public Ser- State ez rel Ellis v. Atlantic Coast line R- Co., 53 Fla 650, 44 So. 213 (1907); and in re Sanford vice Commission § 37 [Jurisdiction) Over Mu- nicipalities and Cooperatives (1983)- e and Winter Park Tel. Service, 26 Fla.Supp. 27 .when municipal utility operates beyond its corporate '-U965).:r=:' limits, the residents there being served do not 11