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HomeMy WebLinkAbout1991 12 06 - Briefing Documenta, UTILITY FRANCHISE NEGOTIATIONS BRIEFING DOCUMENT CITY OF SEBASTIAN 0 INDIAN RIVER COUNTY HARTMAN & ASSOCIATES, INC. GRAY, HARRIS, ROBINSON, KIRSCHENBAUM & PEEPLE,S NOVEMBEP. G, 1991 HAI #91-174.00 HES/ch R5/Brief.Cvr i a, UTILITY FRANCHISE NEGOTIATIONS BRIEFING DOCUMENT CITY OF SEBASTIAN 0 INDIAN RIVER COUNTY HARTMAN & ASSOCIATES, INC. GRAY, HARRIS, ROBINSON, KIRSCHENBAUM & PEEPLE,S NOVEMBEP. G, 1991 HAI #91-174.00 HES/ch R5/Brief.Cvr General Development Utilities, Inc. (GDU) has been providing potable water service to the residents of the .City of Sebastian, with the exception of existing franchise areas, since the early 1970's, and wastewater service since the mid 1980's. In 1981, the City of Sebastian granted GDU a water and wastewater franchise area, which in all general purposes, encompassed all lands within the City's incorporated boundaries. The only areas not included in GDU's water and wastewater franchise arca were a few out -parcels and existing water and/or wastewater franchise areas. Between 1987 and December 12, 1990, the City of Sebastian and Indian River County enteral into a series of agreements which changed the provisions of water and wastewater service in the City of Sebastian. As a result of the December 12, 1991 agreement, the City of Sebastian basically became the County's agent for the provision and regulation of water and wastewater service in the City. On March 5, 1991, Indian River County unanimously agreed to relinquish its franchise rights within the City of Sebastian. As a result of the County's offer, the City of Sebastian conditionally accepted the County's offer, subject to the completion of the necessary documents containing terms and conditions acceptable to both parties so that the agreements, ordinances and resolutions could be rescinded in a manner as to not impact third parties. A feasibility study addressing the advantages and disadvantages of providing water and wastewater services was prepared by Hartman & Associates, Inc. (HAI). The study concluded that the City of Sebastian should take all necessary steps to regain all of its rights under the GDU franchises in order to potentially acquire GDU's Sebastian highlands water and wastewater facilities ko enable the City to develop a City-wide water and wastewater utility. As a result of this recommendation, modifications to the County's franchise is necessary for the development of the City's water and wastewater system. Therefore, there is a need to negotiate with the County to develop the necessary modifications to the County's franchise. It should be noted that presently Indian River County does not provide water service to any residents within the City limits, with the exception of Park Place. The County's Water Master Plan provides for an orderly expansion of the County's potable water system with most of the future improvements occurring north of County Road 512 (Fellsmere Road). 'However, at this time, no facilities are in the ground and all major improvements are just in the pre -planning phase. This is not the case with the wastewater system. Presently, the County has pump stations and wastewater collection and transmission facilities installed in the City, as well as DIES/ch R5/Brief.174 4- major wastewater transmission lines running south along U.S. 1 which serve the Rosilind area and miscellaneous developments (i.e., Park Place, etc.). Furthermore, the County had a significant number (i.e., approximately 2,000) of City residents committed to the wastewater system, and the County was ready to provide service for City customers on or about March S, 1991. Presently, there are approximately 95 equivalent residential units (ERUs) receiving wastewater service from the County. The primary purpose of the negotiations between the County and the City is to develop a relationship between the two (2) entities so that a Smooth transition for providing water and wastewater service to the residents of the City could occur. The County has agreed -A-o MWra with the City, as long as the interests of the County utility system, the bond holders, and the City customers who have reserved capacity in the system are protected. The County and City staff members, as well as their engineering and legal consultants, have met on several occasions to work out interim plaits to effect die separation of the utility systems. As a result of these meetings, a number of drafts and revisions to the proposed "Interlocal Utilities Agreement" have been prepared. Furthermore, the City staff members and their engineering and legal consultants have met with individuals from the private sector to rcapond to any and all concerns. As a result of our meetings with the. County, a fourth draft of the "Interlocal Utilities Agreement" has been prepared and submitted to the County for their comments. It appears that all concerns of the County have been addressed with this third draft. A meeting will be scheduled with the County and their staff in the near future. MAI is presently responding to concerns brought to our attention by Mr. John Little regarding the feasibility study prepared by HAI. It is anticipated that other meetings may be necessary to have future meetings with the County and private sector to answer any additional concerns that these groups may have. As previously mentioned, a number of meetings have been held between the City and County regarding the proposed "Interlocal Utility Agreement." On October 16, 1991, the second HES/ch R5/Brief. 174 eN 11MN meeting was held at the County complex to discuss the County's version of the "Interlocal Utility Agreement." At this meeting, the City presented to the County a revised version of the County's draft "interlocal Utilities Agreement" which the City and their consultants had the opportunity to review and modify. Although there were some discrepancies between the two (2) versions of the Agreement, the meeting was very productive and resulted in the fourth version of the draft "Interlocal Utilities Agreement." Presented in Appendix A is the draft "Interlocal Utilities Agreement" between the City of Sebastian and Indian River County. The "Interlocal Utilities Agreement", as presented in Appendix A of this Briefing Document, means that the City will be permitted to investigate the option of nursu'ng theMuisition of the GDU Sebastian Highlands water and wastewater facilities with no ties. The Agreement provides for a cancellation date (6 -month period) from the date of execution of said Agreement to determine the feasibility of acquiring the GDU facilities. Furthermore, this Agreement immediately cancels the existing franchise and all rights granted to the County by the City under Resolutions R-87-6 and R-87-7 and the Agreement with respect to the territory covered by the GDU franchise. Moreover, up until the cancellation date, the County will allow permanent capacity to the County's system to be purchased by residents within the City limits under the same terms of the existing franchise. After this date, the County will sell available permanent capacity for connections within the City only to the City itself, which in turn will make this capacity available to customers within the City. This portion of the Agreement will enable the City to purchase bulk wastewater capacity from the County, if necessary, until their utility system is in place and operational. This Agreement also re -assigns the City's rights to purchase the GDU Sebastian Highlands water and wastewater facilities effective immediately; thereby, terminating the City Resolution R-90-55 with the County. Furthermore, this Agreement is accepted to allow the City to exercise its option to purchase the GDU facilities and provide water and wastewater service in the territory covered by the GDU franchises. In addition, the draft Agreement identifies three (3) classes of customers. These classes of customers are defined in the Agreement as follows: HIS/ch RS/Brief.174 -3. (1) Class I Units: Customers within the City which are connected to or which have reserved capacity in the County wastewater system prior to January 1, 1992, and have a wastewater collection system available to them, even if the physical connection has not been made. (2) Class II Units: Customers within the City which have reserved capacity in the County wastewater system prior to January 1, 1992, but do not have a wastewater collection system available. (3) Class III Units: All other customers within the City other than Class I and H customers. The Agreement also provides for a service agreement between the City and County which becomes effective on the cancellation date of the agreement. In other words, on this date the County will cease to be the utility provider within the City and will instead become only the wastewater transmission, treatment and effluent disposal provider for all Class I and II units, as well as for the Class III units for which the City has purchased permanent capacity. Furthermore, the City must provide wastewater collection systems for Class I customers, such that the interests of the Class II customers are not harmed by the revocation of the County franchise. As a result, the County agreed to develop a non-discriminatory, cost -of -service rate to be charged to the City. To protect the County and make diem "whole", there is a paragraph in the Agreement which describes the transfer of customers. In summary, the County agrees that on the request of the City, it will transfer to the City for wastewater collection, treatment and effluent disposal purposes, Class I, H and III customers for which permanent capacity has been bought, provided that the County has a customer available to purchase the capacity used or reserved by the customers which are requested to be transferred. In tum, the County will use "good faith" efforts to procure a replacement customer for the capacity. Moreover, upon receipt of the impact fee from the new customer, the County will remit to the City the impact fee originally paid by the customer who is to be transferred to the City. The transfer of customers from the County to the City is schematically illustrated in Figure 1. HES/ch 125/11rief. 174 -4- 11/1J/J1 1.): U0 -jujVI uJJ JIUV ��^�••^^ LSI 004k, Finally, the Agreement acknowledges that certain collection systems may be disconnected from Ole County system entirely, transferred to the City without charge, and reconnected to the City's wastewater system. The transfers of systems will occur when all units on the system are City customers, by transfer or otherwise. As noted, the Agreement has been modified numerous times with the attempt to provide protection to both the County and City. It is firmly believed that this fourth draft Agreement addresses the concerns of the County and protects both the City, County and innocent third parties. ;ra• „r.lr:. � (1) Continue negotiations with Indian River County to develop the final "Interlocal Utilities Agreement" for service area, wholesale service, cost sharing of certain assets, transfer of customers and facilities within the City to the City from the County. (2) Schedule workshops with the public and other concerned residents of the City to respond to any and all concerns. (3) Notify GDU of the City's intention to exercise the purchase of the City's franchise agreement with GDU. Once the "Interlocal Utilities Agreement" between the City and the County is signed and GDU has been notified of the City's intention to exercise the purchase of the GDU Sebastian Highlands water and wastewater facilities, a number of tasks must be initiated: (1) Acquire the GDU Sebastian Highlands water and wastewater facilities, starting with the requirements of Chapter 180.301 of the Florida Statutes (FS), then proceeding with inspections, negotiations, etc., as illustrated in Figure 2. (2) Investigate the possibility of grants, low interest loans, and other forms of financial assistance. HHS/ch R5/Brief. 174 6" 0 O i• 20 CITY/COUNTY INTERWCAL AGREEMENT PREVIOUS CITY COUNTY AC EMENTS UNDuclazo CITY PURSUES COUNTY SEUS EP.U'S FOR ACQUISITION OF NORTH COUNTY RMTP TO CPU CITY AND COUNTY CUSTOMERS EQUALLY ACQUISITION NORTH COUNTY OF GDU MMTP CAPACITY (SEE FIGURE 2) CITY ACQUIRES CDU RATER UNCONNECTED £RU'S AND WASTEWATER WITHIN CITY SERVICE FACNdiTES AREA CRY EXPANDS RATER k WASTEWATER FACILITIES CITY BUILDS CITY CUSTOMER COUNTY OPTION FOR NEW COUNTY FT.OR DIVERSION TRANSFERRING CUSTOMERS FACILITY REQUESTING SERVICE TRANSFEREO TO CCTV CUSTOMER *FOLLOWING THE COMPLETION OF THE FLOW DIVERSION FACILITY AFTER ACQUISITION OF GDU TTIE COUNTY CONCEPTUALLY AGREED TO TRANSFER CTCV CUSTOMERS TO CITY AS NEW COUNTY CUSTOMERS CONNECTED T, LDydIroAgeIoVlag/e8tec, eAoleSnlSietaOCIACITY/COUNTY INTERLOCAL gHARk megTES AGREEMENT SOUTHEAST EANK RUILDINO SUITE 1000 • 201 CAST PINE STREET • ORLANDO,FL 92001 FIGURE 1 TELEPHONE (407)839-0066. PAX (44)7) 099-9700 FOGA POV n:suPPNCE Com 1 mwccb BY OTHERS n . M,mu", ExxoT1 • PU` b AGRCCwCM 0 ITlNxfilL � • EPwIC[ PLAu • immi mond • IBO.]YI NWi1MG • USER PATES • RESOLURWS . CAPITAL C CS . okb"ONCES • VMITY SENIBAMS . SEWER OROI CES • MiDES PROCEDURE . STO. DEVELOPERS AGIKEYEM uA ovcwnoxA „PRMo Tnx • Paamw: •HIAF2TMoAN�Bc ASSeOCm^ATESDaneulNtant• fl SOUTHEAST BANK BUDDING 9URTmepOH0 � IOF� 9' 955NE 5• FAX (OT) 539-3790 OI UTILITY AQUISITION INVESTIGATION FLOW CHART FIGURE 2 (3) Prepare a finance plan. (4) Prepare utilities standards, policies, procedures, rates, charges, code revisions, fornts and other associated activities. (5) Organization and start-up of a water and wastewater utility. (6) Prepare a comprehensive water and wastewater master plan for the City. HES/ch li5/13rief.174 g AP7PENDI% A t• - 1NTERWCAL UTILITIES AGREMENT (AS OE OCTOBER 30, 1991) HES/ch RS.Brief.ApA INTERLOCAL UTILITIES AGREEMENT BETWEEN INDIAN RIVER COUNTY, FLORIDA AND CITY OF SEJBASTIAN, FLORIDA. THIS AGREEMENT, made thin _ day of , 1991, by and between INDIAN RIVER COUNTY, a political subdivision of the State of Florida, the address a£ which is 1840 25th Street, Vero Beach, Florida 32960 (hereafter COUNTY) and the CITY of SEBASTIAN, a municipal corporation of the State of Florida, the address of which is Poet Office Box 127, Sebastian, Florida 32978 (hereafter CITY), and its successors and/or assigns, W I T N E S S E T H: That for and in consideration of the promisee and other good and valuable consideration, the receipt and sufficiency of which in hereby acknowledged, the COUNTY and the CITY agree an follows, I. AGREED FACTS. The following are true statementsi 1.1. The CITY granted a water franchise to General Development Utilities, Inc. (GDU) in CITY Ordinance 0-81-8 and granted a sewer franchise to GDU in CITY Ordinance o-81-9 (col- lectively the'GDU franchises) to allow GDU to operate and main - twin a water distribution and a wastewater collection and dis- posal system within a portion of the CITY. 1.2. On January 14, 1987, by CITY Resolution R-87-6, the CITY gave the COUNTY a 30-yoar exclusive franchise for the provision of water and wastewater services within the rest of the City. 1.3. An interlocal agreement entered into between the CITY and COUNTY and effective July 3, 1987, required the CITY to assist the COUNTY in assessing property owners for the construc- tion of collection systema in the City limits. 1 1.4. At construction financing for a wastewater plant and main lines, the COUNTY issued revenue bonds in the amount of $6,075,000 on October 15, 1989- Part of the security for the re- payment of these bonds was the revenue from impact fee Assess- ments for reserved connections within the City. I.S. The COUNTY has constructed a wastewater treatment plant, major collection lines, and certain force mains from the plant through the unincorporated area into the City and beyond and was ready to provide service for CITY customers on or about march 5, 1991. 1.6. Approximately 95 CITY equivalent residential units are now receiving wastewater service from these facilities. 1.7. On December 12, 1990, the CITY and COUNTY entered into and executed an assignment whereby the CITY transferred to the COUNTY, and the COUNTY accepted, all of the CITY's right, title, and interest in the GDU franchises, except the right to receive any and all franchise revenues and fees owed under the GDU franchises, and except the right to regulate rates and charges being charged and collected pursuant to the GDU fran- chises. 1.8. The CITY on or about February 27, 1991, deter- mined that it would be in the CITY's best interest to consider a revocation gr cancellation of the franchise given to the COUNTY in paragraph 1.2 and perhaps provide its own water and wastewater service. 1.9. On march 51 1991, the COUNTY unanimously agreed to relinquish its franchise rights within the CITY if that was what the CITY wished. 1.10. On March 13, 1991, the COUNTY sent a letter to the CITY offering to relinquish its franchise rights. 1.11. On April 5, 1991, the CITY conditionally accepted the COUNTY's offer, subject to completion of the neces- sary documents containing terms and conditions acceptable to both 2 A0%, As► parties so that agreements, ordinances, and resolutions may be rescinded in such a manner as to not impact third parties. 1.12. On March 27, 1991, the CITY hired a utility con- sultant to prepare a feasibility study concerning whether the CITY should provide its own water and wastewater systems. 1.13. The feasibility study prepared by the CITY's consultants wan presented to the CITY on .lune 26, 1991, and recommended that the CITY go ahead with its own utility service. 1.14. Based on the announced intention of the CITY to develop its own utility systems, on or about August 6, 1991, COUNTY Cancelled plana for expanding the COUNTY's North County wastewater Treatment Plant. 1.15, The CITY is taking the necessary steps to regain all of its rights under the GDU franchises in order to potentially acquire GDO's water and wastewater systems to enable the CITY to develop a City-wide water and wastewater utility. Modification of the COUNTY's franchiae is also a necessary prerequisite to the CITY's development of its own water and wastewater system. 1.16. The COUNTY has agreed to cooperate with the CITY as long as the interests of the COUNTY utility system, the bond holders, and the CITY customers who have reserved capacity in the system are 411 protected. 1.17. The COUNTY and CITY staff members have met on several occasions to work out interim plans to effect the separa- tion of the utility systema and have recommended the provisions of this agreement as an acceptable way to satisfy the concerns of all parties. 2. CANCELLATION OF COUNTY FHANCHIjjE. Effective six (6) calendar months from the date of execution of this Agreement (the "Cancellation Date"), the parties hereby agree to and do cancel' the existing franchise and all of the rights granted to the COUNTY by the CITY under CITY Resolutions R-87-6 and R-87-7, and under the Intergovernmental Agreement between the CITY and the 3 COUNTY which was effective February 3, 1987; provided, however, that the CITY and COUNTY agree and do hereby cancel the existing franchise and all of the rights granted to the COUNTY by the CITY under said resolutions and agreement with respect to the terri- tory covered by the GDU franchises, said cancellation to take affect immediately. Upon the Cancellation Date, the CITY's retail water and wastewater service area shall be as depicted on Exhihit "A" attached to and incorporated in this Agreement. 3. CONTINUANCE OF PRESENT SERVICE. Up to and until the Cancellation Date, the COUNTY will allow available permanent capacity of the COUNTY system to be purchased by customers within the City limits pursuant to the terms of the existing franchise. On and after that date the COUNTY will 8011 available permanent capacity for connections within the City only to the CITY itself, which may in turn make this capacity available to customers within the City. 4. REASSIGNMENT OF RIGHTS TO PURCHASE GDU FACIIITIES. The assignment by the CITY to the COUNTY by CITY Resolution R-90-55 of all right, title, and interest in GDU's franchises given in CITY Ordinances 0-81-8 and 0-81-9 are hereby reassigned to the CITY effective the date of this agreement. That Agreement between the CITY and COUNTY entered into on December 12, 1990, is hereby terminaxed, The parties agree that the effect of this termination and reassignment, together with the immediate partial cancellation referred to in paragraph 2 hereof is to allow the CITY to exercise its option to purchase the GDU facilities and provide water and wastewater service in the territory covered by the GDU franchises. 5. DEFINITIONS. 5.1. ClAss I Units - Units within the CITY which are connected to or which have reserved capacity in the COUNTY waste- water system before January 1, 1992, and which have a collection system available to them, even if the physical connection to the unit has not been made. 4 5.2. C�:.ss Il B i s - Units within the CITY which have reserved capacity in the COUNTY wastewater system before January 1, 1992, but which do not have a collection system available. 5.3. Claes 222 Units - Units within the CITY other than Class I and II Units. 5.4. "Utility Service" shall be used to include rate setting, customer connections, meter installation, meter reading, billing, bill collection, customer relations, customer com- plaints, collection system conatruotion, related repair work, and all other necessary, customary, and convenient activities per- formed by a utility company other than the treatment of waste- water. Utility service shall not include repair and maintenance of the COUNTY,a lines, force mains, or pump stations shown on Exhibit "B". These shall be the responsibility of the COUNTY. 6 . :�A�Ii'�A�xEe14aNT , 6.1. Effective on the Cancellation Date, the COUNTY will cease to be the utility Service provider within the City and will become instead only the treatment, transmission, and effluent disposal (hereinafter "treatment") provider for all wastewater generated for all class I and II Units and for the number of Class III Units for which the CITY has purchased or does purchase' permanent capacity in a COUNTY wastewater treatment plant. 6.2. Effective on the Cancellation Date, the CITY shall become the utility service provider for all classes of customers within the service Area depicted on txhibit "h" hereof and shall, As part of this duty, provide collection systema for Class I customers in a manner such that the interests of the Class II customers will not have been harmed by the revocation of the COUNTY franchise. The COUNTY agrees to develop a non- discriminatory, c06t-of-aervice rate to be charged to the CITY for treatment of the wastewater which rate Shall take into account the fact that the CITY is the utility Service provider 5 for All classes of units within the CITY. The rate and components which make up this rate are depicted in Exhibit "C" attached to and incorporated in this Agreement. The CITY reserves the right to become a wastewater treatment provider also for any or all unite within the CITY subject only to the rights of the COUNTY as described in paragraph S. The points of Interconnection between the CITY's and COUNTY's wastewater systems are depicted on Exhibit "B" hereof. To bill for the rates hereunder, the COUNTY shall install at its initial expense (to be recouped in the non-discriminatory, cost -of -service rates) metere in the pump stations to calculate usage. 6.3. Upon installation and acceptance, the metering equipment shall become the property of the provider, and the provider shall be responsible for the operation, maintenance, and replacement of the meter. The provider shalllread the meter for billing purposes. The metering equipment shall meet the standards of the American Water Works Association ("AWwl.") for accuracy, which is plus or minus five percent (54). The purchaser may request an accuracy teat by the provider without charge once during any twelve (12) month period. The purchaser may witness the test. Additional testing may be requested by the purchaser at the provider's established cost for such tests. Copies of the,test results will be provided, to the purchaser within thirty (30) days of the test. There will be no charge for tests that discover an inaccurate meter. If an inaccurate meter is found, as defined by the AWWA, bill adjustments will be made for one-half (1/2) of the preceding period since the last accuracy test. 6.4. As a bulk customer of the COUNTY wastewater system, CITY understands that it will have to comply with COUNTY policies on the quality of wastewater put Into the COUNTY system and other customer reasonable, technical standards adopted by the COUNTY countywide. t ' /M%, "ON 7. T2MSFER OF UNITS. The COUNTY agrees that On the request of the CITY it will transfer to the CITY for treatment purposes also Class I and Claes II Unite and any Class III Units for which permanent capacity has been bought, whenever the COUNTY has a COUNTY customer available to purchase the capacity used or reeerved by the units which are requested to be transferred. The COUNTY will use good faith efforts to procure a replacement cus- tomer for the capacity, and, upon receipt by the COUNTY of the COUNTY impact fee current at that time from the new customer, the COUNTY shall remit to the CITY the impact fee originally paid by the customer who is to be transferred to the CITY. This sum of money may be used by the CITY to finance the City operated replacement capacity needed to provide wastewater treatment for that transferred unit. Units so transferred shall not be charged an additional capacity impact fee by the CITY. B. TRANSFER OF COLLECTION SYSTEMS,. The COUNTY and the CITY both acknowledge that certain collection systems may be dis- connected from the COUNTY system entirely, transferred to the CITY without charge for the collection facilities, and reconnected to a new CITY system, said reconnection to be at CITY's expense, when all units on the system to be reconnected are City customers, either by transfer or otherwise. The COUNTY will cooperape in making these transfers. 9. CITY FURCK"S OF nM ITy 10 COUNTY PLANT, COUNTY Agrees to sell capacity to the CITY under standard COUNTY poli- cies and rates. The present COUNTY policy is to expand waste- water treatment plant facilities when financially and technologi- cally feasible, and when consistent with the Utility Master Plan, provided that reservations are committed which will fund the expansion. Part of the reservation includes the requirement to pay the COUNTY monthly base facility charges. 10. DISCLAIMER OF THIRD PARTY RENEFI AERIES. This agree- ment is solely for the benefit of the formal parties herein and no right or cause of action shall accrue upon or by reason 7 hereof, to or for the benefit of any third party not a formal party hereto. Nothing in this agreement expressed or implied is intended or shall be construed to confer upon or give any person or corporation other than the parties hereto any right, remedy, or claim under or by reason of this agreement or any provisions or conditions hereof; and all of the provisions, representations, covenants, and conditions herein contained shall inure to the sole benefit of and shall be binding upon the parties hereto and their respective representatives, succeesors, and assigns. 11. TERM OF AGREEMENT, The agreement shall be in effect for 30 years. The termination of agreements, resolutions, and ordinances specified in paragraphs 21 and 5 hereof shall not be affected by termination of this Agreement. IN WITNESS WHEREOF, COUNTY and CITY have entered into this agreement on the date first above written, Attest! Jeffrey X. Barton, Clerk. Attests Clerk INDIAN RIVER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS lay Richnrd N. Rird, Chairman CITY OF SEBASTIAN, FLORIDA By: Attachments: Exhibits "A," "B," and -C- 77/29011/2 W Mayor