HomeMy WebLinkAbout1995 05 03 - Factual Info Regarding Utility SystemCity of Sebastian
1225 MAIN STREET 13 SEBASTIAN, FLORIDA 32958
TELEPHONE (407) 589-5330 o FAX (407) 589-5570
MEMORANDUM
DATE: May 3, 1995
TO: Arthur L. Firtion, Mayor & Sebastian City Council
FROM: Joel L. Koford, City Manager
SUBJECT: Factual Information Regarding the City Utility System
The City Council has directed the City Manager to prepare a "White Paper" regarding
the possible sale of the City Water and Wastewater System to the Indian River County
Utilities. The following pages reflect this requirement.
/jmt
The following information was obtained from a variety of sources and is provided to
you regarding the City of Sebastian Water and Wastewater Utility System.The primary
source documents were:
1. The official statement of $5,000,000 Municipal Bond issued for the
Utilities System Revenue Bonds, Series 1993, as prepared by Raymond
James & Associates, Inc., dated December 1, 1993.
2. The City of Sebastian Water and Wastewater Master Plan as prepared by
Hartman & Associates, Inc., dated, August 1, 1994.
3. Financial Statements of the Utilities Fund of the City of Sebastian for the
year ended September 30, 1994, as audited by Hoyman, Dobson &
Company, P.A., Certified Public Accountants.
4. Memorandum prepared by the Utility Director of the City Water and
Wastewater System.
5. The Operating Statements for the first six (6) months of the current fiscal
year (October 1, 1994 to September 30, 1995) as prepared by the City
Finance Department.
I_I: s WIIC "TOI11►17
The City of Sebastian issued $5,000,000 in Utilities System Revenue Bonds,
Series 1993 under the terms and conditions of Resolution R-93-67, which was
adopted by City Council on December 8, 1993. The 1993 Bonds were issued
to provide funds for the following purposes:
1) To finance the cost of acquiring certain water production, storage and
distribution facilities, wastewater collection and treatment facilities and
eluent disposal facilities owned by General Development Utilities, Inc.
("GDU"), and combine such facilities with certain water and sewer utility
facilities owned and operated by the City to form a combined and
consolidated utility system.
2) To (mance the cost of acquiring and constructing certain unprovements
to the utility system.
3) To fund a 'Reserve Subaccount".
4) To capitalize a portion of the interest on the 1993 Bonds, and
5) To pay certain expenses related to the issuance and sale of the Bonds.
The following summary of transactions related to the Fund for the year ended
September 30, 1994:
Debt Payable at October 1, 1993 -0-
Plus:
0 -
Plus: Debt Issued $5,000,000
Debt Payable at September 30, 1994 5,000,000
Less: Unamortized Bond Discount 8228
$ISSL772
The first operating year for the total Utility System resulted in a negative "retained
earnings". The following reflect the financial information provided by the Utilities
Fund Statement of Reserves, Expenses and Changes in Retained Earnings September
30, 1994:
3
M:1
Operating Reserves
Charges for Service $ 889,780
Operating Expenses
Personal Services 208,868
Material, Supplies and Other
Operating Expenses 559,225
Depreciation 156,696
Amortization 6,087
Total Operating Expenses $ 930.876
Operating Income ( 41.096)
Non -Operating Revenue (Expenses)
Interest Income 372811
Interest Expense ( 203.840)
Total Non -Operating Revenues (Expenses) ( 166,029)
Net Income (Loss) ( 207,125)
Retained Earnings, October 1, 1993 ( 1,100)
Retained Earnings, September 30, 1994 $( 208.225)
CURRENT INFORMATION
1. As of 2/28/95 there were approximately 1374 customers on the City of
Sebastian water distribution system, and an additional 259 customers on
the City operated Park Place/Palm Lake Club water distribution system
for a total of 1633 "water" customers.
2. The current treatment capacity for the City water treatment facility is
671,000 gallons per day, and the average daily demand as of 2/28/95 for
water from this plant is 383,693 gallons per day.
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3. The current treatment capacity for the Park Place water treatment plant is
100,000 gallons per day and the average daily demand for water from this
plant is 39,400 gallons per day. This treatment plant is scheduled to be
decommissioned July 11, 1999 and the customer demand transferred to
the City facility, unless transferred by earlier action.
4. The current treatment capacity for the City sewage treatment plant is
300,000 gallons per day, and the current average daily flow for sewer
service is 76,000 gallons per day. However, the current disposal
capability for the City sewage treatment plant is only 142,000 gallons per
day or approximately one-half of the current treatment capacity.
The Water and Wastewater Master Plan provides two (2)
recommendations for correcting this problem. The first recommendation
is to provide spray irrigation to local citrus groves for an additional
investment of approximately $576,450; and the second recommendation
is to constrict a reuse pipline and provide spray irrigation for the
municipal golf course at an approximate cost of $742,950. To implement
both recommendations, it would cost approximately $1,319,400 for
constriction and related costs.
Item
Recommendation
#1
Grove Irrigation
(Preliminary Est.)
Recommendation
#2
Golf Course Spray
Irrigation (Est.)
TOTAL
Construction Contingencv Engineering Total
$ 384,300 $ 76,860 $ 115,290 $ 576,450
$ 495.300
$ 99.060
$ 148.590
$ 742.950
$ 879.600
$ ]75.920
$ 263.880
$1.319.400
Since the current average daily flow is only 76,000 gallons per day and the
current capability is limited to disposing of 142,000 gallons per day, the
growth is restricted to the difference (142,000 - 76,000 = 66,000) or 66,000
gallons per day, unless one or both recommendations are implemented.
5
The City is obligated to accept the Park Place/Palm Lake Club sewage for
treatment and disposal. This system currently generates 39,400 gallons of
sewage which is presently being treated by the County's wastewater
treatment plant at Hobart Park. Once the system transfers from County to
City, the reserve disposal capability will be reduced from 66,000 gallons
capability to 26,600 gallons per day. (66,000-39,400 = 26,600). The current
system is receiving sewage from the Highlands at approximately 280
gallons per household. This means that without spending money on either
recommendation outlined in the Water and Sewer Master Plan, the system
would only be able to accept an additional 95 residential units (95 x 280
gal/unit = 26,600 gallons).
5. The consulting engineers have outlined a detailed plan for expansion of the
wastewater (sewage) treatment system and have identified the need for
additional treatment capability that should be on line during 1999. The
projected cost of this expansion is estimated at $1,803,600, and an
additional $461,100 is required to upgrade the disposal system for a total
of $2,264,700. These figures however, are based upon the implementation
of the proposed changes outlined in paragraph 4. Assuming the City accepts
recommendation #1, another $576,450 can be added for a new total of
$2,841,150. However, the consultants have also indicated that the City
would need to upgrade the treatment system again by the year 2008.
6. The City water treatment and distribution system upgrade costs for the
period 1995 through 1999 as outlined by the consulting engineers in the
Water Master Plan total $1,143,533.
7. The consulting engineers have also stated that the water demand projections
will exceed the City water system capability between the years 2001 and
2002. Therefore, additional water supply must be provided in a timely
manner to provide sufficient water supply capacity. The recommended
population projections utilized with the Water and Wastewater Master Plan
however, have already been exceeded. The following represents the data
provided by Table 6-4 (page 6-7) of the Master Plan.
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YEAR POPULATION PROJECTIONS
1994
11570
1995
12302
1996
13123
1997
13976
1998
14884
1999
15852
2000
16882
2001
17980
The census tract upgrade for Sebastian as prepared by the University of
Florida, established 12,800 as the population for the City of Sebastian on
April 1, 1994. The difference in population projections as utilized in the
Master Plan and the census reflect a difference of 1,230. The projected
costs for water system upgrade to meet this requirement was estimated at
$5,900,232. However, with the acceleration of population, the upgrade
should be in place by 1999 instead of 2001.
The current residential user charges for water and sewer in the City of Sebastian
and Indian River County Utilities, are as follows:
A. WATER
SEBASTIAN
COUNTY
(Gallons)
(Gallons)
0-3,000 Gal Water
$1.56 Per Thousand
$1.75 Per Thousand
4-7,000 Gal Water
1.91 Per Thousand
2.15 Per Thousand
8-13,000 Gal Water
2.27 Per Thousand
2.55 Per Thousand
13,000 +
4.33 Per Thousand
2.30 Per Thousand Surcharge
Impact Fee - Water
$1,100
$1,570
B. SEWER
0-10,000 Gal Sewer $2.83 Per Thousand $3.35 Maximum (Residential)
11,000+ N/A 4.45 Per Thousand
Impact Fee - Sewer $1,650 $2,551
7
9. The following represents the projects identified in the "Official Statement" for the
Bond issue and with estimated costs over a five (5) year period.
(1) Water System
a. TTHM Control System $
22,000
b. Miscellaneous Water Distribution and
Transmission System Improvements
300,000
C. Water Use Permit Renewal
19,700
d. Water System Master Plan
40,000
e. Miscellaneous Water Treatment System
Improvements
45,700
TOTAL $ 427.400
(2) Wastewater System
a. Sludge Stabilization and Wastewater
Treatment Plant Improvements $ 220,000
b. Wastewater System Master Plan 20,000
C. Above Ground Fuel Storage Tank 17,400
TOTAL S 257.400
The total Capital Improvements Programs for the first three (3) fiscal year period
ending September 30, 1996, totaled $1,169,300. The following Capital
Improvement Projects were not to be funded by the bonds:
a. Barber St. Watermain Interconnection $ 54,000
b. Park Place Force Main Interconnect 108,000
C. Effluent Disposal Rerouting & Expansion 322,500
TOTAL 484.500
RECAP: $ 427,400 Water
257,400 Wastewater
484,500 Combination
1.169.300
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10. The bond debt covenants require that the Utility Net Revenues, at all times, must
a least equal one hundred fifteen percent (115%) of the annual debt service on all
outstanding bonds becoming due in the current fiscal year. The Utility Fund was
not able to comply with the bond covenant but was able to pay the annual debt
service due in the current fiscal year. A rate increase is projected to satisfy this
bond covenant equates to approximately $1.00 per thousand gallons for water and
$1.00 for the wastewater rate.
During the first year of operation, the following projects are either complete or are
in the final completion stage.
a. Trihalomethane (Ammoniation) Control System (Design &
Permitting Completed)
b. Water Use Permit Renewal (Completed)
C. Water & Wastewater Master Plan (99% Complete)
C. SUMMATION
1. Under the provisions of the Water and Wastewater Master Plan, the
following dollar requirements are necessary for utility service by the year
2004. (Expressed in 1994 dollars)
WATER WASTEWATER TOTAL
CY 1995-1999
$1,143,533
$2,841,150
$ 3,984,683
CY 1998-2004
5.900.232
2.320.114
8.220,346
WATER TOTAL:
$7.043.765
$5.161264
$12.205.029
The recommended schedule provided within the Water and Wastewater Master Plan will
require the City to generate $12,205,029 in financing to meet the demand for water
treatment and distribution, and for wastewater collection, treatment, and disposal of the
effluent in accordance with the State and Federal regulatory agency requirements before
the end of the year 2004.
2. In order for the Utility Fund to comply with the Bond utility rate covenant,
an increase in the water and wastewater rates is required. The increase
necessary to provide net revenues equal to 115% of the annual debt service
would be $1.00 per thousand gallons.
C