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HomeMy WebLinkAbout2025 01 22 Status Update on Interlocal Agreement between IRC and Sebastian1-oft, SEBASTIAN CENTENNIAL CELEBRATION 1714 - LUM CITY OF SEBASTIAN CITY COUNCIL STAFF REPORT DATE January 22, 2025 TO Honorable Mayor and City Council THRU Brian Benton, City Manager FROM Jennifer Cockcroft, City Attorney Status Update on Interlocal Agreement between Indian SUBJECT River County and the City of Sebastian relating to Water and Wastewater. EXECUTIVE SUMMARY As the Council is aware, the City of Sebastian and Indian River County entered into an Interlocal Agreement in 1997 relating to water and wastewater. Under the terms of the transfer, Indian River County and the City undertook certain responsibilities relating to future provision of water and wastewater after the transfer of systems. At the direction of the City Council on November 20, 2024, the City Attorney was asked to obtain an opinion from outside counsel relating to options the City may have under the existing Interlocal and whether any obligations have not been met, specifically. (1) evaluate the agreement; (2) determine the obligations of the City and the County under the ILA; and (3) whether the agreement is enforceable. Mr. Andrew Mai, Esq. prepared an opinion in response and it is attached. Staff seeks input from the City Council as to requested next steps. RECOMMENDATION Direct Staff to continue actions under Interlocal agreement, including continuing work on CRA Septic to Sewer agreement with Indian River County and Mr. Mai's follow up matters. ATTACHMENTS: 1. Interlocal between Indian River County and the City of Sebastian 2. Outside counsel legal opinion relating to the Interlocal Agreement FUNDING SOURCE: Expenditure required Amount Budgeted: Funding source Additional Funds Needed: $ 0.00 �00 89 2, h d rf.✓t 6 t o .t Status Undate on Interlocal Agreement between Indian River Countv and the ON of Sebastian relating to Water and Wastewater The City Attorney gave a status update on the Interlocal Agreement that was entered into back in September of 1995. Under the terms of that agreement, Indian River County and the City of Sebastian took on certain responsibilities related to the future provision of water and wastewater. At the direction of City Council on November 20, 2024, the City Attorney was asked to obtain an opinion from outside counsel, Mr. Andrew Mai, who has knowledge on complex utilities and was the interim City Attorney in the past, to find out what options the City might have under the Interlocal Agreement. Specifically, Mr. Mai was asked to evaluate the obligations of the City and the County and whether the agreement is enforceable. Mr. Mai gave an opinion that he believes the agreement is enforceable. The City Attorney and the City Manager spoke with Mr. Mai on the phone today for further clarification and asked him to be available for the City Council meeting tonight on Zoom to give a supplemental opinion and to respond to followup questions they had for him. The City Manager reviewed the three options that Mr. Mai had presented in his opinion. 1) Continue discussions with the County in order to expand the obligations of the parties through negotiation or amend or release the parties from their obligations under the Interlocal Agreement. 2) Explore City options under Section 6.07(A) of the Interlocal Agreement and the imposition of special assessments. 3) Solicit funding options to help homeowners since House Bill 1379 gives homeowners the option to replace their existing septic tank with a nutrient reduction septic tank when a sewer connection is not available. Mayor McPartlan said that option 3 sounds good because some homeowners are going to have to replace their septic tanks. He also commented that nothing seems to happen by having discussions with the County. What stood out to him when he looked at the Interlocal Agreement is that on page 23 of the agreement it states: The County will furnish water or wastewater service earlier than the time period established in this section if a public health problem occurs or the demand for such service makes the service economically feasible. Mayor McPartlan said he thinks a public health problem exists because of how many leaking septic systems are out there. The City Attorney points out the agreement does not define what would be considered a public health problem. She would like Mr. Mai to provide more input on that option as well as Section 6.07(a) relating to the City expanding the system with special assessments. Mr. Mai said that additional data and analysis would be needed, but he believes there is the potential to consider this a public health problem, although public health problem is not defined in the agreement. He thinks it is prudent to keep the County informed as to what the City is considering and get the County's position on it. He said he is not sure what kinds of bonds are tied up with the improvements the County has made or what kind of capital expenditures the County has made in reliance upon this agreement, but this agreement may be an impediment to the City in resolving the problem without knowing all of the possibilities. Council Member Dodd said there is no doubt that Council has to continue discussions with the County, and we need to hear from the County either a yes or no on whether they will service the whole City of Sebastian and how they will plan to do it. Whether it is done because of Section 6.07(a) or some other part of the agreement, there needs to be a yes or a no. The biggest issue is a timeframe. This has been discussed without resolution since he got on Council in 2016. He also notes this is a separate from the septic -to -sewer discussion within the CRA District, and he would like to talk about that as well when the time is right. He would like Mr. Mai to take the next step in the evaluation process before at some point in time the septic tanks will begin failing and prices will rise as these problems increase. He wants the City to move forward with protecting citizens from this problem and he agrees with trying to find grant money at the same time as discussing the matter with the County. The City cannot afford to do what has been done in the CRA and provide grants to pay for half of the cost of the conversion on a citywide basis. He is in support of sending a letter from the Mayor to the County Administrator and the Chair of the County Commission and tell them the City would like to set up a formal committee and a formal communication channel to get to the yes or no answer from the County to begin working towards a solution within a specific timeframe. We need to keep the County involved in this conversation, and we need to be prepared to take action, even if it is legal action based on the Interlocal Agreement. Vice Mayor Jones pointed out that according to the Interlocal Agreement, there were specific deadlines to expand the system and a map that shows where the expansion must occur. He asked if we have a map or information from the County indicating that these expansions have happened by those specific deadlines? The City Manager said that the deadlines within the agreement referred to installation of water service, not sewer, and he does not know if this was completed within the timeframe, but he believes this was completed. Mayor McPartlan said when they were installing the water pipes, the County was supposed to install the sewer pipes simultaneously. Council Member Dodd said there is nothing in the agreement that states that is how it would happen. Section 6.08(b)(4) is the only place where it mentions wastewater. He recalls that he heard the County Administrator said in their joint meeting that the City did not ask for this, but he does not know that the City must ask. The City Attorney said the agreement does say the City must ask. Council Member Nunn pointed out that the Section 6.08(B)(4) states: The County will provide wastewater service simultaneously with the installation of public water service in any designated area if the City requests such service in writin , and the County has the wastewater treatment capacity available and a financing plan approved by the City and County is developed for providing such service. Council Member Nunn asked if the City or Council had made that request in writing. Council Member Dodd said they should do that as a result of this meeting. The City Manager read the Section 6.08(B)(4) again. The County will provide wastewater service simultaneously with the installation of public water service ... if the City requests such service in writing. Council Member Nunn realizes this means the request should have been made when the water service was being installed. He also notes that wastewater and water service is being installed now within the new developments. He referred to Section 6.07(E) on page 113 where it states: The City will own any water or wastewater improvements which are constructed with funds for which the City imposes special assessments. After the improvements are constructed, the City may transfer such improvements to the County and the County shall accept the improvements as part of the County Utility System. While the improvements are in the ownership of the City, the County shall operate, maintain, repair, and replace, if necessary, such improvements as if the improvements were part of the County's utility system. The County's cost to operate, maintain, repair and replace such improvements shall be included in the County's usual utility charge to its customers. This means if Sebastian has to built a wastewater plant itself, the cost of maintaining that will be on the County according to this agreement. Mr. Mai said the caveat to that would be provided the County has identified within its most recent adopted wastewater capital improvement plan adequate treatment capacity, but if that exists, that is a route for the City. The City Manager said that the City could look more into option 2, exploring the options under Section 6.07(A) of the Interlocal Agreement using special assessments. Mayor McPartlan said what bothers him about Section 6.07(A) is that it means there will be a new plan. The last plan was done in 2017 and it was before House Bill 1379 came up. This is not just affecting Sebastian. There are many residents within the County that do not have sewer service. Council Member Dodd said to build a plant and have a special assessment, the County would have to determine that they need the capacity and what is built will provide the capacity. It is complicated. He wants to know whether or not the County will commit to providing wastewater service to Sebastian residents that still need it, with a plan and a timeframe for completion. We want the County to let us know if they can provide the wastewater service and Sebastian will be investigating alternatives if they cannot. They do not need to do a major engineering study. They can obtain the information from GIS to determine capacity requirements. The City Manager summarized the direction he has received from Council. He will have staff draft a letter to send to the County on behalf of the Mayor expressing that the City is looking at options and asking if they can provide the wastewater service within a certain timeframe. Council Mayor Dodd asked the City Attorney if a resolution from Council would lend more credence than a letter from the Mayor. The City Attorney said it could be done either way. She was amenable to drafting a resolution and has already started drafting one, but a letter could go ahead and be sent before a resolution is prepared. Council Member Nunn said sending a letter would be faster. The City Attorney reminded Council that the City passed a resolution along those lines in 2023 after the joint session with the County Commission at the North Indian River County Library, and that resolution can be attached to the letter and say that this has been ongoing issue of concern. Council Member Nunn asked if it would be of assistance to declare a public health problem in the City based on our septic issues. Mr. Mai said if the City has evidence to back it up, they could take that route. He thinks that would be quite extreme, but it may be necessary if there is evidence to support it. Council Member Nunn said according to the environmental groups it is a health emergency. Council Member Dodd said the County did a study on their own that was approved by the County Commission that listed the top polluting areas within the County from septic and parts of the Sebastian Highlands were in the top 10. He does not think the letter needs to be brought back to Council for approval if the City Attorney and City Manager are comfortable with the wording and the Mayor approves it. It should be sent to the Chair of the Commission with a copy to the County Administrator and County Attorney. Mayor McPartlan suggested sending a copy of the letter to the other municipalities as well. Council Member Nunn would definitely recommend sending a copy Fellsmere since they have a similar situation. Council Member Dodd said that Fellsmere cancelled their sewer study. Sentic-to-Sewer in the CRA District Council Member Dodd would also like to recommend a letter be sent to the County from the Mayor related to the septic -to -sewer issues within the CRA District. Council had approved $100,000 to spend on materials for extension the infrastructure within the CRA and the right-of-way approvals that were needed, but no action has been taken on that by the County. He thinks the letter should state the agreement the City has reached and would like to receive a plan from the County on implementation. The City Manager clarified that there was specific direction given by Council on the agreement they want from the County on December 11, 2024. The City would commit up to $100,000 to cover materials. The City also wants a commitment from the County that our residents will not be assessed any costs for this project. The City also wants specific timelines on when the project would be completed. He had previously met with the County Administrator and a County Commissioner and worked out the preliminary agreement that the City would pay the material costs and the County would do most a bit of the work in house, though there is some work that has to be done by an outside third party. The County will have the responsibility to obtain the easements since it is their utility, but the City and County to can work together to discuss with property owners and get the easements in place for the properties. Council Member Dodd wanted clarification on when this meeting with the County Administrator, County Commissioner Laura Moss, and Utility Department Head had taken place. The City Manager confirmed that meeting was in October 2024. The City Engineer was present at the meeting as well. Meeting minutes were taken and sent them to the County, but there has not been any farther communication since that time. He reviewed what was discussed at the December 11, 2024 Council meeting was his communications with the County Administrator from December 10, 2024 in which the County had proposed using operating revenues to cover the cost of project management, construction, and other related services for the public infrastructure for the CRA septic - to -sewer project and the City/CRA would cover the cost of the material related to the project and will assist the County in obtaining the necessary easements. Council Member Dodd asked for a second letter to confirm there is an agreement in place that consists of an implementation plan with timelines.