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HomeMy WebLinkAbout1991 09 09 - Briefing Documentr HARTMAN & ASSOCIATES, LLC. engineers, hydrogeologists, scientists & management consultants September 9, 1991 HAI #91-178.00 Mr. Robb McClary City Manager City of Sebastian P.O. Box 780127 Sebastian, Florida 32978 Subject: Briefing Document for Investigation of Existing Utility franchise and the Advantages and Disadvantages of Providing Water and Wastewater Services for the City of Sebastian, Florida Dear Mr. McClary: This document will serve as a briefing document for the City Council regarding the project status and future tasks, the negotiations between Indian River County and the City of Sebastian, as well as our responses to the concerns which were brought up at the City Council meeting on August 28, 1991, and subsequent meetings with the City and concerned residents. To facilitate your review, we have divided this document into four (4) sections as identified below: o Section 1 - Sebastian Utility System project status. o Section 2 - Meeting with Indian River County - September 4, 1991. o Section 3 - City Council Meeting - August 28, 1991. o Section 4 - Meeting between Robb McClary, Clay Price and Damian Gilliams. SOUTHEAST BANK BUILDING • SUITE 1000 . 201 EAST PINE STREET • ORLANDO, FL 32801 TELEPHONE (407) 839.3955 • FAX (407) 839-3790 PRINCIPALS: JAMES E. CHRISTOPHER • CHARLES W. DRAKE • GERALD C. HARTSLIN • MARK I. LUKE • MARK A. RYNNING • HAROLD E. SCH.MIDT, JR. Mr. Robb McClary September 9, 1991 Page 2 We trust this briefing document and our responses to the comments by the concerned residents answer any questions the City may have regarding the utilities. If you should have any questions, please feel free to call us. Very truly yours, Hartman & Associates, Gerald C. jHart2(,P.E President • aW 11YJLLLYl1L HES/GCH/ch C6/McClary.hes cc: City of Sebastian Council Dan Eckis, P.E. - City of Sebastian Brian Cooper - City of Sebastian Thomas A. Cloud, Esquire - GHR n SECTION 1 SEBASTIAN UTILITY SYSTEM PROJECT STATUS o CITY COUNCIL HAS ACCEPTED THE HAI REPORT. o CITY HAS HIRED LEGAL ASSISTANCE TO UNBUCKLE CITY/COUNTY AGREEMENTS. o THE COUNTY IS IN PROCESS OF GIVING GDU FRANCHISE AGREEMENT BACK TO CITY. o CITY AND COUNTY MET ON SEPTEMBER 4, 1991, AND CONCEPTUALLY AGREED ON CUSTOMER TRANSFER PROGRAM (SEE FIGURE 1). o CITY ADVERTISES FOR PROFESSIONAL CONSULTANTS TO ASSIST IN THE ACQUISITION OF GDU. o FUTURE TASKS: - HUE PROFESSIONAL CONSULTANTS TO ASSIST IN THE ACQUISITION OF GDU. - CONTINUED NEGOTIATIONS WITH THE COUNTY AND ADDRESS ASSESSMENT ISSUE. - NOTIFY GDU OF CITY'S INTENTION TO EXERCISE THE PURCHASE OF THE CITY'S FRANCHISE AGREEMENT WITH THE COMPANY. - ACQUIRE GDU WATER AND WASTEWATER FACILITIES (SEE FIGURE 2 FOR TASKS INVOLVED). - ORGANIZATION AND START-UP OF A WATER AND WASTEWATER UTILITY. - PREPARE UTILITY STANDARDS, POLICIES, PROCEDURES, RATES, CHARGES, CODE REVISIONS, FORMS AND OTHER ASSOCIATED ACTIVITIES. - PREPARE FINANCE PLAN. HES/GCH/ch/mg C6/SECI.RPT 1-1 CITY/COUNTY INTERLOCAL AGREEMENT PREVIOUS CTTY/COUNTY AGREEMENTS UNBUCKLED CITY PURSUES I I COUNTY SELLS ERU'S FOR At CQUISTION OF NORTH COUNTY WWTP TO GOD CITY AND COUNTY CUSTOMERS EQUALLY ACQUISITION OF GDU (SEE FIGURE 2) CITY ACQUIRES GOD WATER UNCONNECTED ERU'S AND WASTEWATER WCTHIN CITY SERVICE FACILITIES AREA CITY EXPANDS WATER & WASTEWATER FACILITIES NORTH COUNTY WWTP CAPACITY CITY BUILDS CITY CUSTOMER COUNTY OPTION FOR NEW COUNTY FLOW DIVERSION TRANSFERRING CUSTOMERS FACILITY TRANSFERED TO CITY REQUESTING SERVICE CUSTOMER *FOLLOWING THE COMPLETION OF THE FLOW DIVERSION FACILITY AFTER ACQUISITION OF GOD THE COUNTY CONCEPTUALLY AGREED TO TRANSFER CITY CUSTOMERS TO CITY AS NEW COUNTY CUSTOMERS CONNECTED HARTMAN & ASSOCIATES, INC. CITY/COUNTY INTERLOCAL engineers, hydrogeologists, scientists & management consultants AGREEMENT oL °o SOUTHEAST BANE BUILDING SUITE 1000 - 201 RASE PINE STREET • ORLANDO,FL 32801 FIGURE 1 TELEPHONE (407)839-3955• FAX (407) 839-3790 OWN A=14� • FINANCE PLAN DOCUMENTATION FOR PURCMSE OPERATIONS PRE—InON NON -BONG ISSUE PROCRAAIS INSURANCE COSTS I nNMCED W OTHERS HARTMAN & ASSOCIATES, INC. engineers, 6y&ogeologists, scientists k management consulLanls L SOUTHEAST BANK BUILDING SUITE 1000 • 201 EAST PINE STREET • ORIANOO,FL 32001 TELEPHONE (407)039-3055• FAX (407) 030-3790 • AGREEMEM MIMS • 180.301 HEARING • USER RATES • WIT& CHARGES • UnlR STANDARDS • POMES PROCEDURE MANUAL • PURCHASE AOREEMEM • 100.301 HEARING • RESOLUnONS • OMCES • SEWER ORDINANCES • STD. DEVELOPERS A REEMEHT • FINANCML REPORT UTILITY AQUISITION INVESTIGATION FLOW CHART FIGURE 2 has already sold capacity on a rerated basis at a value of significantly less than their 250 gpd/ERU with no problem from FDER. The City requested a list of all the customers requesting capacity at the North County WWTP, as well as the ones requesting capacity immediately. In addition, HAI requested the approximate number of new connections added per year from the City and County. Mr. Asher indicated that approximately five (5) ERU's were added to the County's system last year. We asked the County what the bulk transmission impact fee component was under the County system. No response from the County was given. Mr. Hartman indicated throughout the meeting that the City intends to make the County "whole" for all their investments. It was recommended to the County and seemed agreeable to the County that they would continue to sell ERU's to the residents of the City of Sebastian on a non-discriminatory basis and the new ERU's should be considered as equals or permanent. Therefore, business should be conducted as usual. At some point in the future, the City will remove capacity from the North County WWTP on a gradual basis; thereby, reducing the flows from the City to the North County WWTP. Prior to this date (September 4, 1991), the City ERU's which are wetted up will be considered the City's when the City is ready to accept them. Once the City acquires the General Development Utilities, Inc. (GDU) facilities and is ready to treat the wastewater and provide potable water, there will be a transitioning period when the County will transfer to the City a portion of the City's ERU's and pay the City back the principal of the impact fee paid to the County. The transfer and payback of ERU's will occur once the County has ERU's to trade. Therefore, this will allow the County to sell the transferred ERU's at a higher rate, as well as be maintained "whole" for their investment. Additionally, the assets now built will be transferred from the County to the City. Moreover, the County will be able to buy capacity from the City to treat a portion of the wastewater and/or provide potable water service on an as -needed basis. Mr. Cloud provided to the County draft copy of the City of Sebastian/Indian River County Interlocal Utility Agreement and Purchase and Sale Agreement for their review. In addition, it was recommended that the County provide to the City the following information: o Capital and wholesale costs for bulk capacity. o Discount rate off the impact fee. o Names and addresses of City customers, as well as City residents who have purchased ERU's from the County. The meeting can be summarized as follows: o The City of Sebastian has submitted a draft working document agreement, and requested comments from the County towards finalizing this agreement. HES/GCH/ch/mg C6/SEC2.RPT 2-2 o New customers will be treated on an equitable non-discriminatory basis within the service area. Therefore, for the immediate future, customers within the City will be permanent customers of the County, subject to a buy -down by the City at a later date. o The interim and permanent distinctions no longer applies. o There will be a transition of capacity and customers through time, such that the County can be maintained whole. o Prior to September 4, 1991, those City customers on the County system will all be incorporated into the City's facility at once. It is important to note that while there are 1,300 committed ERU's of capacity in the City, only 800 have paid the assessments, and less than 10 ERU's of capacity are actually connected and being serviced by the County system. o Certain assets of the County that do not serve the County, but serve customers in the City, should be transferred to the City at some future date. o The City and the County should enter into an interconnect deal/flow diversion deal that allows for the sale of wholesale water and sewer capacity back and forth between the City and the County. o The County agreed to give us back the GDU franchise purchase option now. o The Indian River County franchise will revert back to the City of Sebastian after the City is ready to take on the permanent capacity within the County plant. HES/GCH/ch/mg C6/SEC2.RPT 2-3 n - PREPARE WATER AND WASTEWATER MASTER PLAN. - APPLICATIONS TO APPROPRIATE STATE AND FEDERAL AGENCIES FOR FINANCING ASSISTANCE. HES/GCH/ch/mg C6/SECI.RPT 1-4 SECTION 2 MEETING WITH INDIAN RIVER COUNTY - SEPTEMBER 4, 1991 On September 4, 1991, a meeting was held in the Engineering Conference Room at the City Hall complex to discuss the potential water and sewer interlocal agreement between Indian River County and the City of Sebastian. Attendants at this meeting included: o City of Sebastian - Robb McClary, Dan Eckis and Brian Cooper. o Indian River County - Terry Pinto, Charles Vitunac and Harry Asher. o Hartman & Associates, Inc. - Gerry Hartman and Hal Schmidt. o Gray, Harris & Robinson, P.A. - Tom Cloud. Mr. Vitunac and Mr. Pinto opened the meeting by indicating that the County recently discovered that no capacity was available for the North County wastewater treatment plant (WWTP), and in fact, the North County WWTP was over -committed based on existing equivalent residential units (ERU's) sold. Furthermore, the County was advised by their financial consultants that it is impossible to fund the construction of the WWTP without permanent customers. Mr. Pinto then informed us that the County builds and/or expands their WWTP's once they are fully committed. Mr. Pinto indicated that the County would like to get away from selling capacity to the City on a customer -by -customer basis and would prefer to sell bulk capacity to the City on a wholesale basis, which would then be sold by the City to its customers. Mr. Hartman indicated that we would need to know from the County what the capital and wholesale costs for wholesale service would be from the County. At this point, it was requested that the County could rerate the North County WWTP flows based on actual historical flows to the facility, which in turn, will create interim capacity, make the County "whole" and avoid the need for a wholesale agreement. The County indicated that they could not consider rerating the North County WWTP so a value less than 250 gpd/ERU could not be used. However, the County was informed of several municipalities that have been rerating plant capacities based on historical wastewater flows (i.e., Cities of Melbourne, Orlando, Palm Bay, etc.). Mr. Asher indicated that of the over 5,200 ERU's have been sold for the North County WWTP, which is currently rated at 1.0 MGD, approximately 2,000 are located within the City limits. Of these 2,000 City ERU's, over 700 ERU's have been turned into the County and have been recommited. In addition, approximately 500 ERU's of the 1,300+ ERU's have not paid their fust assessment. We were then informed that of the 5,200 ERU's remaining sold for the North County WWTP, FDER has issued wastewater collection system permits for approximately 2,500 ERU's. Based on this information, it became obvious that the County HES/GCH/ch/mg C6/SEC2.RPT 2-1 SECTION 3 CITY COUNCIL MEETING - AUGUST 28, 1991 On August 28, 1991, a number of issues were brought up regarding the above referenced report from three (3) specific individuals. Summarized herein are our responses to these comments as delineated by the individuals who had these concerns. o Mr. George Metcalf Comment No. 1 Concerns of the taxpaying public and the City have no backup information from the consultants (i.e., no on-site inspections of GDU facilities and these facilities have not been inspected for a number of years, etc.). The questions which remain unanswered are the most important. Response: We firmly believe that the City Council and taxpaying public have been provided sufficient information regarding whether or not the City should acquire the GDU water and wastewater franchise agreements. The potential acquisition of the GDU facilities will require a full investigation of the Chapter 180.301 of the Florida Statutes (F.S.) stated information and other information. We expect that the public will be informed as to the status of this future investigation and a public hearing under Chapter 180.301 F.S. will be held if the final acquisition is recommended. Even though no site inspections could be conducted, our firm is very knowledgeable regarding the construction and operation and maintenance (O & M) practices of GDU. In fact, we have visited the WWTP and WTP in the past; although, not during this study due to the present legal constraints; and members of our project team (i.e., past GDU employees) are very knowledgeable regarding the GDU water and wastewater facilities and management practices. Comment No. 2 How much is the total complete projected cost of the wastewater and potable water system? Response: The total complete projected cost of the water and wastewater system, including the initial expansion, is approximately $6,200,000 as identified in Table 5-5 of the report. This value excludes the cost of wastewater collection and water distribution which may be funded through assessments or other means. HES/GCH/ch/mg C6/SEC3.RPT 3-1 Comment No. 3 The water system has numerous citations (refer to page ES -3). Response: The violations noted were for not conducting the monitoring requirements as required in Chapter 17-550 of the Florida Administrative Code (FAC). On only a few occasions was GDU cited for violating the water quality standards for total trihalomethanes (TTHM's) and copper. These problems were intermittent and can be readily corrected. The TTHM's will not be formed if ammoniation is used as is practiced in Palm Bay. The copper problems can be controlled through pH and alkalinity adjustment at the WTP. Both these solutions are simple and inexpensive. Comment No. 4 The wastewater system was planned to be updated to bring it up to speed and now we are committing ourselves to spend approximately $6.5 million. Response: No, GDU had no plans to improve and/or expand the WWTP. Presently, the WWTP is treating an average daily flow of 113,000 gpd and the WWTP has a rated capacity of 300,000 gpd. The effluent disposal system has a permitted capacity of 142,000 gpd. To increase capacity, it was recommended by HAI that the WWTP be expanded to 600,000 gpd, as well as increase the effluent disposal system to same. Comment No. 5 How will it be financed and over what period of time? Response: Presented in Section 5, specifically pages 5-22 through 5-26, are a number of financing options available to the City with pay -back periods ranging from 20 to 40 years. The method of financing will be determined at a later date, so that the best financing method is provided to the City and its customers. Comment No. 6 Did we, as County residents, vote through a referendum to go for a bond issue for Phase I of the wastewater system and therefore, are we going to pay for this again? Response: No, the taxpayers will not be paying for Phase I of the wastewater system again. The City and County has tentatively agreed in principle to an ERU buy-back/transfer program presented at the September 4, 1991 meeting. HES/GCH/ch/mg C6/SEC3.RPT 3-2 Comment No. 7 What will the impact fees be? Response: It is difficult to determine the actual impact fee. However, based on what is known regarding the GDU water and wastewater systems, the impact fees should not be greater than the County's impact fee. Comment No. 8 Page ES -17 indicates a savings of $1,068 if we use this system, but there is no back-up or data to support these figures. Response: The paragraphs in question compared the GDU impact fees to the County's impact fee. Basically, the GDU water and sewer impact fee is $2,545.00 and the County's 1991 water and sewer impact fee is $3,613.00. The difference between them is $1,068.00. Comments No. 9 When will the City system be on-line? Response: Initially, the City system was proposed to be on-line by the summer of 1992. However, due to delays, this time frame could be pushed further back to the winter of 1992. Comment No. 10 What happens during the interim in developing this system a moratorium; no new tax base (refer to ES -17 regarding concurrency statement)? Response: This is untrue, since at a recent meeting between the City and the County, it was tentatively agreed upon that the County will continue to sell ERU's to City residents on an equitable non-discriminatory basis. Therefore, for the immediate future, customers within the City will be permanent customers of the County, subject to a buy -down by the City at a later date. Therefore, concurrency requirements will be met. HES/GCH/ch/mg C6/SEC3.RPT 3-3 Comment No. 11 Why have we gone this far with no public hearing? Response: There have been several appropriately noticed public meetings and many newspaper articles. No action requiring a public hearing has been undertaken. Comment No. 12 The County system uses no tax dollars. Will the City be able to say the same? Response: The County uses a special assessment to finance the capital of WWTP construction. The City may also utilize this method of funding water and wastewater facilities; otherwise the City system will not use tax dollars. Comment No. 13 What are the implications of the new utility department (i.e., staff, vehicles, etc.), new building, etc.? Response: A new utility will require additional expenses and facilities. However, based on the size of the existing systems, these expenses should be minor and will be in the form of operational personnel, preferably GDU operations personnel, utility billing staff and miscellaneous O & M expenses. It is anticipated that the City Engineer can handle the responsibility of the Public Works Director, and vehicles and other miscellaneous items can be obtained through the utility acquisition. To a great extent, there will be a transfer of utility duties from Miami and GDU operations in Palm Bay to the City of Sebastian. o Mr. Warren Dill Comment No. 1 Concerned with the fact that the consultants "flat-out said" that mandatory hook-ups to fund the wastewater system. Response: This is a false statement. We did not say that mandatory hookups to fund the wastewater facilities was required. A similar method to the County's will be proposed, as well as special assessments. HES/GCH/ch/mg C6/SEC3.RPT 3-4 r 1 Comment No. 2 No real physical review of WWTP; his understanding is it is a small site. Where is effluent going to be disposed of (i.e., golf course, etc.)? Response: The condition of the GDU facilities were not inspected during this study, due to the existing legal constraints imposed by GDU's legal staff. However, our experience and knowledge of GDU's construction methods and O & M practices, as well as discussions with ex-GDU employees, have given us valuable information regarding the facilities assets. The overall site which the WWTP is located on is approximately 29 acres, which can accommodate a significant future expansion. Regarding the effluent disposal, it was suggested that expansion for the first phase of the wastewater facilities may be accommodated at the City of Sebastian Golf Course and Country Club or other sites. Comment No. 3 The County's system was designed and located to utilize parks, golf courses, etc., for effluent reuse disposal and we may have a problem in the future due to effluent disposal which may restrict the size of the City's WWTP. There was a glancing blow in the report as to the golf course for effluent disposal and how much effluent reuse can the golf course handle? Response: Based on our review of the data obtained from the Soils and Conservation Service (SCS), approximately 300,000 to 600,000 gpd of treated effluent could be land applied on a golf course of this size. Other forms of effluent disposal include parks, agricultural reuse, residential reuse, as well as the existing percolation ponds are available. Comment No. 4 Assumption that the City will collect $2,400,000 from the County for advanced payment for ERU's? Is this true or will the City taxpayer receive this payment instead of the City. Response: As previously mentioned, at two (2) previous meetings prior to the issuance of the report the County and the City have tentatively agreed upon a method to enable both entities to work together. At a September 4, 1991 meeting, the County reconfirmed the tentative agreement to continue to sell ERU's to City residents on an equitable non-discriminatory basis. Therefore, for the immediate future, customers within the City will be permanent customers of the County, subject to a buy -down by the City at a later date. There will be no transfer of HES/GCH/ch/mg C6/SEC3.RPT 3-5 funds between the County and City taxpayers, unless the taxpayer does not want the utility service provided by either the County or the City. Comment No. 5 Centralization of services; what we have here is decentralization of services. Response: It is proposed in the HAI report that the City will have centralized water and wastewater facilities for the City of Sebastian. Comment No. 6 Potential of moratorium, which most likely will have to be imposed on all commercial properties that have not purchased ERU's to date. These property owners will not be able to use this property until the City system is on-line (i.e., 2 to 3 years). Response: There will be no moratorium imposed on any development within the City limits for properties that have not purchased ERU's to date. On September 4, 1991, the City and representatives from the County met to discuss the transitioning period until the City had control of GDU facilities. It was tentatively agreed to that the County would continue to sell ERU's to City taxpayers on a non-discriminatory basis within the City's proposed service area. In addition, for the immediate future, customers within the City will be permanent customers of the County, subject to a buy -down by the City at a later date. o Mr. Clay Price Comment No. 1 Report does not state that the City can provide water and wastewater service at a rate less than the County. The report only does a comparison on the County, surrounding communities and what the current GDU rates are and there are problems with the GDU costs that need further analysis. Response: This is true, the report does not state that the City can provide water and wastewater service at a less cost than the County. However, utilizing today's impact fees and rates for water and sewer, the County impact fees and rates are significantly higher than GDU's and surrounding communities. Furthermore, the County's impact fees will increase $638 to $4,121/ERU for water and sewer service, as well as their rates will increase to $50.49 for 5,000 gallons in 1993. Therefore, utilizing the best data we have regarding the existing conditions, the City should be capable of providing water and sewer service at an equitable cost to the taxpayer. HES/GCH/ch/mg C6/SEC3.RPT 3-6 However, the primary concern is not whether or not the water and wastewater service can be provided at a lower cost. The major emphasis should be whether or not the City wishes to control their own destiny in the utility business, which in turn controls growth. Comment No. 2 Of the $2,345,000 for expansion of the WWTP, nothing is allocated for effluent disposal (i.e., purchase of land, etc.). The GDU WWTP is at capacity. There is $675,000 identified in the report for effluent disposal, but it does not say for what it is (i.e., land, line extensions, acquisition of right-of-way, etc.). Response: The estimated $675,000 identified for expansion of the effluent disposal facilities included pipeline costs, pumping facilities, acquisition of rights-of-way, site improvements, etc. necessary for delivering reuse water to the golf course. Improvements to the percolation ponds are considered on-site costs and are within the $1,670,000 value. Neither the WWTP or existing effluent disposal facilities are at capacity. Comment No. 3 Under positive impacts, item no. 3 states that there would be a $1,068 cost savings per connection to the system. How does Hartman & Associates, Inc. (HAI) determine the cost to be $2,545 per connection for the City, if the acquisition cots, expansion costs, number of customers and financing costs have not been determined? Response: The comparison was based on the existing County and GDU's impact fees for 1991. The $1,068 savings is represented by the difference between the County's impact feed of $3,613.00 and GDU's impact fee of $2,545.00 for water and sewer service. Comment No. 4 The purchase price of GDU WWTP's have been stated to be $2,000,000 (refer to 5- 19). How has this price been determined with regard to the absence of a facility inspection? Response: The price of $2.0 million was determined based on our knowledge of the Sebastian water and wastewater facilities and franchise documents, review of permitting documents and discussions with ex-GDU employees regarding these systems. We preformed a preliminary "rate base" replacement cost analysis and HES/GCH/ch/mg C6/SEC3.RPT 3-7 added the costs of acquisition to determine a preliminary estimate. Note that the costs of expansion and improvements are presented as a separate value. Comment No. 5 The report has certain capital recovery assumptions that do not seem to bear analysis (refer to page 5-20 of report). Item No. 1: The City can presell 2,000 water and wastewater ERU's. Item No. 2: There are another 1,000 units at $1,200/ERU for a total sale price of $1,331,000. Therein of itself is a mathematical error. Item No. 3: Consider the assumption for water ERU's for 3,000 ERU's for capital recovery will be sold at $1,214. There is no increase for future costs. Item No. 4: There are supposed to be an additional 3,000 ERU's with regard to the system and line extension cost are $2,000,000. How does the figure $667 per ERU figure into the costs related to the County (i.e., included in impact fee or built-in somewhere else). Response: The City is not preselling any water and wastewater ERU's. The 2,000 ERU's noted were the ones which the County and City would participate in the buy-back program that was tentatively agreed upon at a meeting between the City and County on September 4, 1991. The footnote identified in the table after "Future Capital Revenue from 1,00 ERU's for wastewater system" should be changed from (1) to (2) and footnote (2) should read "...$1,214 per ERU and the existing GDU wastewater impact fee of $1,331 per." and thus no mathematical error. The 3,000 ERU's for water service includes the 2,000 ERU's already committed to the County which will be transferred back to the City based on the specific conditions of the buy-back program. It is difficult to compare the $667/ERU figure for line extension costs with the County's costs for the same since the County did not provide this information to use for this study. Comment No. 6 The report states that the City can provide "significantly improved" water and wastewater services to the customer. Is this over GDU or the County? Secondarily, the report states that they have more stringent design standards and operational procedures. Response: The City can provide significantly improved water and wastewater services over GDU providing these services, as well as providing an equal service HES/GCH/ch/mg C6/SEC3.RPT 3-8 in comparison to the County. The City will most likely impose more stringent design and operational providers in comparison to GDU. This is very common for public utilities to have more stringent standards than private utilities. Comment No. 7 The report states that the City system will provide a system that will provide a system whereby the infrastructure costs to the customers will pay $2,500 to $3,500 less than what the customers would pay under the County systems. Response: This is based on our preliminary estimates of both County and GDU facilities and operation. We felt that it would not be unreasonable to project that the cost for a water and sewer combined infrastructure normally dedicated to the utility and paid for by the customer may cost between $5,000.00 and $8,000.00 for the County system and for expansion of the GDU system the cost would range from $3,500.00 to $5,500.00. Our preliminary estimate is that a City taxpayer would save between $2,500.00 and $3,500.00 total in capital cost by City ownership versus County customer connections. Comment No. 8 The $667 per ERU capital recovery expenditure for line extensions is not included in the customer provided infrastructure. Response: The $667/ERU is not an appropriate calculation. The $2,000,000 is an optional line extension fund which may present an opportunity to pay for extensions with tax-free financing dollars. Comment No. 9 What this report does not tell me is the number of customers, purchase price of the utility, costs for expanding the facilities, financing method and here is how we are going to pay for the facilities. Response: The report indicates that the County will ultimately transfer to the City the 2,000 ERU's which were held by the County, plus it is anticipated that an additional 1,000 ERU's will be sold in the future. The estimated purchase price of the utilities and the anticipated costs for expansion was provided in the report to be approximately $6.2 million. In addition, a number of financing methods were presented in Section 5 of the HAI report. HES/GCH/ch/mg C6/SEC3.RPT 3-9 rMIN o Damian B. Gilliams Comment No. 1 Agft. Have concurrency right down the road and if water and sewer is not in place by a certain time period, everything will come to a halt, which will affect a number in this area. Response: On several occasions the County committed to work with the City. The County will continue to sell ERU's to the City residents on an equitable non- discriminatory basis. Therefore, for the immediate future, customers within the City will be permanent customers of the County, subject to a buy -down by the City at a later date. Therefore, concurrency will be met. HES/GCH/ch/mg C6/SEC3.RPT 3-10 SECTION 4 MEETING WITH CLAY PRICE AND DAMIAN B. GILLIAM - AUGUST 30, 1991 Comment No. 1 Of the $2,345,000 for expansion of the WWTP, how much, if any, is allocated to the cost of off-site effluent disposal and does the golf course have the capacity for such. See page 5-18. Response: Refer to response to Comment No. 2 of Clay Price's under the August 28, 1991 Council meeting above. Comment No. 2 Under positive impacts, Item 3 states that there would be a $1,068 cost savings per connection to the system. How does Hartman & Associates, Inc. determine the cost to be $2,545 for Sebastian, i.e., with acquisition costs (not old GDU costs) and expansion costs, number of customers and financing costs not determined. Response: Refer to response to Comment No. 3 of Clay Price's under the August 28, 1991 Council meeting above. Comment No. 3 The purchase price of GDU the report has been stated as $2,000,000 (see 5-19). How has this price been determined with regard to the absence of facility inspection? Response: Refer to response to Comment No. 4 of Clay Price's under the August 28, 1991 Council meeting above. Comment No. 4 The report has certain capital recovery assumptions (page 5-20) that do not seem to bear close analysis: 1) That the City can presell 2,000 wastewater ERU's. 2) There is a mathematical error in that the sale of 1,000 ERU's at $12.00/ERU is $1,331,000. How does the report estimate future costs? HES/GCH/ch/mg C6/SEC4.RPT 4-1 3) Please consider the assumption as to water ERU's capital recovery in that no future costs are associated with this, i.e., 3,000 ERU's will be presold at $1,214. 4) If there are 3,000 additional ERU's with regard to the system and the line extension, costs are $2,000,000. How does this amount of $667 per ERU figure into the costs related to the County costs? Response: Refer to response to Comment No. 5 of Clay Price's under the August 28, 1991 Council meeting above. Comment No. 5 The report states that the City can provide "significantly improved" water and wastewater services to customers. Over GDU or the County, i.e., more stringent design standards and operation/maintenance procedures? Response: Refer to response to Comment No. 6 of Clay Price's under the August 28, 1991 Council meeting above. Comment No. 6 The report states that the City system will provide a system whereby the infrastructure costs, the customer will pay $2,500 to $3,500 less than what the customers would pay under the County systems. Hartman & Associates, Inc.'s report recommends the City acquire the GDU plants and revoke the franchises with the County. The report does not state that the City can provide services less expensively than the cost per ERU would be based upon a customer base. Response: Refer to response to Comment No. 7 of Clay Price's under the August 28, 1991 Council meeting above. HES/GCH/ch/mg C6/SEC4.RPT 4-2