Loading...
HomeMy WebLinkAbout1995 08 08 - Acquisition of City of Sebastian Utility SystemIndian River Coun BOARD OF COUNTY COMMISSIONERS Department of Utility Services Public Hearing Document Florida Statutes Chapter 125.3401 August 8, 1995 Acquisition of City of Sebastian Utility System ch125seb.doc INDIAN RIVER COUNTY, FLORIDA Public Hearing Document August 8, 1995 City of Sebastian Utility System Acquisition Date: July 28, 1995 To: James E. Chandler County Administrator Thru: Terrance G. Pint Director of Utility Services Prepared and / n Staffed By: Harry E. Asher y�i/'�' Assistant Director of Utility Services Subject: Acquisition of City of Sebastian Utility System - Florida Statutes Chapter 125.3401 - Purchase or sale of water, sewer or wastewater reuse utility by County. Indian River County (County) has received an offer of sale from the City of Sebastian for its' utility system. Before the County can purchase the utility system it must comply with Florida Statutes, Section 125.3401, as follows: Section 125.3401 - Purchase or sale of water. sewer or wastewater reuse utility by County. No County may purchase or sell a water, sewer or wastewater reuse utility that provides service to the public for compensation until the governing body of the County has held a public hearing on the purchase or sale and made a determination that the purchase or sale is in the public interest. In determining if the purchase or sale is in the public interest, the County shall consider, at a minimum, the following: 1. The most recent available income and expense statement for the utility. 2. The most recent available balance sheet for the utility listing assets and liabilities, and clearly showing the amount of contributions in aid of construction and the accumulated depreciation thereon. 3. A statement of the existing rate base of the utility for regulatory purposes. 4. The physical conditions of the utility facilities being purchased or sold. 5. The reasonableness of the purchase or sales price and terms. 6. Impacts of the purchase or sale price on the utility customers. 7. Additional investment required. 8. The alternatives to the purchase or sale and the potential impact on utility customers. 9. Ability of the purchaser to provide and maintain high quality and cost-effective utility service. CH125PRS.DOC TABLE OF CONTENTS CHAPTER 125.3401 REQUIREMENTS SECTION THE MOST RECENT AVAILABLE INCOME AND EXPENSE STATEMENT I THE MOST RECENT AVAILABLE BALANCE SHEET 2 STATEMENT OF EXISTING RATE BASE OF THE UTILITY 3 ANALYSIS OF PHYSICAL CONDITIONS OF THE UTILITY 4 STATEMENT OF THE REASONABLENESS OF THE PURCHASE 5 ANALYSIS OF THE IMPACT OF THE PURCHASE ON THE UTILITY 6 CUSTOMERS ADDITIONAL INVESTMENT REQUIRED H ALTERNATIVES TO THE PURCHASE OR SALE AND THE POTENTIAL 8 IMPACT ON UTILITY CUSTOMERS ABILITY OF THE PURCHASER TO PROVIDE AND MAINTAIN HIGH 9 QUALITY AND COST-EFFECTIVE UTILITY SERVICE ADDITIONAL INFORMATION PROPOSED INTERLOCAL AGREEMENT 10 CITY OF SEBASTIAN RESOLUTION NO. R-9542 11 SECTION 1 The most recent available income and expense .statement for the utility. Audited Income and Expense Statement as of September 30, 1994 attached UTILITIES FUND CITY OF SEBASTIAN, FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS (ACCUMULATED DEFICIT) YEAR ENDED SEPTEMBER 30, 1994 OPERATING REVENUES Charges for services f 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 LOSS (41,096) NON-OPERATING REVENUES (EXPENSES) Interest income 37,811 Interest expenses (203,840) TOTAL NON-OPERATING REVENUES (EXPENSES) (166,029) NET LOSS, BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (207,125) CUMULATIVE EFFECT OF ACCOUNTING CHANGE ON YEARS PRIOR TO 1994 (33,455) NET LOSS (240,580) RETAINED EARNINGS, BEGINNING OF YEAR 32,355 ACCUMULATED DEFICIT, END OF YEAR (208,225) The accompanying notes are an integral part of these statements. -2- Charles W. Hayman, Jr. Roger W. Dobson Barbara J. Oswalt Honorable Mayor and City of Sebastian Sebastian, Florida HOYMAN, DOBSON & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS 215 Baytree Drive, Suite 1, Melbourne, Florida 32940 (407) 255-0088 Fax (407) 259-8648 Independent Auditor's Report Members of City Council Eugene K. Bfeming 1homas L. Kirk Karen E. Kirkland We have audited the accompanying financial statements of the Utilities Fund of City of Sebastian, Florida, as of and for the year ended September 30, 1994. These financial statements are the responsibility of the City of Sebastian, Florida's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, the financial statements present only the Utilities Fund and are not intended to present fairly the financial position and results of operations of the City of Sebastian, Florida, in conformity with generally accepted accounting principles. In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of the Utilities Fund of City of Sebastian, Florida, as of September 30, 1994, and the results of its operations and cash flows for the year then ended in conformity with generally accepted accounting principles. Hayman, Dobson & Company, P.A. March 29, 1995 American Institute of Certified Public Aecoun-tT i # Florida Institute of Certified Public Accountants Private Companlas Practice Seclion of the A.I.C.P.A. k Accounting Firms Associated, Inc. SECTION 2 The most recent available balance sheet for the utility, listing assets and I liabilities, and clearly showing the amount of contributions in aid of construction and the accumulated depreciation thereon. Audited Balance Sheet as of September 30. 1994 attached HOYMAN, DOBSON & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS 215 Baytree Drive, Suite 1, Melbourne, Florida 32940 (407) 255-0088 Fax (407) 259-8648 Charles W. Hoyman, Jr. Eugene K. Bjeming Roger W. Dobson Thomas L Kirk Barbara J. Oswalt Karen E. Kirkland Independent Auditor's Report Honorable Mayor and Members of City Council City of Sebastian Sebastian, Florida We have audited the accompanying financial statements of the Utilities Fund of City of Sebastian, Florida, as of and for the year ended September 30, 1994. These financial statements are the responsibility of the City of Sebastian, Florida's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, the financial statements present only the Utilities Fund and are not intended to present fairly the financial position and results of operations of the City of Sebastian, Florida, in conformity with generally accepted accounting principles. In our opinion, the financial statements referred to in the first paragraph presellt fairly, in all material respects, the financial position of the Utilities Fund of City of Sebastian, Florida, as of September 30, 1994, and the results of its. operations and cash flows for the year then ended in conformity with generally accepted accounting principles. Hoyman, Dobson & Company, P.A. March 29, 1995 American Institute of Certified Public AccountaNsi �, Florida Institute of Certified Public Accountants Private Companies Practice Section of the A.I.CP.A. ♦ Accounting Firms Assodated, Inc. UTILITIES FUND CITY OF'SEBASTIAM, FLORIDA BALANCE SHEET SEPTEMBER 30, 1994 ASSETS CURRENT ASSETS Cash and cash equivalents $ 616,929 Investments 402,274 Accounts receivable 93,689 Inventory 91156 TOTAL CURRENT ASSETS 1,122,048 RESTRICTED ASSETS Investments 356,294 OTHER ASSETS Unamortized bond issue costs, less accumulated amortization of $6,087 252,598 PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation of $169,143 4,227,707 TOTAL ASSETS $5,958,647 LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $ 78,021 Due to other funds 130,000 Accrued compensated absences 6,196 TOTAL CURRENT LIABILITIES 214,217 LONG-TERM LIABILITIES Bond payable, less unamortized discount of $8,228 4,991,772 TOTAL LIABILITIES 5,205,989 FUND EQUITY Contributed capital 960,883 Accumulated deficit: Reserve for debt service 356,294 Unreserved (564,519) TOTAL ACCUMULATED DEFICIT (208,225) TOTAL FUND EQUITY 752,658 TOTAL LIABILITIES AND FUND EQUITY $5,958,647 The accompanying notes are an integral part of these statements. -1- SECTION 3 A statement of the existing Rate Base of the Utility for Regulatory purposes. A statement of the existing Rate Base at the time of purchase from GDU is attached SECTION 3 The rate base of a utility company represents the depreciated cost q/Yhe plant and facilities financed by the owners of a utility which is used to provide service to the public. The rate base of a utility includes gross plant in service, less depreciation and contributed capital and/or plant, and an allowance for working capital, materials, and supplies and inventory. City of Sebastian Schedule of Year End Rate Base -Water System as of September 30, 1995 Water Sewer Total Description Rate Base (1) Rate Base (1) Rate Base (1) Utility Plant In Service Utility Land and Land Rights Construction Work in Progress Less: Accumulated Depreciation Contributions In Aid of Construction Working Capital Allowance TOTAL WATER RATE BASE(2) $2,592,826 $1,550,144 $105,470 $148,410 $750,000 ($81,509) ($304,327) ($54,723) ($380,421) $4,142,970 $253,880 $750,000 ($136,232) ($684,748) $26,698 $19,077 $45,775 $3,089,158 $1,282,487 $4,371,645 (1) Amounts shown derived from the value per books of City of Sebastian. (2) Represents amount of utility investment for which a regulated utility can earn a rate of return for rate making purposes. SECTION 4 The physical conditions of the utility facilities being purchased or sold A statement of the physical conditions of the utility facilities is attached scbphy.doc SECTION 4 WATER The water distribution system consists of approximately 35 miles of pipeline, 149 fire hydrants, and 1,910 water services. The pipelines range in size from 2 to 16 inches in diameter and are constructed of either polyvinyl chloride (PVC), asbestos cement (AC), or ductile iron (DI). The water transmission and distribution system is considered to be in average condition. Due to operational costs and necessary improvements required to the water treatment plant the acquisition evaluation was based on connection to County facilities and dismantling of the water treatment plant. It should be noted that there are maintenance items in the water distribution system that will need to be addressed as follows: (1) Replacement of galvanized service lines - estimated at approx. 150 (2) Meter replacement and testing program (3) Fire hydrant maintenance program (4) Valve maintenance program. Wastewater The wastewater collection and transmission system consists of approximately 69,100 linear feet of gravity sewer and force mains ranging in size from 3 to 12 inches in diameter, six (6) lift stations, and 200 manholes. Due to operational costs and necessary improvements required to the wastewater treatment plant the acquisition evaluation was based on connection to County facilities and dismantling of the wastewater treatment plant. An inspection of the wastewater system was conducted in December, 1994 and again in July, 1995. The inspection included manholes and lift stations in the Sebastian Highlands area. Random manholes were inspected and found the system to be in good physical condition, but in need of cleaning. Some lines were 60% to 75% full of grit and grease. Each lift station was inspected and various problems were noted. Cost estimates for the required renewal and replacement to bring the stations up to County standards are included in the budget requirements if the system is purchased. The wastewater collection system will need to be televised to locate areas of inflow and infiltration. The wastewater system is evaluated to be in poor to average condition. 07/26/1995 08:24 4077705478 IRC UTIL W 4077705478 INDIAN RIVER COUNTY UTILITIES DEPARTMENT INTEROFFICE MEMORANDUM DATE: JULY 269 1995 TO: HARRY ASHER, ASSISTANT DTII (TIES DIRECTOR FROM: TERRY SOUTHARD, WASTEWATER SUPERINTENDENT SUBJECT: SEBASTIAN UTILITIES WASTEWATER SYSTEM PAGE 02 A brief Inspection was performed on the Sebastian Highlands Wastewater System, in December 1994, and Monday, July 24, 1995. This inspection Included inspection of manholes and liftstations in the Sebastian Highlands area. Random manholes were inspected and found the system to be in good physical condition, but in need of cleaning. Some lines were 60% to 75% full of grit and grease. Cost of total cleaning and dumping fees are: $ 6,969.00 Each liftstation in the Highlands was Inspected along with the City Hall. Station #1 is dry cantwet well station. The station upon inspection was 6" - 8" deep in sewage in the dry pit section. One pump was still out for repair, but was due back from the shop this week. This station is in need of immediate repair and changed over to submersible pumps. In the event that the existing concrete in the wetwell is unusable, then we would need a complete new station similar to Vero Shores. This would change the estimate of $35,000 estimate to near $60,000. $ 35,000.00 Station #2 receives piggy -back flow from (4) four other stations and has a serious HZS (Hydrogen Sulfide) problems. The concrete walls have deteriorated and this station is in need of a fiberglass liner. $ 8,000.00 The other (4) four stations appear to be in good physical condition, but all (6) six stations In the Highlands and (1) one station at the City Hall will need generator receptacles. $1,200.00 07/26/1995 08:24 4077705478 IRC UTIL W 4077705478 PAGE 03 The residential station at 813 Bailey Drive needs to be upgraded to a Rockrldge type station. $ 3,000.00 Ten of the eleven stations will require RTU's. $ 52.400.00 The total cost for repairs are: $106,669.00 If you have any questions or concerns, please do not hesitate to contact me. City of Sebastian I{earing Data "THE PHYSICAL CONDITION OF THE UTILITY FACILITIES BEING PURCHASED OR SOLD" The water system consists of two water treatment plants, approximately 35 miles of pipe, 149 fire hydrants, and 1,910 water services. The largest system is the Sebastian Highlands system which supplies water to Units 7, 9, 12, 14, 15 and portions of Units 3, 10, 11 , 16, and 17. The water treatment plant located at 170 Filbert Street was constructed in 1992. The source of raw water supply is the shallow aerator and consists of two (2) raw water supply wells each 100 feet deep. The plant is permitted as a 671,000 gallon per day treatment facility ahhough the St. Johns River Water Management District has permitted the addition of a third well for a total withdrawal of 190,000 gallons per day. The treatment process at the Filbert Street plant consists of aeration, lime softening, filtration, and disinfection. The finished water is stored in a 500,000 gallon ground storage tank. It is pumped to the distribution system by high service pumps. Presently, the aerator is functioning well but the screens on the aerator are being replaced. The precipitator for the lime softening has been shut down for repairs. There is a restriction in the overflow pipe from the precipitator to the filters which has not yet been removed. However, lime softening is not an essential part of treatment required by the Department of Environmental Protection, since it only provides treatment for hardness of water. The 400 and 600 gallon per minute high service pumps are working well but the 250 gallon per minute pump does not work and must be replaced. The plant has a 350ECW emergency diesel powered generator which provides power for the entire plant when a power outage occurs. Enough water is usually produced during an 8 hour shift to supply all of the needs of the 1659 customers on the system. The plant can be considered to be in average to good condition. The Sebastian Highlands water transmission and distribution system consists of over 31.3 mites (approximately 165,400 feet) of pipeline ranging in size from 2 to 16 inches in diameter consisting of a combination of polyvinyl chloride (PVC), asbestos cement (AC), and ductile iron (DI) pipe. 5.0 The following table summarizes die quality of water distribution and transmission pipe lines for the Sebastian Highlands water system: Pipe Material Diameter Size Tyne Linear Feet 16 -inch transmission Ductile Iron 14,400 12 -inch transmission Ductile Iron 25,826 10 -inch transmission PVC (1) 1,700 8 -inch transmission PVC (l) 7,780 6 -inch transmission PVC (1) 2,200 6 -inch distribution PVC or AC (2) 101,537 4 -inch distribution AC (2) 10,500 3 -inch distribution AC (2) 840 2 -inch distribution AC (2) 600 Total 165,383 Notes: (1) PVC= Polyvinyl Chloride (2) AC = Asbestos Cement The. City has experienced no problems with transmission and distribution piping since it purchased the system in December 1993. The pressure in the system is normally maintained between 53 and 63 psi which meets the fire flow requirements of the City of Sebastian. The water distribution system includes 133 fire hydrants throughout the service territory. Most of the hydrants are in average to good condition. There are 1,651 service connections to date, the majority of which are 3/4" polyethylene service lines connected to 5/8" x 3/4" meters to serve residential houses. Larger service lines provide water to the Pelican Ishmd Elementary School, Sebastian Lakes Condominiums, Food Lion Supermarket, and the Sebastian Elementary School. The service lines are considered in good to excellent condition with the exception being in Unit 9 where many of the services areafvanized steel pipes which fail from time to time due to rusted connections over their 0 30 year ex• istence. 5.1 There are several different types of water meters within the system. Unfortunately, the City does not have the personnel to test each one for accuracy so many of them could be reading lower than they should be due to age which will normally slow down the meter. A majority of the meter boxes need to have the dirt removed within which has accumulated and covered the meter but majority of the meter boxes themselves are in good condition. The Park Place / Palm Lake Club system consists of a 100,000 gallon per day water treatment plant, two shallow raw water wells, approximately 3.3 miles of water main, and 16 lire hydrants and 260 services. The water plant at 1000 Barber Street is a prefabricated steel plant placed in service in 1985 which provides aeration and disinfection of the water. The gallon ground storage tank and a 5,500 gallon hydropneumatic tank. The plant has a 32.000 plant is fully automatic over a 24 hour period but does not have an emergency generator to operate the plant during power outages. Basically, the plant is in very good to excellent condition. The water distribution system serves only the two mobile home park developments known as Park Place and Palm Lake Club in the southeast portion of the City. The transmission and distribution system consists of 17,315 linear feet of polyvinyl chloride (PVC) water main ranging from 6" to 12" inches in diameter as summarized in the table below: Pipe Material Te w linear Feet Diameter Size 9,970 6 -inch PVC 8 -inch PVC 5,520 LO -inch PVC 765 12 -inch PVC 1 060 _ 17,315 Total The pipe in the distribution system is in excellent condition. 5.2 Due to improper restraint of a dead end line, there was only one failure which occurred in 1994 of an 8" water main. The 16 fire hydrants are in good to excellent condition. There are approximately 260 service connections to date most of which are polybutylene. The City has 0xperienced several failures of these service lines due to poor installation procedures. These services are in fail: to good condition. There seems to be an insufficient amount of shut off valves in the Park Place Mobile Home park and insufficient amount of fire hydrants in the area of Heather Way and East and South Derry Drives. Several blowoffs for dead end conditions appear to be under the pavement_ WASTE WATER SYSTEM The Sebastian Highlands wastewater treatment plant consists of a 300,000 gallon per day extended aeration activated sludge wastewater facility provided with screening aeration, secondary clarification, filtration and chlorine disinfection. The plant, which is located at 810 Batley Drive, was built in 1982. Unfortunately, the wastewater plant percolation ponds are limited to a permitted capacity of 142,000 gallon per day due to the eluent disposal limitation. The sludge generated at this facility is treated utilizing an aerobic digestion process. Liquid sludge is then hauled from the site by a private sludge hauling contractor and disposed of on petmitted agricultural sites in St. Lucie County. The effluent disposal facilities consist of three (3) percolation pond with a total disposal capacity of 0.142 NIGD. 5.3 I The wastewater collection system consists of approximately 200 manholes, and 48,900 linear feet of 8 diameter gravity sewer. The wastewater transmission system cousist of force mains ranging in size From 2 to 8 inches in diameter and six (6) sewer lift stations. The wastewater collection and transmission system, the treatment plant and effluent disposal facilities are in average to above-aiterage condition. The lift stations are all duplex submersible pump stations with the exception of Lift Station No. I which has a dry can / wet Well combination. This station has recently been plagued with problems since the dry can was inundated in early May. One pump is still not operational. There is a small residential station at 813 Bailey Drive which has recently failed for the second time this year. It is still not operational but repairs are in progress and it should be back on line soon. Other stations that the City maintains are located at the Sebastian Elementary School, Captain Hirami s, and at Sebastian City Hall. These stations are considered to be in above average to excellent condition. The Park Place/Pahn Lake Club wastewater system consists of 62 manholes, 15,390 linear feet of 8" diameter PVC gravity sewer main, 80 linear feet of 4" diameter PVC force main, and one sewage lift station. There are 260 customers connected via PVC sewer laterals to lly terminates at the Indian River County Regional Lift the wastewater system which eventua Station north of Barber Street and east of the entrance to Park Place. The lift station a pumps the sewage into a force main which runs south along US 1 and Old Dixie High y to th Countys wastewater treatment plant at Hobart Park The condition of the wastewater system in Park Place and Palm Lake Club is considered to be excellent. (utl-cond) 5.4 SECTION 5 The reasonableness of dee purchase or sales price and terms. A statement as to the reasonableness of the purchse price and terms is attached sebpurpr.doc SECTION 5 The staff in its analysis of the purchase has reviewed all of the documents utilized for the City's acquisition of the GDU utility system. This included the engineering reports and the bond documents. The purchase price as set forth in the offer of sale from the City of Sebastian is $5,000,000.00, the amount of the bond indebtedness for the utility system. The terms of the sale are as set forth in the Interlocal Agreement (attached as part of this document). The value of the Sebastian Utility System being received is as follows: Water and Wastewater Utility System (Plant value less depreciation) $3,363,248 (Plant Purchased from GDU) Indian River Drive Water Line 750,000 Fund Transfers 1,237,470 Total $5,350,718 The staff believes that the purchase price and terms of the Interlocal Agreement are reasonable. SECTION 6 Impacts of the purchase or sale price on the utility customers. A statement as to the impact of the purchse price on the utility customers is attached SECTION 6 Impacts of lite purchase or sale price on the utility customers. The current County utility customers would not be impacted by the County's purchase of the City of Sebastian utility system. The debt service for the acquisition cost and operation and maintenance requirements will be supported with revenues generated from the existing City customer base under current County uniform rates. The current City of Sebastian utility customers would realize a decrease in their monthly charges as follows: 5,000 Gals. Per Month 7,000 Gals. Per Month Current City Charges $68.45 $82.97 Under County Rates $58.88 $70.52 Increase/(Decrease) ($9.57) ($12.45) % Decrease - County Rates 13.98% 15.01% In addition to the reduction in rates additional benefits to the City of Sebastian utility customers would be as follows: 1. Improved quality of water. 2. Higher level of service. 3. More stable rate environment. 4. Ability to finance connection costs (impact fees). UTILITY RATE COMPARISON CITY OF SEBASTIAN VS. INDIAN RIVER COUNTY RESIDENTIAL CUSTOMER - 5,000 GAL WATER & SEWER PER MONTH RATES IN EFFECT AS OF JULY 1, 1995 BILLING BILLING WATER RATE CITY UNDER CITY COUNTY UNDER COUNTY DIFFERENCE RATES RATES RATES RATES DIFFERENCE 00 $2 00 $025 1111% 1 Charge $2.25 $11.25 $2.25 $11.25 $2. $9.20 $9.20 $2.05 18.22% Facility Charge 10 Gal.(Per th.) $2.51 $7.53 $1.75 $5.25 $2.28 30.28% .7,000 Gal.(Per th.) $2.65 $5.70 $2.15 $4.30 $1.40 24.56% TOTAL WATER CHARGE $26.73 $20.75 $5.98 22.37% SEWER RATE Ing Charge $3.75 se Facility Charge $13.00 ,000 Gal(Per th.) $3.75 TOTAL SEWER WATER AND SEWER my Surcharge (6%) Tax (10%) TOTAL BILL BILL UNDER COUNTY RATES Plus City Tax TOTAL BILL IMPACT FEE WATER SEWER $3.75 $2.00 $13.00 $13.50 $18.75 $2.85 $35.50 $62.23 $6.22 $66.45 $68.45 CITY $1,100 $1,650 $2.00 $1.75 46.67% $13.50 ($0.50) -3.85% $50.50 $11.73 18.85%I $3.03 $53.53 $5.35 COUNTY $1,570 $2,551 SEWER RATE ing Charge $3.75 se Facility Charge $13.00 ,000 Gal(Per th.) $3.75 TOTAL SEWER WATER AND SEWER my Surcharge (6%) Tax (10%) TOTAL BILL BILL UNDER COUNTY RATES Plus City Tax TOTAL BILL IMPACT FEE WATER SEWER $3.75 $2.00 $2.00 $1.75 46.67% $13.00 $13.50 $13.50 ($0.50) -3.85% $43.00 $35.43 $7.57 17.60%1 $75.43 $60.48 $14.95 19.82%1 $7.54 -- $82.97-- $3.63 $64.11 $6.41 $82.97__ - _$70.52, _ $12.45 1 CITY COUNTY $1,100 $1,570 $1,650 $2,551 UTILITY RATE COMPARISON CITY OF SEBASTIAN VS. INDIAN RIVER COUNTY RESIDENTIAL CUSTOMER - 7,000 GAL WATER & SEWER PER MONTH RATES IN EFFECT AS OF JULY 1, 1995 BILLING BILLING WATER RATE CITY UNDER CITY COUNTY UNDER COUNTY DIFFEREN RATES RATES RATES RATES DIFFERENCE Charge $2.25 $2.25 $2.00 $2.00 $0.25 11.11% Facility Charge $11.25 $11.25 $9.20 $9.20 $2.05 $5.25 $2.28 18.22% 30.28% )0 Gal.(Per th.) -7,000Gal.(Perth.) $2.51 $7.53 $1.75 $2.85 $11.40 $2.15 $8.60 $2.80 24.56% TOTAL WATER CHARGE $32.43 $25.05 $7.38 22.76% SEWER RATE ing Charge $3.75 se Facility Charge $13.00 ,000 Gal(Per th.) $3.75 TOTAL SEWER WATER AND SEWER my Surcharge (6%) Tax (10%) TOTAL BILL BILL UNDER COUNTY RATES Plus City Tax TOTAL BILL IMPACT FEE WATER SEWER $3.75 $2.00 $2.00 $1.75 46.67% $13.00 $13.50 $13.50 ($0.50) -3.85% $43.00 $35.43 $7.57 17.60%1 $75.43 $60.48 $14.95 19.82%1 $7.54 -- $82.97-- $3.63 $64.11 $6.41 $82.97__ - _$70.52, _ $12.45 1 CITY COUNTY $1,100 $1,570 $1,650 $2,551 City of Sebastian Hearing Data "THE IMPACTS OF THE PURCHASE OR SALE ON UTILITY CUSTOMERS, BOTH POSITIVE AND NEGATIVE" The major positive impacts of the proposed Agreement for the sale of the Sebastian Water and Wastewater Utility System by the City of Sebastian to Indian River County are summarized as follows: 1) The purchase will provide a uniform utility service fee structure for City of Sebastian and Indian River County Utility customers. 2) Economy of scale will enable the County system to maintain a lower utility rate structure. 3) The County will assume the municipal bond indebtedness, thus releasing the current pledge of the City's one-half cent ('/z¢) sales tax to the Utility Debt service. 4) The County will assume the task of operations and maintenance of the City Utility System. 5) Because of the common utility customer rate, the operation, maintenance and expansion of the customer service base provides a substantial financial advantage to the City utility customers, particularly during periods of financing. 6) Under the proposed County ownership, the City customer's water and wastewater monthly fees and charges for service will be lower than the current City fees and charges. 7) Future Capital Improvements required for the continued efficient operation of the City of Sebastian Water and Wastewater System can be more economically financed by the County. 8) The County has extensive experience in the operation and management of water and wastewater systems and has the sufficient employee's to operate and manage the City system. 7.0 The major negative impacts associated with the proposed utility sale are as follows: 1) The County will be the single authority for decisions relative to Capital costs. 2) The County will be responsible for resolving customer complaints rather than the City of Sebastian. 3) Management policies that would be more beneficial to the City than the County will be made by the County Utility Department. 4) The City customer will become a member of a larger organization and personalized responses to questions will normally not be exclusively formatted for the City customers. 7.1 SECTION 7 Additional in vestment required. A statement as to the additonal investment required is attached SECTION 7 Additional investment required The investment to upgrade the water and wastewater systems where required is well within the Countys ability, given the County's past, present, and planned commitments to maintaining and expanding service to meet effectively and efficiently the water and wastewater needs of the County's utility service area. The capital requirements for connection to the County facilities and renewal and replacement requirements are attached. The commitment contained in the Interlocal Agreement for the expansion of the water and wastewater system to serve the areas of the City of Sebastian not presently served are a very important consideration to the future financial stability of the system. tsebcon.wk4 - 7/26/95 SCHEDULE 2 INDIAN RIVER COUNTY Department of Utility Services Analysis of Acquisition of City of Sebastian Utilities Capital Requirements for Connection to County Facilities Sewer Utilizing the existing 6" force main currently connected to the force main near Reflections Development on US 1, would require a regional lift station to be constructed at the wastewater plant site - cost is as follows: Lift Station $140,000 Force main relocations at plant site. $30,000 $170,000 10% engineering $17,000 10% contingency $17,000 Total $204,000 Remote Telementry Units for 10 lift stations @ 5,400. ea. $54,000 Renewal and Replacement(T. Southard Memo Attached) $72,200 Estimated demolition cost for Wastewater Plant $125,000 Total Sewer Connection Charges $455,200 Water The following are the initial connections that are required to supply water from the County facilities: 1. 16" connection CR510 North to existing 16" $213,534 Powerline Road 2. 8" connection at Reflections Development on US 1 $6,000 3. 12" connection at Sebastian Lakes Development on SR 512 $94,000 4. Barber Street be in from US 1 - 12" line $145,000 6. Master metering for all connection points. $24,100 $482,634 10 % Engineering $48,263 5% Contingency $24,132 $555,029 Renewal and Replacement- Galvanized Lines $25,000 (City of Sebastian memo attached) Estimated Demolition/Removal of Water Plant $100,000 Total Water Connection Charges $680,029 Projected Engineering Services to Revise Water, Wastewater, and Effluent Master Plans $50,000 Total Projected Capital Requirements for Connection to County Facilities $1,185,229 Page 1 SECTION 8 The alternatives to the purchase or sale and the potential impact on utility customers. A statement as to the alternatives to the purchase or sale and the potential impact on utility customers is attached SECTION 8 The alternatives to the purchase or sale and the potential impact on utility customers. The alternatives to the purchse of the City's utility system by the County and the potential impact on (County) utility customers would be as follows: as follows: 1. No Sale and the City retain the utility system. No Impact on the County utility customer. The "no sale" option would impact the City utility customer 1. Higher rates to the current City customer. 2. Limited growth and expansion of the system. SECTION 9 Ability of the purchaser to provide and maintain high quality and cost- effective utility service. A statement as to the County's ability to provide and maintain high quality and cost-effective utility service is attached SUCTION 9 Ability of the purchaser to provide and maintain high quality and cost-effective utility service. The County's finished water and wastewater treatmal regulatory ent at all f its plants is in compliance with State and F toeCrov'de and maintain high demonstrating the ability of the County p levels of quality of service. The cost of providing water and a production rodwastewater and treatment facilities considering the type and size of the p and the level of treatment required to comply with State and Federal regulatory agencies. The County's sources of funding (water and wastewater impact fees and bonds) demonstrate the effective use of capital in financing improvements to the water and wastewater systems.