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11.H.2. FLORIDA EAST COAST RAILWAY COMPANY - YEARLY LEASE AGREEMENTS AND ADDITION TO BLANKET AGREEMENT The Board reviewed a Memorandum of October 30, 2000: DATE: OCTOBER 30. t99t TO: JAMES E. CHANDLER COUNTY ADMINISTRATOR FROM: DONALD R. HUBBS, P.E. DIRECTOR OF UTILITY St PREPARED STEVEN J DOYLE P E AND STAFFED CAPITAL PROJECTS MANAGER BY: DEPARTMENT OF UTILITIES SUBJECT: FLORIDA EAST COAST (FEC) RAILWAY COMPANY YEARLY LEASE AGREEMENTS & ADDITION TO BLANKET AGREEMENT BACKGROUND AND ANALYSIS Utilities, which cross the Florida East Coast Railway Company (FEC) right-of-way are subject to a yearly, lease fee. The Standard Blanket Agreements allow for the continued use of select FEC Railway Company right -of --way for the purpose of County water, wastewater and reclaimed water utilities. Schedule -A (attached) depicts a hsting of all known utilities crossing under FEC right-of-ways The Schedule further defines the annual costs associated with each utility crossing Recently the Department of Utilities submitted for an additional utility crossing (water main) along Main Street in Sebastian The Department of utilities has been denied a utility crossmg through FEC halt - of -way until such time that the Board of Count Commissioners has executed the Addition to the Blanket Agreement. This proposed water main crossing on Main Street gave the FEC the opportunity to impose additional provisions to the blanket Agreement. Paragraph 14 of the Standard Blanket Agreement has been revised to further indemnify and hold harmless the FEC. Paragraph 16 the Standard Blanket Agreement allows annual automatic price rate increases based on the Consumer Price Index (CPI) or 3% whichever is greater. The Additions to the Standard Blanket Agreement are presented in Attachment -B. During the permitting process the FEC required a modification (Addition to Blanket Agreement) to the Annual lease agreement, which allowed FEC automatic price increases based on the Consumer Price Index (CPI). The Addition to the Blanket Agreement further allowed a rate increase of 3% regardless of the Consumer Price Index. The Department objected to the proposed Addition to the Blanket Agreement and requested wntten clarification from FEC on Justification fot-the annual price increase. The Departments letter of objection and the response from the FEC are presented in Attachments C and D respectively. NOVEMBER 14, 2000 -128- BK 116 PG 140