Loading...
HomeMy WebLinkAbout9/8/1982Wednesday, September 8, 1982 The Board of County Commissioners of Indian River County, Florida, met in Special Session at the County Commission Chambers, 1840 25th Street, Vero Beach, Florida, on Wednesday, September 8, 1982, at 1:40 o'clock A.M. Present were Don C. Scurlock, Jr., Chairman; Alfred Grover Fletcher, Vice Chairman; Dick Bird; Patrick B. Lyons, and William C. Wodtke, Jr. Also present were Michael J. Wright, County Administrator; Gary Brandenburg, Attorney to the Board of County Commissioners; Jeffrey K. Barton, Finance Director; and Virginia Hargreaves, Deputy Clerk. The Chairman called the meeting to order. REPORT ON COMMITTEE ON STRAW BALLOT Chairman Scurlock noted that the Commission had charged him with the responsibility of appointing a blue ribbon committee to study the issue of a straw ballot. He reported that he had appointed the following to this committee and their first meeting will be at 9:30 A.M. Friday, September 10th. Lomax Gwathmey Victor Hart Byron Cooksey Marilyn Chennault Tom Lockwood ADDITIONS TO AGENDA The Chairman requested that an item be added re appointment of Board members to serve on the Property Appraisal Adjustment Board. ON MOTION by Commissioner Lyons, SECONDED by Commissioner Fletcher, the Board unani- mously agreed to add the emergency item requested by the Chairman as above. K 51 t �. S E P 81982 Big or 51 pAb� 21 Chairman Lyons wished to add an item regarding putting something on the agenda of the State Association of County Commissioners re jails and state mandates. ON MOTION by Commissioner Lyons, SECONDED by Commissioner Bird, the Board unanimously agreed to add the emergency item requested by Commissioner Lyons as above. MEMBERS OF COMMISSION TO SERVE ON PROPERTY APPRAISAL ADJUSTMENT BOARD Attorney Brandenburg suggested that an organizational meeting of the Property Appraisal Adjustment Board be held on September 23rd or 24th and the first hearings set for October 4th. Discussion ensued as to which three Commissioners would serve on the Property Appraisal Adjustment Board. Chairman Scurlock and Commissioner Lyons agreed that they would serve, and after considerable discussion among the three remaining Commissioners, it was decided that Commissioner Wodtke would serve. Chairman Scurlock, Commissioner Lyons, and Commissioner Wodtke, were approved as the three Board members to serve on the Property Appraisal Adjustment Board by acclamation. DISCUSSION RE PUTTING MATTER ON AGENDA OF S.A.C.C. Commissioner Lyons reported that in pursuing research on construction of a new jail facility, it has come to light that a large amount of our jail activity is involved with State prisoners - people involved with the Circuit Court. - He stated that he would like to get the actual statistics as to the percentages involved and ask the State Association of County Commissioners to put this down as a specific on their goal to get state mandates paid for. 2 Commissioner Wodtke agreed and felt when we build our jail we should look very closely into our responsibility for housing prisoners as opposed to.the state and federal government's responsibilities for correctional activities. DISCUSSION RE RATE HEARING FOR THE INDIAN RIVER COUNTY WATER & SEWER SYSTEMS Attorney Brandenburg recommended that the Board authorize a public hearing on September 29, 1982, to consider adjusting rates and charges for thQ,,;county Water and Sewer systems. He stated that it is not necessary to advertise the amount of the proposed rate increase, just the title of the ordinance indicating that there will be a change. Chairman Scurlock reported that last week he, together with Attorney Brandenburg and Administrator Wright, met with FmHA representatives and discussed delaying any rate change until we could do a full scale analysis. After looking at the new issue, however, it became apparent we not only did not meet the requirements of the new issue, but we also were not meeting the requirements of the old issue, and FmHA has indicated we have to move ahead to bring this up to the required level. Attorney Brandenburg informed the Board that the Letter of Conditions submitted by FmHA when they placed the bond anticipation notes, indicated there would be an 8 and 2 rate structure, and they are indicating they will not close on the new bonds on September 30th unless the County has rate structures that will produce at least the amount the 8 and 2 rate would produce. Chairman Scurlock and Finance Director Barton confirmed that they have been running figures all weekend which indicate we may have to go higher than 8 and 2 to get adequate coverage. 3 51 PA -a 213 SEP 8 1982 S EP 8 1982 51 . Administrator Wright reported that staff started doing an in-house rate analysis a month ago, which brought out this information. They worked all weekend trying to get different variables and have come up with the information set out in the following Revenues Chart: REVENUES - 2,000 gallons 9.00 2,000 - 31000 gallons 1.75 3,000 - 5,000 gallons 3.00 5,000 - gallons 3.25 Inverse 7.10/1.50 8.00/2.00 9.00/2.00 Rate Water/Sewer Sales 912,300 1,310,600 15378,400 1,548,800 Service Charges 252000 25,000 25,000 25,000 New Services 181,000 181000 18,000 18,000 Hydrant Fees 169500 16,500 16,500 161500 Penalties 6,500 6,500 - 6,500 6,500 TOTAL 978,300 1,37611600 1,444,400 1,614,800 Impact Fees - $350,000 - EXPENSES Debt Service/Reserve 492,900 Operations/Maintenance 6559900 Administrative 235,200 Capital Outlay 22,700 Contingency 74,400 TOTAL 1,481,100 * Does not include $124,000 for sewer plant transfer 4 * Inverse Rate: 0 - 2,000 gallons 9.00 2,000 - 31000 gallons 1.75 3,000 - 5,000 gallons 3.00 5,000 - gallons 3.25 L—A Discussion followed on that fact that there is not sufficient time to have an outside study done and also regarding the reasoning behind not going with the 8 and 2 rate the FmIiA is willing to accept. Finance Director Barton explained that the 8 and 2 FmHA used was based on a study done three years ago, and did not take into consideration the Ixora, Treasure Coast, and other systems we are acquiring. It was emphasized that our requirements are set out in the bond covenants and we must meet them. Administrator Wright then proceeded to explain the figures set out in the chart, noting that in the first column, they took the rates we are billing today and ran them through the machine to see what this would produce -next year. The 8/2 column is what FmHA requires as a minimum; it also takes into consideration certain other variables such as considering the Vista Properties to be 1800 single family units whereas today they are actually considered on master meters as 130 single family units with high consumption. Discussion followed about the County having had a special agreement with Vista Royale, and Attorney Brandenburg believed there was an understanding their rates would remain the same until the time the County water system came on line; although, there is nothing in -the actual agreement with Vista Royale that speaks to the rates. In further discussion it was noted that there is a line to Vista Royale now, but our water plant will not be on line until October. Discussion continued about various rates, including the possibility of an inverse rate, and Joe Baird of the Utility Department noted that all County rates will go up since we have to have a unified county rate. Finance Director Barton emphasized that the plant was designed and built based on providing service to a given 5 SEP - 8 ..SEP...8 1982 go 51 NNE 21.5 O SEP 1982 51 PAF ? �. 6 number of people in a given service area and whether those people are here or not, they should pay a pro rata share for that readiness of service. Administrator Wright was of the opinion that their estimate of expenditures may be very conservative, especially since we are taking over a number of small systems and are continuing to run Ixora Utilities, probably for a year. Commissioner Wodtke pointed out that these rates only take into account the number of people who will hook up the day the system is on line. The capacity of the plant, however, is such that it can serve additional.people, and if we were using and selling more water, we'could meet our obligations; there will be additional people who will hook up relatively soon, and Commissioner Wodtke asked if finding additional water users can be pursued. Administrator Wright stated that they will be actively pursuing as many as possible, and the estimate is for 60 growth.. This is not considered in the base rates because these people will not be on line October lst; also this does not necessarily mean 6% more revenue as the new customers will come on at different times. He then explained in detail how actual consumption figures were applied to the various rates. Chairman Scurlock agreed that obviously if more customers come on the system, it will be better, but even at the 8 and 2 rate, we have a shortfall of $100,000. Discussion then ensued on the roughly $350,000 of impact fees collected to reserve capacity, which have not - been taken into consideration, -and the feeling that those who are reserving capacity and have this water locked up should be billed. also. Mr. Baird explained that, according to the County Ordinance, impact fees can only be used for certain 6 things, i.e., improvements and possibly debt service, if we do not have sufficient revenue to cover the debt service. Administrator Wright noted that actually these funds are a roll-over growth fund; otherwise, we would be funding growth and previous debt service out of operating accounts. Engineer John Robbins read the following list of those who have paid impact fees to reserve 1,095 connections: Tropic Villas South 16 Oak Villas 19 Carmen Apartments 65 Colonial Heights 91 Pinecrest 107 Hotel in South County service area 120 South Town Plaza 22 Orange Terrace 64 Maggie's Trailer Park 16 Vista Royale (Commercial property) 458 Tropic Villas North 117 -� Mr. Robbins commented that the county is -obligated to serve those listed and the majority are in areas where water lines are either being constructed or are in the ground now; so, there is the potential for 1,095 connections to come on line at some rate during 1983. Because we do not have a time schedule on their user agreement, however, it is very difficult to project just when they will come on line,.and that is why they estimated 6% based on the historical rate of growth in the County. Commissioner Lyons felt we must look at the situation as it exists as of October 1st, which is that we just do not have sufficient income to meet the installments. Chairman Scurlock again emphasized that the 8 and 2 rate was supposed to have been adopted quite some time ago, but this was never done. _ Discussion followed about when those with present lines and water systems must tie in, and Attorney Brandenburg explained that the ordinance requires that when the County has a water supply, they will tie in immediately. 7 .SEP 8 .1982 P���F 4: 7 SEP 81982 sm, 51 FFw o� It was pointed out that it will take a few months to phase this in, and it is necessary to talk about what actually exists now. Lengthy discussion ensued as to charging people for the water capacity they are tying up. Attorney Brandenburg discussed a capacity reservation fee as an incentive for developers to tie in earlier, and Mr. Wright felt that even though they are not hooked up, one option would be to require them to pay a minimum bill. It was agreed that we need tools to encourage people to get on the system as soon possible. Commissioner Lyons believed we should use the most conservative figure for the number of customers and for the monthly bill and take the highest of the proposed rates in order to get on a healthy basis. Commissioner Wodtke stated he could not agree with that, and Finance Director Barton pointed out that we are playing catch-up right now. Chairman Scurlock pointed out that FmHA told us two years ago the rate structure was inadequate, and they now have told us we have no choice; we must have at least the 8 and 2. our analysis has shown that rate to be inadequate. Administrator Wright reiterated his feeling that the numbers shown are conservative and recommended going with the 9 and 2 rate on an interim basis and reevaluating in six months because we have done a hurry -up in-house study. It was his belief that the ultimate rate will have to generate more revenue, but that we could live with the 9 and 2 if everything goes all right expensewise. Chairman Scurlock was in favor of a capacity reservation charge also. Considerable discussion ensued on the bond require- ments, and it was explained that the current debt service, plus operating and associated expenses, are multiplied by 8 1.2, and a rate is required which will produce that amount of income. Attorney Brandenburg again reminded the Board that we must raise the rate at least to 8 and 2 by September 30th, and beyond that we have a continuing obligation to meet the 1.2 test. In addition, the Master Bond Resolution has an even more stringent requirement of a certification that projected revenue will be 1.25 times the average annual debt service for the preceding year. He further noted that FmHA has an interest in seeing what level the County will set the rates at, -and if it is not satisfactory, it is possible they could reevaluate to see if we should have gotten those grant monies or not. Commissioner Fletcher asked about the South Beach water system extension, and Attorney Brandenburg noted there is a commitment with the City of Vero Beach to provide that service by 1985. It is a tight schedule. Commissioner Fletcher felt the proposed expansion to South Beach had caused some changes in the South County Water System, but Engineer Robbins stated that the plant was designed for 5,000 connections, and his feeling was that the plant has adequate capacity, based on the lower actual water consumption found in re -rating the plant, to provide the projected connections in the South County, plus providing the water for the South Beach. Commissioner Wodtke noted that in the original docu- mentation approved by FmHA, the rate was set at $7.10 and $1.50, and he asked what consumptive rates they used on an average. Mr. Robbins stated that their 1979 report was based on an average usage of 9,000 gallons per month. Commissioner Wodtke asked if that is why the rate was set at $7.10 and $1.50. 9 SEP S 1982GEM PA ��9 9 E P 81982 890x 51 pn, 920 Mr. Robbins explained that at that time the rate for the South County was 8 and 2. The rate that was established for the Gifford system (and at that time FmHA required that you treat the systems individually) was $7.10 and $1.50, and the rate that was adopted under the uniform rate structure ordinance was the $7.10 and $1.50. The application that was submitted to FmHA in February of this year, prior to the adoption of the Master Bond Resolution, reevaluated the number of connections (5,152) at 6,040 gallons per month, and showed the existing $7.10 and $1.50 rate as being capable of meeting the covenants of the then bond resolution. What has taken place since the adoption of the Master Bond Resolution is that we now are getting an indication that the mandate for reduction of water use that the Water Management District placed on all utilities last year had a much greater effect than anticipated, i.e., a 30% reduction rather than 150. So, basically what has happened - the connection totals appear to be fairly good, but the water use is down and the additional coverage requirements f of the Master Bond Resolution have put us in somewhat of a precarious position. Chairman Scurlock noted that the bottom line is that from the beginning the recommendation both from the engineers and from FmHA was not a rate of $7.10 and $1.50. Mr. Robbins confirmed that was correct - it was 8 from the original inception of their preliminary engineering report. Commissioner Wodtke emphasized that those original figures were based.on 9,000 gallons as an average use, and the lower usage of water has had a tremendous effect which will require more dollars. 11r. -Robbins explained in detail how the consumption figures were arrived at in 1979 and how the decrease in water consumption has caused the rates to be insufficient. 10 He noted the decrease in water use also has had an adverse effect on the -City of Vero Beach system. In further discussion it was noted that the City has lower rates, but their capital investment was made many years ago when costs were much lower. Discussion returned to how the impact fees are invested, and Finance Director Barton pointed out that we already have had to use some of these funds to pay debt service. Commissioner Lyons felt continuing this discussion is a waste of time since it is obvious the system only brings in just so much and it costs much more to operate, and even if we raise it to the 8 and 2 rate, we still will be short $100,000. Motion was made by Commissioner Lyons to�set the County water and sewer rates at $9.00 for the first 2,000 gallons, using the inverse rate as shown at the bottom of the chart, and set a public hearing. Administrator Wright suggested that a more conservative approach might be to go with the 9 and 2 rate and the capacity reservation fee. Commissioner Wodtke stated that he would like to advertise the 8 and 2 rate and try to explain it to the public; then get the system open and operating and see what is going to happen in the first year. Commissioner Lyons' Motion died for lack of a second. Commissioner Lyons emphasized that if we go with the 8 and 2 rate, we are going to be sitting here with a system that cannot cover its expenses and we cannot go for the other bond issue to go across the river. Finance Director Barton also emphasized that we are sitting in a deficit position right now and we aren't even talking about making that money up; the 8 and 2 will only put us further behind. SEP 8 1982 K SE 8 1982 51- Attorney 1 Attorney Brandenburg pointed out that the only action the Board is taking today is to authorize publishing for a hearing on September 29th, and he suggested leaving as much flexibility as possible by advertising the high inverse rate and the plant capacity reservation fee, and then on September 29th, the Board could decide whether or not to lower those increases. Motion was made by Commissioner Lyons, seconded by Commissioner Bird, to authorize advertising a public hearing on County water and sewer rates, setting out the high inverse rate and a plant capacity reservation fee. Discussion resumed re the Motion and various possible rate structures, and Administrator Wright noted that something which has not been addressed is that impact fees may be too low and also if we go with the capacity reservation fee, some people may come in and want their money back. Attorney Brandenburg suggested that the advertisement simply indicate that the Board is going to adjust the schedule of rates and charges and that proposals of the rates will be available in the Administrator's office. Mr. Baird of the Utilities Dept. stated that he did not feel comfortable with the inverse rate and felt it would require a lot more research because if consumption should change in any way, it could really throw your projections off. Commissioner Lyons amended his Motion to go to the 9 and 2 rate and a capacity reservation fee, and Commissioner Bird agreed to second the amendment. The Board and staff continued to review various rates, and the Attorney again recommended that the advertisement be left open to provide flexibility to change and that we just advertise a time certain on September 29th to increase the schedule of rates and charges for the County utility system. 12 Commissioner Lyons stated that he did not want to go to a public hearing and then have our debate; that it would be better to thrash this out now. Commissioner Bird asked if we were to put this on the agenda for next Wednesday so that staff could have final figures then, if that would give us sufficient time to advertise. Attorney Brandenburg stated that it would not, but pointed out that if the ad were left open, the Board then could discuss this further and come into the public hearing with a definite figure which could be resolved next week. Commissioner Bird agreed with Commissioner Lyons that a definite figure should be advertised before the public hearing. Commissioner Lyons withdrew his Motion. Finance Director Barton emphasized that something must be done on September 29th or we will be in -default on the bonds, which not only would affect our credit rating, but could be very expensive. Discussion continued at length about various rates, ranging from 8 + 2 to 9k + 2; the fact that the financial people are convinced that the 8 + 2 is inadequate and will only put us further behind; the fact that we have had to use the impact fees to keep going and have no way to recoup; and also the point the if FmHA should feel the grant money were in jeopardy, they might take it back. Motion was made by Commissioner Lyons, seconded by Commissioner Bird, to advertise the rate to be 9 plus the inverse rate and not get involved with the monthly capacity reservation charge until we have had further study. Further discussion ensued as to the fact that this is only a residential rate, and we told FmHA we would charge 12 and 3 for commercial. 13 51. Pmot S E P 18 1982 � I SEP 8 1992 Attorney Brandenburg stressed this is why he is recommending the Board not tie this into a specific rate in the ad because the commercial rate would have to be included also, and it is necessary to get the ad in to the newspaper within -the hour. Commissioner Lyons withdrew his Motion and Commissioner Bird withdrew his second. ON MOTION by Commissioner Lyons., SECONDED by Commissioner Bird, the Board unanimously authorized the Attorney to advertise a public hearing in regard to adjusting the County Utility rate schedule for Septem- ber 29, 1982, at 7:00 P.M., leaving the advertisement as broad as possible. There being no further business, on Motion duly made, seconded and carried, the Board adjourned at 3:30 o'clock P.M. ATTEST: Clerk 14 %2L, �i 'e�4L�G�%J2IG �, Chairman