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HomeMy WebLinkAbout06/24/2021PUBLIC MEETING MINUTES THURSDAY, JUNE 24, 2021 10:00 A.M. CITY HALL, COUNCIL CHAMBERS, VERO BEACH, FLORIDA PRESENT: CITY OF VERO BEACH Monte Falls, City Manager; John Turner, City Attorney; and Rob Bolton Water, Sewer Director and Tammy Bursick, City Clerk INDIAN RIVER COUNTY — Jason Brown, County Administrator; Dylan Reingold, County Attorney; and Vincent Burke, County Utilities Director This meeting is being held pursuant to Section 164.1053(1), Florida Statutes to discuss the 1989 Service Area Agreement. Mr. John Turner, City Attorney, stated that this is a meeting of the City and County staff members consisting of Monte Falls, City Manager; John Turner, City Attorney and Rob Bolton, Water and Sewer Director. The people representing Indian River County at today's meeting are Jason Brown, County Administrator, Dylan Reingold, County Attorney and Vincent Burke, County Utilities Director. This meeting was requested pursuant to the City of Vero Beach. It is initiated through the adoption of a Resolution requesting that the parties engage in Chapter 164 proceedings. They have agreed to conduct the meeting this morning at 10:00 a.m., on June 24, 2021. He said that a conflict has developed as the result of the application of the 1989 territorial agreement that was entered into between the City of Vero Beach and Indian River County. It was for the service areas outside of the County's service areas and located on the barrier island. In particular the areas are South Beach and the Town of Indian River Shores (being referred to as the Town). The results revolve around the use of the term of the territorial agreement. There are certain revisions in the agreement addressing that it will be on a permanent basis and there is no provisions in the agreement stating a term of other than it is permanent. The City's position is that it is in existence and in full affect at this time. He will not summarize what the County's position is, but it is contrary to that. Mr. Turner addressed Chapter 164. He said it is a process that the State Legislature has required that if there is a dispute between governmental entities that they try to resolve the matter without going to litigation. The specific directions from the Legislature are to first meet on a staff level, which is what they are doing now to try and resolve the matters. Then if they are unsuccessful at that attempt then the parties will meet with their respective Boards at a public meeting and then if that is not successful then they meet with a mediator to try and resolve the matters. He said all three (3) of those steps have to be completed prior to any litigation being filed. He said both parties are here today to try to discuss this and see if there is a way that they can resolve their differences. For purposes of this meeting he has made copies of some of the documents (on file in the City Clerk's office) that they all probably have, but will make them available in case anyone needs them. He passed out copies of the minutes from the joint meeting of April 20, 1989, where both the County Commission and the City Council met to discuss this. He had both sets of minutes that were prepared by the City and the County. He provided copies of the minutes from the August 15, 1989, City Council meeting and minutes from the County Commission meeting held on September 19, 1989, where they adopted the territorial agreement. He also had a copy of the large map that was attached to the agreement if anyone would like to see it. Page 1 June 24, 2021 Conflict Resolution Minutes Mr. Jason Brown, County Administrator, stated that from the outset the County has believed that this is a dispute between the City and the Town of Indian River Shores regarding whether the Town could seek services from the County with their franchise agreement with the City. The County does not want to engage in litigation with the City over this issue. He said that he is not an expert on the Chapter 164 dispute Resolution process, but he believes the attempt there with all the necessary steps prior to litigation is to avoid litigation between local governments. He proposed that the City and the County attempt to reach an agreement to avoid a potentially costly court battle between the City and the County. He wanted to present the general framework of what the County would propose for a potential settlement today for the City's consideration. He said that County staff would propose if they are able to reach an agreement for the franchise for the City to serve the existing unincorporated customers, the County would agree with the City on the territorial agreement that it is still in affect and there would be no further dispute with the City on this issue. He understands that they have been negotiating on the franchise agreement for some time now and there are some differences in their proposals and the County proposes a compromise on this issue of the franchise agreement. He went through the main issues. The first being the territorial service agreement on the City's expressed opposition to the County's language where. the County's franchise agreement supersedes the territorial agreement in the new franchise agreement. He said the City's versions has various clauses stating that it is still in effect and what the County would propose is that the franchise agreement is silent on the territorial agreement. There would be a 30 -year franchise agreement between the County and the City for the unincorporated areas and if there is a dispute the matter would likely be resolved through litigation with the Town if the Town so chooses to debate the issue. He brought up rates and said that the County had been requesting County rates for the unincorporated areas, which they have been discussing since 2015 and last year that became an issue for the City that the City could not maintain those County rates going forward. He said that puts the County in a little bit of a difficult position because since they have a franchise agreement with the Town that provides those County rates through 2027 for the first initial 15 -year term and then maybe another 15 -year term until 2034. There is a current franchise agreement in affect with the Town where County rates are being provided, however they understand their concerns about not being able to control their own rates and set City rates. What the County would propose is that the City would maintain County rates for the unincorporated customers through 2027, which is the expiration date for the first 15 -year term for the Town agreement and then following that they would propose that the unincorporated residents would be charged City rates in the same manner that City residents are with no outside City limit surcharge as contemplated in Section 180.19(1) or other Florida Statutes that are applicable. Also they would request for some rate protection that the City would agree not to raise the rates more than 5% a year for the initial 5 -year period and following that it would just be City rates. He said that these are two (2) terms that they would propose for a 30 -year franchise agreement that goes with an initial term of 15 - years with a follow up with a second 15 -year term for a total of 30 -years similar to the structure with the Town's current franchise agreement. He said the third issue is service standards. The County would accept the City's service standard proposals and request a line be added saying that the unincorporated residents would receive the level of service equal to City customers. He said for purposes of transparency he would say that the County would agree with the City that the territorial agreement is still in place. If the Town were to file a suit challenging the City and/or challenging the County that the County would not actively participate and would basically be a neutral party. The County believes this is a dispute between the Town and the City. The County is hopeful that this proposal will enable the County and the City to avoid potentially costly legal battle and they look forward to discussing the parameters of such an agreement if they can reach a final agreement. Mr. Monte Falls, City Manager, commented that it was good to have something to discuss moving forward. He briefly gave the history of the relationship between the City and County on how all of this Page 2 June 24, 2021 Conflict Resolution Minutes came about. He said that he mainly gave it for the benefit of the public. He then asked does the County want to serve the territory area as described in the 1989 service territory agreement and do they have any obligations to serving those areas and do they have the capacity to serve them. The City is concentrating on building a new waste water reclamation facility and he realizes that the County continues to focus on the growing County areas out west. Mr. Turner felt that from what Mr. Brown has presented that it might be beneficial to take each one (1) of the points and flush them out a little more so they can all understand what the offers are. He said that they are all here today regarding the 1989 territorial agreement. If there was a new franchise agreement there would or would not be references to the 1989 territorial agreement and how was this is going to be dealt with in the future. From what he understood there would not be any references to the 1989 territorial agreement. However, the County would not be contesting the validity of the 1989 territorial agreement as they move forward. He said if there was any dispute or litigation involving other parties in which the 1989 territorial agreement is a part of that dispute that the County would be taking a neutral position and would be an interested third party, but not want to be included as a litigantin that particular dispute. Mr. Dylan Reingold, County Attorney, felt that Mr. Turner hit the first point pretty well. He said as he understands the City theory of this is that there are basically two (2) silos. There is the territorial agreement and the franchise agreement and there is history with both of these agreements. He knows one (1) of the things that he has heard from City staff and Mayor Brackett is that they are tired of getting these drafts from the County that keep saying all prior agreements including the territorial agreement are superseded. So the County is happy to take that language out of the franchise agreement as part of the compromise. He said as far as the litigation issue goes what he envisions happening is if the Town decided to sue both the County and the City for taking the position that the territorial agreement is in effect, the County does not plan on hiring outside counsel and they don't plan on spending a lot of money. They would look to the City to defend that issue. They would not take any action that would be contrary to that position and not file anything with the Courts saying they don't believe the territorial agreements is in place. They will listen to whatever the judge has to say and would not be interested in appealing the decision either way. Mr. Turner said the second matter was concerning rates. He said from the City's point of view they would be under the Indian River Shores franchise agreement through 2027. He asked Mr. Bolton for an explanation on rates. Mr. Rob Bolton, Water & Sewer Director, responded on the rates. He said that would present a problem. with the construction of the new water reclamation facility. He said that the City is about to embark on a bond issue. He mentioned the agreement that they have with the Town. He said it is one (1) thing to have roughly 17% of your revenues tied to an agreement and it is another thing to have 35% of your revenues tied up in an agreement that they don't have control over going out to the open bond market. This has been an issue moving forward and why they were looking at the County's ultimate point, which was City rates. He said moving forward in the future after 2027 they would propose that they have City rates moving forward. There is no agreement that ties them to have County rates. He said that the County rates have been based on political reasons addressed years ago. There is nothing in their agreements that ties them into a County rate structure. Mr. Brown commented that the secret of a good compromise is the situation where neither parties are really happy. He can tell them that City residents, Town residents, and unincorporated residents are all Page 3 June 24, 2021 Conflict Resolution Minutes County constituents and all County taxpayers. They have to understand that what he is hearing is that the City seems to be planning to continue to charge County rates to the Town, but the County still has to answer to their unincorporated residents and what they are already offering is Tess control than what the Town receives. There is already a problem where the Town residents might be getting better treatment than unincorporated County residents. It is a very challenging situation for them. What they are presenting here today is in the spirit of cooperation. He expressed that the County was not actively looking for new customers. They have plenty of growth in the unincorporated areas that does present its own challenges for them to continue serving the increased demands. But, what they are experiencing is residents who meet with them andsay that they want out of the City service area, which is the same thing that they are hearing from the Town. The County is happy if the City continues to serve these residents, but one (1) of the concerns that they are expressing is the "taxation without representation." This is why they are just looking for some rate protection. He said that he does not know where the rates are going. He said the County is having to adjust their rates. They are doing an annual Consumer Price Index (CPI) adjustment to increase their rates because the cost to provide service continues to increase with the new regulatory environment that they are in. They are just looking for some kind of protection for those residents. He reiterated that the County is perfectly happy for the City to continue providing service to those residents. However, it does put them in a terrible spot to say that they cannot provide the same service to the residents in the unincorporated areas that the Town is receiving. That is why they are seeking a compromise on this. Mr. Bolton commented that he was speaking with the previous Town Administer about having one (1) rate for everything and then came the lawsuit so discussion had to stop. Their ultimate goal is to have one (1) rate and no surcharges. He would like to see everyone treated the same. Mr. Falls said that the reason they need to have the decision on the rates is because of the construction of the new facility. He has not heard anyone who is opposed to the City doing that project and getting that facility off of the Lagoon. They are trying to make that happen. It is a new environmental sound and sensible project to getting any contamination off of the river. However, that does come with a cost. There will need to be some rate adjustments because of that. The rates would not stay the same even if the Plant is left on the river and they didn't build the new facility. There are also costs to leaving it there that would be passed on to all the ratepayers. They would like to be charging the same rates to all their customers. He hoped that staff could go back and caucus these items presented to them this morning. Mr. Turner stated that the process is if there is not a resolution entered into or agreed to today then the next phase is the meeting between their respective Council/Boards in a joint meeting. He said that has to occur according to Florida. Statutes within 50 -days after the datethat the letter was sent from the City to the County. He said that date can be extended by a written agreement of both parties. It is 50 -days unless they agree otherwise. He said during this period of time they can have on-going discussions regarding what has been proposed today. He said if they could set a date today or arrange for that joint meeting it might help keep them moving forward. Mr. Reingold read directly out of the. Florida Statutes that says if there is a tentative resolution that they can agree upon by the representatives of the primary conflicting governmental entities at the conflict assessment meeting that the primary conflicting entities may proceed taking whatever steps they deem appropriate to fully resolve the conflict including but not limited to the schedule of additional meetings for informal negotiations or proposing a resolution of the governing bodies of the primary conflicting entities. He said in the event that no tentative resolution can be agreed upon then they have the 50 -days. He was hoping that today they could walk away saying that they think that they can work this out. He Page 4 June 24, 2021 Conflict Resolution Minutes said that maybe they caucus separately and then meet again. He would think that they would agree that there is a tentative resolution today and hold off on the 50 -days so that they have time to sort through whatever issues that they have. Mr. Falls commented that if that meets the spirit of the Florida Statutes then he would support that as well. However, he would not like to have a time that runs on and on. He would like to see them agree that within the next couple of weeks that they schedule another meeting and talk about this. He expressed how important it was that they get together again and "hammer" out the details. Mr. Turner asked if they want to say now that they are entering a phase that there is framework for a settlement that needs to be fine-tuned, but looks like something that the parties can agree to. If they could reach an agreement then under the Florida Statutes they can extend the time and agree to meet. However, he would still like to have a date for the future to keep them on track for the joint meeting. The 50 -days will be around August 15t. He was thinking that the Last week in July might be a good time for the joint meeting between the City Council and the Board of County Commissioners. Mr. Reingold said that he would rather not schedule that meeting yet. He is hoping that they can go through the different points and figure out how far apart they are, but not set a date for the joint meeting. He is confident that they can get this done and agreed that they should not drag this out. He is committed to keep moving forward and meeting. Mr. Falls suggested meeting again before the end of July. Mr. Reingold said that he would be out of town the last week of July. The next public meeting was set for July 22"d at 10:00 a.m. Mr. Reingold asked Mr. Turner if he wanted to treat this as a continued meeting until July 22"d. Mr. Turner answered yes. Mr. Turner stated that they would recess this matter right now and will continue it to July 22nd at 10:00 a.m. Mr. Bolton commented that they have looked at some of the service standards that were in question. Their intent is to expand their STEP System outside the City limits into the County unincorporated areas so they could then have a septic to sewer conversion process for their entire service territory. He would list some of these things that they plan on doing and have it available for their next meeting, which he said might help in the agreement process. Mr. Reingold said that would be great. He expressed that their broader concept was just simply a statement in the agreement saying that unincorporated customers would have the same quality of water as City customers. Mr. Brown added that he was looking for something that would say that they are running the system basically agnostic to where the City limit line is, meaning that unincorporated residents would get the same service as City residents. Page 5 June 24, 2021 Conflict Resolution Minutes Mr. Falls thanked the County for presenting the framework for a possible solution and he was looking forward to meeting again to continue working on this. This meeting is recessed until July 22, 2021, at 10:00 a.m. Today's meeting adjourned at 10:40 a.m., with minutes being taken by Mrs. Tammy Bursick, City Clerk, for the City of Vero Beach. /tb Page 6 June 24, 2021 Conflict Resolution Minutes