HomeMy WebLinkAboutDocumentation_Special Meeting_Tab 4-C_2/24/1998 JY l d C
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Seacoast Utility Authority Mailing
P.O.Box Address:
PalmBeach Gardens,
Florida 33410-9602
EXECUTIVE OFFICE:
February 19, 1998
Mr.Tom Bradford,Village Manager
Village of Tequesta
P.O. Box 3273
Tequesta,Florida 33469-0273
Re: Tequesta Water System
Dear Mr.Bradford:
I have informally reviewed Tequesta water system documents provided by your office and offer
the following plan for your consideration. This approach would provide Tequesta with a seat on
the Seacoast Utility Authority Board, generate cash for the Village's discretionary use, save
Tequesta approximately $9 million in long term construction cost, and provide water service to
Tequesta's average residential customer at a rate some 9%lower than proposed Tequesta rates.
Tequesta's water system could be merged with Seacoast Utility Authority through a series of
agreements involving Seacoast; it's participating governments, Jupiter, and Tequesta. The
following outline describes the essential elements of such agreements. This outline is offered for
discussion purposes only and should not be considered a solicitation to buy or sell all or any
portion of either system. Only the Seacoast Utility Authority Board may make a legal offer, and
it would only do so after reviewing a detailed analysis by professional engineering, finance, and
legal consultants.
SUMMARY OF OBJECTIVES
Terminate Jupiter/Tequesta Bulk Sale Agreement
Terminate Jupiter/Tequesta Franchise Agreement
1) Tequesta deeds facilities serving Jupiter customers to Jupiter
a) Distribution lines and appurtenances
b) Bridge crossing
c) Meters and appurtenances
2) Jupiter agrees to relocate Tequesta interconnect meters in a manner acceptable to Seacoast
3) Jupiter agrees to isolate its customers from Tequesta system in a manner acceptable to
Seacoast
4) Jupiter residents currently served by Tequesta thereafter will be served by Jupiter
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4200 Hood Road, Palm Beach Gardens, Florida 33410-2198
Phone: Customer Service (561) 627-2920 / Executive Office (561) 627-2900 / FAX(561) 624-2839
Mr.Tom Bradford,Village Manager
February 19, 1998
Page-2-
Terminate Existing Jupiter/Seacoast Emergency Interconnect Agreement
1) Replace with an agreement between Seacoast and Jupiter
2) Seacoast delivers up to 5.5 million gallons per day (MGD) to Tequesta through Jupiter
system
a) Seacoast/Jupiter and Jupiter/Tequesta meters compared semiannually
b) Difference is balanced by water delivery or payment to the other utility during a 60 day
"compensation period"
c) Requires hydraulic analysis (relative system pressures)
3) Jupiter and Seacoast pledge their unused and uncommitted capacity to one another
4) Jupiter and Seacoast provide assurance of water quality
Tequesta Agrees To Approve Interlocal Agreement Joining Seacoast
1) Seacoast pays Tequesta.$9 mullion cash, less the cost of extraordinary maintenance or repairs
if the engineering evaluation indicates that'any are required. This assumes that Tequesta's
existing 2.7 MGD water treatment plant can`produce water meeting all pending federal, state,
and local drinking water standards
2) Seacoast agrees to provide sufficient capacity for,Tequesta's 'future needs. All customers
connecting after the effective date of the Tequesta/Seacoast transaction must pay all
applicable Seacoast feesand charges
3) Seacoast hires up to 12 current Tequesta employees at Seacoast pay and benefits
4) Seacoast rates (plus a defined charge for,"wheeling".'Water through Jupiter), policies and
regulations shall be applied within Tequesta's,service area
5) Seacoast`assumes responsibility for construction work in progress as of merger date
6) Tequesta conveys all its_water:system interest in. land,;wells,:facilities,'permits, licenses,
easements,,franchises, inventory, assets, service nghts etc;:to Seacoast
7) Tequesta grants exclusive service rights to Seacoast,pern tssion to use Village rights of way,
easements for water service
8) Tequesta indemnifies Seacoast againstxliens,'suits,claims filed''or incurred before the date of
the merger/acquisition
9) Tequesta transfers the balance of its capital charges accounts to Seacoast
10)Estimated board member voting share is as follows: Lake Park 7%'North Palm Beach 16%,
Palm Beach Gardens 45%, Juno Beach;2%,;,Palm Beach County 23%, Tequesta 8% (if all
governments, except Palm Beach County,,currently, served by Tequesta assign board
representation to Tequesta)
Seacoast's transaction cost for the plan described herein would be $12.9 million. That figure
includes the $9 million cash payment plus $3.9 million in existing capacity to replace the
temporary capacity currently provided through the Jupiter bulk sale agreement. The comparative
benefit to Tequesta, however, is $16 million - $9 million cash plus the•deferred $7 million in
water plant construction cost.
Mr.Tom Bradford,Village Manager
February 19, 1998
Page-3-
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If this proposed framework appeals to the Village, Seacoast recommends that Tequesta delay the
sale of water plant construction bonds by 90 days. During this time, Seacoast, Jupiter and
Tequesta will address transaction details, including facility and records inspections, and prepare
a draft agreement.
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Of course, ending the water supply litigation between Jupiter and Tequesta is critical to this
proach. Understanding that,I have briefly reviewed these concepts with Jupiter staff, and they
re generally receptive. Many details remain to be addressed, but we are clearly on the right
We
track.
Finally, I must acknowledge the Tequesta staffs assistance in developing this analysis. Both
you and Tom Hall have been completely responsive, cordial and professional, respecting the
constraints imposed by a '30 day review period The conclusions outlined' herein are based
entirely on information your staff has;.provided, and' I am therefore, quite confident that
subsequent detailed research will}Held similar results
Thank you again for your cooperation 'I will await your direction before taking further action.
t
Sincerely,
SEACOAST UTILITY AUTHORITY
Rim Bishop
Executive Director
cc: Authority Board 21,
y. 4
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