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HomeMy WebLinkAboutMinutes_Miscellaneous_04/22/1996_Finance & Administration Committee c VILLAGE OF TEQUESTA Post Office Box 3273 • 357 Tequesta Drive Tequesta, Florida 33469 -0273 • (407) 575 -6200 Fax: (407) 575 -6203 o A 4 f,C CouN VILLAGE OF TEQUESTA FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22 1996 I. CALL TO ORDER AND ROLL CALL The Tequesta Finance and Administration Committee held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Monday, April 22, 1996. The meeting was called to order at 9:02 A.M. by Chairman Joseph Capretta. A roll call was taken by Betty Laur, the Recording Secretary. In attendance were: the following Committee members: Joseph Capretta, Mayor Ron T. Mackail and Michael R. Meder. Also in attendance were Village Manager Thomas G. Bradford, Village Clerk Joann Manganiello and Department Heads. II. APPROVAL OF AGENDA Committeemember Meder requested the addition under ANY OTHER MATTERS of discussion of the status of the electronic billboard project and the special issue of Smoke Signals. Chair Capretta requested the addition under ANY OTHER MATTERS of a discussion of the ENCON sewer meeting. Committeemember Mackail made a motion to approve the agenda as amended. Committeemember Meder seconded the motion. The vote on the motion was: Joseph N. Capretta - for Ron T. Mackail - for Keciicled Paper t VILLAGE OF TEQUESTA Post Office Box 3273 • 357 Tequesta Drive Tequesta, Florida 33469 -0273 • (407) 575 -6200 3, Fax: (407) 575 -6203 o f O d 4� f'C COUM� VILLAGE OF TEQUESTA FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 I. CALL TO ORDER AND ROLL CALL The Tequesta Finance and Administration Committee held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Monday, April 22, 1996. The meeting was called to order at 9:02 A.M. by Chairman Joseph Capretta. A roll call was taken by Betty Laur, the Recording Secretary. In attendance were: the following Committee members: Joseph Capretta, Mayor Ron T. Mackail and Michael R. Meder. Also in attendance were Village Manager Thomas G. Bradford, Village Clerk Joann Manganiello and Department Heads. II. APPROVAL OF AGENDA Committeemember Meder requested the addition under ANY OTHER MATTERS of discussion of the status of the electronic billboard project and the special issue of Smoke Signals. Chair Capretta requested the addition under ANY OTHER MATTERS of a discussion of the ENCON sewer meeting. Committeemember Mackail made a motion to approve the agenda as amended. Committeemember Meder seconded the motion. The vote on the motion was: Joseph N. Capretta - for Ron T. Mackail - for Kecucled Payer FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 2 ------------------------------------ Michael R. Meder - for The motion was therefore passed and adopted and the agenda was approved as amended. III. COMMUNICATIONS FROM CITIZENS (NON - AGENDA ITEMS) Tom Little, 486 Dover Road, inquired when this meeting had been set, since he had been told that agendas had not been available prior to this morning and that it had not been on the bulletin board until Saturday. Mr. Little also inquired what amount of lead time was required for the meeting notice to be in the newspaper. Village Manager Bradford explained that the Palm Beach Post called each Friday to get the information for meetings for the following week. Village Clerk Manganiello reported that agendas for this meeting had been on the counter in the Village Clerk's Office on Friday. IV. REVIEW OF REVERSE OSMOSIS TREATMENT FACILITY FINANCING OPTIONS Chairman Capretta announced that the Village was now in the planning stages to build a reverse osmosis plant, for which financing alternatives would be discussed at today's meeting. Water Department Manager Tom Hall distributed copies of a chart demonstrating the projected time that 90* water use would be reached as 1996 or 1997, when the Village would be required by Palm Beach County to have new water facilities under construction. Mr. Hall explained that it was critical to move ahead with the new facility, since if construction had not started when 90% usage was attained the County could prohibit installation of additional water mains and /or service connections to the village's distribution system. FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 3 Chairman Capretta commented that the point of the chart was to show that 90% usage was approaching rapidly. Mr. Hall explained that during the drought of 1988 usage had reached 4 -1/2 MGD, which was the present level, and the Village had prudently instituted conservation step rates, which had delayed the necessity for new facilities for approximately seven years. Village Manager Bradford commented that a number of variables had to be taken into account before the water system could be expanded to include reverse osmosis, one of which was to obtain a 10 -year consumptive use permit from SFWMD, which had been accomplished, and to bring all permitted wells on line to provide all of the surficial aquifer water available, which would take approximately one more month. DEP had indicated that they would grant the R/O discharge permit, which was another variable needed. Mr. Reese commented that conditions in the permit were generally consistent with those discussed during the negotiation process, however, he hoped to get some requirements for details reduced. Mr. Reese explained that the draft permit allowed discharge on both outgoing and incoming tides and that monitoring would be done during actual discharge operations to determine whether there was a negative impact, and if so, then discharge would be changed to only outgoing tides. Discussion ensued regarding Jupiter's discharge permit, during which Mr. Reese commented that regulators realized that Tequesta's discharge proposal was much closer to requirements than Jupiter's, which had helped the Village in negotiating their permit. Village Manager Bradford commented that the discharge permit application fee cost $12,000, and explained that the test well which would indicate the amount of water available at 1700 feet for the R/O system would be finished in approximately 60 days. Tom Jenson of Reese Macon & Associates responded to Chairman Capretta that Jupiter had obtained R/O water at a depth of 1400 - 1500 feet, but were now deepening to 1700 feet, where the water quality was better and the quantity increased. Mr. Reese explained that the R/0 well would be under some FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 4 artesian pressure. Village Manager Bradford explained that the only remaining variable was financing, which would be needed possibly during late summer or early fall, and commented that the preliminary design had been approved and now a permit was needed from the Health Department. The Village Manager stated that now was the appropriate time to figure the cost for the size of plant anticipated, and that the Village had no debt now in the existing water enterprise fund, which had averaged $335,000 - $350,000 in payments in past years. Village Manager Bradford explained that three different scenarios had been developed for the Committee's consideration. (1) The first scenario, for $10,355,000, considered that money was no concern, and that the Village was independent of Jupiter. (2) The second scenario, for $6,105,000, considered an ultimate design building initially equipped for only one MGD, and initially did not include a finished locker room, break room, office, or laboratory. Mr. Reese explained that a lot of instrumentation and control was not included in that figure. Another estimate, for $7,000,000 +, included bringing control from the existing facility into a central control room at the R/O plant to provide the ability to monitor both plants from one location. (3) Village Manager Bradford explained that the third scenario, for $4,220,000, which was only a one million design and a one million dollar startup, was referred to as a throw away plant. Village Manager Bradford explained that the reason alternatives had been presented for consideration was because of the water dispute and contract with Jupiter. Using the $4.2 million scenario, when the Village was able to sever the Jupiter contract at some future date, that plant would have to be torn down and a new plant built. Therefore, staff recommended the $6 million alternative, which would provide the water needed and once Jupiter was FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 5 ------------------------------------ out of the picture, it could be modified and upgraded. According to figures provided by Finance Director Kascavelis, the debt service ratio on that scenario could be financed with no water rate increase. Mr. Kascavelis reported that Mr. Hall and Mr. Reese favored the $7 million startup, which he believed would require a 5% water rate increase. Chairman Capretta discussed the cost per gallon, now obtained by the village at 85- per thousand gallons from the surficial wells, and at $1.25 for the portion purchased from Jupiter ($2.50 during the present dispute) . Mr. Hall commented that the anticipated cost per gallon under the $7 million scenario was between $1.10 and $1.15. Chairman Capretta commented that in the future, without Jupiter, approximately half of Tequesta's water would come from the aquifer at 85� per gallon and half from the R/O plant at $1.20, basically giving a cost per gallon of $1.00. Chairman Capretta discussed the possibility of a negotiated settlement of the lawsuit with Jupiter in which the village could buy its way out of the contract in 3 -4 years. Another possibility discussed by Chairman Capretta was that if the village won the lawsuit they could continue to buy water from Jupiter for another twelve years, the price of which would slowly increase over that period from $1.25 to $1.80, however, with their own R/O facility Tequesta could produce water cheaper than that. Chairman Capretta indicated that the prime strategy was to become independent, so that if Tequesta won the lawsuit they could negotiate an end to the contract; however, if the village lost the lawsuit there was a risk that Jupiter might not allow them to negotiate out of it, which would place the village in an untenable position of having an R/O facility but still having to purchase from Jupiter. Chairman Capretta indicated that no matter what the outcome of the lawsuit was, those possibilities had no bearing upon the financing discussion at this meeting, since Tequesta must proceed with construction of a new facility to FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 6 ------------------------------------ meet County requirements, and in his opinion the present low interest rates indicated that now was the time to obtain financing. Chairman Capretta suggested that a case could be made to borrow the whole $10 million now so that the village could become completely independent. Committeemember Mackail discussed at what point in time and at what cost the Village would invest the additional $3 million in order to become independent, after having spent $7 million for the initial facility. Committeemember Mackail stated he did not like the fact that Jupiter was trying to increase rates 97W. Chairman Capretta suggested that the additional $3 million would cost the Village 50W more at a future point than it would at today's rates, so that it would be cheaper to build the $10 million facility now. Mr. Reese explained that the planned $7 million facility was sized to eventually house equipment up to 4 -1/2 MGD and adding the equipment would not cost what it would to construct an additional building. Discussion ensued during which it was pointed out that the price of equipment would escalate in the future. Chairman Capretta suggested that if Tequesta won the lawsuit that instead of buying 1 -1/2 MGD, the village should buy 2 MGD, since it cost Jupiter $1.50 to provide Tequesta with $1.25 water. Committeemember Mackail stated he would like to buy water for less than the Village was currently paying. Mr. Hall explained that using historical rate increases by Jupiter as a basis, projections indicated that by the year 2007 Tequesta would be paying $2.27 per thousand, without indexing. village Manager Bradford expressed his opinion that the Village would not be able to negotiate out of the contract if Tequesta lost the lawsuit, so the village must prepare for the worst -case scenario: to be stuck with the increase Jupiter was now trying to impose, plus indexing, plus Finance Director Kascavelis' 5% increased rate estimate to pay for the $7 million R/O facility. Mr. Hall commented that another expansion would be needed in approximately 2005 FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 7 ------------------------------------ if Tequesta was still under the Jupiter contract. Committeemember Mackail commented that water was a very lucrative business, and with coming growth - -in approximately five to seven years-- Tequesta would be in the running to attract more water customers, and expressed his opinion that the Village should proceed on the basis of what they wanted to do without considering Jupiter. Committeemember Meder questioned differences in the proposals for the $7 million and the $10 million plant. Discussion ensued regarding the equipment that would be installed, during which Mr. Reese explained that the design intent would be not to get into a throw away mode between the $7 million and the $10 million facilities, and estimated that it would take 1 -1/2 years to upgrade the $7 million facility to a $10 million plant. Mr. Kascavelis commented that to fund a $10 million facility, water rates would need to increase 20 %. Committeemember Meder commented that if the Village had a 20W increase in their production cost for water for building a $10 million facility and eliminated the 91%- increase proposed by Jupiter by getting off their system that there would really be a 71$ decrease in current rates. Mr. Kascavelis reported the Village currently paid $675,000 annually for bulk water, which they would no longer pay if they were off the Jupiter system. Further discussion ensued regarding the lawsuit and what might happen if it were won or lost. Committeemember Mackail suggested asking Jupiter point blank whether they wanted Tequesta off their system to help decide between the $7 million or $10 million facility. Village Manager Bradford explained that although Jupiter's Council may only have realized late in the game that they did not want to lose Tequesta as a customer, their staff had always known it, because (a) it was false that they were losing money on Tequesta, and (b) the contract covered a FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 8 ------------------------------------ significant amount of their overhead. Chairman Capretta commented that if he were on the Jupiter Council that he would not want to lose Tequesta as a customer until they could be replaced with another customer, such as Abacoa, and the perfect strategy for Jupiter would be to phase out Tequesta and phase in Abacoa. Chairman Capretta discussed the fact that Jupiter had painted themselves into a corner politically so that they could hardly ask Tequesta to stay on their system if Tequesta won the lawsuit. Several comments were made regarding possibilities and strategies in regard to the lawsuit, to which Mr. Little objected, stating that those items should not be discussed until the lawsuit was settled. The response to Mr. Little was that in this case the decision would be made by someone who knew nothing about the Town of Jupiter or about the Village of Tequesta, but by an expert in rate studies. Village Manager Bradford stressed that if Tequesta lost the lawsuit that the 5% increase or the 20* increase would be on top of the 97t being paid today. Chairman Capretta commented that Jupiter wanted Tequesta to pay retail prices and with Abacoa they would have plenty of retail customers; that Jupiter's system would be stretched with both Tequesta and Abacoa on it; and therefore a date should be negotiated for Tequesta to get off their system. Discussion ensued regarding when money would be needed, to which the response was that approximately $200,000 more would be needed for design of either plant after the beginning of the next fiscal year. Village Manager Bradford explained that staff was working on the budget for next year and needed to know whether to use figures based on a $7 million facility or a $10 million facility. Committeemember Neder made a motion to recommend to the Village Council that the village plan for a $10,705,000.00 plant for budgeting purposes. Committeemember Mackail seconded the motion. During discussion of the motion, FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 9 Committeemember Meder commented that five years off the Jupiter system would save enough to pay for the difference in the $7 million and the $10 million facility. There were no comments from the public. The vote on the motion was: Joseph N. Capretta - for Ron T. Mackail - for Michael R. Meder - for The motion was therefore passed and adopted. Mr. Reese questioned whether their firm should change their design strategy, to which the response was that the motion had been made for budget planning purposes and the present design strategy should pursued; however, the Committee would review the matter in approximately 60 days. V. ANY OTHER MATTERS Committeemember Meder requested the status of the electronic bulletin board system for which he had provided a demonstration at the last Village Council meeting. Committeemember Mackail suggested that the next step should be to look at the cost difference between that and the Village newsletter, to which Committeemember Meder responded that his intention had been for the computer system to be in addition to the newsletter and not to replace it. Village Clerk Manganiello suggested that there was one old computer available for use which would need conversion from a 5 -1/4° to a 3 -1/2° floppy drive. After discussion, it was proposed that the computer be placed in the Village Hall meeting room facing out so that it could be read through the window, and that it run 24 hours per day. Committeemember Meder discussed the special issue of Smoke Signals which would have a pullout section containing community information. During discussion of this matter, it FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 10 ------------------------------------ was stated that revisions to this section would take approximately 2 -3 months, and that the census information would come from the 1990 U.S. Census. In the past, revisions had been done by staff and not reviewed by the Village Council; however, it was requested that the Village Council receive a full mark -up before it was submitted to the printer. The Village Clerk stated that she would send a mark -up to the whole Council. Chairman Capretta discussed the recent ENCON meeting on sewers, and reported that their Board had voted 3 to 2 to postpone the decision whether to require sewers. Boardmember George Gentile had proposed that everyone work together, which Chairman Capretta stated to some people meant working together to develop a plan to put the sewers in, and Tequesta did not mean that. Chairman Capretta commented that the cost to the taxpayers to install sewers could be $10 million, and the decision should not be based on an inadequate study which did not prove that septic tanks were polluting the river. Now the village had 30 days to develop a proposal to present to ENCON, and Chairman Capretta expressed his opinion that the points to consider in development of the proposal were that the village should get together with Mr. Amy and others to prepare an approach, that ENCON must prove the septic tanks were polluting the river, that ENCON could not just go after Tequesta but must use a more regional approach on all of the Loxahatchee River and then determine the present level of pollution and rank the main pollutants in order of importance. A 5 or 10 -year plan needed to be developed to clear up the pollution. Chairman Capretta predicted that when ranking the pollutants that septic tanks would be 7 or 8 on the list, not at the top. Chairman Capretta suggested that ENCON itself might be the biggest polluter of the river with the nitrate enriched IQ water containing more nitrates which they sold to the golf courses, which ran back into the river. The golf courses also used fertilizer, which ran back into the river. Stormwater drainage problems also contributed pollutants. FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 11 ------------------------------------ After identification and ranking of the major pollutants, then a plan needed to be developed to address the problem. Chairman Capretta suggested that stormwater utility rates could be combined with cleaning up pollution of the Loxahatchee River. Chairman Capretta suggested a plan which would include hiring a consulting firm, establishing a task force, determining the biggest pollutants and ranking them in order of importance, and gaining agreement by all entities involved to contribute an amount of money to clean up pollutants. Chairman Capretta suggested that a six -month test of 50 septic tanks be conducted, and predicted that septic tanks would be on the list of pollutants, but not near the top. The problem would be to convince ENCON to produce such a ranked, cost effective plan to really solve the problem of pollutants in the river. Chairman Capretta commented that ENCON made approximately $1 million profit annually and had $14 million in the bank, and needed to be convinced to spend some of their own money rather than asking Tequesta's taxpayers to come up with $10,000 per family. Chairman Capretta explained that ENCON had placed themselves in the political position of only being interested in septic tanks. Village Manager Bradford advised that Councilmembers could speak to ENCON Boardmembers privately without breaking the Sunshine Law to enlist their support of the proposed plan. Committeemember Mackail indicated he had spoken to George Gentile, who had indicated his willingness to look at a five to seven year program, and a regional concept. Village Manager Bradford commented that he could put together a presentation which would consolidate data presented to ENCON by various individuals to be approved by the Village Council at their May 9, 1996 meeting; however, he did not believe ENCON would be interested since he believed that ENCON wanted Tequesta to be the buffer between them and the residents when they put in sewers. Chairman FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 12 ------------------------------------ Capretta commented that ENCON knew that Tequesta would have resisted everything they did to legally delay them. Chairman Capretta stated that there were at least three ENCON Boardmembers willing to listen, and they must be approached by him and by Mayor Mackail as to the minimum they would accept. Chairman Capretta stressed that this must be done in a very short time. Village Manager Bradford commented he could do an outline, and Chairman Capretta suggested that Mr. Amy and others could prepare the proposal. Committeemember Meder commented that other areas were involved, such as unincorporated areas in both Palm Beach and Martin Counties, and questioned whether the presentation would speak for everyone on the entire peninsula. Committeemember Mackail responded that Tequesta would have to speak for themselves, and that low pressure areas needed to be identified where lift stations would be needed. Chairman Capretta expressed the opinion that as long as the dialogue was about how to work out details of putting in a sewer system that ENCON would cooperate, and the real question was whether there was any way they could accept that sewers were, for example, in sixth place and there were five other larger polluting sources, which ENCON had said was impossible to determine. Therefore, specific ways to determine pollutants must be proposed, and how to rank them. Chairman Capretta expressed his opinion that the major pollutants were connected to stormwater drainage and runoff problems and that this issue should be linked with the stormwater utility so that ENCON money could be used instead of levying a tax rate on the residents. Chairman Capretta suggested that if ENCON would pay to fix the stormwater drainage problem for the Village including the cost to maintain, that he would agree to sewers. It was suggested that Mr. Reese could provide the technical expertise to help Mr. Amy. Mr. Reese agreed it could be done by the May 9th meeting. Mr. Little commented that at a prior ENCON meeting one of FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 13 ------------------------------------ the biggest pollutants had been identified as runoff from NorthFork and C -18, and ENCON's own brochure listed surface drainage as a pollutant. Mr. Little stated that he had questioned Mr. Dent as to why they were not aerating the water from those sources and he had responded there was no money in that, that the money was in the pennisula. Mr. Little commented that cleanup was not targeted at the source, and ENCON had not proven to anyone that septic tanks were a pollutant. Village Manager Bradford concurred with Mr. Little, but agreed that Chairman Capretta's suggestion should be implemented. Chairman Capretta commented that the proposal should be made if for no other reason than to provide ammunition for the three Boardmembers who had voted for delay to keep voting against the other two. Mayor Mackail agreed to speak to George Gentile to obtain his input regarding a five -year plan so that it could be incorporated into the proposal. Chairman Capretta suggested that more data be provided to Snag Holmes to reinforce his position that the Harbor Branch study was invalid and that ENCON should participate in a good study. Mr. Little suggested that ENCON should pay for a new detailed study which would begin at the north end of the Loxahatchee and include all the forks of the river, so that they could prove the need for sewers. Councilmember Hansen, who was present in the audience, commented that it was time to present a solid front against ENCON, and that many people, including Gary Collins, Mr. Amy, and Mr. Jacobs, were ready to help do that. Councilmember Hansen agreed that septic tanks were not one of the top pollutants, and expressed the opinion that Mr. Little was right and there was more money in sewers for ENCON. Committeemember Mackail expressed his opinion that Tequesta must take the lead to prove whether sewers were needed. Chairman Capretta suggested the Village go to ENCON and tell them the Village had hired the finest environmental FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 14 ------------------------------------ consulting firm in the country at a cost of a quarter million dollars to conduct a one -year study monitoring every septic tank in the whole Village, and ask them to split the cost; and thereby concentration would be on a good study which would repudiate the Harbor Branch study, which would be a good delaying tactic. At best, the study would show that the pollutants from septic tanks were a very small factor in the total pollutants. Mr. Little commented that ENCON's original studies twenty years ago when they had monitored the river all the way up and down had showed pollutants to be from the C -18 canal and NorthFork, but the money had not been there. Councilmember Hansen commented that the majority of ENCON's charter talked about doing something with runoff and stormwater, and did not talk about sewers. Chairman Capretta commented that the more compatible suggestion to ENCON would be to pursue repudiating the Harbor Branch study and replacing it with a better one, which would delay the sewer question, but in the long run the real pollutants must be found, and the Village must convince ENCON to find them. Village Manager Bradford commented that Mr. Dent wanted Tequesta involved in the sewer project so that the wrath of the people would be borne by the Village when sewers were installed and decisions must be made where to place lift stations. Committeemember Meder suggested that ENCON should appoint Mr. Amy, Mr. Collins, and others to study the problem, and also suggested that the village might not want ENCON to become involved with the stormwater utility. Village Manager Bradford explained that the Village's idea for stormwater utility was just to install infrastructure to take water from the Village to the river, and the idea that the EPA had about it concerning the Clean Water Act was a different matter, and the people did not realize that northern cities were being required to treat the water in a treatment plant before returning it to the rivers, which could become a requirement in this area in FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 22, 1996 PAGE 15 ------------------------------------ 10-15 years. Chairman Capretta commented ENCON was short on sewer water to make enriched IQ water to sell to the golf courses. Village Manager Bradford commented he would get the proposal started. The Committee requested another meeting before the Village Council meeting on May 9, to report progress on the proposal. VI. ADJOURNMENT There being no further business before the Committee, the meeting was adjourned at 11:10 A.M. upon motion by Committeemember Meder, seconded by Committeemember Mackail, and unanimously carried. Respectfully submitted, 4xc J �� o Betty Laur ATTEST: Recording Secretary J oann manganiello Village Clerk DATE APPROVED: