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HomeMy WebLinkAboutMinutes_Miscellaneous_04/10/1995_Finance & Administration Committee c VILLAGE OF TEQUESTA Post Office Box 3273 . 357 Tequesta Drive Tequesta, Florida 33469 -0273 • (407) 575 -6200 3 Fax: (407) 575 -6203 3 0 A 4 f7CH CoUM'y VILLAGE OF TEQUESTA FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES APRIL 10, 1995 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 10, 1995. The meeting was called to order at 8:30 A.M. by Chairman Joseph Capretta. A roll call was taken by Betty Laur, the Recording Secretary. In attendance were: Chairman Joseph Capretta and Co- Chairman Ron T. Mackail. Also in attendance were: Village Manager Thomas G. Bradford and Department Heads. Village Clerk Joann Manganiello arrived at 8:37 A.M. II. APPROVAL OF AGENDA The Agenda was approved as submitted. III. CONSIDERATION OF RESPONSE RECOMMENDATION RELATIVE TO TOWN OF JUPITER LETTER REQUESTING INFORMATION CONCERNING TEQUESTA LONG RANGE CONTRACTUAL PLANS FOR WATER SERVICE. Chairman Capretta explained that the focus of this meeting would be to prepare a response to a letter from Jupiter asking about Tequesta's future water supply plans in order to finalize their plans for a new reverse osmosis plant, and to decide whether Tequesta planned to continue to purchase water from Jupiter after the year 2007. Tom Hall stated that the Village was currently selling 3 -1/2 million gallons, the sources for which were Tequesta's own wells and 1.5 million gallons minimum per day purchased from Jupiter, with a maximum day allowed of 2.5 million gallons, Rec Paper Finance and Administration Committee Meeting Minutes April 10, 1995 Page 2 and that an average of 1.7 million gallons could not be exceeded in any given year. Mr. Hall explained that in order to increase the rate that Jupiter must hold a rate hearing and demonstrate costs to substantiate an increase, as had happened in 1991 when the rate was raised from 85( to $1.22, and that it was believed Tequesta could obtain water from their own reverse osmosis plant for approximately $1.22. David Brown, Water Manager for the Town of Jupiter, responded to Chairman Capretta that Jupiter had purchased water from Seacoast Utility before their reverse osmosis plant was completed, but no longer purchased water from anyone. Chairman Capretta pointed out that Jupiter probably did not want Tequesta to continue to purchase water from them after 2007 since they would need another reverse osmosis plant to provide the water to Tequesta. Mr. Hall stated that according to projections by the Village consultants, at ultimate buildout Tequesta would need up to 5 -1/2 million gallons plus the amount needed for fire protection. Mr. Jenson, consultant with the firm of Reese, Macon and Associates, explained that was a worst -case scenario which allowed for the downtown redevelopment. Chairman Capretta explained that he had concluded that the amount of water pumped from a well was not being constrained by South Florida Water Management, as he had always believed; but by the way in which the wells were operated, since he had learned that Tequesta had no wells that had ever operated at the level designed or permitted, and considering that some wells would be down periodically for repairs, the productivity factor probably was not over 50 %. After discussion in which Consultant Reese explained that 1.5 million gallons must be purchased from Jupiter under their contract whether it was used or not so that the amount used from Tequesta's wells had never really been calculated, Chairman Capretta stated that in order to arrive at the amount of reverse osmosis water needed he should be able to subtract the amount that could be obtained from Tequesta's wells from the projected 5 -1/2 million gallons. Mr. Hall assured Chairman Capretta that he would have that figure by the end of the day, and that Tequesta pumped capacity each year. Chairman Capretta questioned Mr. Brown as to whether one of the Jupiter councilmembers was particularly concerned with water, and was told it was Councilmember McCarthy, who Chairman Capretta commented had had an article in the newspaper recently which basically stated that if Jupiter Finance and Administration Committee Meeting Minutes April 10, 1995 Page 3 did not sell water wholesale to Tequesta they would sell it at retail for a higher price. Mr. Brown responded to Chairman Capretta's question regarding Jupiter's water rates that the normal residential rate was $1.27 per thousand gallons and the approximate cost of raw water obtained from reverse osmosis was $1.22 per thousand gallons. Mr. Brown explained that Jupiter's concern was that Tequesta was using 14% of their capacity and that Tequesta only generated 9% of their income. Chairman Capretta stated again that the amount needed for an reverse osmosis plant should be arrived at by subtracting the capacity of the current wells from the projected 5 -1/2 million gallons. Consultant Reese explained that in determining the size of reverse osmosis plant needed that rather than using a current production figure that they used the amount that was permitted to secure; to which Chairman Capretta responded he was implying that Tequesta was getting less than permitted and Mr. Reese was implying that Tequesta was getting more. Mr. Reese explained that in establishing the size of an reverse osmosis plant that his firm presumed that the amount of water permitted was the amount that could be secured, and if that could not be done for some reason such as maintenance, etc., they assumed that could be solved. Chairman Capretta discussed that the capacity of reverse osmosis wells would be steady and dependable over time since there were no problems with drought or aquifer types of problems, as compared to the capacity number for shallow wells which would fluctuate over a range. Chairman Capretta stated that the current wells should be operated at capacity to know whether they could be operated at capacity. Consultant Reese suggested that if Jupiter was willing to reduce their minimum that he thought that was advisable. Chairman Capretta stated that he needed to know how much the current wells could produce in order to determine how much to purchase from Jupiter short -term, long -term, and how large an reverse osmosis plant to build. Chairman Capretta asked Consultant Reese whether he had any doubt that we could put in a reverse osmosis plant which plus our wells would provide enough water, and could solve the problem of obtaining water that didn't smell as well as the problem of brine disposition. Consultant Reese stated there was always doubt, and that he believed the water Finance and Administration Committee Meeting Minutes April 10, 1995 Page 4 ----------------- - - - - -- quality would not be known until drilling had taken place. Mr. Reese commented that based on other local wells there was good reason to believe reasonable volume could be obtained, however, a zero production well was possibly although not likely. Mr. Reese explained that the odor was caused by hydrogen sulfide and that he did not know of any process which would remove all of it. Mr. Brown contributed that Jupiter had improved their percentage of hydrogen sulfide from 60% to 90% using a new process. Chairman Capretta commented that while former Chairman Collings had favored going to reverse osmosis as soon as possible that he had wanted to wait as long as possible hoping that technology would improve. Consultant Reese responded that this was discussed ten years ago and the decision was made to defer as long as possible, and that technology had indeed changed, so that on -site you would still know that hydrogen sulfide was present but off -site it was no longer noticeable. Reject disposal was discussed by Mr. Reese, who explained that they had decided to move forward with the application and then react to concerns; and that Tequesta had options for physical locations for disposal that Jupiter did not have. Mr. Reese stated that the salt content of the reject water was purer than the water in the Intracoastal. Location of an reverse osmosis plant was discussed. Mr. Hall commented there was enough room to build it at the present water plant site. Chairman Capretta stated that in such a small town the odor problem could be serious, to which Mr. Reese responded that the problem would be treated until it was tolerable. Mr. Reese also commented that the cost of operation for an reverse osmosis plant should be no different than anyone else's cost of operation, and from information to be received this week on Well 27 that it's capacity would be known, and if the Village added up everything taken out of all their wells they would still need an reverse osmosis plant. Village Manager Bradford commented that the report done by P & G Associates contained two different scenarios, one with Tequesta totally independent of Jupiter, and the other with Tequesta still purchasing water from Jupiter and building a smaller reverse osmosis plant. This report suggested that it would be cheaper for Tequesta to be totally independent of Jupiter, since it was believed the price charged by Jupiter would increase. Mr. Hall explained that the current Finance and Administration Committee Meeting Minutes April 10, 1995 Page 5 step rate system instituted in 1989 had encouraged conservation, and had resulted in a 30% reduction in consumption while there had been a 10% growth rate in areas served by Tequesta. Chairman Capretta questioned why Tequesta didn't sell the Jupiter customers to Jupiter; Village Manager Bradford explained that Tequesta made a profit on those customers. Co- Chairman Mackail stated that the Town of Jupiter was asking for Tequesta's response for future planning, and he questioned why Tequesta would want to change if they had a reasonable price from Jupiter today. Chairman Capretta responded that the letter was really asking Tequesta to assure Jupiter they would be off Jupiter's system by 2007. Village Manager Bradford commented that an analysis done the previous summer indicated it would be cheaper to become independent versus what Tequesta assumed Jupiter would ultimately charge for water. The Village Manager also commented that there had been several staff meetings with Jupiter on the subject of trading customers, and that Jupiter was not interested because the Jupiter system was older than the Martin County system and doing the physical changes necessary to accomplish trading customers would be expensive and also that Jupiter probably made more money from the South Martin County customers than the Jupiter customers because the South Martin County consumption was higher. Co- Chairman Mackail questioned how the Town of Jupiter Island fit into the picture, and proposed that available resources should be considered regardless of municipalities' boundaries and customers should be traded if necessary to make the situation better. Chairman Capretta responded that ENCON had proposed a huge facility to sell reverse osmosis water to everybody. Co- Chairman Mackail commented that the more water produced the cheaper it should be. Mr. Reese commented that would be more efficient but politics interfered. Co- Chairman Mackail responded that this matter should not be political but should be management of the resource, and should be a regional issue. Mr. Reese commented that there was a 10 --15% difference in a smaller reverse osmosis plant's cost of water than a larger reverse osmosis plant's cost, and that a lot of the cost of building the plant went into items not directly relating to water treatment. Village Manager Bradford commented that all of the municipalities profited from their water systems, which might be lost under a regional system. Co- Chairman Mackail Finance and Administration Committee Meeting Minutes April 10, 1995 Page 6 responded he was not proposing to do away with the existing water systems but to consider at what future point to consolidate, and he believed Tequesta should be providing water to Jupiter Island. Village Manager Bradford commented that although Jupiter Island did not want short term help, they were interested in long -term help from Tequesta. Village Manager Bradford expressed his view that at the end of the Jupiter contract term that in order to renew additional connection charges would have to be paid, or Tequesta would have to get off of the Jupiter system. Village Manager Bradford stated agreement with Chairman Capretta that Jupiter was really saying they wanted Tequesta to become independent because there were other alternatives available that were not offered. Chairman Capretta suggested as a minimum risk strategy that Tequesta could plan to get off Jupiter's system by 2007, since the Village would not want to get off sooner as long as water was cheaper by staying on. Mr. Reese stated that he believed that close to the end of the year one well could be drilled and reject location tied down in approximately 6 months. Chairman Capretta suggested that with only one of the four wells started in 1990 now operational, that the process was very slow. Mr. Reese responded that securing sites had taken a long time. Chairman Capretta stated he wanted the productivity question answered as soon as possible. Chairman Capretta summarized by commenting that recommendation to the Village Council should be that at the end of the Jupiter contract in 2007 that Tequesta should become independent, however, more information was needed before a definite answer could be determined. VII. COMMUNICATIONS FROM CITIZENS There were no communications from citizens. Finance and Administration Committee Meeting Minutes April 10, 1995 Page 7 ----------------- - - - - -- VIII. ADJOURNMENT There being no further business before the Committee, the meeting was adjourned at 10:00 A.M. Respectfully submitted, Betty Laur Recording Secretary ATTEST:, Joann Mangani llo Village Clerk DATE APPROVED: