HomeMy WebLinkAboutMinutes_Miscellaneous_06/08/1992_Finance & Administration Committee f
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VILLAGE OF TEQUESTA
Post Office Box 3273 • 357 Tequesta Drive
Tequesta, Florida 33469 -0273 • (407) 575 -6200
f 4 ° FAX: (407) 575 -6203
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F I N A N C E A N D A D M I N I S T R A T I O N
C O M M I T T E E M E E T I N G M I N U T E S
J U N E 8, 1 9 9 2
I. CALL TO ORDER AND ROLL CALL
The Finance & Administration Committee of the Village Council
held a Committee Meeting on Monday, June 8, 1992 in the
Village Hall, 357 Tequesta Drive, Tequesta, Florida. The
meeting was called to order at 5:00 p.m. by Chairman Joseph
N. Capretta. Finance & Administration Committee Co- Chairman
Earl L. Collings was also in attendance. Staff members
present were: Village Manager, Thomas G. Bradford; Tom Hall,
Water System Manager, and Bill Kascavelis, Finance Director.
Also in attendance were Village Attorney John Randolph, as
well as Mike Rocco of Gee & Jenson.
II. APPROVAL OF AGENDA
The Agenda was approved as submitted.
III. CONSIDERATION OF STAFF RECOMMENDATION RELATIVE TO PROPOSED
TOWN OF JUPITER WATER RATE INCREASE.
Village Manager Bradford explained that approximately one
month ago the Utility Consultant for the Town of Jupiter,
Howard Osterman, contacted Attorney Randolph requesting
audience with the Village of Tequesta to review information
they had which would justify a bulk water rate increase to the
Village of Tequesta. That meeting took place, Tequesta
reviewed the information which indicated that Tequesta
consider amending the bulk rate from $.85/1000 gallons to
$1.22/1000 gallons. Tequesta investigated the legitimacy of
the request, and staff now recommends to the Finance and
Administration Committee to accept the $1.22/1000 gallon rate,
as well as recommending that some contractual bulk rate
agreement change be negotiated which would allow the Village
some flexibility.
Recycled Paper
Finance and Administration
Committee Meeting Minutes
June 8, 1992
Page 2
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Jupiter has shown a prior six months increase in operating
expenditures justifying the rate increase. Attorney Randolph
explained that Gee & Jenson reviewed the figures presented by
the Town of Jupiter.
The Bulk Rate Agreement contract with Jupiter, effective
through the year 2007 and in effect since July, 1976, states
the current rate of $.85/1000. There has been no rate
increase since 1984. The contract takes into account that
Jupiter's costs will change from time to time, and when they
do they can present a rate change to the Village of Tequesta.
Rate costs are not to be confused with capital costs. Jupiter
is charging Tequesta a "blended" cost of production of $.85;
a non - variable component for the rate of approximately $.35
bringing the new rate to $1.22/1000 gallons.
Mr. Rocca reported that, from a cost basis, Jupiter's proposal
is still more reasonable than the cost would be if Tequesta
dropped the contract and built an R/O plant of its own. The
cost of producing water would be relatively the same between
Jupiter and Tequesta, with no significant difference. If
Tequesta built an R/O plant, the Village would have to meet
the capital requirements of building that facility. The way
the project is financed would impact the rate charged, and
would probably be significantly higher than the increase
Jupiter is proposing. Mr. Bradford explained that if Tequesta
built an R/O plant, with 2 /mgd capacity, the cost would be
approximately $6M, with a debt service cost of $680,000 /year,
as well as $275,000 /year presently paid on debt service.
Mr. Bradford suggested that if Tequesta goes along with the
rate increase, the Village should consider an amendment which
would be to its advantage, modifying the ratcheting provisions
of the contract.
The Committee recommended that the Village Council accept the
$1.22/1000 gallon rate, also recommending that a ratcheting
modification be added to the Agreement.
Finance and Administration
Committee Meeting Minutes
June 8, 1992
Page 3
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VI. ANY OTHER MATTERS
There were no other matters before the Committee.
VII. ADJOURNMENT
There being no other matters before the Committee, the meeting
was adjourned at 6:05 P.M.
Respectfully submitted,
"JX4/w &i��
Fran Bitters
Recording Secretary
Date Approved:
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61 671
ATTEST:
J ann Manganie o
Village Clerk