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HomeMy WebLinkAboutMinutes_Workshop_07/16/1996• VILLAGE OF TEQUESTA Post Office Box 3273 357 Tequesta Drive Tequesta, Florida 33469-0273 (407) 575-6200 Fax: (407) 575-6203 VILLAGE OF TEQUESTA VILLAGE COUNCIL WORKSIIOP MEETING MINUTES JULY 16, 1996 I. CALL TO ORDER AND ROLL CALL The Tequesta Village Council held a workshop meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Tuesday, July 16, 1996. The meeting was called to order at 5:30 P.M. by Vice Mayor Elizabeth A. Schauer. A roll call • was taken by Betty Laur, Recording Secretary. Councilmembers present were: Vice Mayor Elizabeth A. Schauer, Joseph N. Capretta, and Michael R. Meder. Also in attendance were: Village Manager Thomas G. Bradford, Village Clerk Joann Manganiello, and Department Heads. Mayor Ron T. Mackail and Councilmember Carl C. Hansen did not attend as they were on vacation. II. APPROVAL OF AGENDA Councilmember Meder requested addition under Any Other Matters of discussion of a memo which had been sent to the Councilmembers from Village Manager Bradford regarding an illegally parked recreational vehicle. Councilmember Capretta requested addition under Any Other Matters of Village Manager Bradford's missing merit increase. Councilmember Meder made a motion to approve the Agenda as amended. Councilmember Capretta seconded the motion. The vote on the motion was: • Elizabeth A. Schauer - for IZecyded Paper • Village Council Workshop Meeting Minutes July 16, 1996 Page 2 Joseph N. Capretta - for 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) There were no communications from citizens. IV. REVIEW OF PROPOSED FY 1996-1997 BUDGETS A~ WATER ENTERPRISE FUND Finance Director Kascavelis provided a handout reflecting • changes in budget figures made since the last workshop meeting. Village Manager Bradford explained there were basically no changes in the Water Enterprise Fund other than an increase in total operating expenses of 2.5$. The Village Manager commented that the main issue of this meeting was to discuss reverse osmosis and the associated debt service A decision must take into account that rates must change based upon the option chosen. Village Manager Bradford explained that Consultant Phil Gonot had worked with Finance Director Kascavelis and Water System Manager Tom Hall on rates associated with debt service. The Village Manager explained that the Water Department was expected to have a surplus of approximately $519,000, which anticipated zero debt service, and that at this meeting a debt service and construction scenario should be developed so that the true surplus could be determined. Village Manager Bradford commented that the capital outlay for renewal and replacement was only $140,100, and capital projects other than R/0 was only $18,050, indicating that basically ail surplus money had been spent over the last 4-5 years building storage tanks and extra wells to meet the Water Department's Master Plan; therefore, money must be borrowed in order to build a RIO plant. . Councilmember Capretta questioned the status of the approved . Village Council Workshop Meeting Minutes July 16, 1996 Page 3 ----------------------- wells and the capacity they would ultimately provide, which would be the cheapest source of water for the Village. Water System Manager Hall responded that the wells would provide 2.7 MGD when completed, based on the SFWMD allocation. Mr. Hall explained that more water could be removed from the wells but the Village's allocation from existing wells had been reduced. Mr. Hall reported that Well 27 was complete and that Well 26 would become operational after completion of the current bacterial samples collection and completion of the water quality analysis form from DEP, which would require no further cost. Councilmember Capretta commented that 2.7 MGD from the wells added to 1.5 MGD from Jupiter would provide 4.2 MGD. Mr. Hall commented that in April on a peak day 4.3 MGD had been used. Councilmember Capretta questioned ultimate peak capacity, to which Mr. Hall responded that would be 6-1/2 MGD, the remainder of which would come from R/0. • Councilmember Capretta then assumed that a total of 6 MGD would be needed, with roughly 2 MGD provided by R/O; and that the concept to build a basic structure capable of going to 4 MGD would initially operate at half of that capacity. Councilmember Meder questioned how efficient the plant would be if it were run at only 50~. Councilmember Capretta explained that the cheapest water was from the surficial aquiter; however, he was questioning whether that would be true below a certain percentage. Mr. Hall responded that the figure would be approximately 500, but that it was dependent upon demand and water quality, therefore the R/0 plant might have to be run continuously for certain parameters; and the surficial source would be maximized to full capacity. Councilmember Capretta questioned the cost of two trains running at full capacity compared to ultimate buildout of four trains. Mr. Hall responded that basically the only increase would be for chemicals and power. Councilmember Meder questioned the minimum capacity at which the trains could operate and not reduce efficiency. Mr. Hall's response was that would depend on the number of trains being operated and that a train could not be run at half capacity, but must either be on or off. Councilmember Capretta stated that there was some lost capital, which could be referred to as interest. C] . Village Council Workshop Meeting Minutes July 16, 1996 Page 4 ----------------------- Councilmember Capretta described a situation in which Tequesta won the lawsuit from Jupiter with the contract to continue for twelve years including the cost of living escalator, allowing the Village to purchase from Jupiter at basically the current rate, to obtain water from the surficial wells at approximately 85t, and R/0 water at approximately $1.25; and questioned how to optimize those figures when operating at either half or full R/O plant capacity. Another question was whether the aquifer would become depleted. Councilmember Capretta commented that optimization using only the numbers would first use the shallow wells up to their maximum always--since they were the cheapest source; then would use Tequesta's R/0 water as the second cheapest source; and finally would add Jupiter as the third source--however, since a fixed amount must be purchased from Jupiter, it was clear that for budget purposes the 4/2 R/0 combination {building capacity for four • trains with two operational initially) would be the most logical construction option, with the work to begin as soon as possible. The other Councilmembers expressed agreement. Village Manager Bradford proposed a 4/1 combination as a more conservative approach. During ensuing discussion, Mr. Hall explained that the combinations which should be considered were either 4/1 or 4/3, since 4/1 would be sufficient while still on the Jupiter contract and upon its termination 4/3 would be required immediately. Councilmember Capretta discussed the shallow wells and whether they were being depleted, and whether SFWMD would grant permits to shut down old wells and take higher amounts from newer wells in order to stay at 2.7 MGD for the next ten years. Consultant Phil Gonot explained that a number of combinations had been considered, and that the studies had focused on a one MGD plant now with capacity to add three trains later, or a 3 MGD plant now with capacity to add one train later, which would provide some savings. With the 3 MGD plant, without Jupiter's contract, and without the Town of Jupiter customers, the cost of an average monthly bill would be $27.58. The base rate would increase to $13.30. • The commodity rate would be slightly less than the current commodity rate since water could be produced cheaper than • Village Council Workshop Meeting Minutes July 16, 1996 Page 5 the cost to purchase from Jupiter. Mr. Gonot commented that today's average bill was $30.49 including the $7.00 surcharge, and when the surcharge stopped that even though the base rate was higher the total average bill would be less than today's average. Mr. Gonot stated that the cheapest combination for the customers would be to go to a 3 MGD plant immediately, and sever ties with Jupiter as quickly as possible, however, that was dependent upon the outcome of the lawsuit. Even if the Village was paying only half of the increase it would still be better to go with the 3 MGD plant and sever ties with Jupiter as quickly as possible, and that would not change whether the Village kept the Jupiter customers or not. Councilmember Capretta questioned when the R/0 plant should be started, to which Mr. Gonot responded that the sooner that the design and construction could be started the better, and that the borrowing process should begin right away. Mr. Hall • explained that water quality and quantity information would be received beginning this Friday. Since ENCON would not allow discharge onto the ground as previously approved, a meeting was to be held the next day to determine whether discharge into the lift station on Old Dixie Highway was acceptable as an alternative. After resolution of those items, bonds could be floated; therefore in approximately 60 days the money could be in hand and the plant design and construction process could begin. Councilmember Capretta commented that it might be a year before the outcome of the Jupiter lawsuit was known, which could have influenced the decision of how big a R/0 plant was needed. Mr. Gonot stated that the estimate on the 4/3 option was $10,705,000; and that the 4/1 option was $7,055,000, with upgrade costs of another 3-1/4 or 3-1/2 million dollars depending on the configuration chosen. Councilmember Capretta discussed the financial forecast of rising interest rates, which indicated that the cost of borrowing would be more expensive in the future; and that based on everything known today it would be best to borrow the entire amount up front. Councilmember Capretta questioned how the Village could handle the debt service. Mr. Gonot stated that the financial advisor's information • had contained a slightly lower interest rate for the larger 25-year bond issue--5.9918% versus 6.099--as well as Village Council Workshop Meeting Minutes July 16, 1996 Page 6 ----------------------- better purchasers. Village Manager Bradford advised that the Village Council should give direction to staff at today's meeting. The Village Manager commented that he favored the 4/1 combination since it was likely the judge could rule that the Village would stay under the Jupiter contract until 2007, and urged the Councilmembers to look at the worst case to the Village and to the rate payers. The differences in the $4, $6, $7, and $10 million plants were explained. The $4 million plant would be a throwaway when additional water was needed. The $6 million plant would contain the structure but not the piping, etc. necessary for later expansion. The $7 million plant would contain everything necessary for expansion, and the $10 million plant would be the expanded version. Mr. Hall • stated that since the situation with Jupiter was unknown that if the 4/3 option were built that the demand was not there yet so that it was not cost effective to spend those capital dollars for the equipment just to sit. Vice Mayor Schauer presented a scenario in which all of the downtown area was developed, the Village was still on the Jupiter contract, and the 4/1 R/0 plant had been built, and questioned whether supply would be sufficient. Mr. Hall explained that would not happen for several years. Councilmember Capretta discussed the various sources and their cost, and concluded that the 4/1 plant would be sufficient if the Village were required to stay with Jupiter. Mr. Hall advised that the 4/1 plant would not be operational for approximately two years, and expansion would not be necessary for several more years. Councilmember Capretta stated that there was only one scenario he could think of which would require a larger MGD plant sooner, which would be if the Village won the lawsuit completely and Jupiter would want an end to the contract in order to make more money by selling water to Abacoa instead of Tequesta. Discussion ensued regarding past demand for water: Mr. Hall reported regarding r/o water quantity and quality, that to date there was no reason to believe water would not • be found, and that the water quality would not change the cost per thousand gallons except that a more expensive • Village Council Workshop Meeting Minutes July 16, 1996 Page 7 ----------------------- filter membrane might be required. Councilmember Meder questioned whether the 4/2 combination had been studied, to which Mr. Hall responded that based upon forecasting demand the 4/1 and 4/3 scenarios had been the best combinations because of the unknown factors. Mr. Gonot advised that the 4/1 combination was best if the Village were required to stay under the Jupiter contract, and the 4/3 scenario was best if all ties with Jupiter could be severed. Village Manager Bradford commented that Mr. Gonot was telling the Village that the 4/1 combination would entail higher capital costs in the long run; however, the Village Manager asked why should the Village pay for a 4/3 plant if they did not need it. Councilmember Meder questioned what would happen if the 4/1 combination was chosen today and a year from now the 4/3 combination was needed, to which the Village Manager responded that the Village could refinance or get a separate loan, or there might be enough retained earnings to bring • extra trains on line. Mr. Hall explained that the equipment was all the same so that once the water quality was known it would just be a matter of setting in identical new trains. Village Manager Bradford questioned whether a revenue anticipation note would be obtained in order to ascertain all costs before actually borrowing, or whether the entire amount would be borrowed up front an the assumption that the budget would be met. Finance Director Kascavelis responded that Florida Municipal Advisors had recommended borrowing the entire amount up front since the cost of borrowing was lower today than it probably would be in the future. Mr. Kascavelis explained that the bonds would be insured with a AAA rating, and that it would take 30-45 days to have the sale. Mr. Kascavelis also explained that the financial advisor had made his computations by taking the cash flows for the construction for each scenario and had determined the least amount of debt by applying capitalized interest on the investments until the money was spent for construction, to keep the amount of the sale down. 10~ construction contingency was included. In response to the Village Manager's question of what would be done financially if the 4/1 plant were built immediately and a year later it was found that ties could be severed with Jupiter so that it was • necessary to expand, Finance Director Kascavelis responded that a proviso would be placed into a Resolution of • Village Council Workshop Meeting Minutes July 16, 1996 Page 8 ----------------------- Necessity at the beginning of the bond issue that would authorize additional parity bonds to be issued for the project already approved, which could then be marketed without additional legislation. Mr. Gonot explained that there were actually two different procedures available and that the financial advisor could tell the Village which was best: There could be two issues--96 and 96A--with 96A to be sold when needed after Village Council authorization; or a larger issue could be obtained in the beginning with part of it not sold until needed. The latter choice could be more costly. Mr. Kascavelis commented that the financial advisors were now recommending negotiation of a bank line of credit as short-term financing prior to a bond issue rather than a BAN, since the transcript required for a Bond Anticipation Note would cost almost as much as the sale. Village Manager Bradford commented that everyone should understand that unanticipated problems when the money was • secured could cause the risk that the budget expectations had been incorrect, which could place the Village into a bind. The Village Manager commented that this was the Village's first R/0 project and everyone assumed everything would go as planned; however, since every project had some problem or change order that could throw everything off balance, he wanted to be sure there was enough money to cover unanticipated expenses. In response to Counciimember Meder's question regarding cancellation of the Jupiter contract, the Village Manager explained that it could be canceled by mutual agreement of the parties. Councilmember Capretta commented that if a 4/1 plant were built initially that there would be an approximate 7-1/2 year window when additional capacity would be needed, and if the Village were able to negotiate out of the Jupiter contract that window could not be sooner than 3- 5 years. Mr. Kascavelis explained that if rates went down that the Village could refund the issue and get new bonds. It was the consensus of the Village Council to build the 4/1 MGD R/O plant combination now and to place it on the July 25, 1996 Village Council meeting agenda for authorization to staff to proceed. Councilmember Capretta commented that it • would take 30-45 days to get the bond issue ready and it would take less than an hour to sell the bonds. Discussion • Village Council Workshop Meeting Minutes July 16, 1996 Fage 9 ----------------------- ensued regarding the high demand for this type of bonds. Councilmember Meder questioned the item regarding aid to community organizations. The Village Manager Bradford explained that last year's budget contained $5,000 for BRITT, $5,000 for Lighthouse Gallery, and $2,500 for Coastal Players. The 1997 budget proposed $5,000 for Lighthouse Gallery and $5,000 for Coastal Players; and amounts were not budgeted ahead of time in the General Fund for Project Graduation or other requests that might arise during the year. Vice Mayor Schauer explained that Project Graduation might not need more than $500. Village Manager Bradford commented that ten years ago the Village was giving over $30,000 annually to organizations from the General Fund, which the Village Council had slowly reduced over the years by weaning off various organizations and partly through transfers to the Water Enterprise Fund in order to spread • the amounts over a larger base. Village Manager Bradford explained that if a donation to Project Graduation were included in the General Fund budget that the tax rate would be affected, which would not happen if it were taken from Undesignated Fund Balance. Councilmember Meder expressed concern that the Undesignated Fund Balance was the emergency fund and should be replenished. Village Manager Bradford explained that there were two ways to replenish the fund--by devoting money specifically from the revenue stream, or by revenues exceeding expenditures. There were no further questions regarding the Water Enterprise Fund. Bj REFUSE AND RECYCLING ENTERPRISE FUND Village Manager Bradford explained that refuse and recycling charges had been taken off the water bills and now appeared on the tax bills as a non ad valorem assessment, and that this year a new fund had been created for this item, taking it from the Water Enterprise Fund. The Village Manager explained that the expenses were under a franchise agreement contract and would rise 3.2~ commencing October 1, 1996 because the franchise agreement with Nichols Sanitation used • the CPI rate published each June. Village Manager Bradford explained that even with the increase the Village was paying • Village Council Workshop Meeting Minutes July 16, 1996 Page 1Q less than three years ago when Nichols Sanitation had given the Village a price break of 15%-20%. Village Manager Bradford expressed satisfaction with the service received, stating that very few phone calls were received from residents regarding garbage service, and stated that two years remained on the contract. Councilmember Capretta explained that a good deal could be negotiated every five years since the companies did not want to re-bid. During ensuing conversation, Village Manager Bradford explained that the homeowners could get a 4% discount by paying their tax bill in November. G) STORMWATER UTILITY ENTERPRISE FUND Village Manager Bradford explained that the cost was $5.12 per ERU, with 1.33 of that paid by larger properties and smaller properties paying .66. Councilmember Meder • commented that looking at the buildings it was very hard to distinguish between the medium and large categories. Village Manager Bradford explained that the line item on the tax bill would only include the name and amount, for example, Tequesta Stormwater Utility $61.44. Finance Director Kascavelis commented that commercial properties would receive a breakdown. Village Manager Bradford explained that the notice explaining stormwater utility charges to be sent in late August would be pre-approved at the August Village Council meeting. Councilmember Meder requested that a notice be placed in the newsletter, to which Village Clerk Manganiello responded that a notice had been included in the June newsletter, which could be repeated. Village Manager Bradford commented that people would not really realize that they were being charged until they received the notice, and that many of the homes in the Country Club would receive bills in the $80 range. V. ANY OTHER MATTERS Councilmember Meder requested discussion of the memo sent to the Councilmembers by the Village Manager regarding recommendation far resolution of the improperly parked • recreational vehicle at 326 Country Club Drive. Village • Village Council Workshop Meeting Minutes July 16, 1996 Page 11 ----------------------- Manager Bradford explained that was Don Hires' vehicle and that Mr. Hires had indicated in his prior application that he had a medical problem, which led the Village Manager to believe he would request a medical hardship, which did not exist under the Village Code; and also another party had been trying to get a medical hardship for some time. During review of the matter with Village Attorney Randolph, the attorney had suggested amendment of the Ordinance to provide that if proof of ownership of a vehicle in question prior to the date of implementation of the more restrictive ordinance could be provided, that a party could continue to park or keep that vehicle, boat, truck, or trailer in the fashion required prior to adoption of the more restrictive ordinance. This would not affect the other person who had been pursuing a medical hardship since that was in a different zoning district. Councilmember Meder questioned whether this would set a precedent for the other case to be • grandfathered. Village Manager Bradford explained that the grandfathering in the Hires case was letting him go to a less restrictive parking arrangement, while grandfathering the other case would be to allow that person to do whatever they wanted. Vice Mayor Schauer pointed out that if Mr. Hires sold this vehicle to purchase a different one that he would no longer be grandfathered. Councilmember Meder questioned the highest classification of ACLF allowed under the Village's ordinance, of which the one now being built was a level 5. Village Manager Bradford replied that the Village Attorney was in the process of obtaining the State requirement. The Village Manager explained that it appeared that the nomenclature in the Village Code was part of the problem. Vice Mayor Schauer commented that she had requested information from the State regarding their requirements for ACLF and ECF facilities, which she had provided to the Village Manager. Councilmember Capretta commented that all salaried employees had received cost of living raises each year for several years as well as merit increases. Village Manager Bradford had volunteered 5 or 6 years ago to set an example by not receiving a merit increase since the Village was trying to • cut expenses. Each year Mr. Bradford had been evaluated by the Village Councilmembers, however, no money had • Village Council Workshop Meeting Minutes July 16, 1996 Page 12 accompanied the evaluation even though warranted by performance. Discussion ensued regarding the amount of the Village Manager's salary compared to other staff members and to similar positions in other municipalities. Councilmember Meder expressed discomfort that this matter was being discussed in public and questioned whether there was a different forum allowed for such a discussion. Village Manager Bradford explained that the only other way would be for the Councilmembers to discuss the matter with him on a one-to-one basis. Councilmember Capretta suggested that each Councilmember could place their recommended increase in a sealed envelope which could be opened and an average taken to determine the amount of the increase. Councilmember Meder commented that he wanted to discuss the pay scale throughout the Village.. Village Manager Bradford commented that he would be focusing on priorities since they would be on the July 25 meeting agenda. Vice Mayor Schauer commented • that all of the priorities for the previous year had been met. Councilmember Capretta suggested that since in prior years the evaluations had been given with no raise, that this year the money should be given without a formal evaluation. Finance Director Kascavelis commented that in the first budget workshop it had not been pointed out that the ad valorem property tax proceeds would actually be increased $20,800, since preliminary figures had been used for budget purposes. Councilmember Capretta suggested a weighted survey of salary spreads compared with other municipalities, to assure that a competitive salary could be offered in the event an employee left and the Village needed to hire a replacement. Councilmember Meder requested information on all compensation received by employees. Vice Mayor Schauer stated she would provide information from other municipalities. Councilmember Meder commented that many municipalities included as a standard part of the budget each employee's salary and benefits. Village Manager Bradford explained that he had planned to • provide the Councilmembers with a form to evaluate his performance after the July 25 meeting on priorities, as had Village Council Workshop Meeting Minutes July 16, 1996 Page 13 ----------------------- been done every year. The Village Manager responded to Councilmember Meder`s request for salary surveys that he would provide that information. VII. ADJOURNMENT Councilmember Meder moved that the meeting be adjourned. Councilmember Capretta seconded the motion. The vote on the motion was: Elizabeth A. Schauer - for Joseph N. Capretta - for Michael R. Meder - for • the motion was therefore passed and adopted and the meeting was adjourned at ?:16 P.M. Respectfully submitted, ~~ Betty Laur Recording Secretary r1 U ATTEST: _ _.~ n17 Joa n Manganiel Village Clerk DATE APPROVED: r ~, ~9 96