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03-11-1987 - Special Recessed to 04-27-1987 ~ o o CITY COUNCIL OF EDGEWATER SPECIAL MEETING MARCH 11, 1987 MINUTES Mayor Baugh called the meeting to order at 5:04 P.M. in the Community Center. He stated the purpose of the meeting was for review of the capital improvement program. ROLL CALL Mayor Earl Baugh Councilman Louis Rotundo Councilman Russell Prater Councilman Neil Asting Present Excused Present Present Councilman David Mitchum City Attorney Jose'Alvarez City Clerk Connie Martinez Chief Lawrence Schumaker Present Present Present Present Also present were: Terry A. Wadsworth, Utilities Superintendent; Ron Austin, Public Works Superintendent; David Garrett, Recreation Director/Buildings & Grounds Maintenance Superintendent; Frank Marshall of Marshall, Engineers and Gerry Hartman from Dyer, Riddle, Mills & Precourt, the City's consulting engineers; Gerry Ferrara, the City Engineer; Alex Kish of Brent Millikan & Co., the City auditors; Karen Rickelman, Finance Officer; Bill Sundstrom, Esquire; and Harry Ryan and Billy Klein, members of the team appointed to study the capital improvement projects. Councilman Asting presented a detailed statement of the history of this program, pointing out dates of meetings. He read an excerpt of the letter received from the Health Department, citing the septic tanks in Florida Shores as a public health hazard. He noted that Council was presented with a wastewater master plan with an estimated cost of $10,768,967, which included expanding the treatment plant, but didn't cover repairs to roads. He added that it was later revised to $13,100,000, which included road repairs. He gave a brief review of the meetings that were scheduled to discuss City improvements. Mayor Baugh pointed out that the City Attorney was absent from the February 17th meeting, along with a Councilman, and that was one reason why they rescheduled the meeting, because he was in on it from the beginning. City Attorney Alvarez then reviewed the background, starting with a master sewer system in Florida Shores as a result of rains and conditions, and then expanding to a decision of what is needed in capital improvements in the City. He noted there was a team formed to look into it with experts in different areas, the firm of Dyer, Riddle, Mills & Precourt, Gerry Hartman, Frank Marshall, and Bill Sundstrom with the firm of Levy, Myers and Levinson as a financial expert. He said they need to know what is needed for engineering and to know the feasibility of accomplishing whatever this Council decides to carry out regarding capital improvements. He stated there are two steps to the process, one to look at a map of the City and other maps to see what is needed and second is how the City financially can achieve those goals and objectives. He pointed out the figures quoted in the report serve as a guideline and include contin- gencies but these are not the last figures and are rough. He added that it will show them how one project relates to another in terms of cost. He then introduced Finance Officer Karen Rickelman and the City Auditor Alex Kish. City Attorney Alvarez pointed out that in the 50's there was no requirement for the developer to provide the infrastructure for paving, water and sewer, but now there are laws that the developer has to provide these. He reviewed what developers would be required to provide, and said this is an attempt to take care of problems from the past. o o Review of the capital improvement program (Continued) - Councilman Mitchum asked Mr. Hartman if the master plan for Florida Shores has been approved, in his opinion, and Mr. Hartman replied it was accepted by Council September 29, 1986. Councilman Mitchum asked Mr. Marshall if he also thought it was accepted then and Mr. Marshall replied yes. Mr. Hartman said he believed the City Council accepted the master plan September 29, 1986. Councilman Mitchum read excerpts from the minutes of the September 29th meeting, which stated there was acceptance of the report. Mr. Hartman pointed out that the report contained the plan. Councilman Mitchum stated they did not approve a plan of work. He then asked to have entered into the minutes that on December 4, 1986, the Council allowed Frank Marshall to get bids on a topo- graphic survey that's on a project he doesn't think exists. He noted that in the Capital Improvement Program book, it lists in 4 places that the City Council approved the Wastewater Master Plan. He said, for the record, that as far as he can tell, there was not a plan approved, they just accepted a report. Councilman Asting stated that the master plan has been prepared and is included in the engineering report presented September 29, 1986, and it so states the master plan is included in the report with a series of five different maps showing piping, etc., to be installed. Councilman Mitchum again stated they accepted the report and not the plan. Councilman Asting then again stated the plan is included in the report. Mayor Baugh said they accepted the report. Councilman Mitchum said they paid to have a report done and it's not a construction project, and they don't need a topographic survey on the report. Mr. Hartman noted that a report was provided and when they looked at it, they discussed the possibility of having to tear up streets to put in a sewer, and due to a concern with costs, they decided to look at capital improvements. He pointed out there's a Comprehensive Planning Act in the State and the City is required to identify capital improvements for the City, but not necessarily to implement them. He said the report has identified the capital improvements in the letter of transmittal and throughout the report. He pointed out they only identified those things they want to do for infrastructure in the City. He said throughout the report they tell about the roads, but not the health problems. He reviewed how the septic tanks work, pointing out that the water table in Florida Shores is very high and the drain fields have sewage percolate laterally on top of the drainage system and on top of the septic system. He stated that as engineers, they are required with their license to make recommendations for public safety, health and welfare, and the Florida Shores Master Plan responds to a potential health situation and the City has been noticed on it and he doesn't think they can ignore it. He again said he's bound by his license to make them aware of this, and he recommended the Council and citizens implement this. He said they looked at financial aspects of the City also and there's a range of costs the City can implement. He added the public health aspect is shown on the master plan and it's 13 million for that, but he won't recommend the financial end of it. Mr. Hartman stated the list of projects has things they need but may not be able to afford all of them, but they'll try to implement and prioritize and see what they want to spend over and above the public health aspects. He pointed out he'll ask them not to serve them again if they don't take care of the public health aspect. He added that the City has taken every step to make the capital improvement program as cost effective as possible, and to be sure to use as much money as possible that's available, they're applying for a grant. He then introduced Mr. Gerard Ferrara, City Engineer. -2- Council Special Meeting Minutes March 11, 1987 o o Review of the capital improvement program (Continued) - Mr. Ferrara pointed out on a large map displayed on the wall the paving projects to cover all the unpaved streets in the City. He stated he grouped them by starting with Florida Shores and where they have sanitary sewers and there were five divisions. He pointed out the five divisions for the Council and audience to see, and the various areas that need paving. He noted that they are not in priority. He reviewed the areas. Mr. Ferrara then said they went to drainage for the entire City and he identified them by subdivision area. He pointed out on the map the major systems in the City. Mayor Baugh asked if the entire City drains to 18th and 10th and Mr. Ferrara replied yes, and pointed it out on the map, then added there's a separate system in the south end. Mayor Baugh asked what improvements can be made in the systems to get them to work and Mr. Ferrara replied there was no master plan and evaluating of sizes and they're identi- fying every area that drains to a major system and then they'd determine pipe sizes and increase the sizes or close the system up and put it under- ground, or use a combination of drainage ditches, retention areas, and pipes. City Attorney Alvarez asked if there are particular areas in the systems that need improvements now and Mr. Ferrara replied yes, and there are blockages down through the system. Councilman Prater asked about those going under the railroad and Mr. Ferrara replied that's a major outlet and there are 5 pipes in the area and one is at a lower area with the other 4 at a higher level so water has to build up to the top. Mr. Ferrara added that they're in the process of evaluating that now. Councilman Asting asked about per- mission from FEC and Mr. Ferrara replied they talked to them and they have to come up with a plan and then FEC will look it over and will talk about it. City Attorney Alvarez asked how drainage of stormwater interfaces with the public health situation. Mr. Ferrara replied there are many septic tanks in the area and when there's a problem with drainage, the septic tanks stop functioning, and putting in the sewer system will eliminate septic tanks backing up. Councilman Asting noted that it involves part of the drainage problem also and Mr. Ferrara agreed. Councilman Mitchum asked if they can put in the sewer without improving the drainage and Mr. Ferrara replied yes. Councilman Mitchum asked if a heavy rain would infiltrate the sewer system and Mr. Ferrara replied the sewer systems these days are pretty tight and infiltration is at a minimum amount. Mr. Ferrara added that they have water in the ground all the time because the water table is just below the ground. Councilman Mitchum pointed out that Riverside and Flagler have problems. Mr. Ferrara said the system has been TV'd on Flagler and they couldn't get it all the way through because of all the breaks in the system and they're going to fix it because the road is also collapsing. Mr. Hartman said the critical stormwater improvements should be done and Mr. Ferrara agreed some should be done immediately. Mayor Baugh asked him to identify the critical ones and Mr. Ferrara said the pipe systems are under size in the Wildwood area and they want to put in the proper size, but in some cases they can't get below these houses to work on that system. He added that money will determine which ones to do first. Mr. Frank Marshall spoke on the growth in recent years, noting that there wasn't a public health problem in 1970 because there weren't many homes in Florida Shores. He reviewed the phases they used and what would be included in each phase. He noted they expanded the well system out by 95 because they're approaching capacity on Park Avenue and were experiencing salt intrusion. He said they recently did a hydraulic analysis of the system. He said that later they'll convert Park Avenue to a repump system. He noted that there have been requests for water and they've studied extending the pipe to the City of Oak Hill and Boston Whaler. He pointed out the 201 program developed for this entire area designated Edgewater to be the subregional recipient of all the wastewater flows from Gaborday Canal south to Oak Hill to the river and over to 95. He said they looked at additional storage also. -3- Council Special Meeting Minutes March 11, 1987 o o Review of the capital improvement program (Continued) - Mr. Hartman explained that the water treatment plant improvements now have no debt except a short term bank loan that's being paid off by pledges of revenues and connection fees with new customers paying for these. He noted that the additional customers put a damper on future rate increases. Mr. Hartman said a public safety and police complex is a good improvement for the City at large and they identified it and costed it out. He added that there were some minor projects also that were totalled at $30,000 and they're not there. Mr. Hartman stated that Bill Sundstrom is a specialist and has been bond counselor for millions of dollars in bonds. He said they want to protect the citizens and the customers. He pointed out the priority on these projects has not been laid out and there's a financial range they can afford. He added that some projects pay for themselves and they need to be identified in accordance with the Comprehensive Planning Act. City Attorney Alvarez asked that he explain how a project pays for itself. Mr. Hartman explained that when a subdivision has 100 units the developer puts in some of the requirements and dedicates it to the City and the City takes over the burden of operating and maintaining the system and that it meets public health aspects. He said the person pays impact and connection fees amounting to about $1,200 per unit and that's paid up front. He noted that pays for the capacity he uses in the system, and new customers do not create an increased labor cost. City Attorney Alvarez asked if there's a way to pay for alleviating an existing problem without obligating the general obligation of the City and Mr. Hartman replied through rates and charges and grants. Clifford Radder, 712 Egret Court, asked if he'll be assessed again for the sewers in Florida Shores. Mayor Baugh explained that they've not decided on anything and this is just a presentation from the engineers on what is needed. Mr. Hartman pointed out that Council previously accepted the philosophy of equity so people who get the benefit pay for the befit. William Ihrig, 408 Village Court, spoke on the problems of taking water out of the City and having restrictions on water for washing cars and watering lawns. Mr. Hartman explained the previous capacity was 1.4 MGPD and with the expansion of the plant, it increases to 2.44 MGPD. Mayor Baugh asked if there will be any water restrictions with the new improvements at the water plant and Mr. Hartman replied he doesn't think they'll have water restrictions with the current plant. Mr. Wadsworth agreed that unless there's a problem, there should be sufficient water. Councilman Mitchum asked Mr. Hartman if expansion of the water plant is a City-wide benefit. Mr. Hartman replied that the old expansion was not for growth but for existing customers and it's City wide for the component base. Councilman Mitchum asked where those funds came from and Mr. Hartman replied from impact fees and funds on hand. Councilman Mitchum noted that 95% of new construction is done in Florida Shores. Billy Klein, 2910 Needle Palm, asked if the present facility they expanded will allow them to put adequate lines in Florida Shores for fire hydrants, which they're lacking. Mr. Wadsworth replied yes, and that's what they're planning to do. Mr. Marshall apologized that he'd forgotten to show on the map the fire protection improvements in Florida Shores. Arthur Newell, Royal Palm, said it was mentioned there were no funds for pollution control and he heard grants are available. Mr. Hartman pointed out that President Reagan's veto on the Clean Water Act Bill was overridden by Congress. -4- Council Special Meeting Minutes March 11, 1987 o o Review of the capital improvement program (Continued) - Mr. Hartman then introduced Mr. Bill Sundstrom, noting that he's been involved in multi-million dollars of grant projects and looks at the financial markets and interest rates for borrowing money. He added that Council agreed this is a good time to borrow money. Bill Sundstrom stated they can have 30 year fixed rate financing in the vicinity of 6.7%, with some short term money down in the 4's. He noted that water and sewer municipality financing is attractive to investors because it's secure and solid. He added that there's a tremendous demand for tax exempt bonds now and later in the year the financial market will deterioriate. He advised Council that if they decide what they want to do they should put together the financial information to get it to market because it's better in the middle of the year than at the end if they decide to sell the bonds. He said they've been meeting with City Attorney Alvarez and others since November, and they'll help and inter- view. City Attorney Alvarez asked about pledging through a bond issue the full faith and credit of the City. Mr. Sundstrom replied there are Constitutional and State caps on what the municipality can pledge on what indebtedness it can take on. He added that indebtedness secured by impact fees and revenues is an enterprise and there's no cap. City Attorney Alvarez said the #1 source will be the general obligation bond issue type and #2 is the revenues produced by the projects, and #3 is grants. Mr. Sundstrom agreed, pointing out it could be a combination of the three and they'll shop for money and will look at it and make recommendations to Council. He added that the municipality can impose a surcharge on water and sewer revenue for services outside the City limits and Mayor Baugh pointed out they already have that. Mr. Sundstrom noted that some cities impose that on connection charges as well as rates. Mr. Alex Kish pointed out there are different options if they want to pursue it and some alternatives are ad valorem taxes, general obligation bonds, and they have the ability to levy special assess- ments against abutting property owners and the utilities revenues generated from the sewers. He stated that the City Charter limits the legal debt for the City of 10% and based on 1986 would be in the range of $24,800,000 maximum, over and above what they have now. Councilman Mitchum asked if that includes general obligation bond or if there's a way around it. Mr. Kish replied he understands it's revenue bonds and general obligation debts but some sections of Florida Statutes may not make it applicable and they need a legal opinion. Mr. Sundstrom said the question is what they want to do and how much they can finance, and if Council can give them a priority idea of what they want, they can look at all the various aspects and try to figure out how to get it and come back to Council. Councilman Mitchum said if there's a way to get around the debt ceiling, it would be feasible to see how much money they can stand and see how to get the most for their money and select the projects that way. Mr. Sundstrom agreed they can go at it that way. He noted the population projections for the community go up and they need to get some kind of priority. Councilman Asting stated they should limit the needs to the absolute minimum because when they borrow money, they'll pay for it. He read a calculation of $851,000 for interest for $13,100,000 at 6~% and said that's only for paying off the interest, and not for the principal. He added that he wouldn't go for anything over the minimum. Councilman Mitchum said he respects Councilman Asting's opinion but he disagrees with it, and if they don't get the most from their dollar today, they'll have to get more in 5 or 10 years and pay for it then. He questioned that amount of interest and Councilman Asting replied that's per year. Councilman Asting noted that people on fixed incomes will be assessed for the sewer, and the cost to set up a bond issue service will be about $450,000. He added they're applying for a grant, but may not get it. Councilman Mitchum asked for clarification of the $100,000 wastewater grant cost for $13,000,000. Mr. Hartman said that's deferred until they list them on a funds list and they don't repay grant funds. He said documentation has to be provided, including the update of the 201 plan that's over 5 years old and is required by the State, a financial capability list, and other items, and they'll pay $100,000 for $2,000,0000 to go through the red tape. He pointed out it's a low percentage for the money. -5- Council Special Meeting Minutes March 11, 1987 o o Review of the capital improvement program (Continued) - Mayor Baugh explained to the audience that this is an informational meeting to give them background to do the most for the City with the least amount of money. Bill Klein, a member of the team, passed out a letter to Council from him as President of Florida Shores Property Owners Association. He read the letter for the audience. Mr. Klein wondered where Councilman Rotundo was for this meeting and Mayor Baugh explained his wife is in the hospital. Mr. Klein continued reading from his letter, and when he mentioned water lines for fire hydrants, Mayor Baugh pointed out this was answered earlier with the water line being expanded for the fire system, and the people they're expanding to will pay the entire bill and it won't cost the City anything. Mr. Klein stated they object to any future expansion outside the City limits. Mayor Baugh expressed his appreciation for the comments, noting they're having this meeting to get input to find out how they can finance it. He added that if they want to pay for it, they can do it right now, and they're looking at the future of the entire City, and not just Florida Shores. Mr. Klein questioned why a facility for fire, rescue, and police would be listed under other identified projects at 5~ million. Mayor Baugh explained these are not priorities and Council has the right to set priorities. Mr. Klein asked if there's any way to identify it. Mr. Hartman replied when they prepared that aspect, they didn't know where to weight that aspect and he will identify it individually. Alice Murphy, 230 North Riverside Drive, questioned why there wasn't more emphasis on this meeting in the newspapers and on the radio as she had to hear about it from a telephone call. Mayor Baugh replied the newspapers were notified. Mrs. Murphy stated that growth has its limits and they may run out of potable water because they're close to the sea. She referred to more industry in the area. Mayor Baugh suggested she talk to the County about industry. Mrs. Murphy said citizens should have something to say about the industry here. A man from the audience asked how a capital improvement program would affect his tax bill and Mayor Baugh replied he can't answer that. Mr. Walton, Sabal Palm, asked why meetings are held in the afternoons when people are eating. He suggested they be at 7:00 and Mayor Baugh stated the meetings will be at 7 from now on. John Scherz, Egret Court, asked if engineering costs will be the same for 13 million or 31 million and Mr. Hartman replied they'll be much different. Mr. Terry Wadsworth, Utilities Superintendent, then spoke on an application for a grant. He noted at the last short meeting on the CIP project the Council wanted to apply for a Small Communities Grant Program for Wastewater and they haven't formalized to go ahead for this but the deadline for appli- cation is Sunday. He said if they don't apply, they won't have a chance to get in on the inclusion list, and if they decide not go go ahead with the project, they can send a letter and ask to be withdrawn from the list. Mayor Baugh stated that he was asked to sign this but wouldn't do it until he had authorization from the Attorney or entire Council. Councilman Mitchum again went back to the September 29th meeting minutes regarding if they instituted a plan or a report. He said he wanted a legal opinion from the City Attorney on this and if they're spending money on a project that doesn't exist. Councilman Mitchum reviewed the chronological order of previous meetings, pointing out they didn't have the one on the 4th because Mr. Marshall was on vacation. He added that if it's so important, why are they just presented it today and told there was a deadline. Mr. Wadsworth explained that at the meeting on the 17th, they brought it up and it was voted on by Council to apply, and the reason it wasn't presented before was because the money wasn't available until President Reagan's veto was overridden. Councilman Mitchum asked if it pertains to the Edgewater sewer master plan and Mr. Wadsworth replied absolutely, and if they decide not to do the plan, they can send a letter and withdraw, but if they don't apply, they have no chance to get the funds. He added there's no additional cost for this. -6- Council Special Meeting Minutes March 11, 1987 o o Review of the capital improvement program (Continued) - Councilman Mitchum asked the cost to apply for the grant to date and Mr. Wadsworth replied he doesn't have an accounting and they just got it done over the last ten days. Mr. Hartman said the application was prepared in his office and they probably have less then $1,000 in the request for inclusion. He added it is common at this time of year to apply for these and a lot of people don't have plans approved, but each city they serve, they bring the question up in February to consider applying for grant funds because it's prudent. Councilman Mitchum asked for the City Attorney's opinion. Mayor Baugh asked if there's any problem with applying for this grant. City Attorney Alvarez said it appears that eventually something will be done regarding water and sewer and paving in the City, and asked if the grant can be used for something besides the master sewer plan and Mr. Wadsworth replied no, it's a specific item. City Attorney Alvarez said the issue is if the master sewer plan has been approved by Council, and he asked if it will have an impact or be an admission that it was an approval of the master sewer plan. Mr. Wadsworth replied not in his opinion. Mr. Hartman said it's not required by the State but the application has to have a plan or an adjustment to the application by the end of June, 1987. City Attorney Alvarez said the concern is whether the money's being spent on a project not approved and they're going to submit the paperwork and will decide on the approval or priorities at a later date. Mayor Baugh asked Councilman Mitchum if he had any problems with that and Councilman Mitchum's reply was not audible. Mayor Baugh stated they approved this at the February 17th meeting and if there's no problem with signing it, he'll do so but he wanted to bring it to Council. Councilmen Asting and Prater indicated they had no problem with it. City Attorney Alvarez said they can recess this meeting to another one or call another one. He asked Council to approve the team or fire them. He noted some of the City personnel, the Auditor and the City Engineer, are doing this over and above the normal duties, and the consultants and Mr. Sundstrom. Mayor Baugh said they're already in place and Council appointed Harry Ryan and Billy Klein to the team. Councilman Asting asked Council to consider forming a Finance Committee, consisting of the City Administrator, the Finance Officer, the Auditor, and a Council member, to oversee the procedures for financing any plan they may come up with. City Attorney Alvarez asked, for the record, if Councilman Mitchum approved of the committee to date and Councilman Mitchum said yes, but he had a couple of problems with engineering matters, but will wait for a legal opinion on those and will pursue them when he gets an opinion. Councilman Asting said he has no problem with the present team and Councilman Prater said no. Councilman Asting returned to the subject of forming a Finance Committee to examine finance procedures, validation, etc. City Attorney Alvarez noted that projects of this magnitude often have subcommittees appointed to oversee, and they can have several subcommittees. Mr. Sundstrom pointed out that any official action requires a vote of the entire Council. Councilman Asting moved that the Finance Committee be formed consisting of personnel he mentioned. Councilman Mitchum seconded the motion. City Attorney Alvarez said he'd like to look into the Sunshine Law rules regarding this to see if it applies for a Council-designated elected official. Mayor Baugh requested they withdraw the motion and Councilman Asting withdrew his motion and Councilman Mitchum withdrew his second. City Attorney Alvarez said he'd see if it's applicable. -7- Council Special Meeting Minutes March 11, 1987 o o Review of the capital improvement program (Continued) - Councilman Mitchum asked Mr. Ferrara how long he's been an Engineer and what are his qualifications and background. Mr. Ferrara replied he's been an engineer for 28 years and started in 1959 with a consulting firm in St. Pete and then moved to the City of St. Pete and left there in 1967. He said he then came to Volusia County as their Assistant County Engineer. Councilman Mitchum asked if he'd done the paving part of the report and Mr. Ferrara replied the proposed paving and drainage. Councilman Mitchum asked if he can do wastewater and Mr. Ferrara replied that for 28 years he's done the City and County sewer systems, and in his private practice he gets involved in water and sewer. Mayor Baugh, called the meeting recessed. Councilman Asting so moved. Councilman Mitchum seconded the motion. Mayor Baugh advised the audience they will be notified when the next meeting will be held. Meeting was recessed at 7:12 P.M. CONTINUATION OF RECESSED MEETING - MARCH 11, 1987 to APRIL 27, 1987 MINUTES Mayor Baugh called the continued recessed special meeting of March 11, 1987, to order at 7:00 P.M. in the Community Center. He stated the purpose of the meeting will be to prioritize City-wide capital improvement projects based upon need and to publicly discuss the water conservation program. ROLL CALL Mayor Earl Baugh Councilman Louis Rotundo Councilman Russell Prater Councilman Neil Asting Present Present Present Present Councilman David Mitchum City Attorney Jose'Alvarez City Clerk Connie Martinez Chief Lawrence Schumaker Present Present Present Present Also present were all the City Department Heads; Karen Rickelman, Finance Officer; Gerry Hartman and Ron Ferland from Dyer, Riddle, Mills & Precourt, Inc. and Frank Marshall from Marshall, Engineers, the City's consulting engineers; Gerry Ferrara, City Engineer; Alex Kish of the City's auditing firm; and Bill Sundstrom. Mr. Hartman gave a brief review of what had transpired prior to this meeting. He pointed out that the bond market has done worse since the last meeting. He said they are at the step of presenting a review of the projects from an engineering standpoint and to prioritize the projects based on need, having Council and citizens input, and to talk about the financial impact. He displayed the schedule on a graphic display. He noted the FDER grant appli- cation for funding for the sewer project was done. Mr. Hartman noted that in the ranking, first is public health and safety and they were ranked at the top. He said that next was the critical flooding problems and he continued with a brief review of the other ranked areas. Mr. Hartman stated that the Florida Shores Sanitary Sewers, phases I through V at $9,750,000 were ranked number one, and also ranked number one is the waste- water plant expansion from 1.0 to 2.5 MGD. He added they have to have adequate capacity for the flow because the current plant doesn't have the facility to take on those customers and that cost is $3,350,000. He stated the next project is Shangri-La critical stormwater improvements and they've been identified by Gerry Ferrara to correct that situation, at a cost of $510,000. He said the Wildwood stormwater system for critical improvements in flooding is estimated at $870,000. He said fire protection improvements City-wide are $700,000. He stated that next is Florida Shores East stormwater critical improvements at $620,000. He said the Police complex is $150,000., and the Florida Shores Middle stormwater system critical improvements is $565,000. He noted that when they're completed, there will be an additional water demand with the sewerage and they'll need an additional water treatment plant. -8- Council Special Meeting Minutes March 11, 1987 and recessed to April 27, 1987 o o Prioritization of City-wide capital improvement projects (Continued) - Councilman Asting asked the divider line between east and west Florida Shores. Mr. Hartman replied that there's a middle section between the east and west and it doesn't flood like the east and west. Mr. Ferrara noted that the middle section is probably about Juniper to Queen or Pine. Mr. Hartman then stated the 4th ranked projects are a 20" main to 442 at $350,000., 5.0 MGD water treatment plant and western wellfield expansion for $4,250,000., and a 16" water main to U.S. 1. He said that takes care of the public safety and health, and sanitary sewers for Florida Shores, wastewater treatment plant and accompanying water facilities 'for the sewer. He noted that numbers 1 through 4 are the higher priority projects. Mr. Hartman then reviewed the projects ranked as 5, which included additional minor stormwater improvements, additional paving projects, additional minor sanitary projects, and some combinations of paving and drainage projects. Mr. Hartman stated that ranking number 1 through four totals $21,675,000. and rankings through 7 will go to thirty million, and unranked projects go to fifty-six million. He added that they didn't rank the projects over twenty-nine million because the didn't feel there was sufficient need at this point. He noted that items 4 through 7 of the public works projects are implemented by many cities, but they aren't a critical need. Mr. Hartman said items 1 through 4 are a critical need. He pointed out that enterprise fund projects for utilities have various modes of recovering the cost, and public works projects are assessments and don't have the flexibility that revenue generating projects have. Mr. Hartman reviewed the cumulative percentage of breakdown for the types of projects. Mr. Hartman stated they used the figure of $1,000,000 for the grant funds. He said FDER believes the application is one of the finest they have and everything looks good at this time. He added they took the lower figure to be conservative. Mr. Hartman said if drainage improvements are done for Florida Shores West, those will be shown on the preliminary assessments just to that area. He added the assessments are not cumulative and are only for the people receiving the benefit, who will pay for the benefit. He said on the sanitary sewer system, there's an equity system with an assessment, and a rate increase across the board. Mr. Hartman stated that group 1 is for 13 million and will have a 45% City-wide sewer rate increase, or about $43 per customer per year or $3.60 per month. He noted that in Florida Shores only there will be a $650 sewer assessment and the new customers will pay the prevailing wastewater impact fee, which is $1,000 for new customers throughout the City. Mr. Hartman stated that with the next group with stormwater improvements, it would be the same thing with an addition of a City-wide water rate increase of about 11%, or about $1.00 per month per customer, and for Shangri-La and Wildwood there would be an added $975 assessment. He noted this is just a preliminary concept and it would be about $111 per year for 10 years. Mr. Bill Klein, from the audience, asked the interest rate and Mr. Hartman replied the rate is 8% and they use the money from previous projects, plus some people pay 100% up front rather than payments. Mr. Hartman stated that group 3 is the same as group 2 and they add on the Florida Shores drainage systems at a $535 assessment that would be over 10 years. Mr. Hartman stated that group 4 is where they draw the line and that's about the same as group 3 with a 36% City-wide water rate increase or about $3.00 per customer per month, and then Shangri-La and Florida Shores assessments are independent. -9- Council Special Meeting Minutes April 27, 1987 o ~ Prioritization of City-wide capital improvement projects (Continued) - Mr. Hartman briefly reviewed group 5, pointing out that's farther then they're recommending. He noted that group 1 cost is $3.60 compared to $6.60 for the rate on group 5, and the impact of $1,650. versus $3,000. He said that's for the resident impacted by all the improvements. He stated he'd defer bond and financing questions to Alex Kish and Bill Sundstrom. Councilman Asting asked the figures for connection for each group. Mr. Hartman replied for group 1 in Florida Shores would be $1,000 impact fee plus $650 assessment and then the cost to hook the main to the street would be about $500 to $600. Councilman Asting asked if the cost will be greater as they go into the higher groups. Mr. Hartman replied if they don't have drainage improvements and are not in Florida Shores, the cost doesn't go up, but it would go up in City-wide rate increases for major water improvements. He added that it's area specific and areas impacted will pay a large portion of it. He pointed out the City and the residents will decide how they want to spread the cost, and people who don't get improvements will only pay $3.60, or nothing. Mayor Baugh asked the cost for someone with water and sewer and paving and Mr. Hartman replied it's a cost of $3.60 for a sewer rate increase on group 1. Councilman Rotundo asked if they're talking about a new wastewater plant or adding to the old one and Mr. Hartman replied the old one, and they'll rebuild certain aspects to allow for the expansion to 2.5 million. Councilman Rotundo stated that price seems high. Councilman Asting asked where the effluent will go from the expanded sewer plant. Mr. Hartman explained they did a study for St. Johns for the Consumptive Use Permit and showed cost effectiveness of using 30 to 40,000 gallons daily. He added they'll have to improve the level of treatment and continue to do it. He suggested they find a way to reuse the effluent. Mr. Bill Klein asked about areas of Florida Shores without assessments for drainage and where it will go because it goes to one canal or another. Mr. Hartman explained they cut the level of these projects off that weren't critical, but they do need improvements. Mr. Klein stated he differed with him. Mr. Hartman said it's according to what they want to pay for, and if the Council determines it's beneficial to go higher in the ranking, they'll do that. Mr. Frank Ferguson, Shangri-La Village, asked for a copy of these figures. Mr. Hartman explained when they decide on projects, they can calculate it out and see how it will effect each area and make copies. Mr. Hartman pointed out they believe that taking criteria together, groups 1 through 4 can be afforded and will go to the upper limit of the financial capability. Mayor Baugh asked if these costs are the maximum for each project. Mr. Hartman explained they have contingencies in all the costs and they believe the totals are not to be exceeded. He added that contingencies are 10%. Mayor Baugh noted it could come in lower than these costs and Mr. Hartman said he hoped it would, and if it's lower than estimated, they can go into the next project. Councilman Mitchum asked for an explanation on the 16" water main to U.S. 1 in the rank 4 group. Mr. Hartman agreed that project can be trimmed down and he showed on the display board that if they take that main out of groups 1 through 4, the total would be 17.4 million. He showed the total if they took the $560,000 away and figured $1,000,000 for the grant as about twenty million. He added the bond issue will be larger because of bond costs. There was a brief discussion about the one water transmission line necessity. Mayor Baugh asked how far down 442 the 20" line will go and Mr. Hartman replied to Air Park Road. Mr. Hartman noted there's about three quarter million dollars of fire system improvements and it was determined they could take it to Air Park Road and take it from there. Mr. Wadsworth noted they have to go to Willow Oak. Councilman Mitchum asked where the assessment will be placed for the $560,000 if someone already has sewer. Mr. Hartman replied the 20" water main is a City-wide transmission facility and it will be a City-wide rate increase. -10- Council Special Meeting Minutes April 27, 1987 Q u Prioritization of City-wide capital improvement projects (Continued) - Mr. Hartman stated that at this meeting they're requesting a decision if the 20 million program is the one they want and if they should look at a financing plan for it. He added they also need guidance on applying the cost recovery mechanism. He said they are requesting: 1) a 20 million program or another program or nothing to come up with a financing plan and get them the detailed number so the citizens can be informed with a map and a summary, and 2) guidance on application. He recommended the limit be $20,115,000 with allocation to be assessments for the areas impacted and City-wide for improvements that will benefit all. Councilman Rotundo asked Mr. Kish what program he feels we can afford and not hurt the City and the public. Mr. Kish replied the group came up with $20,115,000 as the maximum and in group 4 it would require a 45% sewer rate increase, $650 sewer assessment, and $1,000 sewer impact fee that's already in place, and a $36 average annual increase in water, and $975 charge for Shangri-La and Wildwood. He added those are specific charges and the rest would be recovered through water and sewer rates. He said they feel that's the maximum upper limit within tolerance and anything beyond that they'll have to rerun the numbers and look at it. Mayor Baugh asked if that's in the scope of the City for pay backs and Mr. Kish replied yes, and that's rough estimates. Mr. Hartman again reviewed the total reached of $20,115,000, and noted they consider these all critical improvements for the City. Councilman Rotundo asked if that includes Flagler Avenue and Mr. Wadsworth replied that's not in the project. Councilman Rotundo asked about the older part of town, such as Thomas Street. Councilman Asting pointed out that Shangri-La and Wildwood are in the older part of the City. Mayor Baugh noted it's in ranking 7. Councilman Rotundo said he'd like to get some of that included. Mr. Hartman suggested they could bring in some of the smaller projects and prioritize them and add them in if funds are available, or increase it by certain projects. He stated he was advised there will be interest earnings on construction funds and those earnings may fund some of those projects. Mr. Bill Sundstrom suggested they could try to package the financing as bond anticipation financing or a 3-year financing with the right to lock it in sometime during the three years. He noted they may bring the money in at an interest rate in the 5's and the savings would be several hundred thousand dollars and they could use that for some of those other projects past priority 4. He said they put the less risky projects up front from an investor's point of view and will pull a lower interest rate because it's like an enterprise fund type of package that funds itself. Mr. Bill Klein asked for an explanation of an enterprise fund. Mr. Sundstrom explained that's capital improvements that support themselves through impact fees, assessments, and monthly service rates as opposed to adding money on the tax bills. He said they are not ad valorem items and only the people who receive the benefits primarily will pay for it. Mr. Klein asked if that's the only way it can go and Mr. Sundstrom replied no, but it's normally the way. Mr. Bill Klein, Florida Shores Property Owners Association President, then read a list of concerns. He asked if the stormwater system improvements included in the 2 or 3 category will take care of the problems, or a percentage. Mr. Gerard Ferrara, City Engineer, explained how they'd try to solve some of the problems and said it should increase the drainage better than 50%. Mr. Klein and Mr. Ferrara briefly discussed the problem areas, including Shangri-La and Wildwood. Mr. Klein stated the people in Florida Shores have paid their assessments tax-wise and are presently supporting the City by the major portion of taxes. He asked that they consider going other ways besides assessments, and suggested when they put it out to bid that they specify that the contractor putting in the sewer system give a price per house to connect from there to the sewer system. Mr. Hartman agreed that could be done and the contract would be with the City. -11- Council Special Meeting Minutes April 27, 1987 o o Prioritization of City-wide capital improvement projects (Continued) - Mr. Klein stated that on rank 4 is expanding the water treatment plant and that was supposed to have been done a year ago and they still don't have water. He asked about the increase to 5 MGD and what the projection on this is and if it could be put off. Mr. Wadsworth, Utilities Superintendent, said it's to be built with enough capacity to serve Florida Shores in a fully built out state and the 2.4 they have now doesn't have that capacity. He added the life span is to 1991 without the consideration of doing the sewer in Florida Shores and accelerated growth. Mr. Klein said they spent I! million on the water treatment plant and he asked if there was consideration given to increasing it, which would be feasible, cost-wise. He asked if it was brought up and denied. Mayor Baugh said it was brought up at the time but it was a cost factor. Mr. Klein then asked about the western wellfield expansion and Mr. Wadsworth replied they still are drilling and two of the wells failed so they have to investigate the area for the best location. Mr. Hartman reviewed some of the problems with the two wells. Mr. Klein said he'd hesitate to go with the same area because there's no legal lease, only one signed by the one person and Council didn't sign the lease on the land where the wells are. There was a discussion about a lease being required, and Mr. Hartman said land for a wellsite isn't a problem and it's not a large site. Mr. Klein asked if they can condemn it and Mr. Hartman replied yes. Mr. Klein asked if the proposed assessments on the wastewater impact fee and sewer assessments will be given to Radnor Corporation. Mr. Wadsworth replied the rates will be applied City-wide. Mr. Klein again asked about fees for Radnor and Mr. Hartman pointed out they're providing infrastructure which will be dedicated to the City at no cost. Mr. Klein then spoke on the contract the City has with Frank Marshall as an engineer. He asked why they employ him when they have a City Engineer at a lesser fee. Councilman Asting pointed out that Frank Marshall is an associate of the consulting firm of Dyer, Riddle, Mills & Precourt. Mr. Hartman stated the contract with the City for utility services is a consulting contract versus an annual contract and the City Engineer is an hourly rate. He explained their joint contract with Marshall, Engineers. Mr. Klein asked Mr. Marshall what projects he's worked on and Mr. Marshall briefly reviewed designs and figures he'd been working on, noting they're equal partners with Dyer, Riddle, Mills & Precourt. Mr. Klein then asked Mr. Ferrara if there's anything he wouldn't be able to do. Mr. Hartman objected at this point, noting if they want to talk about engineering services, they should reconvene, as a professional courtesy. Mr. Klein stated there was over $50,000 spent by this Council that would have paved more of Florida Shores or gone to the Police. He asked the Council to consider what they're paying out and take it to the public for a vote. Mr. Hartman asked for consideration of projects 1 through 4 and guidelines for them to continue with the 20 million figure or some other figure. He noted they can do less, but they're advising to go in a positive manner for 20 million and the application of the cost recovery mechanism would be assessment and City- wide rates. Frank Roe, 2732 Juniper Drive, said the sewer plant will be obsolete in no time because of the growth. Mr. Hartman pointed out the figure used is when it's built out and that's to the year 2007. Mr. Roe noted the City has annexed to the south. Mayor Baugh said that's included. Mr. Roe said people aren't as receptive as they should be and they shouldn't make a hasty decision and should contact the voters through the water bill or some way. Mr. Dominick Fazzone, Shangri-La Village, President of Homeowner's Association, stated the original figure for Shangri-La was 1.8 million but it's been revised. Mr. Hartman explained they changed it for critical improvements compared to rehabilitation. Mr. Fazzone read the description from the booklet and said Shangri-La is still selling houses and the City is talking about replacing culverts and the drainage system because there's not adequate drainage now. He said it's wasted money and the builder should have been responsible for that, but he's not held accountable for it. He added that it's the fault of someone who okayed the engineering surveys. He said a part of the subdivision is 2! feet lower than it should be, and Mr. Ferrara suggested they go south instead of north for a lot less than th~ $500,000. Mr. Hartman noted Mr. Ferrara's estimate is $500,000. -12- Council Special Meeting Minutes April 27, 1987 Q Q Prioritization of City-wide capital improvement projects (Continued) - Councilman Mitchum asked if the drainage in Wildwood is the fault of design or an inability of surrounding areas to drain what is already there. Mr. Ferrara said the systems within the project are sufficient in size but the problem is the out falls the systems go into. Mayor Baugh said that's why there's a problem with the retention pond and they need to go south. Mr. Ferrara said the system leaving it is too small. There was a brief discussion about the subdivision being built 2~ feet too .low. Mayor Baugh called a 5-minute recess at this time, 8:40 P.M. Mayor Baugh called the meeting back to order at 8:56 P.M. Mr. Hartman clarified the decision they're requesting is not a program, but authorization to go for a financial plan with this cap of a certain dollar amount, which doesn't restrict them from doing much less. He noted that will give them the benefit of the best financial market. Mayor Baugh stated that doesn't bind them to anything in projects 1 through 4. Mr. Hartman said they need to set a cap to run figures. Councilman Asting moved that they go with group 4 with a cap of $20,115,000. Mayor Baugh asked if that includes 1 through 4 and Councilman Asting agreed. Councilman Mitchum suggested an amendment that a project of this nature for this amount of money include anything they decide on expenditures and/or priority be brought to the voters for their opinion on this. He added he'd like voters' input on 20.1 million dollars since they're going to pay for it. Councilman Asting accepted that as a part of his motion. Councilman Rotundo suggested it include the financing and Councilman Mitchum said his amendment is anything from this point on that this Council decides in spending 20 million and choosing a project when they decide it, it will be put to a vote of people. Mr. Hartman asked for clarification that the motion is to develop a financial plan with this cap with no commitment, and the amendment is when they come up with a program, they put that to a vote. Councilman Asting agreed. Councilman Mitchum stated the 20 million cap is to be approved along with that and the people may not want to spend that. Mr. Hartman said he wants to understand that it's one vote on the program. Councilman Mitchum said they can pursue the 20 million. Councilman Rotundo seconded the motion. Motion CARRIED 5-0. Mr. Hartman then asked for a decision on financing, taxation or non-taxation. Mayor Baugh expressed his thought that it should be without taxation. Mr. Hartman agreed that's his advice that it be done without ad valorem taxes. Mr. Sundstrom suggested that if they're going to have a referendum, they can back it up with that option and that might bring the interest rate down. Councilman Mitchum said those in the north who already have water and sewer shouldn't pay for those, but Florida Shores has 95% of the construction, and they should consider that Florida Shores has spent all this money all these years. He noted that he's lived on a street 9 years and the only improvement he had was water and there's still mudholes at his house. He then moved that they at least investigate other means and come back with some type of informal suggestion that maybe would be feasible to help with the funding or lessen the burden for all those involved. Mayor Baugh asked if they can do it both ways and Mr. Hartman replied yes. Councilman Rotundo pointed out they're going to get the rate increase from every customer and payments from sewer throughout the entire City which would benefit this project. Councilman Mitchum said he just wants to have something to look at, and he again noted that Florida Shores has been, and continues to be, the provider of a major source of income. Mayor Baugh noted a simple way is for the engineers to come back both ways. Councilman Mitchum said he'd prefer a combination and to be brought back from the financial team in both ways or a combination. Councilman Prater seconded the motion. Motion CARRIED 5-0. Harold Kramer, Shangri-La, said the City let R. A. Coleman get away with the drainage there and the inspectors didn't tell him it was 2 feet too low. He stated the City shouldn't expect Shangri-La people to pay an assessment or impact fee to cure a problem the City should have stopped in the first place. -13- Council Special Meeting Minutes April 27, 1987 o o Prioritization of City-wide capital improvement projects (Continued) - Irene Lloyd, 810 Egret, asked if everybody would be taxed, according to the motion. Councilman Mitchum explained that his motion wasn't that they be equally assessed, and it's just to authorize the engineers to investigate a certain means of financing, but not to implement. He added that everything decided from now on should be put to the vote. Ms. Lloyd pointed out that they're in the minority. Councilman Mitchum noted the whole city will benefit from some things. Ms. Lloyd agreed she's willing to pay her proportionate share if they benefit. Councilman Mitchum said she's not paying her share of the water now. He pointed out everything has to be approved by the voter. Mayor Baugh stated it will come back three ways, assessment or ad valorem or a com- bination of both, and they'll look at it. Mayor Baugh noted that Council will decide what the voters will vote on. Ms. Lloyd asked if it's possible that everyone, will be equally assessed. Mayor Baugh said they'll see all three ways. Councilman Mitchum again stated that the motion is not that they be equally assessed. An unidentified lady from Pelican Cove stated there are three times as many people in Florida Shores when they go to the voting. G. J. Beltz, Egret Court, stated that properties in Florida Shores will increase but his will not go up. He noted he already has it and has paid for it. He added that Florida Shores is the cause of all this, or the engineers. Councilman Mitchum pointed out the City Council annexed this in the 50's is the cause of it. Mayor Baugh noted that the services into the home will increase the value a lot more than a home that already has it. Mr. Hartman agreed that generally happens. Mayor Baugh asked City Attorney Alvarez to explain assessments for the audience. City Attorney Alvarez said people don't object to paying for things that are a City-wide benefit, such as improvements to Police and Fire or City Hall. Mayor Baugh noted the water and sewer improvements will be assessed. John Scherz, Egret Court, said those who are going to benefit will pay for something that will benefit the whole city because they already paid these and that part of the amendment should be stricken out. Councilman Mitchum pointed out the amendment didn't mention assessments and his motion was for the whole project. Mr. Scherz said he wants it put to the vote but some will have to pay it again. Mayor Baugh explained when the proposals come back from the engineers there will be a meeting to discuss this and they'll have input from the audience and they'll make a recommendation as to what the people want and if they don't want it, they'll vote it down. He added this doesn't mean there will be an assessment and it will come back three ways. Councilman Mitchum clarified he doesn't want them to pay for the sewer but the motion was to avoid a situation like the present water treatment plant and impact fees from Florida Shores are paying for this expansion, which is a City-wide benefit. Bill Klein stated 365 homes are being built in Florida Shores compared to a small percentage elsewhere each year, and impact fees for the new water expansion plant are being paid 85% by people in Florida Shores. Mayor Baugh stated that's because they're the ones causing the impact. Councilman Rotundo said 5 or 6 years ago they put 2" water lines in Florida Shores and that was at a cost to people from old Edgewater and they paid for the plant in the first place. Mr. Klein asked that they figure the percentage of taxes paid that are coming out of Florida Shores compared to the rest of the City. City Attorney Alvarez stated the consulting team will present to Council a series of reports, recommendations, and alternatives and at the last meeting they approved the consulting team and a motion is needed to clarify the record. Mr. Hartman stated the team is: City Attorney, Alex Kish, City Engineer, Bill Sundstrom, firm of Marshall, Engineers, firm of Dyer, Riddle, Mills & Precourt, Finance Department, City Administrator, and Director of Utilities. Councilman Mitchum moved to clarify the minutes and adopt that team. Councilman Rotundo seconded for clarification and asked for additional information on the team. Mr. Hartman explained the various functions of each member of the team. Motion CARRIED 5-0. -14- Council Special Meeting Minutes April 27, 1987 o o Discuss the water conservation program - Mr. Hartman said he wants the City projects for the water conservation program to be on going, and currently the Utilities Department provides free literature for water conservation, has infor- mation programs the City conducts, and a matrix of mailouts and plant tours, school children and community seminars and programs all documented to the Water Management District. He stated the ordinance sets forth policies regarding water shortages and it's in effect, and they're reminding the public that there's an ordinance relative to water conservation and activities when there's a water shortage. He noted there's a leak detection program done on an annual basis, and unaccounted for water reduction program is continually going on, and fire usage per occurrence is estimated by the Utilities Department. Mr. Hartman stated the purpose of this informational session is to have for the record relative to grants an informational session on water usage and water conservation programs. He stated the entire system is metered and there's no free service, and that's a matter of policy and record. He added there are pressure regulations throughout the system. Mr. Hartman stated re-use potentials have been investigated and pursued and there's an average area of re-use in the City of 40,000 gallons a day, which is primarily used at the wastewater treatment facilities. He added that presently there are no opportunities for industrial, institutional, or commercial re-use but they're looking into re-use for future developments as they apply to the City. Mr. Hartman stated he wants Council and the public to be apprised of this and concur with the program. He requested a motion concurring with the continuation of the existing re-use program to have it as a matter of record for water conservation for water management permitting and for wastewater permitting. He said the motion is to continue the re-use program. Councilman Asting made that a motion. Councilman Rotundo seconded the motion. Councilman Mitchum asked if it's a program continuation and Mr. Hartman explained it's in operation now and he again explained some of the literature, etc., available for the public. Councilman Mitchum asked if they're talking about watering the lawns and Mr. Hartman replied that nothing will change. Motion CARRIED 5-0. Councilman Asting stated that Mr. Val Pagan, Controller of New Smyrna Beach, has volunteered to work with our financial committee at no cost or charge to us as an advisor on financial matters concerning the bond issue. Mayor Baugh asked for additional information. Councilman Asting explained he's Controller of the Utilities Commission in New Smyrna Beach and has been involved in bond issues there. Mayor Baugh asked if Alex Kish will help and Mr. Kish replied that Val had talked with him about it and indicated he'd be happy to provide any assistance at no cost. He added that he's a CPA and has been in the business 25 years and been to about 30 bond closings. Councilman Asting moved to contact Mr. Pagan, and ask him if he will offer his services at no charge to us and help out. Councilman Rotundo seconded the motion. Motion CARRIED 5-0. Councilman Asting asked if the committee wilLhave formal meetings on the financial aspects and Mr. Hartman replied yes. Councilman Asting asked if other members of the community will be invited and Mr. Hartman replied yes, and City Attorney Alvarez has been the lead point before. Councilman Asting asked if he had the time and City Attorney Alvarez replied he always does. Mayor Baugh requested a motion to adjourn. Councilman Prater so moved. Councilman Rotundo seconded the motion. Meeting was adjourned at 9:44 P.M. Minutes submitted by: Lura Sue Koser ATTEST: ~ CITY CLERK/ADMINISTRATO Approved this18thday MJ:; ,1982-.-. MAYOR ---::> (51- rp- ~ ~ Y-<-~ ~f -15- Council Special Meeting Minutes April 27, 1987