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2020-R-01 - Water Customers & Facilities - Pearl St - James St - Elizabeth St - Tatum Blvd - Mission Oaks MHP RESOLUTION NO.2020-R-01 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDGEWATER, FLORIDA; PROVIDING FOR CERTAIN DETERMINATIONS, FINDINGS AND STATEMENTS AS REQUIRED BY SECTION 180.301, FLORIDA STATUTES; APPROVING THE APPRAISAL DONE BY QUENTIN L. HAMPTON & ASSOCIATES (NOW KNOWN AS MEAD & HUNT); APPROVING AND AUTHORIZING THE CITY COUNCIL'S RIGHT TO PURCHASE THE WATER CUSTOMERS AND ASSOCIATED WATER FACILITIES SERVICING PEARL STREET, JAMES STREET, ELIZABETH STREET, TATUM BOULEVARD AND MISSION OAKS MOBILE HOME PARK FROM THE UTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH, FLORIDA; APPROVING AND AUTHORIZING EXECUTION OF THE AGREEMENT BETWEEN CITY OF EDGEWATER AND UTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH FOR PURCHASE AND SALE OF UTILITY ASSETS; AUTHORIZING THE MAYOR, CITY ATTORNEY, AND OTHER APPROPRIATE STAFF TO TAKE ALL STEPS NECESSARY TO CLOSE THE TRANSACTION; REPEALING RESOLUTIONS IN CONFLICT HEREWITH; PROVIDING FOR SEVERABILITY AND APPLICABILITY AND ESTABLISHING AN EFFECTIVE DATE. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Edgewater,Florida: SECTION 1. Findings and Intent. The City Council, City of Edgewater, Florida makes the following findings and declares the following legislative intent: (A) The City of Edgewater(the "City") is a municipal corporation created pursuant to the laws of the State of Florida, and enjoys the rights, duties, and privileges of municipal home rule pursuant to Article II,Florida Constitution. (B) The City was originally incorporated under the general law on October 20, 1924, "Municipal Charters" (Volusia County) and, pursuant to F.S. Chapter 180 and Ordinance#2009- 0-01,has the power and authority to provide utility services within its utility service territory. (C) The City recognizes the necessity to efficiently operate the City's utilities and manage its business affairs with minimum liability for its rate payers. (D) The City desires to acquire certain of the utility assets of the Utilities Commission, City of New Smyrna Beach, Florida (the "Utilities Commission') for the consideration and on the terms and subject to the conditions set forth in the City of Edgewater/Utilities Commission, City of New Smyrna Beach, Florida Asset Purchase and Sale Agreement (the "Agreement"). The Agreement is attached hereto as Appendix 1. Pursuant to the 1 SEwekilveagh passages are deleted Underlined passages are added #2020-R-01 Agreement, the City will purchase the water customers and associated water facilities servicing Pearl Street, James Street, Elizabeth Street, Tatum Boulevard and Mission Oaks Mobile Home Park, hereinafter referred to as the"Water System." (E) The City has provided the Utilities Commission written assurance from Florida Power and Light ("FPL") that the City's continued provision of electrical service within the incorporated areas of the City of Edgewater is not in conflict with any provision of the FPL franchise agreement (F) The Utilities Commission commissioned an appraisal by Quentin L. Hampton & Associates (now known as Mead & Hunt) which determined the fair market value of the Water System. (G) Both the Utilities Commission and the City Council of Edgewater have provided due public notice of and have conducted or me scheduled to conduct a public hearing under § 180.301, Florida Statutes, and have considered and received both written and oral testimony regarding the following: (i) the utility's most recent available income and expense statement; (ii) the utility's most recent available balance sheet listing assets and liabilities and clearly showing the amount of contributions-in-aid-construction and the accumulated depreciation thereon; (iii) a statement of the utility's existing rate base for regulatory purpose; (iv) the physical condition of the utility facilities being purchased; (v) the reasonableness of the purchase or sales price and terms; (vi) the impacts of the purchase on utility customers,both positive and negative; (vii) any required additional investment and the ability and willingness of Edgewater to make that investment-, (viii) alternatives to the purchase, and the potential impact on utility customers if the purchase is not made; and (ix) the ability of Edgewater to provide and maintain high quality and cost effective utility service. (H) The City agrees to purchase certain water customers and utility assets for the consideration and on the terms and subject to the conditions set forth in the Agreement. SECTION 2. Determinations by the City; Approval of Quentin L. Hampton & Associates Appraisal and Agreement. The City Council has reviewed and considered the purchase of the Water System,and in so doing,has considered the following: (A) the utility's most recent available income and expense statement; 2 8t sk-threugh passages are deleted Underlined passages are added #2020-R-01 (B) the utility's most recent available balance sheet listing assets and liabilities and clearly showing the amount of contributions-in-aid-construction and the accumulated depreciation thereon; (C) a statement of the utility's existing rate base for regulatory purpose; (D) the physical condition of the utility facilities being purchased; (E) the reasonableness of the purchase or sales price and terms; (F) the impacts of the purchase on utility customers,both positive and negative; (G) any required additional investment and the ability and willingness of Edgewater to make that investment; (H) alternatives to the purchase, and the potential impact on utility customers if the purchase is not made; and (I) the ability of Edgewater to provide and maintain high quality and cost effective utility service. The City Council's determinations and findings presented at this public hearing and filed with the City Clerk are hereby incorporated by reference and made a part hereof (hereinafter referred to as the"Staff Report"). The Staff Report is attached hereto as Appendix 2. The City Council also bases its decision to purchase on the fact that the City previously purchased the sewer customers and facilities within Mission Oaks Mobile Home Park associated with the Water System in 2007. This Resolution, the Appraisal, Staff Report, and the Agreement are intended and declared to be the statement required under § 180.301, Florida Statutes, demonstrating that the purchase and sale of the Water System currently owned and operated by the Utilities Commission is in the public interest. Based on these documents and other evidence and testimony submitted and considered at the public hearing held on February 3, 2020, the City Council hereby determines and finds that it is in the public interest for the City to purchase the Water System currently owned and operated by the Utilities Commission. SECTION 3. Approval and Authorization to Execute the Agreement and Consummate Sale. The City Council of the City of Edgewater hereby authorizes and delegates to Mayor Mike Thomas the authority to execute the Agreement and consummate and close the transaction contemplated by the Agreement to sell the Water System. SECTION 4. Conflicting Provisions. All resolutions or parts of resolutions in conflict are hereby repealed. SECTION 5. Severability and Applicability. If any portion of this resolution is for any reason held or declared to be unconstitutional, inoperative, or void, such holding shall not affect the remaining portions of this resolution. If this resolution or any provisions thereof shall be 3 Stwsktlxengh passages are deleted Underlined passages we added #2020-R-01 held to be inapplicable to any person, property, or circumstances, such holding shall not affect its applicability to any other person,property, or circumstance. SECTION 6. This resolution shall become effective immediately upon passage and adoption. SECTION 7. Adoption. After a motion by Councilwoman O'Keefe with second by Councilwoman Power the vote on this resolution is as follows: AYE NAY Mayor Mike Thomas ABSENT Councilwoman Christine Power �. Councilwoman Kimberly Yaney �. Councilwoman Megan O'Keefe Vice-Mayor Gary Conroy PASSED AND DULY ADOPTED this 3rd day of February,2020. ATTEST: CITY COUNCIL OF THE CITY O EDGEWATER,FLORIDA v��'i��l l-y]Lt xyntr By: Robin L.Matusick,CM[C G4ff Co ro City Clerk V c or For the use and reliance only by the City of Approved by the City Council of the City of Edgewater,Florida. Approved as to form and Edgewater at during the Council meeting held on legality by: Aaron R. Wolfe,Esquire the 3rd day of February 2020 under Agenda Item City Attorney 8e Doran,Sims,Wolfe,Ciocchati&Yoon 4 SE sk thFeugh passages are deleted Underlined passages are added #2020-R-01 RESOLUTION NO. 2020.01 A RESOLUTION OF THE UTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH, FLORIDA; PROVIDING FOR CERTAIN DETERMINATIONS, FINDINGS, & STATEMENTS AS REQUIRED BY SECTION 180.301, FLORIDA STATUTES; APPROVING THE APPRAISAL DONE BY QUENTIN L. HAMPTON & ASSOCIATES; APPROVING AND AUTHORIZING THE UTILITIES COMMISSION'S RIGHT TO SELL THE WATER CUSTOMERS & ASSOCIATED WATER FACILITIES KNOWN AS THE MISSION OAKS WATER SYSTEM; APPROVING AND AUTHORIZING EXECUTION OF THE AGREEMENT BETWEEN CITY OF EDGEWATER AND UTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH FOR PURCHASE AND SALE OF UTILITY ASSETS; AUTHORIZING THE CHAIRMAN, CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, GENERAL COUNSEL, AND OTHER APPROPRIATE STAFF TO TAKE ALL STEPS NECESSARY TO CLOSE THE TRANSACTION; PROVIDING FOR SEVERABILITY; PROVIDING FOR AN EFFECTIVE DATE. NOW, THEREFORE, BE IT RESOLVED BY THE UTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH, FLORIDA, AS FOLLOWS: SECTION 1. FINDINGS AND INTENT. The Utilities Commission, City of New Smyrna Beach, Florida (the "Commission') makes the following findings and declares the following legislative intent: (1) The Commission was created and made a part of the government of the City of New Smyrna Beach by Section One of the Special Act, Chapter 67-1754, Laws of Florida, incorporated as Chapter 15 of the City of New Smyrna Beach Code of Ordinances, as amended by Chapter 85-503, Laws of Florida (hereafter the "Special Act"). (2) The Special Act provides the Commission with full and exclusive authority over the management, operation and control of all the City's utilities. (3) The Commission is further empowered to exercise the right of eminent domain to appropriate property and to acquire all such lands, waters, and lands adjacent to waters, which the Commission judges may be necessary for the full and complete construction, maintenance and operation of any utility. (4) The Commission recognizes the necessity to efficiently operate the city's utilities and manage its business affairs with minimum liability for its rate payers.. (5) The fitle to all property, real or personal, owned or acquired by the Utilities Commission as "part of the government of the City of New Smyrna Beach" is vested in and owned by the City as a whole. (6) Section 82-2 of the Code of Ordinances, City of New Smyrna Beach, Florida (the "Code of Ordinances') states it is the policy of the City to vest power in the Utilities Commission in the following manner, It is declared to be the public policy of the city that the utilities commission established by chapter 15 of the Charter shall be in complete charge of all utilities in accordance with the resolution of intent adopted by the city commission. It is the further declaration of policy that the utilities commission shall be separate from the city commission of the city insofar as the laws of the state and the previous ordinances and covenants will allow and that the city commission shall cooperate to the fullest extent to guarantee the separation of the operation of the utilities from the politics of the city. (7) All assets and liabilities of the City with respect to its utilities were transferred to the Utilities Commission, City of New Smyrna Beach, at the time the Special Act was ratified by the electorate of the City. (8) The Commission has previously adopted Resolution No. 11-1980 to establish a system and procedures for the sale lease or disposition of property for the Commission. (9) The Commission has previously adopted Resolution No. 17-1980 to clarify that all property it holds as "Utilities Commission, City of New Smyrna Beach, Florida'are held by the Commission by virtue of the Commission being an integral part of the City of New Smyrna Beach and does in fact vest in the City of New Smyrna Beach. (10) The City of Edgewater, Florida ("Edgewater") was originally incorporated under the general law on October 20, 1924, "Municipal Charters" (Volusia County) and, pursuant to F.S. Chapter 180 and Ordinance#2009-0-01, Edgewater has the power and authority to provide utility services within its utility service territory. (11) Edgewater desires to acquire certain of the utility assets of the Commission for the consideration and on the terms and subject to the conditions set forth in the Agreement Between City of Edgewater and Utilities Commission, City of New Smyrna Beach for Purchase and sale of Utility Assets (the"Agreement"). (12) Edgewater has provided the Commission written assurance from Florida Power and Light("FPL")that the Commission's continued provision of electrical service within the incorporated areas of the City of Edgewater is not in conflict with any provision of the FPL franchise agreement. (13) The Commission commissioned an appraisal by Quentin L. Hampton & Associates which determined the fair market value of certain retail water customers and utility assets to be referred to as the Mission Oakes Water System. 2 (14) Both the Utilities Commission and the City Council of Edgewater have provided due public notice of and have conducted or are scheduled to conduct a public hearing under§ 180.301, Florida Statutes, and have considered and received both written and oral testimony regarding the following: (a) the utility's most recent available income and expense statement; (b) the utility's most recent available balance sheet listing assets and liabilities and clearly showing the amount of contributions-in-aid-construction and the accumulated depreciation thereon; (c) a statement of the utility's existing rate base for regulatory purpose; (d) the physical condition of the utility facilities being purchased; (e) the reasonableness of the purchase or sales price and terms; (f) the impacts of the purchase on utility customers, both positive and negative; (g) any required additional investment and the ability and willingness of Edgewater to make that investment; (h) alternatives to the purchase, and the potential impact on utility customers if the purchase is not made; and (1) the ability of Edgewater to provide and maintain high quality and cost effective utility service. (15) The Commission agrees to sell certain of its water customers and utility assets for the consideration and on the terms and subject to the conditions set forth in the Agreement. SECTION 2. DETERMINATIONS BY THE UTILITIES COMMISSION: APPROVAL OF QUENTIN L. HAMPTON &ASSOCIATES APPRAISAL AND AGREEMENT. The Utilities Commission has reviewed and considered the sale of the Mission Oaks Water System, customers, and water facilities it currently operates, and in so doing, has considered the following: 3 (a) the utility's most recent available income and expense statement; (b) the utility's most recent available balance sheet listing assets and liabilities and clearly showing the amount of contributions-in-aid-construction and the accumulated depreciation thereon; (c) a statement of the utility's existing rate base for regulatory purpose; (d) the physical condition of the utility facilities being purchased; (a) the reasonableness of the purchase or sales price and terms; (f) the impacts of the purchase on utility customers, both positive and negative; (g) any required additional investment and the ability and willingness of Edgewater to make that investment; (h) alternatives to the purchase, and the potential impact on utility customers if the purchase is not made; and (1) the ability of Edgewater to provide and maintain high quality and cost effective utility service. The Utilities Commission's determinations and findings regarding the items listed above are set forth in this Resolution. The Utilities Commission also bases its decision to sell on the fact that Edgewater previously purchased the sewer customers and facilities associated with this water system in 2007. This Resolution, the Appraisal, and the Agreement are intended and declared to be the statement required under§ 180.301, Florida Statutes, demonstrating that the purchase and sale of the Mission Oaks Water System customers and water facilities currently owned and operated by the Utilities Commission is in the public interest. Based on these documents and other evidence and testimony submitted and considered at the public hearing held on January 27, 2020, the Utilities Commission hereby determines and finds that it is in the public interest for the Utilities Commission to sell the Mission Oaks Water System customers and water facilities currently owned and operated by the Utilities Commission. SECTION 3. APPROVAL AND AUTHORIZATION TO EXECUTE THE AGREEMENT AND CONSUMMATE THE SALE OF UTILITY SYSTEM. The Utilities Commission hereby authorizes and delegates to its Chairman, General Manager/L;mef Executive Officer ("CEO"), Chief Financial Officer, General Counsel, and other appropriate staff the authority to execute the Agreement and consummate and close the transaction contemplated by the Agreement to sell the Mission Oaks Water System customers and water facilities. SECTION 4. SEVERABILITY. If any provision or portion of this Resolution is declared by any court of competent jurisdiction to be void, unconstitutional, or unenforceable, then all remaining provisions and portions of this Resolution shall remain in full force and effect. SECTION 5. EFFECTIVE DATE. This Resolution shall take effect immediately upon its passage by the Commission. THIS RESOLUTION was introduced at a regular meeting of the Utilities Commission, City of New Smyrna Beach, Florida, held this 27th day of January, 2020, by Commissioner Davenport who moved for its adoption, which motion was seconded by Commissioner Holcomb , and upon roll call vote he fission was DULY ADOPTED as follows: CHAIRMAN ` /^ 5 VICE CHAIRMAN SECY.-TREAS. ASST. SECY-TREAS. �( e COMMISSIONER APPROV D7 ATTEST: t lam E. B e enbach, Chairm n L lia Conrad, Secretary-Treasurer App TO 8 LEG ITY: Th mas A. loud, eneral Co set 5 CITY OF EDGEWATERIUTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH, FLORIDA ASSET PURCHASE AND SALE AGREEMENT This Agreement (hereafter "Agreement") is made and entered into this _ day or February,2020, by and between Utilities Commission,City of New Smyrna Beach, Florida, a political subdivision of the State of Florida (hereafter "Seller') whose mailing address is Post Office Box 100. New Smyrna Beach, FL 32170-0100 and the City of Edgewater, Florida, a municipal corporation of the State of Florida (hereafter "Purchaser') whose mailing address is Post Office Box 100,Edgewater,FL 32132-0100. RECITALS 1. Seller owns and operates electric, water,wastewater, and reuse water systems within its service area, located in Volusia County,Florida. 2. Seller holds title to certain water system assets and currently provides retail potable water service to customers within the Mission Oaks Mobile Home Park and other areas within the City of Edgewater service area, as depicted in Exhibit"A" attached to and incorporated into this Agreement. 3. Seller previously transferred certain sewer assets to the Purchaser pursuant to the Interlocal Agreement for Water and Wastewater Services between Utilities Commission and City of Edgewater dated October 16,2006(hereafter"2006 Transfer Agreement"). 4. Purchaser was originally incorporated under the general law on October 20. 1924, "Municipal Charters" (Volusia County) and, pursuant to Chapter 180, Florida Statutes, and Ordinance 02009-0-01,Purchaser is authorized to provide potable water service within its utility service territory. 5. Purchaser currently owns certain sewer assets and provides retail central sewer service to the Mission Oaks Mobile Home Park pursuant to the 2006 Transfer Agreement, 6. Seller is willing to sell,and Purchaser is willing to acquire the Water System Assets, subject to the terms and subject to the conditions set forth in this Agreement. 7. Seller and Purchaser have negotiated in good faith, and each represents to the other that each has the power and authority to enter into this Agreement to buy and sell the Water System Assets as defined hereinbelow. 8. The Purchaser has provided Seller written assurance from Florida Power and Light ("FPL") that Seller's continued provision of electrical service within the Seller's electric utility 1 service territory and within the incorporated areas of the City of Edgewater are not in conflict with any provision of the Purchaser's FPL franchise agreement. 9. Pursuant to Section 190.301, Florida Statutes, the Purchaser has examined Seller's Water System Assets, has examined its existing financial structure, has examined the long-range needs and goals of the Purchaser relative to the provision of water and wastewater service to its present and future citizens,and has determined that the acquisition of the Water System Assets is in the public interest. ACCORDINGLY, in consideration of the foregoing recitals and benefits to be derived from the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree to sell and purchase certain utility assets upon the following terms and conditions: SECTION 1. RECITALS. The foregoing recitals are true and correct, form a material part of this Agreement,and are incorporated herein. SECTION 2. COVENANT TO PURCHASE AND SELL; DESCRIPTION OF WATER SYSTEM ASSETS. 2.1. Purchaser shall buy from Seller, and Seller shall sell to Purchaser, the Water System Assets (as defined below) upon the terms, and subject to the conditions precedent as set forth in this Agreement. 2.2 Purchaser is purchasing the Water System Assets "As-Is" "Where-Is" subject to "All Disclosed Faults." 2.3 "Water System Assets"shall include: (1) All water transmission mains, distribution mains, supply pipes, valves, meters, meter boxes, fire hydrants, service connections and all other water utility infrastructure as identified in the auto cad/GIS systems drawings referenced below for: (a) Pearl Street 6-inch diameter Water Main(1,740 linear feet); (b) James Street 6-inch diameter Water Main(2,960 linear feet); (c) Elizabeth Street 8-inch diameter Water Main(5,640 linear feet); (d)Tatum Boulevard 2-inch diameter Water Main(540 linear feet);and, (e) The water lines, meters, and appurtenant equipment currently located within the Mission Oaks Mobile Home Park. 2 (2) All water utility infrastructure within the Service Territory identified in Exhibit"A" to this Agreement (which appendix shall include a legal description of the Service Territory and a map showing all major components of the Water System). (3) All non-exclusive easements, licenses, prescriptive rights, rights-of-way, rights to use public and private roads, highways, canals, streets and other areas identified in the Service Territory identified in Exhibit "A" to this Agreement for purposes of providing retail potable water service:provided,however, that Seller hereby expressly reserves all its easements, license, prescriptive rights, rights-of-way, and rights to use public and private roads, highways, canals, streets and other areas to continue to provide electric service within its electric utility service territory and within the City of Edgewater,Florida. (4) All sets of record drawings, including auto cad/GIS drawings in paper or other acceptable media, showing all facilities of the water utility facilities within the Service Territory, including all original tracings, sepias or other reproducible materials in Seller's possession. (5) All retail water customers located south of Josephine Street and east of Old Mission Road which is also south and east of the green line depicted on Exhibit"B" hereof, including but not limited to the fifteen (15) retail customers located on the south side of Josephine Street SECTION 3. PURCHASE PRICE. Purchaser shall pay to Seller for conveyance of the Water System Assets a cash payment in the amount of One Hundred Fifty Thousand Dollars ($150,000.00)via wire transfer to the account(s)designated by Seller at Closing. SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER. As a material inducement to Purchaser to execute this Agreement and perform its obligations hereunder, Seller represents and warrants to Purchaser as follows: 4.1. Seller has been duly organized, and is a validly existing political subdivision of the State of Florida created by Chapter 67-1754, Laws of Florida (1967), and as amended by Chapter 85-503, Laws of Florida (1985). Its status is active under the laws of the State of Florida. Upon formal approval by the Commission, Seller has all requisite power and authority and will have taken all requisite action necessary to (1) enter into this Agreement, and (2) perform all of the terms and conditions of this Agreement. 4.2. This Agreement constitutes, and all other agreements to be executed by Seller with respect to this Agreement will constitute, when executed and delivered, valid and binding obligations of Seller,enforceable in accordance with their terms. 43. The execution, delivery and performance of this Agreement will not violate any provision of law, order of any court or agency of government applicable to Seller, nor any 3 certificate, indenture, agreement, or other instrument to which Seller is a party.at by which it is bound. 4.4. Seller has exclusive possession, control and ownership to the Water System Assets. 4.5. Seller has good and marketable title to the Water System Assets. At Closing, the Water System Assets shall be subject to no mortgage, pledge, lien, charge, security interest. encumbrance,or restriction. 4.6. To the best of its knowledge, Seller is in material compliance with all applicable Environmental Laws and has no material liability thereunder, and there is no reasonable basis for Seller to believe that any such liability exists. 4.7. There are no current actions, suits or proceedings at law or in equity pending or, to Seller's knowledge, threatened against the Seller before any federal, state, municipal or other court, administrative or governmental agency or instrumentality, domestic or foreign, which affect the Water System Assets or the Seller's right and ability to make and perform this Agreement: nor is the Seller aware of any facts which to its knowledge are likely to result in any such action, suit or proceeding. Seller is not in default with respect to any Certificate, permit, order or decree of any court or of any administrative or governmental agency or instrumentality affecting the Water System Assets.Seller agrees and warrants that it shall have a continuing duty to disclose up to and including the Closing Date the existence and nature of all pending judicial or administrative suits, actions, proceedings and orders which in any way relate to the Water System Assets. 4.8. No representation or warranty made by the Seller in this Agreement contains any untme statement of material facts or omits to state any material fact required to make the statements herein contained not misleading. 4.9. After the date of the execution of this Agreement. Seller shall not cause any change in its condition of properties,assets, liabilities, business or operations other than changes in the ordinary course of business which are not,either in any case or in the aggregate, materially adverse to the operation of the Water System Assets.. SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. As a material inducement to Seller to execute this Agreement and to perform its obligations hereunder, Purchaser represents and warrants to Seller as follows: 5.1. Purchaser has been duly organized, and is a validly existing political subdivision under the laws of the State of Florida. Purchaser has all requisite power and authority to(1)enter into this Agreement,and(2)carry out and perform the terms and conditions of this Agreement. 4 5.2. This Agreement constitutes,and all other agreements to be executed by Purchaser with respect to this Agreement, will constitute, when executed and delivered, valid and binding obligations of Purchaser,enforceable in accordance with their terms. 5.3. The execution, delivery and performance of this Agreement will not violate any provision of law, order of any court or agency of government applicable to Purchaser, nor any indenture,agreement,or other instrument to which Purchaser is a party,or by which it is bound. 5.4. All necessary public hearings required to authorize Purchaser's purchase of the Water System Assets and Purchaser entering into this Agreement will have been held in a manner and at the times duly required by law and all other appropriate governmental actions required to be taken by Purchaser will have been duly taken prior to the Closing Date. 5.5. No representation or warranty made by Purchaser in this Agreement contains any untrue statement of material facts or omits to state any material fact required to make the statements herein contained not misleading. SECTION 6. PURCHASER ASSUMPTION OF LIABILITIES AND OBLIGATIONS. The assignment of all contractual duties and responsibilities from Seller to the Purchaser, and the assumption and faithful execution of those duties by the Purchaser, is a material consideration for this Agreement,without which Seller would not close. At closing,the Purchaser shall assume all liabilities, obligations,duties and responsibilities of Seller relating to the ownership and operation of the Water System Assets, plus the operation of the retail potable water service to customers within the previously identified service area so transferred as depicted on Exhibit "A" hereof, including, but not limited to, continuation of service to customers, and assumption of all Seller's liabilities and obligations related to maintenance of any necessary state or federal operation permits and approvals and compliance with all terms and conditions set forth in such permits and approvals. SECTION 7. CONDITIONS PRECEDENT TO CLOSING. The obligations of each party to close the transaction contemplated by this Agreement are subject to the following conditions precedent that,at or before the Closing Dale: 7.1. Neither Party is prohibited by decree or law from consummating the transaction. 7.2. There is not pending on the Closing Date any legal action or proceeding that would (1) prohibit the acquisition or sale of the Water System Assets, (2) prohibit Purchaser or Seller from closing the transaction or Purchaser from paying the Purchase Price,or(3) inhibit or restrict in any manner Purchasers use,title,or enjoyment of the Water System Assets. 7.3. Each of the other parties hereto has performed all of the undertakings required to be performed by them under the terms of this Agreement. 5 7.4. There has been no material adverse change in the physical condition of the Water System Assets. For purposes of this Agreement,a"material adverse change"shall mean a loss or damage to the Water System Assets that materially reduces: (1) their value in the aggregate; or (2)the ability to operate the Water System Assets as operated by Seller prior to the Closing Date. 7.5. All warranties and representations of the other party are true in all material respects as of the Closing Date,except to the extent they specifically refer to another date. 7.6. Purchaser shall conduct any necessary public hearing and make any necessary findings as may be required by Section 180.301, Florida Statutes. 7.7. The Purchaser covenants and agrees to design, permit, and construct, at its expense, a water line extension of adequate size and hydraulic capacity to serve the Water System Assets and the customers within the Mission Oaks Mobile Home Park. The Purchaser likewise agrees to disconnect the Water System Assets and the customers within the previously identified service area so transferred as depicted on Exhibit "A" hereof from the Seller's potable water system and shall reconnect the Water System Assets into its water system at its sole expense. Such connection and disconnection to be coordinated so each entity's personnel will be simultaneously on site to fully support and control their own utility system assets. The Purchaser's point of connection shall be made in the area depicted on Exhibit "B" attached to and incorporated in this Agreement. Until such time as the Water System Assets and Mission Oaks Mobile Home Park are fully connected by water pipeline certified in compliance by the Florida Department of Environmental Protection ("FDEP"), the parties hereto agree that the Seller shall continue to provide potable water supply to the Water System Assets and the customers within the previously identified service area so transferred as depicted on Exhibit"A" hereof, that the customers thereof shall during such time remain retail customers of the Seller, and Seller shall continue to establish, levy, set, bill for, and collect appropriate rates, fees, and charges at its then prevailing rates from said retail customers. Purchaser agrees to cooperate with Seller in the provision of water service to the customers until such time as the Purchaser's water pipeline extension is completed, certified in compliance for potable water service by FDEP, and actually placed in service by Purchaser on or before the Closing Date. SECTION 8. PRE-CLOSING CONDUCT; COVENANTS. Prior to the Closing Date,the parties covenant to each other,and shall conduct themselves,as follows: 8.1. During the period between execution of this Agreement and the Closing Date, Seller shall: (1) Operate and maintain the Water System Assets(inclusive of Mission Oaks Mobile Home Park and other depicted service areas) in a normal and ordinary manner to ensure that the condition of the Water System Assets remain in all material respects unchanged, normal wear and tear and usage excepted: 6 (2) Promptly notify Purchaser of any notification received by Seller from any person, business,or agency of any existing or potential Environmental Law violation; (3) All bills of any kind for services, materials and supplies of any kind rendered in connection with the operation and maintenance of the Water System Assets prior to the Closing Date, including but not limited to electricity, phone service and payroll for a period up to and including the Closing Date, shall be paid by Seller. Purchaser shall he responsible for all such costs and expenses incurred subsequent to the Closing Date; and, (4) Promptly notify Purchaser of any event, activity or occurrence that has,or may have, a material adverse effect upon the Water System Assets, the water utility facilities related to Mission Oaks Mobile Home Park,or this transaction. 8.2. During the period between execution hereof and Closing, Seller shall not enter into any contract, oral or written, relating to the Water System Assets without the prior written consent of Purchaser which consent shall not be unreasonably withheld,conditioned or delayed. 93. Seller shall maintain its existing levels of insurance on the Water System Assets and the risk of any loss shall remain with Seller through and up to the Closing Date. 8.4. Purchaser is relying upon its own due diligence investigation in entering into this Agreement. Purchaser shall have sixty (60) days after execution of this Agreement in which to inspect the Water System Assets. Purchaser will notify Seller when it would like to make its inspection so Purchaser's inspector may be accompanied by an employee of the Utilities Commission, New Smyrna Beach (UCNSB). Within ten (10) days of completion of such due diligence inspection, Purchaser shall notify Seller of any defects in the Water System Assets which would make them unsuitable for purchase. Purchaser may then, within said time period, elect to terminate this Agreement. No such examination by the Purchaser's authorized repmmmatives shall interfere with Setter's operations of the Utility Systems or the day to day operations of Settees personnel. 8.5. Seller shall have final review and authorization rights regarding any communications to Seller's customers prior to the Closing Date. Accordingly, Purchaser will submit any proposed communications to Seller for final review and authorization and will not send any communications to Seller's customers until such time as Purchaser has received authorization to do so from Seller, and Seller shall respond within ten (10)days from receipt of any such proposed communications. Seller shall also retain the right to notify its customers of the changeover date. SECTION 9. TERMINATION OF AGREEMENT. 9.1. This Agreement may be terminated (1) by mutual written consent of the parties, (2) by either party if the transactions contemplated hereby have not closed within 12 months 7 after approval of this Agreement by both parties (unless extended pursuant to the provisions of Section 10).or(3)as provided in subsections 9.2 and 9.3 below. 9.2. Either party may termitate this Agreement, in its sole discretion,upon the failure, in any material respect prior to Closing, of any conditions precedent to Closing, any pre-closing conduct, or any covenants herein (e.g. completion of subsection 7.7). The party seeking to terminate this Agreement shall provide written notice of its termination of this Agreement to the other by delivering the same as provided in this Agreement. 9.3. Upon the termination of this Agreement,the following shall occur: (1) To the extent permitted by Florida law, each party shall return all documents,including copies, in its possession,custody,or control,or in the possession,custody, or control, of its agents and consultants to the other, as the case may be. Each party, its agents and consultants, shall treat any information previously received as confidential, and shall not disclose or use such information,unless required by law. (2) Except as otherwise set forth in this Agreement, each party shall be responsible for payment of its own attorney and other professional fees and other costs of any nature whatsoever incurred prior to the termination of this Agreement. (3) In the event the termination occurs this Agreement shall forthwith become void and there shall be no liability on the pan of Purchaser or Seller, or their respective council/Commission members,members, managers,officers or directors. SECTION 10.CLOSING DATE AND CLOSING. 10.1. This transaction shall close upon completion of the connecting water line but not later than 12 months after approval of this Agreement by both parties, at a location mutually acceptable to both parties. This deadline may be extended at the option of either party for a period of ninety (90)days and may be extended past ninety (90)days only by mutual agreement of the parties. As used in this Agreement, the term "Closing Date" shall mean 12:00 a.m. the date that this transaction is closed. 10.2. At Closing: (1) Purchaser shall pay the Purchase Price. (2) Title to the Water System Assets shall be conveyed to Purchaser by Bill of Sale free of all claims, liens, or encumbrances, whatsoever. Seller shall further provide to Purchaser such other instruments of conveyance as are necessary to transfer the Water System Assets in accordance with this Agreement and,when necessary or desirable, in recordable form. 8 (3) Seller shall assign to Purchaser its right, title and interest in those non- exclusive easements or licenses,to the extent any exist. (4) Recording fees, if any. to record the assignment of non-exclusive easements and any other fees, assessments or charges and related instruments necessary to deliver title to Purchaser shall be paid by the Purchaser. (5) All transfers required or necessary to carty out the intent and purpose of this Agreement shall take place.unless waived or extended by mutual consent. (6) Each party shall pay the fees of its own attorneys, bankers, engineers, accountants end other professional advisers or consultants in connection with the negotiation. ' preparation and execution of this Agreement and any documents associated with the Closing. (7) Connection charges (defined as plant capacity, transmission line capacity, or other unit connection fees paid for the availability of utility capacity)received by Seller prior to the Closing Date shall be retained by Seller if a structure has been built,a physical connection to the Mission Oaks Water System Assets has been made,and utility service initiated(although it may be temporarily disconnected)prior to the Closing Date. (8) Seller shall furnish to Purchaser,both at thirty (30)days after the effective date of this Agreement and ten (10)days prior to the determined final Closing Date, a listing of its accounts by customer. Included in this listing shall be the customer name. address, mailing address, meter make,size and installation date and last meter read date. (9) Purchaser shall assume the liability for customer deposits and Seller shall, refund all customer deposits and accrued interest thereon, together with the list of customers for whom such deposits have been collected and corresponding amounts of such deposits through and up to the Closing Date. SECTION It.LIABILITIES. I.I. Assumed Liabilities. On the Closing Date, Purchaser shall assume and agree to discharge only the following liabilities of Seller(the"Assumed Liabilities"): (1) All liabilities to the customers of the Water System Assets and retail water services to the Mission Oaks Mobile Home Park incurred after the Closing Date where the operative act giving rise to the liability occurred after the Closing Date; (2) Any liability of Purchaser under this Agreement or any other document executed in connection with this Agreement; 9 (3) Any liability of Purchaser based upon Purchaser's acts or omissions occurring after the Closing Date. (4) Any liability arising from or related to the ownership, construction, operation and maintenance of the Water System Assets and Mission Oaks Mobile Home Park after the Closing Date. 11.2. Excluded Liabilities. Notwithstanding the foregoing, Purchaser does not assume any debts, liabilities, obligations, or other financial or service obligations of Seller, except as may be expressly provided in this Agreement. Purchaser does not assume and shall not be liable for any expense, assessment exposure, fine, penalty, liability, act or omission of any kind whatsoever imposed or required by any third party, whether known or unknown, contingent, liquidated or not liquidated,arising or accruing under contract,law, tort,ordinance, regulation or otherwise, arising or accruing before or after the Closing Date where the operative act or omission was that of or attributable to Seller for its actions prior to the Closing Date. Seller shall indemnify and hold Purchaser harmless for all such liabilities. SECTION 12. POST CLOSING COOPERATION. Seller and Purchaser shall, after the Closing Date, upon reasonable request of the other party, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, all such further documents, acts, deeds, easements,assignments,transfers,powers of attorney and assurances as may be required in order to implement and perform any of the obligations,covenants and agreements of the parties arising from this Agreement, and to permit Purchaser to operate and maintain the Water System Assets in the manner operated by Seller at the time of Closing. SECTION 13.MISCELLANEOUS PROVISIONS. 13.1, This Agreement,the Documents and the Appendices hereto, collectively embody the entire agreement and understandings between the parties and there are no other agreements or understandings, oral or written, with reference to this Agreement that are not merged into and superseded by this Agreement. This Agreement may be executed in one or more counterparts, each of which shall be considered an original. 13.2. Any notice or other document required or allowed to he given pursuant to this Agreement by either party to the other shall be in writing and shall he delivered personally,or by recognized overnight courier, or by electronic correspondence or facsimile transmission with written confirmation. If to Seller,such notice shall be delivered to: 10 Joseph G. Bunch,Chief Executive Officer Utilities Commission,City of New Smyrna Beach Post Office Box 100 New Smyrna Beach,Florida 32170-0100 jbunch@ucnsb.org with copy to: Thomas A.Cloud,General Counsel Gray Robinson,PA 301 East Pine Street, Suite 1400 Orlando,FL 32801 thomm.cloud@gmy-robinson.com Eft en Chavez,Chief Financial Officer Utilities Commission,City of New Smyrna Beach Post Office Box 100 New Smyrna Beach. Florida 32170-0100 echavez@ucnsb.org If to Purchaser,such notice shall be delivered to: Glenn Irby,City Manager City of Edgewater Post Office Box 100 Edgewater,Florida 32132-0100 girby@cityofedgewater.org with copy to: Brenda Dewees.Environmental Services Director City of Edgewater Post Office Box 100 Edgewater, Florida 32132-0100 bdewees@cityofedgewater.org Notices shall be effective upon receipt or failure to accept delivery, electronic correspondence or facsimile transmission shall be deemed received on the date sent if received by 4:00 p.m. Eastern Daylight Time on a business day. If received after 4:00 p.m. EDT, such transmission shall be deemed received on the next business day. 13.3. The drafting of this Agreement was a joint effort of the parties, and in the interpretation hereof, it shall be assumed that no party had any more input or influence than any other. ]7 13.4. This Agreement is solely for the benefit of the parties hereto, and no other causes of action shall accruc upon or by reason hereof to or for the benefit of any third party (other than successors and assigns),who or which is not a formal party hereto. 13.5. In the event any term or provision of this Agreement is determined by appropriate judicial authority to be illegal or otherwise invalid,such provision shall be given its nearest legal meaning or be construed as deleted, as such authority determines, and the remainder of this Agreement shall be construed to be in full force and effect. 13.6. This Agreement may be amended or modified only if executed in writing and with the same formality as the original. 13.7. This Agreement shall be governed by, and construed and interpreted in accordance with,the laws of the State of Florida. 13.8. All words, terms, and conditions herein contained are to be read in concert, each with the other, and a provision contained under one heading may be considered to be equally applicable under another heading in the interpretation of this Agreement. 13.9. Except as provided for herein, this Agreement may not be assigned without the prior written consent of the non-assigning party. If properly assigned, this Agreement shall be binding upon and inure to the benefit of the parties'successors and assigns. 13.10. For purposes of this Agreement, an individual is deemed to have"knowledge" of a particular fact or other matter if such individual has actual awareness of such fact or matter,or a prudent individual could be expected to discover or otherwise become aware thereof in the ordinary course of conducting his business. 13.11. Notwithstanding anything to the contrary contained herein or in any other instrument or document executed by or on behalf of Purchaser or Seller in connection herewith, no stipulation, covenant, agreement or obligation contained herein or therein shall be deemed or construed to be a stipulation, covenant, agreement, or obligation of any present or future member, officer, employee, contractor or agent of Purchaser or Seller, or of any incorporator, member,director, trustee, officer, employee or agent of any successor to Purchaser or Seller, in any such Person's individual capacity, and no such Person, in an individual capacity, shall be liable personally for any breach or nonobservance of or for any failure to perform, fulfill or comply with any such stipulations, covenants, agreements or obligations, nor shall any recourse be had for the payment of the Purchase Price or for any claim based hereon or on any such stipulation, covenant, agreement, or obligation, against any such Person, in an individual capacity, either directly or through Purchaser or Seller or any successor to Purchaser or Seller, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such Person, in an individual capacity, is 12 hereby expressly waived and released. All references to Purchaser in this paragraph shall be deemed to include Purchaser,Council members, officers, employees,attomeys, contractors and agents.The provisions of this Section shall survive the termination of this Agreement. 13.12. Purchaser shall bear no liability for accrued or current salaries or benefits of any kind reined to Seller's construction, operation, or maintenance of the Mission Oaks Water System Assets up to and including the Closing Date. (Remainder of page left intentionally blank.) IN WITNESS WHEREOF,the parties have caused this Agreement to be executed the day and year first above written. SELLER: ATTEST: UTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH, FLORIDA / 'I r � L D bie Simmon ,Exec, ervices r. Jham E.Bi nbach,Chairman (UCNSB RESOLUTION NO. 2020-01, APPROVED 1-27-20, AI 7-a) Thomas A.Cloud,General Con el Utilities Commission PURCHASER: ATTEST: JCIOP EDGEWATERRobin Metusick,City Clerk/Parolegnlc:j--I-N-IA lor) Aaron R.Wolfe,IQLyytomey 13 EXHIBIT"A" _ y S l r 1 i� Li 14 EXHIBIT"B" h \ s - a 5 u Tatnan Blvd(South of HYDRANT 2142 8,6"GATE VALVE 33-011 2"PVC Water Main 770' 2"BLOW-OF-VALVE 2"GATE VALVE 33-46 Pearl St litmon GATE VALVE 35-45 Southl 2"PVC Water Main 125' 6-PVC Water Main 1,300' 2"GATE VALVE 33-45 6"GATE VALVE 33-15 6"GATE VALVE 33-03 6"GATE VALVE 33-16 2"BLOW-OF-VALVE HYDRANT 2109 Fronnan Ay 6"PVC Water Main 485' 6"GATE VALVE 33-07 l St(SOOth of 8'GATE VALVE 33-05) B"PVC Water Main 960' 6"PVC Water Main 2,810' 2"PVC Water Main 510' 6"GATE VALVE 33-17 6"GATE VALVE 33-08 V GATE VALVE 33-23 6"GATE VALVE 3"1 6"GATE VALVE 34-07 6"GATE VALVE 34-02 2"BLOW-OF-VALVE HYDRANT 2003 HYDRANT2004 HYDRANT 2219 HYDRANT2223 HYDRANT 2222 Claudette St 6"PVC Water Main 455' G"GATE VALVE 33-06 6"GATE VALVE 33-18 HYDRANT2106 Elhabeth St ISouth of 8"GATE VALVE 33-111 8"PVC Water Main 3,355 6"PVC Water Main 125' 8"GATE VALVE 3349 8"GATE VALVE 33-21 8"GATE VALVE 34-03 8"GATE VALVE 34-08 2"BLOW-OF-VALVE HYDRANT 2117 HYDRANT 2107 HYDRANT 2108 16 awn Trail 8"PVC Water Main 2,500' 6"PVC Water Main 2(Y 8"GATE VALVE 33-04 6"GATE VALVE 34-05 Rate St(Mission Oaksl 6"PVC Water Main 810' HYDRANT 2114 HYDRANT2115 El Torres Ay IMI%lon Oaks) 6"PVC Water Main 420' Madre St(Misslon Oaks) 6" PVC Water Maln 850' HYDRANT 2110 HYDRANT 2111 Cad@ AV(Mk4bn Oaks) 6" PVC Water Main 335' 6"GATE VALVE 34-06 6"GATE VALVE 34-09 Mesa Verde St(Mission Oaks) 6"PVC Water Main 830' HYDRANT 2112 HYDRANT 2113 Porto Blvd(Minion Oaksl 6"PVC Water Main 675' HYDRANT 2116 Totals: 8'PVC Water Main—6,715' 6"PVC Water Main—9,115' 2"PVC Water Main—1,405' 8'GATE VALVE-5 V GATE VALVE-15 2"GATE VALVE-1 2"BLOW-OF-VALVE-4 HYDRANTS-17 17