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July 7,1992 RMARMA Reese, Macon and Associates, Inc. City of Okeechobee 55 S.E. Third Avenue Okeechobee, FL 34974 July 7, 1992 ATTN: John J. Drago, City Administrator RE: County Governance Alternatives Report Dear Mr. Drago: In accordance with your request, we have reviewed the preliminary draft report on the referenced subject. Our review was conducted from an engineering perspective and does not address financial aspects. The following comments are relevant. 1. Pg. 1 The stated goal of the report differs from our initial perception, in that it speaks to the "creation, acquisition, construction and operation" of a water and wastewater utility system. We are unclear as to specifically what is unacceptable with the existing approach and why it cannot be expanded to meet regional needs. In short, we feel the specific and detailed problem(s) which led to the authorization for this work must be identified if appropriate solutions are to be developed. 2. Pg. 4 Please explain why "in person" interviews made it "quickly apparent" that a regional approach was appropriate. Is there an intended implication that the existing structure is not sufficiently regional? If not, why not? 3. Pg. 7 First Line Again, is the intended implication that the existing system cannot be used to perform the required tasks? 4. Pg. 10 Again, the existing structure is not considered as an alternative, why? 5. Pg. 19 "Development of a Local Consensus" We totally agree that a local consensus must be established. All problems must be clearly stated before a consensus of agreement for correction can be stated. 3003 S. Congress Avenue Palm Springs, Florida 33461 (407) 433 -9311 Mr. John J. Drago July 7, 1992 Page Two 6. Pg. 24 The WTP was upgraded in 1977 and 1992, as well. 7. Pg. 24 The treatment process does not include lime softening, but does include ammoniation. 8. Pg. 25 The basins are cleaned with an air lift system and manually as needed. 9. Pg. 25 No lime softening. The water is stabilized prior to filtration with sodium hydroxide. 10. Pg. 26 We are aware of no definitive work which indicates the confirmed presence of toxic algae. 11. Pg. 26 The raw water pumps are 2200 gpm. 12. Pg. 26 The discussion on disinfection by products, THM's, etc. is not accurate. The named substances are the THM's and their presence is not limited to surface water disinfection. The City already feeds ammonia. The City is in compliance with THM standards. 13. Pg 26 The consent order was oriented toward capacity matters more than water quality. 14. Pg. 28 -29 There is no mention of the recently completed hydraulic study and the City plans to upgrade the distribution system to improve pressures and flows. 15. Pg. 30 We are not certain what the comment on "negative disparity" is intended to say. 16. Pg. 31- There needs to be a discussion of the existing effluent disposal system on the groves. 17. Pg. 32 Please indicate the basis for concluding that the OBWA system is in fair condition. 18. Pg. 38 Please explain why the City's water plant may not be able to meet current Drinking Water Standards. 19. Pg. 38 A backup deep well may not be required where irrigation is available for disposal. Mr. John J. Drago July 7, 1992 Page Three 20. Pg. 41- Table 8 provides the basis for cost comparison of all of the alternatives. We believe this comparison is the most tangibly fundamental consideration in determining the viability of any utility service option. Since the viability and proper comparison of options depends upon the accuracy of the assumed input, we strongly recommend that a more detailed capital cost structure be developed. Further, since a water and wastewater utility is being contemplated, shouldn't the comparison include wastewater? 21. Pg. 43 The City WTP has a capacity of 3.12 MGD, not 2.88 MGD. The plant will have a capacity of 3.2 MGD when the new WTP is 50% complete. 22. Pg. 43 The City agreement with OBWA is for purchase of 750,000 gpd, not 800,000 gpd. 23. Pg. 44 In consideration of the DER criteria for planning of WTP expansions, the probable peak factor for the City system„ the cost of treatment and surface water quality issues, please explain why "it makes little sense for the City to plan expansions if OBWA leaves the system." Note, that the City previously contemplated at 2.0 MGD expansion when OBWA was with the system. OBWA maximum demand is currently in the vicinity of 0.85 MGD, so an expansion of approximately 1.0 MGD to the City system would appear appropriate. 24. Pg. 44 We do not believe it is appropriate for public funds from SFWMD to be utilized to assist a private enterprise in severing ties with a public utility constructed, in part, to service their needs. 25. Pg. 45 Do all three options include consideration of existing equity as well as indebtedness? 26. Pg. 50 We agree that endless options could be formulated which would support any number of points. However, we are not clear how this analysis produces a "rather obvious" conclusion. On what basis? What makes it clear? 27. Pg. 52 Please include comment that corrective design for many of the "serious infrastructure" problems with the City distribution system is underway. Please provide a similar assessment (good or bad) of OBWA system. 28. Pg. 52 Please discuss the rationale for legal allowance of 25% surcharge to County residents. Why is this permitted under law and are these reasons valid in this application? Mr. John J. Drago July 7, 1992 Page Four 29. Pg. 55 Please explain why the most "sensible approach" is to allow one entity to contribute a publicly funded grant to the proposed utility. We understood the basis of this grant to be SFWMD interest in improving water and sewer utility coordination in the entire area. Why is it appropriate for only one entity to reap the benefits of this policy as it relates to comparison of capital contributions? What monetary value should be placed on "bonding capacity" for purposes of comparing contributions by each entity and how is this amount computed? Hopefully the answers to these questions can form the basis for meaningful discussions on the entire utility matter. If you have questions or wish to discuss this further, please call. WDR/ly 92 -109 Very truly yours, William D. Reese, P.E.