1994/06/01 Dean Mead & Minton ProposalTo The
UTILITY WORKING GROUP
CITY OF OKEECHOBEE
OKEECHOBEE COUNTY
OKEECHOBEE BEACH
WATER ASSOCIATION
All
on
UTILITY SERVICE SOLUTIONS
BY
DEAN, MEAD MINTON
AND
HARTMAN ASSOCIATES, INC.
June 1994
HARTNAN ASSOCIATES, INC.
engineers, hydrogeologists, surveyors management consultants
ORLAWDO JACKSONVILLE TALLAHASSEE FT. MYERS
THE FIRMS 1
DEAN, MEAD MINTON 1
HARTMAN ASSOCIATES, INC. 2
BACKGROUND 3
GOALS 4
POSSIBLE SOLUTIONS 5
EXAMPLE SOLUTION 6
WHAT IS IT? 7
WHAT DOES IT DO? 8
EXAMPLE ENTITIES 9
BENEFITS OF THE AUTHORITY 10
BENEFITS ACCRUING TO THE CITY 11
BENEFITS TO THE COUNTY 12
BENEFITS TO OBWA 13
WHAT ARE THE REVENUES FOR THE CITY? 14
OTHER ITEMS 15
TO GET THESE BENEFITS WHAT DOES THE CITY GIVE UP? 16
TO GET THESE BENEFITS WHAT DOES THE COUNTY OBWA GIVE UP? 17
NEEDED AGREEMENTS 18
RATE COMPARISONS EXISTING 19
RATE COMPARISONS EXAMPLE RATE 20
RATE COMPARISONS 21
HEARINGS 22
CITY DECISIONS 23
MHR/pt/11/R- S -4 /toc
HAI #94- 120.MK
TABLE OF CONTENTS
THE FIRMS
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1 DEAN, MEAD MINTON
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1. Attorneys experienced in utility transfers and utility
management.
2. Attorneys experienced in representing agricultural interests and
with the needs and problems of agricultural communities that
desire to develop a broader economic base.
1 3. Attorneys experienced in complex transactions, mergers,
acquisitions and organizational structures.
4. Attorneys experienced in all facets of local government law.
5. Local offices in Fort Pierce, Melbourne, Viera, Merritt Island
and Orlando.
6. Recognized as innovative in its approach to solving clients'
problems.
7. Michael Minton, Robert Klein and Ken Crooks will be the
responsible attorneys.
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1 MHR/pU11/R- S- 4/preJHAI #94-120.MK 1
HARTMAN ASSOCIATES, INC.
1. Experienced professionals in utility organization, design
operations, rate making and financing.
2. Local offices in Orlando and Ft. Myers.
3. Wide range of utility clients.
4. Recognized as one of the premier firms in utility matters.
5. Gerald Hartman will be principal -in- charge
MHR/p1/11/R- S- 4/pre1HAI #94-120.MK
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BACKGROUND
THERE IS A NEED FOR A UTILITY SERVICE SOLUTION 4
WHY:
1. WUP OBJECTION CITY VS. OBWA
2. HISTORIC MORATORIUMS OBWA
3. NEED FOR ECONOMIC DEVELOPMENT OF
OKEECHOBEE COUNTY
4. LONG TERM ADEQUATE QUALITY AND CAPACITY
5. SERVICE AREA DISPUTE RESOLUTION
6. CONTAIN USER RATES IN THE CITY
7. RELATIVELY HIGH DEBT ON CITY SYSTEM
8. CASH CONTRIBUTIONS NEEDS
9. CONTROL ISSUE
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1. City Provide quality water and wastewater service at best
possible price.
2. County Have water and wastewater utility assist in economic
development through cost effective service and minimum
immediate financial requirements to obtain service.
3. OBWA Obtain additional capacity and service area as needed.
MHR/pt/WR- S- 4/pre./HAl $94- 120.MK
GOALS
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POSSIBLE SOLUTIONS
a
1. NO ACTION CONTINUE AS IS
2. CITY BUYS COUNTY AND OBWA SYSTEMS
3. OBWA BUILDS OWN SYSTEM
4. SPECIAL ACT AUTHORITY OR UTILITIES COMMISSION
5. INTERLOCAL AGREEMENT AUTHORITY
6. 373 F.S. AUTHORITY
7. NOT -FOR PROFIT CORPORATION 63 -20 OR OTHER
8. COOPERATIVE
9. CITY AUTHORITY
10. OTHERS
MHR/pt/II/R-S-41prefRA11194-120.MK
EXAMPLE SOLUTION
AUTHORITY
Let's Discuss this further
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MHR/pW/R- S- 4/prehlAJ $94120.MK
WHAT IS IT?
1. Governing body for utility services.
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1. Provides utility services.
2. Establishes uniform services policies.
3. Establishes rate and charges.
4. Allows for alternative funding sources.
5. Provides participation to all entities within service area.
WHAT DOES IT DO?
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1. WCRWSA
EXAMPLE ENTITIES
2. LEE COUNTY REGIONAL WATER SUPPLY AUTHORITY
(LCRWSA)
3. PRMRWSA
4. VCCWSC
BENEFITS OF THE AUTHORITY
1. NON -FOR PROFIT OPERATION
2. ECONOMY OF SCALE
3. ALL ENTITIES REPRESENTED
4. NO SERVICE AREA DISPUTES
5. COMMINGLED ASSETS AND FACILITIES
6. UTILIZATION OF EXISTING SEASONED
PROFESSIONAL OPERATORS
7. REGIONAL PLANNING
8. MORE FINANCIAL STABILITY
9. ETC.
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MHR/pW/R- S- 4/preJHAl #94- 120.MK
BENEFITS ACCRUING TO THE CITY
1. SAME UTILITY STAFF
2. PAYMENTS IN LIEU OF TAXES
3. ALLOCATED OVERHEAD
4. FRANCHISE FEE AGREEMENT
5. UTILITY TAX REVENUE
6. BROADER CUSTOMER BASE TO DEFEASE DEBT
7. STOPS DISPUTES
8. ALLOWS CITY TO UNDERTAKE OTHER BENEFICIAL PROJECTS
9. REDUCES CITY DEBT BURDEN
10. CITY SHARES IN ECONOMY OF SCALE
11. CITY KEEPS RESERVES
12. REVERTER CLAUSE ON DEFAULT
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BENEFITS TO THE COUNTY
1. GREATER COMBINED RESOURCES FOR ECONOMIC
DEVELOPMENT.
2. REDUCES LOCATION COMPETITION FOR ECONOMIC
DEVELOPMENT.
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3. UNIFIED EFFORT TO GENERATE MAXIMUM BENEFITS FOR ALL
COUNTY RESIDENTS.
4. STOPS DISPUTES.
5. ALLOWS COUNTY TO PURSUE OTHER REGIONAL SERVICES.
6. ALLOW COUNTY TO INVEST IN ECONOMIC DEVELOPMENT.
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MHR/pt4/R- S- 4/preJHAl k94120.MK
BENEFITS TO OBWA
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1. ELIMINATES MORATORIUM DUE TO CAPACITY ISSUES.
2. STOPS DISPUTES.
3. PROVIDES LONG TERM MORE COST EF1 ECTIVE SERVICES.
4. NO DUPLICATION OF SERVICES.
5. MASTER PLANNED UTILITY INCREASES RELIABILITY AND
QUALITY OF SERVICES.
6. ELIMINATES ONE LAYER OF MANAGEMENT /GOVERNMENT.
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4
Payment in lieu of taxes $78,900
Allocated overhead to General Fund 100,000
Utility tax 0 10% 164,600
Franchise fee 0 6% 115.900
TOTAL $453,400
MHR/pt/01R- S- 4/pre./HAl #94-I 20.MK
WHAT ARE THE REVENUES FOR THE CITY?
IN FUTURE THIS INCREASES.
Based on data from the City's financial statements for FY ending September 30,
1993 and Smith Gillespie Report dated April 1994.
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OTHER ITEMS
1. REVERT CLAUSE FOR DEFAULT
2. PROTECTION PROVISIONS
3. OTHER
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MHR/pt/WR- S- 4/preiHAI 4- 120.MK
TO GET THESE BENEFITS
WHAT DOES THE CITY GIVE UP?
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CONCESSIONS:
1. MINORITY VOTE ON BOARD OF DIRECTORS
2. FUTURE DEDICATION OF ASSETS AFTER PAID -OFF
(i.e., 30 years or more)
3. ALLOW A STANDARD AND UNIFORM EXTENSION POLICY
4. AGREES TO SERVE CUSTOMERS WHERE AND WHEN
ECONOMICALLY FEASIBLE
5. ANNEXING INCENTIVES OTHER THAN THE ALLOWED
25% SURCHARGE
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TO GET THESE BENEFITS
WHAT DOES COUNTY OBWA GIVE UP?
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CONCESSIONS:
1. SERVICE AREA
2. DEDICATE ASSETS TO AUTHORITY
3. PAYMENT IN LIEU OF TAXES.
4. FRANCHISE FEE
5. UTILITY TAX
6. ALLOCATED OVERHEAD (marginal)
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NEEDED AGREEMENTS
1. INTERLOCAL AGREEMENT
2. ASSET TRANSFER AGREEMENT
3. OPERATIONS AGREEMENT
4. CITY AND AUTHORITY AGREEMENT REGARDING
REVENUE AND DEBT
5. OTHER
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Water
Capital Recovery and Minimum Service
Volume Charge (1,000 gal)
1. Includes 25% surcharge and 3,000 gal of service.
2. Includes $1.00 franchise fee.
Wastewater
Monthly Service
Volume Charge (1,000 gal)
3. Includes 25% surcharge.
MHR/pt/u/R- S- 4/prchHAl #94- 120.MK
RATE COMPARISONS
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City
$11.60
$1.70
City
$8.95
$2.24
County
$14.51
$2.13
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OBWA
$9.00
$3.00
County 1 OBWA
$11.19 N/A
$2.80 N/A
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RATE COMPARISONS
EXAMPLE RATE
PRELIMINARY BASED ON EQUALIZATION
Water City 1 County
Minimum Service $11.60 $13.46
Volume /1,000 gal 1 $1.47 I $1.71
Wastewater 1 City 1 County
Minimum Service $8.95 $9.49
Volume /1,000 gal $2.59 $2.75
MHR/pV0/R- S- 4/preJHAl M94120.MK
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OBWA
$13.46
$1.71
OBWA
N/A
N/A
EXAMPLE VS. CITY
BASED ON 5/8 -INCH METER AND 5,000 GALLONS
Water $18.95 $20.10
Sewer 21.90 20.15
TOTAL $40.85 $40.25
EXAMPLE VS. COUNTY
Water $22.01 $25.16
Sewer 23.24 25.19
TOTAL
EXAMPLE VS. OBWA
Water $22.01 $15.00
Sewer N/A N/A
TOTAL
Preliminary based on equalization
MHRJpW/R- S- Nptt1HAI #94120.MK
RATE COMPARISONS
$45.25 $50.35
$22.01 $15.00
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MHR/pW/R- S- 4/preJHAI #94-120.MK
180.301
125.3401
189.423
84 -84
HEARINGS
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Required
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MHR/pU0/R- S- 4/preJHAI #94-120.MK
CITY DECISIONS
1. VOTE TO PROCEED WITH AUTHORITY
2. HEARINGS ON TRANSFER
3. RATES
4. BONDS
5. CONTRACTS
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