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1995-07 OUARESOLUTION NO. 95-7 . A RESOLUTION OF THE CITY OF OKEECHOBEE DETERMINING THAT THE PROPOSED TRANSFER OF THE CRY WATER AND WASTEWATER UTILITIES TO THE OKEECHOBEE UTILITY AUTHORITY IS IN THE PUBLIC INTEREST, PURSUANT TO THE PROVISIONS OF SECTION 180.301, FLORIDA STATUTES PROVIDING FOR AN EFFECTIVE DATE WITNESSETH: WHEREAS, on November 10, 1994, the Board of County Commissioners of Okeechobee County, Florida (the "County"), and the City of Okeechobee, Florida (the "City"), entered into an Interlocal Agreement creating the Okeechobee Utility Authority ("Interlocal Agreement"), which is recorded at Official Records Book 360, Page 1784, Public Records of Okeechobee County, Florida; and WHEREAS, the creation of the Okeechobee Utility Authority ("OUA") was intended to provide for a unified system of water and wastewater service for Okeechobee County and the areas currently served by OBWA, and provide for the potential of interconnects with other publicly held systems, so as to ensure the continued provision of a safe and healthy environment for the consumers of the utility system, and to protect the limited water supply capability of the Okeechobee County environment in such a manner as will give priority to encouraging conservation and reduction of adverse environmental effects of excessive or improper withdrawals of water from concentrated areas, as well as proliferation of septic tanks, package plants, and improper wastewater disposal; and WHEREAS, OUA constitutes a separate legal entity, which has those powers, duties, and responsibilities set forth in the Interlocal Agreement; and WHEREAS, on March 17, 1995, OUA and the City entered into an Operational Agreement ("City Operational Agreement"); and WHEREAS, on March 16, 1995, OUA and OBWA entered into an Operational Agreement ("OBWA Operational Agreement"), which was thereafter consented to by the County on April 27, 1995; and WHEREAS, pursuant to the City Operational Agreement and OBWA Operational Agreement, the City and OBWA have been authorized by OUA to continue the operation of the City Utilities and OBWA Utility, within their respective service areas, until Closing, pursuant to the terms and conditions of the City Operational Agreement and OBWA Operational Agreement, respectively; and WHEREAS, upon completion of the transfer to OUA at Closing of all of the assets which comprise the City Utilities, County Utility, and OBWA Utility, OUA shall assume all obligations and liabilities of the City, County, and OBWA which relate to the City Utilities, County Utility, and OBWA Utility, all as hereinafter provided; and WHEREAS, the parties to the Interlocal Agreement have previously agreed that the Master Transfer Agreement shall provide that no transfer of assets from the County, City, or OBWA, shall occur prior to Closing, and that the transfer of assets from the County, City and OBWA to OUA shall occur simultaneously at Closing, which shall occur on or before September 30, 1995; and WHEREAS, the Master Transfer Agreement shall be contingent upon the County determining, after properly advertised public hearing, WA and after consideration of those • factors set forth in Section 125.3401, Florida Statutes (1993), that transfer of the OB Utility from OBWA, through the County, to OUA would be in the public interest; and WHEREAS, the Master Transfer Agreement shall be contingent upon the City determining, after properly advertised public hearing, and after consideration of those factors set forth in Section 180.301, Florida Statutes (1993), that the transfer of the County Utility to OUA and the City Utilities from the City to OUA would be in the public interest; and WHEREAS, the Master Transfer agreement shall be contingent upon OUA determining, after properly advertised public hearing, and after consideration of those factors set forth in Section 189.423, Florida Statutes (1993), that transfer of the City Utilities, County Utility, and OBWA Utility to OUA would be in the public interest; and WHEREAS, Section 180.301, Florida Statutes, requires the City to hold a public hearing prior to selling or transferring any City owned utility; and WHEREAS, the City has held a properly advertised public hearing on July 11, 1995, heard public comment, and considered a number of factors, including, but not limited to the following: a. The most recent available income and expense statement for the Utility; and b. The most recent available balance sheet for the Utility, listing assets and liabilities and clearly showing the amount of contributions -in -aid -of -construction and the accumulated depreciation thereon; and C. A statement of the existing rate base of the Utility for regulatory purposes; and d. The physical condition of the Utility facilities being purchased or sold; and e. The reasonableness of the purchase or sales price and terms; and f• The impacts of the purchase or sale on Utility customers, both Positive and negative; and g. Any additional investment required and the ability and willingness of the purchaser to make that investment whether the purchaser is the City or the entity purchasing the Utility from the City; and h. The alternatives to the purchase or sale and the potential impact on Utility customers if the purchase or sale is not made; and i• The ability of the purchaser to provide and maintain high- quality and cost-effective Utility service, whether the purchaser is the City or the entity purchasing the Utility from the City. IN NOW, THEREFORE, be it resolved by the City Council of the City of Okeechobee, Florida, as follows: • 1 • The proposed transfer by the City of the City Water and Wastewater Utilities to OUA is in the public interest, pursuant to the provisions of Section 180.301, Florida Statutes. 2. The City Attorney and the City Administrator are hereby directed to present the Master Transfer Agreement to the City Council for further action as soon as possible. 3• This Resolution shall take effect immediately upon its adoption, pursuant to law. INTRODUCED AND ADOPTED in special session ATTEST: 3 1th day of July, 1995. JAMES E. KIRK, Mayor CITY OF OKEECHOBEE SPECIAL MEETING OF THE CITY COUNCIL SUMMARY OF COUNCIL ACTION A. Call Special Meeting to order on July 11, 1995 at 6:00 p.m. B. Mayor and Council Attendance: Mayor James E. Kirk Councilmember Noel A. Chandler Councilmember Michael G. O'Connor Councilmember Robert Oliver Councilmember Dowling R. Watford, Jr. Staff Attendance: City Attorney John R. Cook City Administrator John J. Drago City Clerk Bonnie S. Thomas Deputy Clerk S. Lane Gamiotea C. OPEN PUBLIC HEARING Mayor Kirk called the Special Meeting to order on July 11, 1995 at 6:00 p.m. Clerk Thomas called the roll: Present Present Present Present Present Present (entered chambers at 6:04 p.m.) Present Present Present Mayor Kirk requested a moment of silence for City Employee Police Detective Gene O'Neil who underwent major surgery today. Mayor Kirk opened the PUBLIC HEARING at 6:03 p.m. 1. a. Motion to adopt Resolution 95-7, determining that transfer Councilmember O'Connor moved to adopt Resolution No. 95-7, determining that of the City water and wastewater utilities to the Okeechobee transferring the City's water and wastewater utilities to the Okeechobee Utilities Utility Authority is in the public interest, pursuant to the Authority (OUA) is in the public interest, pursuant to the provisions of Section 180.301 provisions of Section 180.301, Florida Statutes - City Florida Statutes; seconded by Councilmember Oliver. Attorney (Exhibit 1). c. Public Comment. Mayor Kirk asked for public comments first to give the City Attorney time to get to the meeting. There were no comments from the public. X X X X X X X X X PAGE 1 OF 8 C. PUBLIC HEARING b. Discussion JULY 11, 1995 - SPECIAL MEETING - PAGE 2 OF 8 Councilmember Watford began the discussion stating that this is probably the most important decision the City has ever made and that he finds it sad that there was no one from the public here to comment on such an important issue. He then stated his personal comments on this issue was: (1) The haste/hurry that we have gotten into all of sudden to get this thing finalized. (2) The rate issue, explaining that he took his bill and used the formula and the rates will go up. (3) Economies of Scale, he understands as things get bigger, they cost more, but he did not think that there is going to be a large amount of customers that hook up just because there is a utility authority now. (4) Politics taken out of the water and sewer issues, not so, the politics will continue and used the example of the latest issue with the Planning and Zoning Board. (5) The amount of South Florida Water Management District's (SFWMD) involvement. (6) The City will lose a very valuable source of income. (7) The lack of compromise on the OUA Board and their staff has said that the County and Okeechobee Beach Water Association (OBWA) feels the same way. (8) Uncomfortable with other disputes we have recently come into with the County. (9) The effect on the City's budget. (10) Franchise fee issue. He continued that he had been wrestling with all this and he did not feel comfortable with all this right now and he did not know if it is within the best interest of the City. Mayor Kirk thanked Councilmember Watford for his comments and responded to some of them. (1) the rates are going to be higher, and he did not think the City could keep them down either. (2) Politics in the system, that is a way of life. (3) Debt service fee higher, no different than the rates. (4) SFWMD, do not have a comment for that one. (5) Lose a valuable asset, that is correct. (6) OUA Board will take a 4/5 vote on all issues so that should give us some peace of mind. (7) It will affect the City's budget. He continued further that he did not know if we proceed with keeping the system that we could do much better with it. The City and County are going to have to get along better and get over some issues. He wished he could tell everyone that this is in the best interest for everyone one hundred percent. We will never have something that is perfect, everyone will just have to vote what they feel. (.0ri JULY 11, 1995 - SPECIAL MEETING - PAGE 3 OF 8 C. PUBLIC HEARING b. Discussion continued. Councilmember Oliver commented that he felt the City and the community had worked on this issue long enough and that although what we have is not perfect, it is good enough. Mayor Kirk asked Engineer Gerald Hartman of Hartman and Associates concerning his letter dated June 30, 1995 on the accounts, 517 and 536 when we "true up" what is left over the City gets to keep? Engineer Hartman responded correct. Discussion continued between the Council and Attorney Minton and Engineer Hartman concerning capital projects, vehicles transferred by OBWA, use of City right of ways and easements, annexation agreements, buy down rates, grant monies available from SFWMD and the proposed wastewater expansion project for Treasure Island. Attomey Cook advised that he would like to briefly review the document that has been prepared. The documents you have, in the very front, page 1-1 has some background information. Page 1-4, the relevant statutes 180.301, prior to the time before you vote on the resolution each of the nine areas under that statute should have been addressed that are on page 1-4. The package you have in front of you is laid out very nicely and each one of those subparagraphs of the statute are addressed. He briefly went over each one commencing on page 2-1, the statute requires the most recent available income and expense statement for the utility be addressed and following that page you have the Hartman documents that do in fact set forth the most recent available income and expense statements. Page 3-1, the second requirement of the statute is to set forth the most recent available balance sheet for the utility, listing assets and liabilities and clearly showing the amount of contribution -in -aid -of -construction and the accumulated depreciation thereon. Again the various Hartman documents substantiate and set forth those figures that do appear to comply with the statute. C. PUBLIC HEARING b. Discussion continued. JULY 11, 1995 - SPECIAL MEETING - PAGE 4 OF 8 Page 4-1, the third requirement of the statue is a statement of the existing rate base of the utility for regulatory purposes. This section states that since the City is exempt from rate regulations it does not have an established rate base approved by an appropriate regulatory entity. Page 5-1, the fourth requirement is to address the physical condition of the utility facilities being purchased or sold. And there based on Reese, Macon and Associates's (RMA) documents, and there are exhibits attached to this document that do code and cooperate these facts and figures, this refers to the RMA exhibit that sets forth the size of the mains, the age of the plants, it has an opinion based on current information as to the condition of the various facilities in the system and the age of it. Page 6-1, the fifth requirement of the statute is the reasonableness of the purchase or sales price and terms. We could discuss this all night, but in that section it sets forth the various consideration that all parities considered. Of course here we are looking to what is in the best interest of the City but they list all the various considerations and the pro's and con's as to why the figures we relied upon are reasonable. Page 7-1, the sixth requirement of the statute is to consider the impacts of the purchase or sale on utility customers, both positive and negative. I believe that has been discussed fully by this Council. The various pro's and con's as to that is set forth in Chapter 7. Page 8-1, subparagraph of the statute, any additional investment required and the ability and willingness of the purchaser to make that investment, whether the purchaser is the municipality or the entity purchasing the utility from the municipality, that would be the authority of course. This section would address the current status of the system, any required improvements, the proposals for future capital improvements by the authority, potential sources of income, etc. and that section would need to demonstrate that the authority is in the position to make the additional investments and the capital improvements. JULY 11, 1995 - SPECIAL MEETING - PAGE 5 OF 8 C. PUBLIC HEARING b. Discussion continued. Page 9-1, the eighth requirement of the statute to consider the alternatives to the purchase of sale and the potential impact on utility customers if the purchase or sale is not made. This also lists the consideration pro and con in regards to that consideration. I think this Council has fully discussed the alternatives available to the City and they are honestly not good. We have discussed this before, if we do not enter into the utility we are going to revert back to the lawsuit with OBWA, we are going to fight over customer base territory, we are going to as a City face the possibility of running the utility and making capital improvements without benefit of the OBWA customers. Page 10-1, the ninth requirement of the statute, the ability of the purchaser to provide and maintain high quality and cost effective utility service, whether the purchaser is the municipality or the entity purchasing the utility from the municipality. Again this will refer to the authority, this is a fairly subjective area because the authority has not operated and we are not exactly sure what is going to happen, however, as this section points out the same staff and management and facilities will be used and the capital improvements have been thought out and programmed into the master transfer agreement and based upon that they believe the authority will have the ability to provide the same quality of service to the customers. The statute requires that those factors be considered, I believe that not necessarily al this meeting but also prior ones, all of these issues have been discussed and the procedure at this point would be to adopt the Resolution if the Council believes that transfer of the utilities is in the public interest, once that is accomplished we would then proceed onto considering the master transfer agreement. (P�o C. PUBLIC HEARING 1. d. Vote on Motion. CLOSE PUBLIC HEARING RECESS D. NEW BUSINESS JULY 11, 1995 - SPECIAL MEETING - PAGE 6 OF 8 Mayor Kirk asked if there was any additional discussion. There was none, he then called for a vote to adopt Resolution No. 95-7 : KIRK CHANDLER O'CONNOR OLIVER WATFORD MOTION CARRIED. Resolution No. 95-7 title reads as follows: "A RESOLUTION OF THE CITY OF OKEECHOBEE DETERMINING THAT THE PROPOSED TRANSFER OF THE CITY WATER AND WASTEWATER UTILITIES TO THE OKEECHOBEE UTILITY AUTHORITY IS IN THE PUBLIC INTEREST, PURSUANT TO THE PROVISIONS OF SECTION 180.301, FLORIDA STATUTES PROVIDING FOR AN EFFECTIVE DATE." Mayor Kirk closed the PUBLIC HEARING at 6:56 p.m. Mayor Kirk recessed the meeting at 6:58 to allow the Code Enforcement Board to have their regular scheduled meeting at 7:00 p.m. and reconvened the meeting at 7:40 p.m. 1. Motion to approve Master Transfer Agreement among the Councilmember O'Connor moved to approve the MasterTransfer Agreement among the City of Okeechobee, Okeechobee County, Okeechobee City of Okeechobee, Okeechobee County, Okeechobee Beach Waster Association, Inc., Beach Waster Association, Inc., and the Okeechobee Utility and the Okeechobee Utility Authority; seconded by Councilmember Oliver. Authority - City Attorney. III X D. NEW BUSINESS Approve Master Transfer Agreement continued. 2. Motion to approve Interlocal Agreement between the City of Okeechobee and Okeechobee Utility Authority concerning the provision of services by the City and the use of City facilities by the Okeechobee Utility Authority effective October 1, 1995 - City Attorney. JULY 11, 1995 - SPECIAL MEETING - PAGE 7 OF 8 Discussion was held between the Council and OUA Staff concerning dissolution, Council revised the Master Transfer Agreement for the dissolution to be ten years, according to Attorney Cook this was a cross reference that was not picked up by the OUA Staff. Other issues discussed were the survey's for the Water Treatment Plants, obtaining a perpetual easement for the old wastewater treatment plant, and that the Council wanted documents in plenty of time to review them at the end of September. Vote on motion to approve the Master Transfer Agreement is as follows: KIRK X CHANDLER X O'CONNOR X OLIVER X WATFORD X MOTION CARRIED. Council discussed a memorandum from Administrator Drago concerning the Interlocal Agreement between the City and OUA for use of facilities and gasoline purchase. Councilmember Oliver moved to approve the Interlocal Agreement between the City of Okeechobee and the Okeechobee Utility Authority concerning the provision of services by the City and the use of City facilities by the Okeechobee Utility Authority effective October 1, 1995 with the changes as stipulated in the memorandum from Administrator Drapo to Council dated July 10, 1995; seconded by Councilmember Watford. KIRK X CHANDLER X O'CONNOR X OLIVER X WATFORD X MOTION CARRIED. U I I ADJOURNMENT - Mayor Kirk PLEASE TAKE NOTICE AND BE ADVISED that if a person decides to appeal any decision made by the City Council with respect to any matter considered at this meeting, he/she may need to insure that a verbatim record of the proceeding is made, which record includes the testimony and evidence upon which the appeal is be based. A tape recording of this meeting is on file in the City Clerk's Office. JarTYes E. Kirk Mayor ATTEST: Bohnie'S; Thomas, CMC City Clerk JULY 11, 1995 - SPECIAL MEETING - PAGE 8 OF 8 There being no further items on the agenda, Mayor Kirk adjourned the meeting at 8:15 p.m.