Fort Walton Beach Council agenda — 10-09-2007 regular agenda — reading text

discussion. Mike Minich - second. Mayor Anderson - okay there' s been a motion and a second to suspend Robert' s Rules of Order, please vote. Okay it does pass unanimously, just for this item. Questions for Mr. Hofstad. Virgil Miller - I have one Mayor Anderson - yes sir? Virgil Miller - I talked with John this afternoon about several things but one of the things I talked to him about was that we need to prepare a list of our requirements, you know, what it's costing us for this treatment. And we need to approach the County, this is what we can do, what can you do for us. And so I think we need to be positive in reaching out to the County and lay down what, how much we can process this water for and what we could expect from them to come close to it. Because if they can' t be competitive with us then they don' t have a product for us. And so the thing is to give them something to be competitive with us. And I think that needs to be spelled out in some type of a City document, you know, that we have our requirements for a base line for negotiation. And I haven' t seen that yet. Mayor Anderson - okay. City Manager - staff will work that issue Mr. Mayor. We understand that we need to have our issues and we need to have an understanding of what those are. We also want to have an understanding of what the County' s issues were before we move forward. So as soon as we get their proposal then we can evaluate that based on what our costs are to treat 1, 000 gallons of sewage and what they' re proposing. We also expect that the County will come back with a capacity purchase, perhaps, in the plant. And that was one of the things that we were interested in initially. So, what we' re requesting is let staff work the issue like we normally do. Mayor Anderson - Mr. Reeves? Dennis Reeves - well I was just that we' ve got a lot of variables facing us and it's, you know, I don' t think 30 days is going to kill anybody and I think we' re on the right track, start thinking about it anyway. Mayor Anderson - okay. Go down, Mr. Minich first and then come back. Mike Minich - certainly it's been a long process trying to get this done and you know things that were in effect three years ago certainly have changed. I mean I think the County is in the same boat. We had land rental conditions that have changed, the capacity issue certainly if we can get this done cheaper, but I don' t see us as a City Council telling what our proposal are, I think this is a staff issue. I believe that the staff ought to work together. I think if 30 days is enough we should give them that amount of time. Certainly, I spoke with the County Administrator yesterday and he didn' t know anything about what I was talking about. 2 of 12 COUNCIL MEETING 10- 9- 07 Mike Minich (cont) - So if we' re talking this, you know at a department level, there is some issues that I'm sure both the County Administrator and the County, or the City Manager have to work out and there' s a lot of things that we have to decide on. I mean, you know with the $ 400,000 spray field facing us in three years, I mean that' s just something we have to approach and this is certainly a long tenn decision. I think that the relationship between the City of Fort Walton Beach and Okaloosa County is a lot better than it used to be. I think that both of us have ad valorem tax issues that we have to face and if we can work together, that it would be a wonderful thing. And if we can save money, then it can also be the same. However, I have concerns about those things that we don' t control, we can' t control, and we have to look out for a long tenn interest of the City in this particular project because as Mr. Miller stated, this is a very large bond issue and we need to look at that. So those, all those things I think that both our staff and Okaloosa County staff have been working very well together and I think they can come up with a proposal that we may be able to accept, and we might not be able to accept. But I don' t think that we need to designate what we want at this point. I think that we should let the staffs work that issue and come back to us when they have had the opportunity to review what their needs are, both the City' s and the County' s. Mayor Anderson - thank you sir. Mr. Hartwell? Jim Hartwell - I'd like to echo some of the things Mr. Minich said. I'm concerned about loss of control, possible loss of control, in this. John on page seven you mentioned that the City will have to contract independent engineering finns to detennine an estimate of cost, to evaluate the proposal. Do we have funds to that? I cringe every time I think of another study but I know some times they are important. Do we have the funding for it or not? John Hofstad - and I echo your concerns sir. I mean it seems like every time I come before you I'm bringing some new study before you. But what I will say is that our ordinance, Ordinance 1633 which we adopted to cover our bond issuance, has specific language in there that if we were to abandon our treatment facility that we have to ensure through a consulting engineering finn that we have revenue sufficiency to pay down that debt. So we are going to have to go to a consulting service to do that evaluation. And no, to answer your question, I do not have money in the budget for it. Jim Hartwell - isn' t this coming up rather quickly then, are we going to have to, may I ask Joyce on this one or John do you know, what are we going to do for sourcing it, we' re talking 50, 70, 100,000, or whatever, how are we going to handle it? John Hofstad - I think, and the City Manager I'm sure is going to have her comments on it as well, but I think from staffs perspective, our goal is to bring you back and arm you with as much infonnation as we can handle, as we can present to you, because I really don' t know now. The staff report details a bunch of different areas that are a concern to me as your Utility' s Director that we' re going to have to evaluate, that we have to factor into this equation. So there' s several different areas that we have to evaluate but we need to be in a position to bring that information back to you, and I have to have something from the County as a starting point because all we' ve done up until now is we' ve talked. And we' ve had several discussions. And we' ve had very good discussions. But until I have a proposal forum that we can evaluate and we can come back to the negotiation table with the County and say, you know this really doesn' t work for us, we need a lesser rate, or we need something else or some other safeguard factored into it. So I' ve got to get to that point and I think once I bring that back to forward and secure those you, you can decide at that time whether you think it' s feasible for us to press consulting services to evaluate that. 3 of 12 COUNCIL MEETING 10- 9- 07 Jim Hartwell- sir if I may, one more question. Mayor Anderson - go ahead. Jim Hartwell - John I think the other night when you were speaking to me didn' t you say there were legal ramifications to put a stop order on this, or penalties, something associated with it? John Hofstad - really I think our Purchasing Director is better to ask that question to, but I will tell you that you know we do have a contract. We have an existing design, engineering design services contract with a large finn and part of that design contract also has a construction administration element to it and we pay that consultant to monitor the construction phase once we get into that process. What I'm concerned about is that these consulting finns, they set their work schedules a year in advance so they might have forgone any other large design projects because they had dedicated the manpower to this. So that' s something we might have to negotiate with them. Really, they might in good faith say, you know we want, we value your business and we understand that you' re not going to go down that road and we' ll just eat that cost. But that's something our Purchasing Director will have to answer and we would have to deal with Brown and Caldwell, our design consultant, on that. Mayor Anderson - thank you. Mr. Tatum, did you want to add anything to that? Mike Tatum, Purchasing Director - no, John' s absolutely correct. Mayor Anderson - okay, thank you. Dr. Pullen? Dr. Pullen - the only comment I'm going to make is as long as we have committed the money I would say, until we see what the County offers that we don' t commit ourselves to any more money than what the present contract says is already there. In other words, let's not spend any more than what we' ve already committed. John Hofstad - I agree with you 100% sir. We' re not asking you to start the construction phase of the project, just complete the design phase. Dr. Pullen - that's what I understood you to say. Mayor Anderson - Mr. Garvie? Bill Garvie - yes sir a couple points, and I have a little bit of an advantage, John was kind enough to take me out to the facility a week or so ago and spent an afternoon explaining how the whole thing worked to me and now I feel like a little part of this thing now. But anyway, a couple of the things that concern me, and I told John this, I feel like the Finance Director should be involved in a fmancial analysis of this between going with the County and destroying or doing away with our own facility. There' s a couple of things that I think need to be, lots of things that need to be considered. One is, the spray field, which is not owned by the City, is given to us at cost free from the government right now and the County, as John has pointed out to me, is paying a substantial amount for their spray fields and we will most likely, most likely, have to pay a substantial amount for our spray fields when our lease is up with them, when we sign a new lease. The other thing is, there is a,the bond debt is going to be a huge amount of money also. That needs to be figured in there, of course everybody knows that. 4 of 12 COUNCIL MEETING 10- 9- 07 Bill Garvie ( cont) - And then the, something that John is sorting of alluding to, and that is the demolition of that site out there which is really a, the value of the land is not going to be as high as one would think because of the items that have been out there, which a facility like this destroys the value of the land. So that all has to be considered in there, what is this thing worth after we tear it down and what's the cost of tearing it down? So a financial analysis not just the cost of them providing the sewage treatment to us versus us doing it ourselves, but all these other things need to be mixed in there and I would like to be able to get something like that and take some time and absorb it. And I think it needs not only the Finance Director but it takes other people too to provide input into that. And I think I you did a real good job on what you gave us right here but I think we need more. But certainly