Fort Walton Beach Council agenda — 06-09-09 regular — reading text

CITY OF FORT WALTON BEACH MEMORANDUM To: Robert Mearns, City Manager From: Michael Beedie, City Engineer Date: June 4, 2009 Subject: Fee Waiver for Harbour Place Apartments (9 Bobolink Street NE) Background: Harbour Place Apartments, LLC is currently developing a 10 -unit affordable housing apartment complex at 9 Bobolink Street NE. The new apartment complex will be managed by the Okaloosa Coalition on the Homeless and will house homeless families for a period of six months to one year to allow the families to become self-sufficient. The apartments are owned by a not -for -profit entity that utilizes grant funding for their operations. Discussion: The required water and sewer connection fees and building permit fees total $ 15, 541. 44 and includes $ 4,400 for a 6 -inch water connection fee, $ 800 for a 3 -inch fire sprinkler connection fee, $ 6,000 for a 6 -inch sewer connection fee, and $ 4,341. 44 for building permit fees. Payment for these fees was required before the issuance of a building permit, and payment was made on December 3, 2008. A letter was received from Harbour Place Apartments, LLC requesting that the City of Fort Walton Beach refund the water and sewer connection fees and building permit fees for this development to assist in offsetting the loss of grant funding for the operation of the program and to reduce construction costs. The development was also subject to water and sewer impact fees, which totaled $ 15, 008. 69. The developer is aware that the impact fees cannot be waived or refunded. In the past, City Council has approved the waiver or refund of water and sewer connection fees 1, 100) and building permit fees ($ 3 50) for single family residences constructed by Habitat for Humanity. However, there is no City policy or language in the Code of Ordinances that set forth the procedures to waive or refund fees. For water connection fees, Section 10.51. 05 of the Code of Ordinances states, " Connection fees shall be paid for connecting into any and all city water mains, which fees shall cover the cost of bringing city water service to the property line of the private property to which such service is requested or required. Such fees shall be established by the city council by resolution, in the general fee schedule..." 75-  Harbour Place Apartments, LLC 204 Cloverdale Boulevard Fort Walton Beach, FL 32547 March 12, 2009 To: City of Fort Walton Beach Missy McKim From: Michael G. Kent, Chairman Harbour Place Apartments, LLC Subject: Reimbursement of building pen-nit fees and water and sewer tap fees Harbour Place Apartments, LLC is the owner of the new apartment units being constructed on the site of the former Okaloosa Coalition on the Homeless apartments on Bobolink Street. Old, outdated units were demolished and are being replaced with 10 These units will be managed by Okaloosa Coalition on the Homeless and will new units. house homeless families for 6 months to one year until they can again become self sufficient.These families constitute the lowest income segment of our City and they are most in need of safe, sanitary housing. This is a very essential program to help those who need some additional support for a short period of time. These units are owned by a not for profit entity, financed in their entirety with grant funds, and will be operated with ,grants and donations. It is essential that we conserve all cost amounts as much as possible to allow the current Rinding to pay for all construction and related costs. We are requesting that the City of Fort Walton Beach reimburse the not for profit owner for all building permit and utility tap fee costs to allow us to complete this facility within our limited budget constraints. We can all take pride in the facility we have created to house those families who are most in need of our assistance. Your approval of this request will be appreciated. Mi 1 ent Chairman INA  CITY COUNCIL MEETING June 9, 2009 Discussion - Direction - Action Approve Wastewater Treatment Plant Interlocal Agreement Synopsis: Provides that Okaloosa County will be the treatment facility for City -wide wastewater for the next 50 years, with annual cost increase of 3 Information received after agenda went to print - these pages are not numbered sequentially Agenda Item Number: g.4  CITY OF FORT WALTON BEACH MEMORANDUM To: Robert Mearns, City Manager From: John Hofstad, Utilities Director Date: June 4, 2009 Subject: Wastewater Service Interlocal Agreement with Okaloosa County Background: On November 27, 2007) City Council authorized staff to solicit proposals from qualified engineering firms to perform a comprehensive evaluation of a Wastewater Service Agreement prepared by Okaloosa County for treatment of the City's influent wastewater flow. Following this action, Council authorized awarding a consulting services contract on February 12, 2008 to Hatch Mott MacDonald, LLC ( HMM) of Panama City for the purpose of evaluating the County' s proposal. Since execution of contract documents in March 2008, HMM personnel have worked closely with City staff to evaluate future wastewater treatment options for the City. At the request of City staff, County personnel provided a document titled FWIB — OCWIS Wastewater Cost Analysis in July of 2008 for review by the City and its consultants. HMM and their sub - consultant PRMG, utilized this information to form a " cost of service" picture for comparison of the City' s anticipated cost of treatment against the County' s projected costs for operating their new 10 MGD wastewater treatment facility. While this information is vital in formulating an accurate comparison of services, no " cost of service" analysis should be considered complete without a projected out - year rate schedule. On October 7, 2008, County staff presented to the Board of County Commissioners a Revenue Sufuiency Analysis report detailing a number of different wastewater rate scenarios. The City Manager and Utility Services Director attended this meeting and, after the presentation, requested a copy of the County' s rate model for the purpose of providing this information to the City' s consultant, HMM. The County honored this request and the information was forwarded by the City' s rate consultant, Burton & Associates, to HMM in early November. In mid-November, HMM provided City staff with a series of tables, graphs, and spreadsheets detailing the County' s proposal over a defined timeframe and comparing the results with the City' s projected costs. Using the County' s base proposal of 75% of their existing commercial rate, HMM developed a 30 -year life cycle cost model to examine the impacts of rate increases over the term of the contract. HMM also ran this same model over a 30 -year period utilizing the City' s projected costs associated with renovating its existing wastewater treatment plant. The City' s model assumed a low estimate and high estimate since information related to final construction costs and sprayfield lease costs were unknown. It bears mentioning that the model developed by HMM is comprehensive and includes all life cycle cost information: capital expenditure, debt service repayment, operations and maintenance costs, fixed and variable costs, and administrative costs. The model developed by HMM only assumes costs associated with wastewater treatment and does not include such items as utility billing costs and sewer collection system costs. City personnel and County personnel worked closely to specify the details for a long -term contract for wastewater treatment. During a meeting held with the County Administrator and County Water Sewer Director on December 30, 20083, City staff presented the County with a series of cost scenarios for their evaluation. The tabular and graphical information provided to the County compared their projected costs against the City' s projected low and high estimates over a 30 -year period. As a follow -up to this meeting, both parties met again on January 6, 2009, during which the County' s staff provided comments to the evaluation previously submitted by the City. Discussion: The County Administrator and his staff indicated their willingness to structure a deal for wastewater treatment which is in the best interest of County and City wastewater customers. The County is offering a " take off' rate of $2. 46 per 1, 000 gallons of sewage treated and a Sewer Readiness to Serve Fee of $3750. 00 per month ( both rates are subject to an annual rate escalator of 3 %). This rate is below the City's low -end estimate of $ 2. 57/ 1, 000 gallons, which is based on a low construction estimate for the WWTP of $ 10,000,000 and a low annual lease estimate for the sprayfield of $245, 000. On January 13, 2009, City Council authorized the City Manager, City Finance Director, and Utility Services Director to negotiate with Okaloosa County for the development of a Wastewater Treatment Services Contract to include rate setting, contract term, and other specifics ancillary to wastewater treatment. After multiple public negotiation meetings, a tentative final version of the Interlocal Agreement was agreed upon by both parties on February 11, 2009. After this initial approval, the City engaged its Bond Council, Richard Lott, to secure approval from AMBAC Insurance Company to modify the Utillity System Revenue Bonds, Series 2005 OS, to permit the City to enter into the Interlocal Agreement. The City has received the approval necessary and the final version of the Interlocal Agreement will be presented for City Council approval at the June 9, 2009 Council meeting. Financial The funding source will be the Utilities Fund revenue stream. The estimated Year 1 cost to the City is $ 1. 03M. The attached Pro -Forma details the cost over the next four years. A rate increase will be necessary to fund the fee charged by Okaloosa County. The City recently issued RFQ 09 -117 for a Utility Rate Study which is scheduled to open later this month. Once the study is completed, staff will have additional information to bring forth to City Council regarding out -year rate schedules for the Utilities Fund. N Recommendation: Staff respectfully requests City Council approval of e Wastewater Service Interlocal Agreement between the City of Fort Walton Beach and O oosa County to serve the long -term wastewater treatment needs for City cus 9 /--) Submitted by: Hofstad, Whes Director Reviewed and Concur: B Wunker, Finance Director Approved for Agenda: 6 / slo bert Mearns, City Manager Date 3  CITY OF FORT WALTON BEACH, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS