City Commission Workshop Meeting

APPROVED: 4/2/2015 City Hall City of Eustis, Florida 10 North Grove Street Post Office Drawer 68 Eustis, FL 32727-0068 Meeting Minutes - Final* City Commission Workshop Thursday, March 19, 2015 7:00PM City Hall CALL TO ORDER: Mayor Eckian - 8:30 p.m. ACKNOWLEDGEMENT OF QUORUM AND PROPER NOTICE Present: 5 - Karen LeHeup-Smith; Linda Bob; Bill Brett; Michael Holland; and Albert Eckian I. Workshop Item 15oso Eastern Wastewater Capacity Study Rick Gierok, Public Works Director and City Engineer, reported on the eastern wastewater capacity study. He stated that the plant is a .3 MGD plant with a reserved capacity of .295 MGD which means there is no capacity available for any future growth. He reviewed the developments served by the eastern wastewater treatment plant (WWTP). He reviewed the average daily flows for 2013 and 2014 and stated it is getting increasingly harder to operate the plant in compliance with Florida regulations. He commented on the labor intensity needed to operate the plant within compliance. He reported that the City hired Tetra Tech to provide computer modeling to analyze the operational challenges at the plant. He estimated the plant needs $1.4 million in improvements with $690,941 allocated in the FY2014-15 capital budget. He then cited the amount of interest the City has received from adjoining areas. He stated that the property is not within City limits but is within the City's utility service area. He estimated a total flow at build out for the area at 4. 95 MGD. Jon Fox, Tetra Tech, explained what repairs and improvements would be completed with the $1.4 million. The Commission asked how much longer the plant would last with those improvements with Mr. Fox estimating 5 to 10 years. Mr. Gierok presented two options for expansion as follows: 1) Decommission the existing plant and replace with a 450, 000 gallon plant; or 2) Decommission the plant and use it to pump the influent to the western plant which is a 2.4 million MGD plant currently processing 1.4. He then reviewed the cost for the two options with Option #1 costing $5.5 million and Option #2 costing $4.5 million. Mr. Gierok then summarized the three options and costs. He explained that the first option of repairing and improving the existing plant for $1.4 million will just allow the City to meet its current commitments and operate at its .3 MGD capacity. He stated there is $690,000 budgeted in the current year for those improvements with $1,789,522 designated in FY15116 for plant repair and redesign. Mr. Gierok stated the advantage to repairing the existing plant is the City can meet the regulatory requirements while treating the committed capacity flows; however, the disadvantage is there would be no room for expansion of flow for undeveloped and uncommitted properties. Dianne Kramer, Acting City Manager, clarified that the $1,789,522 is based on the City issuing bonds and is not actually budgeted with Mr. Gierok acknowledging that additional funding sources would be required. Mr. Gierok then stated that the second option would be to decommission the plant and rebuild it at a cost of $5.5 million with more conventional technology which would allow for projected growth to 0.455 MGD. He stated the advantage is they would meet the regulatory requirements as well as add more capacity for growth of up to 600 additional units; however, the disadvantage would be the initial capital cost would be high and would require additional funding sources beyond impact fees. City of Eustis, Florida Page 1 Printed on 312712015 City Commission Workshop Meeting Minutes - Final March 19, 2015 The Commission asked if any of the individuals that have inquired about obtaining service indicated a willingness to provide funding towards construction of a new plant with Mr. Gierok indicating that no numbers were discussed. He noted that the properties in question would be much more valuable with central sewer than without so it may be an option. Mr. Gierok stated the third option would be to decommission the plant and regionally treat the projected growth flow of .455 MGD at the Bates Avenue plant. He stated that the disadvantage is again the high capital cost and commented on the reduction in capacity at that plant if the eastern flow is pumped to the Bates Avenue plant which would reduce availability for growth in that area. He noted that the treatment facility if decommissioned would no longer be located within the Wekiva BMAP The Commission noted that the reclaimed water would still be sent back to the eastern site and be considered in the Wekiva BMAP It was noted there is discussion in Tallahassee by the legislature of further reducing the maximum nitrogen levels which would increase costs to the City. Mr. Gierok added that an additional option would be to sell the treatment facility. He stated that Tetra Tech provided an estimated value of the facility at approximately $2.5 million. He explained a number of considerations that would need to be evaluated to determine the feasibility of that option. He summarized the need to identify what the City wants to do prior to committing to spend the funds for the necessary maintenance. II. Commission Discussion The Commission discussed the following: 1) the possible sale of the City's plant; 2) the sales of reclaimed water; 3) the location of the water plants and areas served; and 4) the amount of revenue from the eastern water and wastewater plants. Mr. Gierok responded that the eastern wastewater plant generated $379,000 in 2014 with the Commission questioning if the City would be hurting itself by selling off the plant. It was noted that the majority of the City's water and wastewater revenue comes from within City limits not from the eastern area. The Commission discussed the need to see the numbers prior to discussing a possible sale of the plant with Mr. Gierok stating that the operating expenses for the eastern plant totaled $201 ,000 for 2014 for a $175,000 net profit. Ms. Kramer noted that the City's utility rates are based on the entire system and not divided out by area. She said eliminating the revenues and costs from the eastern plant could have a significant impact on the rates for City residents. She stated that the City will be conducting a new rate study and explained that can be reviewed at the same time which might provide some of the information needed. The Commission further discussed the following issues: 1) the difficulty in extending a pipeline from the eastern side to the Bates Avenue plant; 2) the need to have additional information before making a final decision; 3) the possible effect on the City's utility rates; 4) the need additional funding; and 5) the need for any decision to be fact-based and data-based. Ms. Kramer asked what improvements/repairs need to be done immediately. Mr. Fox reviewed the required capital costs for condition-related improvements. He explained the plant is an upflow solids contact unit. He stated due to that the clarifier modifications need to be made in order to get back into a more traditional clarification process. Ms. Kramer indicated the chart on the right on Page 5 of the presentation are those improvements that have to be done as soon as possible. She stated that the necessary $582,000 is already in the capital budget. She further indicated those repairs need to be done and can't wait until the City determines the future plans for the plant. She recommended proceeding with the necessary City of Eustis, Florida Page2 Printed on 312712015 City Commission Workshop Meeting Minutes - Final March 19, 2015 repairs and then conducting the rate study and including an analysis of the effect on utility rates if the plant is sold. Mr. Gierok confirmed that completing the budgeted improvements would keep the plant in compliance depending on how fast the area builds. III. Public Input Mayor Eckian opened the floor to public comment at 9:21p.m. Larry Turnbow, 2810 Pineapple Lane, commented on the undeveloped areas and expressed opposition to selling the plant if the area is expected to develop in the next 20 years. There being no further public comment, the floor was closed at 9:24p.m. IV. Commission Direction CONSENSUS: It was a consensus of the Commission for staff to proceed with the budgeted repairs and obtain the additional information necessary to determine the future plans for the plant with the understanding that a final determination on the plant would take some time. V. Adjournment- 9:25 p.m. - "~:. . .R.c....:.c:..~:..C.-=tM- -'"f'N=- -T'=- E.Z.f'vllh..ILIL L>is= City Clerk ~--.,~-...;.--, Mayor/Commissioner *These minutes reflect the actions taken and portions of the discussion during the meeting. To review the entire discussion concerning any agenda item, go to www.eustis .org and click on the video for the meeting in question. A DVD of the entire meeting or CD of the entire audio recording or verbatim transcript of the meeting can be obtained from the office of the City Clerk for a fee . City of Eustis, Florida Page3 Printed on 312712015