As City Council is aware, the City and Pasco County share ownership of the City’s Wastewater Treatment Plant. The treatment plant is located at 4730 Main Street. The plant was constructed in 1963 and expanded in 1990 to its current permitted treatment capacity of 7.5 mgd of wastewater. The plant’s operation, maintenance, and capital expenses are shared by both agencies outlined in the current wastewater treatment inter-local agreement dated October 9, 1984 identified as attachment “B”. The expense methodology is based on a capacity flow percentage. The City is the lead owner of the plant and is responsible for all expenses during each fiscal year. A “true up” is performed by the City and County at the end of each fiscal year to balance out the budget expenditures.
As City Council may recall, in 2019 the Board of County Commissioners approved the acquisition of the FGUA/Lindrick utility system. In 2018 the City contracted the services of Stantec Consulting Services, Inc. to perform an analysis on the feasibility of acquiring the utility system identified as attachment “C”. The report had several scenarios and recommendations. The impact to the City’s utility and its rate payers was detrimental. The cost to acquire the FGUA/Lindrick system was identified at approximately $25 million. In addition, the FGUA/Lindrick system was identified as a system with facility deficiencies due to age and lack of routine maintenance. Subsequent to the County’s analysis of the FGUA/Lindrick system, and in addition to the acquisition cost, it was determined that an estimated amount of $24.5 million would have to be invested to upgrade the utility facilities over the first five (5) years identified as attachment “D”.
In a memorandum of understanding (MOU) dated April 11, 2019 identified as attachment “E”, the City notified Pasco County the effects of the County’s acquisition would have on the City. Operating and maintenance of the Plant, the loss of possible impact fees, plant capacity adjustments, and several other items not covered in the current interlocal agreement between the City and FGUA/Lindrick system identified as attachment “F” and the inter-local agreement between the City and the County. Subsequent to the County’s response to the City’s MOU dated July 25, 2019 and identified as attachment “G”, the City Manager and County Administrator directed both utility staffs to begin working together to address the items called out in the MOU. During staff discussions, it was agreed that instead of adding a tenth addendum to the original interlocal agreement dated October 9, 1984 a new Wastewater Treatment Plant Operation and Maintenance agreement would be a more efficient way to address all of the new items and items that needed to be updated in the original agreement, identified as attachment “H”.
Items addressed in the proposed interlocal agreement are shown as part of the original inter-local agreement so changes can be shown in correlation. Those changes are as follows:
- Page 1 Minor language additions in the title.
- Page 2 Minor language additions.
Major language addition: WHEREAS, the changes called for in this Agreement are contingent upon and will not take effect until the County closes on the acquisition of the Lindrick System from the Florida Governmental Utility Authority (FGUA).
City Staff Action Item: Staff agrees with the language addition.
- Page 3 Minor language additions.
Major language addition: Furthermore, as of this Agreement, the assigned capacity to the County is 3.0 million gallons per day, the assigned capacity to the CITY is 4.5 million gallons per day. Contingent upon the event of the COUNTY’S acquisition of FGUA/Lindrick Utility the assigned capacity to the COUNTY will adjust to 3.7 million gallons per day, the assigned capacity to the CITY shall be 3.8 million gallons per day.
City Staff Action Item: Staff has reviewed FGUA, County, and City flows and agree with the calculations. Legal review has determined that FGUA/Lindrick inter-local agreement is binding and the existing language states that with the impact fee methodology, the City was allowing the capacity units to be purchased and therefore belong to FGUA/Lindrick and then the County once the acquisition takes place. Staff has performed calculations and is confident the City has enough capacity to accommodate septic to sewer neighborhoods, undeveloped parcels, and redeveloped parcels within the City’s service area. Staff calculations is identified as FGUA Negotiates, Attachment “I”. In addition, there is language in the existing IA that contains a methodology for when an agency has reached maximum capacity and the other agency is not utilizing their maximum capacity limit. Finally, as noted in the above discussion section, first paragraph, the plant was constructed in 1963 or 58 years ago. The last improvements were performed in 1990 or 21 years ago. Plant reconstructions are typically around 60 years. Staff feels that by the time the City’s capacity is near or at the maximum limit, a capital reconstruction of the plant would have to be considered. This reconstruction would accommodate the addition expansion needs.
- Page 4 Minor language addition.
Major language addition: Within forty-five (45) days of closure of the COUNTY’S purchase of the FGUA/Lindrick system, the COUNTY shall pay to the CITY the sum equal to the remaining impact fee balance owed to the CITY pursuant to the Third Amendment to Bulk Wastewater Treatment Agreement between the City of New Port Richey and the Florida Governmental Utility Authority (FGUA), as Successor to Lindrick Corporation, dated December 4, 2012.
City Staff Action Item: Legal review is in agreement due to the County being responsible for any FGUA/Lindrick debt and obligations.
- Page 6 Minor language addition.
Major language addition: Payment for Operations and Maintenance Services Prior to October first of each year, the COUNTY and the CITY shall determine an estimated rate, hereinafter referred to as “ER” to be used for the subsequent fiscal year. That rate must be determined by the following formula: ER = OM x 1.10 x 1000.
C x 365
City Staff Action Item: The City’s Finance Director considered this a “housekeeping” item.
The formula utilized by the City and County historically is ER =OM x 1.10 x 1000 instead of
C x 365
ER=OM x 1.05 x 1000 called out in the original agreement
C x 365
- Page 7 Major language addition: In addition, for the wastewater flows from the former FGUA/Lindrick system for one year following the COUNTY’S closure on the purchase of the FGUA/Lindrick system, the COUNTY will pay 50% of the existing Lindrick wastewater treatment rate; currently $4.156/1000 gallons. (Removed “of $2.078/1000 gallons”). After that first year, the COUNTY will pay for treatment of the FGUA/Lindrick flow per the formula as the rest of the COUNTY’S flow is billed.
City Action Item: Staff proposed a ten year treatment rate that would be reduced each year subsequent to the acquisition. The purpose of this proposal was to reduce the financial impact of the County’s acquisition over a period of time instead of an immediate impact. The County responded with the above proposal without any obligation to accept the City’s initial proposal. City staff accepted the proposal.
- Page 8 Minor language addition.
Major language addition: Adjustment for Indirect cost – If either the City or County feel that the existing indirect cost factor included in the O & M rate is insufficient or inflated to account for indirect operating costs, the CITY and COUNTY may complete a study to determine the new rate. The CITY and COUNTY agree to equally fund the cost of the study. The CITY will provide for a “third party contractor” to perform the work in accordance with federal standards surrounding indirect costs. Language removed: Beginning with the fifth anniversary of this Agreement, provided the CITY or the COUNTY elects, the CITY shall perform a cost allocation study in order to identify the indirect cost associated with the operations of the New Port Richey Wastewater Treatment Plant. Said indirect cost allocation study shall be performed in accordance with the requirements of the Federal Regulations (set forth on OA SC 10 published by HEW in December, 1986, and applicable regulations) and shall also provide for the breakdown of direct cost attributable solely to the operations of the New Port Richey Wastewater Treatment Plant.
City Staff Action Item: Staff agrees with the updated language change. This would allow for rate adjustments without negotiating an addendum to the IA.
- Page 9 Minor language changed:
90 days changed to 240 days following the fiscal year end, when the CITY’s auditors certify the actual expenses of the O & M directly attributable to the New Port Richey WWT facility, including depreciation of tangible personal property, such certification must also include the indirect cost as set forth in the cost allocation study.
City Staff Action Item: Staff agrees with the updated language change. City audit will be completed by the 240 days.
Major language addition: The COUNTY will be responsible for the purchase, installation, maintenance and calibration of all master meters measuring flow in the COUNTY’S system before entering the New Port Richey system. The COUNTY will purchase and install a meter to measure the wastewater flow from the Lindrick system into the County system. The COUNTY will then provide monthly reading to the CITY for the purpose of the special billing for one year after the purchase of Lindrick Utility as stated at the bottom of paragraph 7, with the CITY granted the right to read the meter in conjunction with the COUNTY. A map (Exhibit A) attached shows the existing locations, ownership and responsible party of the meters connected to the system as well as any known future connections.
City Staff Action Item: Staff agrees as this proposal is in accordance with industry standards.
- Page 10 Minor language changed.
Major language addition: heretofore and hereinafter imposed by the Florida Department of Environmental Protection, the United States Environmental Protection Agency or other governmental authority having jurisdiction over wastewater treatment activity.
City Staff Action Item: Staff agrees with the language addition.
- Page 11 Minor language deleted: Upon completion of the initial plant expansion contemplated by the First Addendum to the Inter Local Agreement,
City Staff Action Item: Staff agrees with the language deletion as it is no longer applicable.
Minor language changed: 150,000 gpd was changed to 5%. The “ER” in paragraph 7 plus sixteen cents was changed to 115% of the “ER”. For each 1,000 gallons of excess capacity used by the City up 150,000 gpd was changed to 5%.
City Staff Action Item: Staff agrees with the language. It allows the agreement to continue through future capacity expansions without the need to negotiate an addendum to the agreement.
- Page 12 Minor language changed:
Capital Improvements will include any addition to the wastewater treatment plant costing in excess of $500. The dollar amount was changed/increased to $5,000.
City Staff Action Item: Staff agrees with the language. This updates the capital threshold to be more in line with material costs.
- Page 13 Minor language changed.
Major language addition: Chlorides–The COUNTY acknowledges the former FGUA/Lindrick system has elevated chloride levels and is committed to addressing any concerns regarding any irregular levels in order to maintain full compliance with all regulatory agencies. To reduce the chloride level the COUNTY shall develop a plan to investigate via electronic surveillance equipment (such as CCTV or other video methods) the whole FGUA/Lindrick system over the first 36 months following acquisition for discovery of the type and amount of work required to address infiltration. Following the completion of the investigative work, the COUNTY shall commit to repairing 20% of the identified work per year for a period of 3 years.
City Staff Action Item: Staff agrees with the language. Chlorides have historically been an issue with the Lindrick system. City staff requested a County acknowledgment and a remediation plan to be included in the proposed IA.
- Page 13 and 14 Minor language changed.
Major language addition: Subject to the forgoing, the COUNTY shall use its best efforts to reduce chlorides to acceptable standards. If chloride levels in the former FGUA/Lindrick system wastewater results in any enforcement action or fines, the parties will address the matter pursuant to section 4 above.
City Staff Action Item: Due to the historical data related to the high levels of chlorides staff wanted the County to recognize the environmental impact and commit to a remediation program that address this item and comment to any financial impacts the exceedances may have from surface water treatment and the possible FDEP regulatory fines.
- Page 14 Minor language changed.
Major language addition: Potable Bulk Water Supply Rate – The CITY and the COUNTY have mutually agreed upon a bulk water rate of $3.61 per thousand gallons of metered usage for the CITY to provide treated potable water to the COUNTY.
City Staff Action Item: Staff agrees with the language addition. Staff proposed this item to the County in an effort to reduce the financial impact of the County’s acquisition of the FGUA/Lindrick system.
- Page 14 Minor language changed.
Major language addition: Future Negotiations – The parties agree to enter into negotiations following the closure of FGUA/Lindrick purchase on the following topics: (a) to help reduce potential nutrient loadings to natural waterbodies, the CITY and COUNTY agree that providing sanitary sewer service and replacing existing residential septic systems to East Gate Estates, Barbara Anne Acres, Silver Oaks, Lakewood Villas neighborhoods, and the Town and Country (Southgate) area would improve public health, safety, and welfare, and thus, will discuss the waiver the requirement imposed by the January 7, 1992 Agreement Between Pasco County and the City of New Port Richey which establishes designated service areas for water and wastewater services that at least fifty-one percent of the affected property owners approve a sanitary sewer special assessment project.
City Staff Action Item: Staff agrees with the language addition. Staff proposed this item to the County in an effort to accelerate septic to sewer conversions.
Major language addition: The City’s request to amend the Service Area Agreement Section V. regarding the rate charges to align with Chapter 180.191, Florida Statutes; and
City Staff Action Item: Staff agrees with the language addition. Staff proposed this item as the language in the existing IA is confusing and does not match the existing FSS.
- Page 14 and 15 Minor language changed.
Major language addition: pursuant to the 1994 Reclaimed Agreement between the CITY and the COUNTY, the CITY is supposed to pay the COUNTY for disposal of all reclaimed water delivered to the COUNTY that comes from the CITY’s wastewater flow to the plant, and the parties wish to renegotiate these payment terms
City Staff Action Item: Staff agrees with the language addition. Staff proposed this item due to the reclaimed water discussion between Tampa Bay Water and other members where a reclaimed credit or rate may be identified for reclaimed water.
- Page 15 Minor language changed.
Major language addition: 19. Condition Precedent. The changes called for in this Agreement are contingent upon and will not take effect until the County closes on the acquisition of the Lindrick System from the FGUA.
City Staff Action Item: Staff agrees with the language addition.
Major language addition: 20. This Inter-local Agreement, or amendments hereto, shall be executed on behalf of each participating jurisdiction by its duly authorized representative and pursuant to an appropriate motion, resolution, or ordinance of each participating jurisdiction. This Inter-local Agreement, or any amendment thereto, shall be deemed effective upon the date of execution by each authorized representative and filing in the official records of Pasco County, Florida.
City Staff Action Item: Staff agrees with the language addition.