The Lake County Board of County Commissioners met in regular session on Tuesday, May 19, 1988, at 9:00 a.m., in the Board of County Commissioner's Meeting Room, Lake County Courthouse, Tavares, Florida. Commissioners present at the meeting were: Glenn C. Burhans, Chairman: Claude E. Smoak, Jr.; James R. Carson, Jr.; and Don Bailey. Others present were: Christopher C. Ford, County Attorney; James C. Watkins, Clerk; Michael C. Willett, County Administrator: Katherine A. McDonald, Assistant County Administrator; and Toni M. Austin, Deputy Clerk.

James C. Watkins, Clerk, gave the Invocation and the Pledge of Allegiance was led by Commr. Bailey.

CONTRACTS, LEASES AND AGREEMENTS/LANDFILLS

Mr. Dan Robuck, Attorney for NRG, appeared before the Board and stated that there had been no changes in the contract, since it was presented to the Board on Tuesday, May 17, 1988.

Mr. Mike Stearman, City Manager of Eustis, appeared before the Board to discuss and review questions, as prepared by the cities, in meeting with the County's experts and consultants early this morning, as follows: Why does the County think we need a mass burn or RDF (refuse derived fuel) facility at this time, and was the decision to look at a waste-to-energy, or mass burn facility, done within the context, of the master plan for sanitation?

It was noted that the Board felt that a waste-to-energy facility would be the best solution for the County, rather than continuing to use up land, or polluting underground water supplies, and a master plan had not been done.

It was suggested that all alternatives be considered before the approval of an incinerator.

Mr. Ed Sledge, Piper & Marbury, P.A., addressed the Board and suggested that Mr. Jeff Clunie, R. W. Beck & Co., speak on the conclusion made by the County, for a waste-to-energy incinerator.

Mr. Clunie presented a history background on R. W. Beck & Co., indicating that the company works only for public sector clients, and reviewed the procedures used by the company. The company first develops a comprehensive solid waste management plan, which will assist in the determination of tonnage of waste available, and the alternatives to handle such tonnage.

Mr. Clunie discussed recycling, composting, the formal procurement process, and the selection of vendors, with the County being in the process of hiring Post-Buckley. Mr. Clunie stated that there are a number of advantages, with the proposal being presented, involving permitting and sites.

Commr. Carson stated that the existing permit, issued by the Department of Environmental Regulations, allows 576 tons of garbage to be burned per day.

Mr. Willett stated that Lake County will receive garbage from all of the cites, except Leesburg.

Mr. Robuck informed the Board that, should the Board decide to change the sites for the project, the County would have to reapply for a permit from DER.

Mr. Willett stated that three garbage studies had been done by the County, one study being over a period of one year, and one study being over a period of one month.

Mr. Robuck informed the Board that Mr. Gregg had a study done, and felt that Lake County would have more garbage than estimated. Should there be a shortfall, Disney World has offered its garbage to be burned.

Mr. Clunie discussed the differences between a mass burn facility and a refuse derived fuel (RDF) process, as well as the different technologies, and stated that there are other alternatives that would have a better cost proposal, than the one presented. At this time, Mr. Clunie elaborated on the differences in the boilers, fuel, equipment design, and life span for the facilities.

Discussion occurred regarding the percentage of ash produced in the different processes, and the permitting required for the different facilities.

Mr. Robuck stated that the contract with Mr. Gregg instructs Mr. Gregg to pay for the designing and feasibility study.

Mr. Sledge explained the present conditions of the proposal and the reasons for not requesting RFP's (request for proposals), in relation to Badcock & Wilcox. He further discussed the debt service estimate of fifty-two million dollars, including the six million to be received by NRG, and the interest rates, in relation to the tipping fees.

Mr. Livingston, Smith & Barney, clarified the tax advantages involved, with Mr. Gregg placing ten million dollars cash equity into the project, and funding the excess amount with tax exempt bonds. It was noted that the less debt service, the lower the tipping fees.

Ms. May Griffin, Mayor of Minneola, appeared before the Board to question the benefits to private enterprise.

Mr. Robuck discussed Mr. Gregg's liabilities, in relation to paying off the bonds and burying the garbage, should the project fail.

Mr. Clunie stated that public ownership of a mass burn facility would be more expensive, with no tax benefits, as established by studies.

Mr. Sledge stated that NRG is agreeing to get rid of 163,000 tons of garbage; to produce at least 525 kilowatt hours of electricity, from each ton of garbage; and not to produce more than approximately 30% of residue, from the tonnage that goes in, for a fixed amount of money. He stated that Smith & Barney would look to NRG for the payoff of the bonds, should NRG default. At this time, Mr. Sledge discussed the risks of the County, in relation to the County bringing in enough garbage: should energy prices not increase as projected, the tipping fee will go up: and should the pass through costs turn out to be more expensive than projected, the overall tipping fee will go up.

Mr. Omar Smith, who has been requested by the County to put together a future landfill design-master plan for solid waste management, appeared before the Board to discuss the disposal costs of ash, in a plant of this nature, versus raw garbage. He stated, with the new landfill regulations, the cost is approximately $35.00 a ton, for raw garbage.

Mr. Sledge discussed a provision in the contract, which requires the County to pay the costs for forced majeure, events beyond the control of NRG. He discussed possible future changes in the law by legislation, and the possibility of an increase in NRG's operating and maintenance fees. He further stated that the contract has the absence of a long-term, full construction and operating guarantee.

Mr. Stephens discussed the guarantees to be made by Badcock & Wilcox, stating that the more guarantees made, the more costs to the County.

Mr. Rex Taylor, City of Leesburg, questioned the sale option clause in the contract, with the County being able to purchase the facility.

Commr. Smoak felt that the majority of the questions had been answered, in terms of this particular proposal, as to how it compares with other proposals, short of the feasibility study, to be conducted by Badcock & Wilcox, but that there are still concerns in the areas of construction and operational performance. He stated that he also has concerns with the County's liability to the bond holders: the site chosen for the facility: and whether or not adequate information had been provided, regarding costs for other alternatives, such as landfills.

Commr. Smoak stated that he did not feel the County should sign the contract, however, felt they should continue with the process, supporting the concept and the use with the vendor, as proposed, and continue with the consultants, for advise, on a contractual basis, and that the cities be invited to sit down at workshop sessions, with our consultants, to review the contract in detail, in order to determine whether or not they wish to be involved with the project.

Mr. Robuck proposed that a motion be passed, authorizing Mr. Sledge and Mr. Clunie to continue to work out the differences in the contract, and authorizing the Chairman's signature on same, so that NRG can proceed with the financing of the project.

Commr. Carson stated that he had no problem with the continuation of the negotiating process, but felt that the decision should rest with the Board and the cities.

Mr. Willett stated that there were several aspects involved making it difficult for him to recommend the signing of a contact. He informed the Committee that legislation "as being proposed in Tallahassee, (within the next couple of days), that could have an affect on the amount of garbage that is available. He discussed other concerns, such as: contents in the contract, involving the solid waste district; the mandatory collection, which committed the property appraiser and tax collector to collect the fees: and the County being assured, through DGR, as to who will handle the ash.

Commr. Smoak suggested a contract, contingent upon the cities' decisions and the feasibility study.

Mr. Sledge discussed risks to be taken by the County, with the approval of the contract, in relation to the financing, and the need for a positive decision, by the County, as to the direction it wants to take regarding waste energy.

RECESS & REASSEMBLY

At 12:35 p.m., the Chairman announced that the Board would recess for lunch and reconvene at 2:00 p.m., for continuation of the discussion regarding the NRG project.

CONTRACTS, LEASES AND AGREEMENTS/LANDFILLS (CONT'D.)

Mr. Stearman appeared before the Board to make a statement, in behalf of all the cities. He stated that the cities unanimously voted "no" to the signing of the contract, as it is presently written. The cities further determined the following to be recommendations to the County: (1) a guarantee of performance: (2) a design and operation to industry standards: (3) determining ownership of by-products: (4) concerns regarding the waste tonnage flow; and (5) the fact that the cities would like a commitment from the Board of County Commissioners to go forward with this project, and that the Board will sit down with the cities to negotiate conditions for the signing of this agreement, in support of the project.

Mr. Sledge stated that a course of action was needed, in order for everyone involved to have a complete understanding of the contract. He stated that the first phase would be the feasibility study, to begin immediately, to determine the amount of available garbage, to be disposed of either in landfills, or a mass burn facility. He further stated that once this has been determined, the County needs to ask NRG to go back to Badcock & Wilcox, to get prices for the RDF and mass burn facilities, guaranteeing the construction and operation of the facility, for the full term of the contract (20 years).

Mr. Clunie stated benefits, such as having Badcock & Wilcox aboard, for a 20 year operating period, would help reduce potential technical risks to the County; and the fact that the fair interest rate could reduce the cost of the project from 18-20 million dollars, over the life of the project. He stated that, with the project being constructed to industry standards, R. W. Beck & Co. would be willing to endorse the project. He further stated, by obtaining a price from Badcock & Wilcox, for a RDF facility and a mass burn facility, would further enhance the overall economics of this project for the County, as well as the vendor.

Mr. Schoenhofer stated advantages such as saving time for the arrangement of financing; the reduction of flexibility in cost savings; and the fact that cost reductions could be achieved.

Mr. Robuck agreed with the involvement of the cities, and had no objection to the feasibility study. He further stated that he would agree to having Mr. Sledge present at the meetings with Badcock & Wilcox, with Mr. Gregg handling the negotiations.

Commr. Smoak stated that he felt the mass burn versus RDF study, and the feasibility study, would be sufficient, rather than having Mr. Sledge meeting in the negotiation process with Badcock & Wilcox. He stated that Smith & Barney could supply the information needed, as far as options and types of financial arrangements, including the guarantees.

Commr. Smoak suggested that language be developed in the contract, as a contingency for pending legislation, that would adversely affect the contract.

Mr. Sledge stated that he would like for Mr. Clunie, Mr. Schoenhofer and himself to meet with Badcock & Wilcox, in negotiating with Badcock & Wilcox.

Mr. Clunie suggested that language be incorporated into the contract, which would allow the sharing of energy revenue, whether it be steam or electricity.

On a motion by Commr. Smoak, seconded by Commr. Carson and carried unanimously, the Board approved the finalization and execution of a service contract, with NRG, with the following stipulations:

(1) that the Cities' recommendations be incorporated in the contractual arrangements, specifically that (a) NRG, acting in conjunction with the County, obtain long-term performance guarantees from Badcock & Wilcox consistent with industry standards, (b) revenue-sharing formulas include steam and other energy products, and (c) bids be obtained from Badcock & Wilcox, for both mass burn and RDF facilities.

(2) that the County establish direct liaison with Cities concerning the project and make available County consultants,

(3) that the County, in cooperation with the Cities, review waste generation levels and pending State legislation, in order to determine whether the County and the Cities can undertake the delivery obligations contained in the Service Agreement,

(4) that the Service Agreement contain a condition precedent protecting the County and the Cities against the effects of the enactment prior to project financing, of State legislation, that would materially change recycling patterns, and

(5) the proposed ordinances contained in the Service Agreement be reviewed prior to consideration by the Board, and their enactment be made a condition precedent to the County's obligations under the Service Agreement, it further resolved that upon the completion of final legal review and finalization of the Service Agreement, the Chairman be authorized to execute the Service Agreement in substantially the form presented to the Board with such changes as may be necessary to effectuate the foregoing, it being contemplated that these things be done by Friday, May 27, 1988.

Discussion occurred regarding the projected costs for the consultants and the availability of their services.

At this time, it was suggested that the Board request the consultants to develop a budget, to be presented to the Board in writing.

Mr. Jeff Abernathy, AAA Refuse Service, appeared before the Board to request that private industry be included in the negotiations.

APPOINTMENTS-RESIGNATIONS/LAWS AND LEGISLATION/RESOLUTIONS

Ms. Cecelia Bonafay, Attorney, appeared before the Board to discuss the support given by the Board for a resolution supporting House Bill 1151, regarding an independent special district for water and sewer. She stated that Sumter County passed a resolution supporting three members being elected, and two members being appointed. Lake County wanted three members appointed, with two members elected. She stated that legislative representatives indicate that they would like to see all of the members elected.

Mr. Chris Ford, County Attorney, stated that he saw no problem, if there was a consensus of the Board today, indicating what the Board would prefer.

On a motion by Commr. Smoak, seconded by Commr. Carson and carried unanimously, the Board appointed Commr. Bailey as the representative of the Board of County Commissioners, to represent the Board's best interest in dealing with the Legislature, and that he be given the authority to speak on the Board's behalf.

There being no further business to be brought to the attention of the Board, the meeting adjourned at 3:15 p.m.

GLENN C. BURHANS, CHAIRMAN

ATTEST:

JAMES C. WATKINS, CLERK

TMA/6-3-88