OCTOBER 27, 1988

The Lake County Board of County Commissioners met in special session on Thursday, October 27, 1988, at 2:00 p.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: Thomas J. Windram; 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; Robert K. McKee, Chief Deputy Clerk: and Sandra Carter, Deputy Clerk.


The Chairman, Commr. Glenn Burhans, brought to the attention of the Board the Eact that the Board OEfice had received, this date, from the Sheriff's Department, checks in the amount of $1,636.90 (1987-88 School Crossing Guard Budget) and $467,881.63 (General Fund) covering excess monies at the close of the general fiscal year.

On a motion by Commr. Carson, seconded by Commr. Bailey and carried unanimously, the Board accepted checks from the Sheriff's Department, covering excess monies at the close of the general fiscal year, in the amounts as stated above.


Mr. Ed Sledge, Piper & Marbury, representing the County as special counsel for the NRG project, appeared before the Board stating that he wanted to bring back to the Board an update on the project so that the Board would know where things stand, and have information in time to review, before further action is reguired. He stated that one of the things that need to be discussed is the current arrangements between Ogden Martin and NRG, and the second thing would be to walk through the basic conditions precedent, that were in the original contract, and for him to describe what is contained in the documents, which were distributed to the Board prior to the meeting, for their perusal, in order to answer any questions the Board might have. At this time, he turned the floor over to Mr. Sokol.

Mr. David Sokol, President and Chief Executive Officer of Ogden Martin Corporation, appeared before the Board stating that he would like to report a few things regarding the status of the project. He stated that there was a fair amount of direction given by the Commissioners, that guarantees provided should be directly from Ogden, and that the complexity of how those guarantees get to the County should be minimized, which has been accomplished. He also stated that Ogden Martin recently signed an agreement with Mr. F. Browne Gregg, and NRG, where Ogden will require all the assets of NRG, including the name; therefore, the County will be contracting directly with Ogden. Any apparent guarantee will be directly on this contract, with NRG acting as a subsidiary of Ogden, and Mr. Gregg will, in essence, be a sub-contractor of Ogden.

Mr. Sokol stated that last week he met with all fourteen (14) cities, of the County, to give a presentation and answer questions, along with County staff, the County Attorney, and outside consultants. The consensus of the cities was that their support of the project was very clear, as far as the project being environmentally sound, and acknowledging all the benefits of the project. However, they opposed any special assessments within each community, unless they levied it, and they opposed the notion that they could not recycle. He stated that there was a negative vote taken by the City of Tavares. It appeared, by the discussion, that Tavares intended not to go forward, but to deal with solid waste themselves, by way of a landfill, or a small waste-to-energy plant within the city itself. Two communities voted in favor of the project, being Leesburg and Mt. Dora, which represents approximately 30% of the population, which in combination with the County participation, is approximately 65% of the population, in support of the project. Several of the other communities have been asked to set special meetings to vote on the overall agreement.

Mr. Sokol brought the Board up-to-date on the current construction status. He stated that construction will commence on November 10, 1988, as construction started before November 15th is very critical, as far as a tax perspective. He indicated that the necessary contractors were on board and ready to begin, and that approximately 55% of actual monies have been expended, thus far.

Commr. Burhans questioned Mr. Sokol as to how the change in the contract, regarding recycling, would affect tonnage, to which Mr. Sokol replied that it should not affect it negatively at all. He stated that it is consistent with what the County's consultants assume is going to happen - that recycling is going to be a part of the County's solid waste plan.

Commr. Smoak questioned Mr. Sokol as to whether he concurs with the experts, to which Mr. Sokol replied that he does.

Commr. Smoak questioned whether Ogden Martin has any negative feelings, at all, as to whether there is adequate waste in Lake County, to run the facility to capacity, including any recycling program which might go into effect, to which he was assured that they did not.

Mr. Sokol stated that recycling should, in fact, benefit the communities. He stated that his staff estimates that Lake County will have in excess of 150,000 tons of their own processible refuse, when the plant is started.

Commr. Smoak then questioned whether it would not be a prudent thing for the County to be relieved of the guarantees that the County has, as far as tonnage and BTU output is concerned, if the consulting engineers and Ogden Martin agree that there is more than sufficient tonnage in the County. He stated that he did not think the bankers care who does the guaranteeing - they simply care that there is a guarantee. He suggested letting Ogden Martin and NRG assume the entire risk of the tonnage, which is necessary to run the plant, and the BTU output to generate the kilowatt hours of electricity.

Mr. Sokol replied that he did not think what Commr. Smoak was suggesting would be prudent, at all, from his perspective, as Ogden Martin is guaranteeing the first $800,000.00. He stated that the County's consulting engineers would probably tell the Board that the plant was a very high likelihood of working, just as he said it would, and based on that, the County relieves Ogden Martin of their guarantees of the plant. He stated that he could not stop Lake County from enacting changes, as to how they handle waste in the future, as well as how they deal with Ogden Martin. That guarantee incorporates a lot more than just having the garbage from this County.

Commr. Smoak stated that all he continues to hear is that there is no problem with the facility being in Lake County, and with that statement, from both the vendor and the experts, it seems to him a very prudent thing that the County be relieved from that responsibility. He further stated that Lake County has committed themselves to delivering all the acceptable solid waste in the County, short of recycling, and he would think that that is something that the Board ought to consider.

Commr. Smoak suggested that the County not put up any money, because all the information that the County is getting, is that there is no problem with the facility, that the tonnage is here, that there is more than 130,000 tons, even more than 150,000 tons. He suggested that the people who are making those statements, especially now that NRG is no longer a part of the picture, accept the responsibility of the tonnage, and that the County continue to guarantee that all acceptable waste in the County, that the County has control over, be delivered to them, and relieve the public of the responsibility of making those guarantees.

Commr. Smoak further stated that the point he is really trying to make, is that although the County is hearing that everything is adequate, to fire the plant, to have the tonnage available, that the County is guaranteeing, that will produce the BTU output, per ton, that the County is guaranteeing, the ultimate responsibility rests with the County and the public, and if the tonnage is not adequate, they are the ones that will have to pay the bill.

At this time, Commr. Windram injected that he had a letter (which he submitted for the record), from Attorney Dan Robuck, indicating that Mr. Robuck is no longer affiliated with NRG and the project, therefore, he is free from any potential conflict of interest, and can now participate in any discussions, as well as vote, on the matter.

Mr. Sledge reappeared before the Board stating that he would walk through the items that are covered in the Status of the Conditions Precedent Contained in the Service Agreement (which was distributed earlier) with the Board, and try to summarize, briefly, the status of each of the conditions.

Mr. Sledge stated that condition (a), which is the Ogden Corporation guarantee agreement, states that there will be a full guarantee of all NRG's obligations, under the service agreement, which is required. He informed the Board that this plant uses a technology that is licensed from a German company, and the Martin GmbH covenant of assurance, which is the second half of condition (a), is a side agreement that, if anything were to happen to Ogden Martin, the German company would continue to supply to the successors of NRG, the necessary equipment to operate their licensed technology. These documents are scheduled to be presented, for approval, at the November 8, 1988, Board Meeting.

Mr. Sledge then proceeded to discuss conditions (b) through (g), excluding condition (e), of the above stated document, with the Board. In discussing arrangements for financing, of the facility, Mr. Sledge stated that the County will have control over the variable rate. He stated that the financing documents are in their final stages of preparation, and that the National Westminster Hank has committed to issue its Letter of Credit, in support of the Variable Rate Bonds, to be issued by the County. In negotiations with the Bank, certain technical amendments to the Service Agreement were deemed necessary. Sun Bank and Security Pacific Bank submitted the low bids to provide Trustee, Registrar, Tender and Paying Agent services, respectively. The Board can act on their respective appointments on November 8, 1988.

Commr. Smoak questioned Mr. Sledge as to how he would advise the County to proceed, from this point on, short of having, in hand, the 75% approval of the cities, to which Mr. Sledge replied that the County needs to provide the cities with as much information as possible, and to request the cities to take an action in time for the County to avail itself of the benefits of the tax law.

At this time, Commr. Smoak noted, for the record, that all the documents, in question, are tied to November 8, 1988 (a Board Meeting date), and questioned Mr. Sledge as to how the County should proceed, assuming that the County does not have, in hand, 15% of the population, within the cities, signing contracts.

Mr. Sledge replied that the County should notify NRG that they do not have the 75% and, therefore, the contract will not be effective.

Commr. Smoak questioned the fact that if the County did not have the 75%, in hand, would they have the option to postpone action, and still have a contractual agreement, binding on both parties, should the 75% become a reality, prior to December 31, 1988, to which Mr. Sledge replied that the contract would still be in effect.

At this time, Commr. Smoak stated that he would like for the record to reflect that the contract specifically says that said contract is a binding agreement, on both parties, and that the condition covers up to, and including, December 31, 1988, for performance.

Mr. Sledge stated that, up to that time, both parties have to use reasonable efforts to try and satisfy said conditions.

Discussion occurred regarding good faith obligations, at which time Mr. Sokol gave input regarding same. He also answered a question as to where the County stands, as a whole, if one of the County Commissioners is working against the project. He stated that the County needs to let the cities know that they are for the project.

At this time, Commr. Smoak stated, for the record, his concerns regarding the County rushing the contract and project. He stated that some information, which was requested at an earlier date, has still not been made available to the Board, and that he does not support the speed that the County is going with. He proposed getting all the cities together, to discuss the issue.

After considerably more discussion, Mr. Sledge again stated that the contract is legally binding, on both parties, until December 31, 1988.

Mr. Sledge then proceeded to discuss the remaining portions of the Status of the Conditions Precedent Contained in the Service Agreement, as well as the status of the overall financing.

Mr. Jeff Clunie, R. W. Beck & Associates, discussed the Feasibility Study with the Board, stating that he projects that the County will have 183,000 tons of processible waste, per year, by the year 2000 - 15% of said waste will be recyclable by the year 1991. He also stated that 27% of the waste in Lake County is not processible.

After further discussion, Commr. Windram injected that the agreement, presently before the County, is substantially better than the original agreement.


At 3:35 p.m. the Chairman announced that the Board would recess for 10 minutes.


Mr. Robert Schoenhoffer, Alex, Brown & Sons, appeared before the Board to discuss the financing aspects and to answer any questions that the Board might have regarding same.

Commr. Smoak questioned whether the County will be locked in, for paying back the loan, to which Mr. Schoenhoffer replied that the County would not.

Mr. Jon Wooten, Smith, Barney & Associates, gave input from the audience regarding financing of the bonds.

Mr. Tony Otte, City Manager for the City of Tavares, appeared before the Board to discuss Resolution No. 88-36, opposing a "mass burn" facility. He read the resolution to those present, stating that the City of Tavares request that the Board reject the NRG agreement, for said facility.

Mr. Robert Willets, a local school teacher and resident of the Umatilla area, appeared before the Board and proceeded to show the Board, and those present, how much garbage is generated by an average size family, in one day, and stated his concerns regarding what type of garbage is going to be burned in the proposed incinerator, polluting the air, as well as the water supply, of Lake County.

At this time, Commr. Smoak requested that staff prepare, for the Board, in written form, a comparison of the applications of the three (3) different types of collection and waste stream controlled procedures, and if the County goes to the tipping fee, how that will be structured, and how it will actually be administered - what will be required in the administration process, and how the County will control or have any control over the ultimate net cost to the consumer, for collection, transportation, and incineration and ash disposal. With the procedure, which has been recommended and proposed, the fee would be assessed by the County. The concern, as he understands it, from previous discussions on the tipping fee, and why no one recommended it, was because there was no way to control the pass through costs to the consumer, and feels that this is an option that the County is looking at, and feels that the County ought to look at it, up front, before acting on the interlocal agreement, so that before the County looks at it from a passage, or amendment, that the County understands what it says and what it does.

Mr. Sokol brought to the attention of the Board the fact that, if the cities do not want to be involved in this project, and agree to dispose of their own refuse, that the Board understand that under State law, whether a community supports the project, or not, the County still has the obligation to dispose of their refuse for them, whether they recycle or not, but to the extent that they choose to withdraw from this project, and want to deal with their own refuse, Ogden would be prepared to take on the responsibility of filling their capacity.

There being no further business to be brought to the attention of the Board, the meeting adjourned at 4:15 p.m.