FEBRUARY 10, 1994

The Lake County Board of County Commissioners met in special session on Thursday, February 10, 1994, at 10:00 a.m., in the Board of County Commissioner's Meeting Room, Lake County Administration Building, Tavares, Florida. Commissioners present at the meeting were: Catherine C. Hanson, Chairman; Welton G. Cadwell, Vice Chairman; Don Bailey; Rhonda H. Gerber; and G. Richard Swartz, Jr. Others present were: Frank T. Gaylord, Interim County Attorney; Peter F. Wahl, County Manager; Ava Kronz, BCC Office Manager; and Sandra Carter, Deputy Clerk.

The Chairman opened the meeting.




Mr. Pete Wahl, County Manager, informed the Board that, as a requirement of the Comprehensive Plan, the County is required to, in some degree or fashion, as part of the Stipulated Settlement Agreement, particularly regarding south Lake County, do something with regard to the development of regional water/wastewater services and that staff, after some discussion and preliminary investigation, felt that the matter should be brought before the Board for direction.

Mr. Wahl stated that, in discussions that were held during the Comprehensive Plan negotiations, Mr. Mike McDaniel, Department of Community Affairs (DCA), indicated that he was extremely anxious for the County to move forward with the provision of a regional system. He referred to a color coded map, contained in the Board's backup material, stating that it indicated areas that are already identified as urban expansion. He stated that, within the blue colored portion of the map, the County has projected that 5,600 residential connections will take place, within the next ten years.

Mr. Wahl stated that the County can address the matter in three ways, being (1) do it on a public basis, (2) allow it to occur by private providers, or (3) do it as a public/private partnership, with a private provider, with the County involved as a partner. He stated that the one thing the County cannot do is nothing, because, in doing nothing, the private sector is going to move forward and develop the utilities on a proprietary basis. He stated that two service areas have already been identified, one being Lake Groves Utilities (covering the orange and blue areas on the map, in terms of their current and projected service areas) and the other being the Southlake utility group (covering the yellow area on the map).

Mr. Wahl stated that staff had met with Post, Buckley, Schuh & Jernigan (PBSJ), Public Financial Management (PFM), and Greater Construction Corporation to discuss the three options and, as a result, developed a Decision Matrix (contained in the Board's backup material), which they scored. He stated that it became very clear to staff, in going through that exercise, that there are a lot of subjective issues involved in this kind of decision and that, no matter where one's particular interests lies, one can shape the way the scores are assigned.

Mr. Wahl stated that, if the Board were to make a decision to move forward, they would be approving an activity that requires a tremendous amount of capital costs up front; has some operational liabilities; is dependent, in a large part, on the actual delivery of the "rooftops" that are projected; and would require the County to move in an area where it has no current operational experience. Mr. Wahl stated that staff needed direction, this date, as to what the Board wanted them to do. He stated that, if the County is going to go forward with a public utility, then it needs to move in that direction and begin to do some of the things that were identified in the Master Plan and in the Comprehensive Plan, in a relatively short period of time. He stated that staff feels a public/private partnership would be best for Lake County, if it can be made to work, for several reasons, being (1) it gives the County the ability to move into the area of utility ownership and operation, without carrying all the liability; (2) it gives the County the ability to become involved, from a protective standpoint, in the future; and (3) there would be no operational liability, initially, because the private provider would presumably be continuing to provide the service.

Mr. Wahl stated that there are some financial benefits, in terms of current taxes and what can be done in terms of the delivery of utility services, with public involvement, and the County's ability to assist in tax refinancing and it allows future protection, in that, the County would be acquiring a system that they knew something about and one that they had a high degree of confidence in the quality of, because the County would have been involved, contractually, with the repair and maintenance of the system.

Mr. Wahl stated that, if the Board were to choose to go with a public/private partnership, they would need to understand that there would be some costs involved, in that the County would need some engineering assistance, some specialty law assistance, and it would need to involve PFM, because it is a complex issue. He stated that said costs are predicted to be approximately $150,000.00.

Mr. Wahl stated that staff had held discussions with both the entities and the provider and would propose, in the event the County were able to successfully complete the public/private partnership agreement, that those preliminary costs be borne by the provider and be transferred back through his rate structure and paid by the system payers. He stated that, if the County were not able to agree, then each side, public and private, would pay 50% of the accumulated costs, up to the point that the County called an impasse, or determined that they were not going to be able to reach an agreement, so the Board's exposure, ultimately, would be in the range of $75,000.00. He stated that, if the County chose to go this route and could not reach an agreement, it would not be a total loss, because the engineering aspect of it would be useful, in that the County would have found out that it cannot do this and would move in some other direction.

Commr. Hanson questioned the time frame involved.

Mr. Wahl stated that, optimistically, to get to the point where the County would have a final agreement on a public/private partnership, it would take somewhere between 90 and 120 days.

Commr. Cadwell stated that he felt the public/private partnership was the way to go. He questioned how Issue No. 9, on the Decision Matrix, contained in the Board's backup material, would work.

Mr. Bill Sundstrom, with the law firm of Rose, Sundstrom & Bentley, Tallahassee, Florida, appeared before the Board stating that he was representing the County and was subcontracting with Post, Buckley, Schuh & Jernigan. He responded to Commr. Cadwell's question, stating that the rates would be set pursuant to the contract, not by the Public Service Commission, and that, ultimately, the rates would be controlled by the Board.

Commr. Cadwell questioned how a public/private partnership would evolve over a ten or twenty year span.

Mr. Wahl, County Manager, stated that, initially, the County would reach an agreement on the costs of the capital facility that is currently existing. He stated that, from a tax standpoint, there would be some advantages, in that, as the system grows, the County would own those portions of the collection system that are donated by the entities that are tying into the system, but the costs of the overall system - the development, treatment, and disposal capacity would be borne by the developer, with a formula, or an agreed upon distribution of those costs, that would accumulate, to the point where the County, eight to twelve years from now, would be confronted with an option, that would extend for a period of time, to buy out the private interest in the utility and become the owner/operator, or continue the operation of the facility.

Commr. Bailey stated that he wanted to make sure the County would not be intruding on any area that falls under the City of Clermont.

Mr. Wahl stated that staff would continue to meet with the City of Clermont, in the development of the service areas.

Commr. Bailey stated that he felt the County should go with the public/private partnership concept, as he felt it was the most economically feasible way to go.

Commr. Gerber questioned whether the County would be setting the fees that the customers would pay for their water/wastewater service and whether the County would be faced each year with a request for an increase.

Mr. Wahl stated that the County would not get directly involved in the rate regulation, however, would be involved in the determination of the formula, upon which the rate is established. He further stated that he did not think the County would be faced with a request to increase the fees each year.

Commr. Gerber questioned whether the 5,600 units, alluded to earlier, had already been approved - unit wise, capacity wise, and concurrency wise.

Mr. Bob Mandell, President of Greater Construction Corporation and Lake Groves Utilities, Inc., appeared before the Board, in response to Commr. Gerber's question, stating that not all of the 5,600 units she alluded to have been zoned for ERC permits. He stated that the figure was based upon the densities allowed in the Comprehensive Plan.

Mr. Frank Gaylord, Interim County Attorney, stated that, by going with a public/private partnership, the County would be eliminating a good deal of the risks involved, with the ability, at some point in the future, to acquire the assets themselves.

Commr. Gerber questioned whether this would be a ten (10) year plan.

Mr. Wahl, County Manager, stated that that issue would have to be resolved as the agreement is developed. He stated that it could go from seven to possibly twelve or thirteen years.

Commr. Cadwell questioned whether a decision had been made as to who the private company would be.

Mr. Wahl stated that, if the County does nothing, the private utility has a service area that has been identified, which they have the ability to provide service to, under the Public Service Commission's regulations.

Commr. Gerber questioned whether the County could then do an amendment to the Comprehensive Plan, to get the County out of its predicament with DCA.

Mr. Wahl stated that the Comprehensive Plan encourages the development of public/private partnerships.

It was noted that this issue is time sensitive.

Commr. Hanson stated that she feels the market is going to be in south Lake County and that the County needs to either prepare for it or take what they get. She stated that this is more forward thinking.

Mr. Wahl stated that, if the Board approved to go with a public/private partnership this date, the next step would be for staff to bring back to the Board a specific scope of service, from each of the participants, with a time frame as to where the County needs to be, and develop some milestones. He stated that they could probably report back to the Board in 45 to 60 days, with a stop point, if it looks like the County is not going to go further. He stated that the County could be in a position to have agreements with the three parties involved (the law firm of Rose, Sundstrom & Bentley; Post, Buckley, Schuh & Jernigan; and Public Financial Management) by March 1, 1994.

Commr. Swartz questioned what the analysis shows, with regard to what the ultimate costs will be to the rate payers that are using the system today, or who will use it in the future.

Mr. Wahl stated that staff had not gone to that level of detail, therefore, he could not provide said information this date. He stated that staff had looked at more generic issues that would influence whether the County would want to be involved.

After a brief discussion, public ownership was eliminated by the Board, as a consideration.

Ms. Lavon Wisher, Public Financial Management, appeared before the Board stating that, historically, they have found where governments have provided utilities for a long period of time it has been very cost effective, however, for Lake County, who is not in the utility business, to start from the ground up, would put the County at some financial risks. She stated that the benefits of going into a public/private venture is that the County will try to eliminate some of the things that private enterprise has to pay and pass those savings on to the rate payer. She stated that it is an undefined cost, at this point, but, she feels that it will be to the County's benefit.

Commr. Bailey questioned what, historically, has been better for the rate payer - private or public/private partnership.

Ms. Wisher stated that it depends on where it is constructed. She stated that each instance is different, however, if the County can provide to the rate payers a tax exempt basis for the capital costs in operating the system, it is going to be a benefit over and above just solely private. She stated that she will outline in a financial report, for the Board, the benefits, the disadvantages, the merits, and what it should cost the County in the future. She stated that she should be able to provide the Board with all the criteria necessary for them to make a positive decision and one that will benefit the County in the future.

Commr. Swartz stated that, some years ago, the County had looked at this system, through a study that Post, Buckley, Schuh & Jernigan had done, and it was determined by the Board that there was no way the County could do it effectively and efficiently and compete with a private system, therefore, the County backed away from it. He stated that now the County finds itself with a proposal that says it may be beneficial for the County to do it, so he is a little skeptical about the matter. He questioned why, if it was not a good deal for the County before, it now is. He stated that he is skeptical of where the dollars are going and before he would approve to pay part, or all of, the $150,000.00 that was quoted earlier, he would want to look at a number of instances and see what has happened to the various entities, whether it be the rate payers, the private providers, or the public.

Commr. Swartz stated that what was on the map before the Board this date was exactly what he has been trying to keep from happening in south Lake County. He stated that it is exactly what the County is supposed to be trying to avoid, particularly for the commercial corridor in that area and that he feels, in the end, it is going to cost the rate payers more, not less.

Commr. Hanson questioned whether more preliminary information could be put together for the Board, within the next couple of weeks, to give them an idea of whether or not they should move ahead.

Ms. Wisher stated that she would provide the Board, free of charge, with previous studies that she has done and what her recommendations were, but she did not feel that it would help the Board, in this instance, because this situation is unique. She stated that it is going to depend upon how it effects the rate payers, as to what agreement the County enters into.

Mr. Mandell reappeared before the Board and gave a brief background history of what had transpired, in the past, between Greater Groves Utilities, Inc. and the County, regarding the matter before them this date. He stated that he was before the Board, once again, stating that Greater Groves Utilities, Inc. is interested in being involved with the County, in a public/private partnership, if the County is interested in doing so. He stated that, if the County and Greater Groves Utilities, Inc. can come up with terms that are reasonable for both parties, they will agree to it. If not, they would be willing to share the costs involved for a consultant.

Mr. Wahl stated that he would get the requested information back to the Board as soon as possible.

No action was taken at this time.



A brief discussion occurred regarding this request.

Mr. Craig Willis, Alternate Transportation Coordinator, appeared before the Board and answered questions regarding this request.

On a motion by Commr. Bailey, seconded by Commr. Swartz and carried unanimously, the Board approved a request from Public Services for authorization to accept a $100,000.00 grant, from the Florida Department of Environmental Protection, for the development of the Palatlakaha River Park, under the Florida Recreation Development Assistance Program.


Commr. Cadwell brought up for discussion the issue of the State of the County Address that is scheduled to be held Thursday, February 24, 1994, at the new Lake County Judicial Center. He stated that he had been reading in the newspaper comments about same and that he felt the matter should be discussed and any concerns that any of the Commissioners might have addressed.

A brief discussion occurred, at which time Commr. Hanson apologized for all the negative publicity that the issue has received. She stated that the State of the County Address was intended to be a very positive move, on the Board's part, noting that they had agreed, at the recent retreat, that they would like to see it be an annual affair. She stated that her intention was to have an annual report, to capsulize what the Board had done in the past and what they still needed to do, and then present the priorities that were derived at the retreat, the Mission Statement, and the Vision Statement. She stated that it would be those things that the Board, through consensus, had agreed on. She stated that she would not be speaking about her agenda, noting that she would not do that at a meeting of this kind.

Commr. Cadwell stated that he had felt, from day one, that it was the right thing to do and that the Board should do it.

Commr. Hanson requested the Commissioners to relay to Mr. Wahl anything that they felt should be on the agenda, whether it be a positive or a negative issue. She noted that she feels anything she does this year is going to be looked at as political.

It was noted that the priorities would be listed in the order that they were approved by the Board at the retreat.

Commr. Hanson stated that the State of the County Address is a team effort and that she is only a spokesperson for the Board.

There being no further business to be brought to the attention of the Board, the meeting was adjourned at 11:15 a.m.