A special MEETING OF THE BOARD OF COUNTY COMMISSIONERS
december 13, 2016
The Lake County Board of County Commissioners met in special session on Tuesday, December 13, 2016 at 9:00 a.m., in Training Room A and B, Lake County Emergency Communications and Operations Center, Tavares, Florida. Commissioners present at the meeting were: Timothy I. Sullivan, Chairman; Leslie Campione, Vice Chairman; Sean Parks; Wendy Breeden; and Josh Blake. Others present were: David Heath, County Manager; Melanie Marsh, County Attorney; Wendy Taylor, Executive Office Manager, County Manager’s Office; Kristy Mullane, Chief Deputy Clerk, County Finance; and Susan Boyajan, Deputy Clerk.
Call to order
Commr. Sullivan called the Water and Wastewater Utilities Retreat to order. He explained that these workshops are educational in nature for detailed exploration and discussion of issues and that the goal was to acquire information rather than to make a decision that day.
welcome and introductions
Mr. David Heath, County Manager, stated that the topic for that morning’s session had evolved over the last several years as a result of three principal things, which were the establishment of the Mt. Plymouth-Sorrento CRA (Community Redevelopment Area) for the Sorrento area several years ago, the unique pressures created by the Wekiva Parkway construction on the east side of the county, and the establishment of Wellness Way in the South Lake County area. He recapped that the Board has expressed an interest over the last several years of having a discussion on the issue of the County getting into the utility business. He commented that he wanted to have an informal conversation with the Board in order to hear from the experts in that area who were present that day, since this was such a massive undertaking. He pointed out that he was not asking for a recommended action or for direction at that time, and this was an opportunity for the Board to discuss philosophically how to move forward on this issue when they revisit it at a future meeting. He presented an outline of the speakers for that day’s workshop, including Mr. Robert Chandler, Economic Growth Director, who would discuss the impact that utilities have on land development patterns; Ms. Dottie Keedy, Community Services Director, who would show how Lake County’s service areas are divided up by the cities and private providers and discuss what the CRA has recommended; Mr. Tom Cloud from Gray-Robinson Attorneys at Law, a highly-experienced utility attorney who has represented both counties and cities; Mr. Tom Giblin with Nabors, Giblin & Nickerson, the County’s bond counsel who has also had experience in utility financing; and Mr. Rob Ern, an engineer from BESH (Booth, Ern, Straughan & Hiott) with a lot of experience in the east side of the county. He stated that there would be public comment and open discussion by the Board after the presentations.
Mr. Chandler gave a brief overview of growth patterns in areas both with and without utilities, starting with a graph depicting a substantial increase in the population of Lake County from 210,527 in 2000 to 316,569 in 2015, as well as a graph showing that Lake County is one of the fastest-growing counties in Florida. He presented another graph from the Bureau of Economic and Business Research from the University of Florida forecasting a growth in population of over 200,000 over the next 30 years resulting in a total of 528,534 residents in the county by 2045, as well as a graph showing that the construction of almost 100,000 homes will be added to Lake County over that time period. He discussed the regional implications of the recent population growth, stating that while the northwest and the northeast sections of the county both had significant growth during that time at about 28 and 32 percent respectively, the south part of the county had the majority of the growth at about 130 percent. He specified that the majority of future growth is expected in the Wolf Branch Innovation District; the CRA area around the Wekiva Parkway, including Mount Dora and Eustis; and Wellness Way, as well as growth they expect to see from Horizon West pushing west out of the Orlando area. He commented that the availability of water and wastewater utilities are tightly linked to growth and economic development, since growth affects the costs of water infrastructure, the demand for water, and efficiency of water delivery; conversely, those water policies will also impact the growth decisions and patterns for both residential and commercial growth. He elaborated that in areas without utilities, commercial growth is severely limited or even excluded, and residential growth is typically limited to large lots, low density, and dispersed development. He pointed out that septic is not allowable with smaller lot sizes, there is significantly increased water usage for large lot homes for lawn care, and the low density developments are costly to service. He listed the commercial implications of no utilities, including that the requirements to meet commercial demand levels make constructing well and septic cost-prohibitive, and industrial users often produce wastewater that cannot be accommodated by septic systems. He noted that a Comprehensive Plan amendment might be needed if utilities are provided by the County, because Comprehensive Plan Policy 1-7.12.3 encourages compact and contiguous development patterns, with property adjacent to urban areas within the Rural Transition Future Land Use Category encouraged to connect to services if available. He summarized that well and septic are viable alternatives in areas where significant growth is neither expected nor desired; however, in areas where growth is anticipated, the availability of utilities will significantly enhance the likelihood of achieving the type of growth that is desired, such as smart residential growth that protects natural resources and job-generating commercial growth.
EXISTING UTILITY SERVICE AREAS AND CRA CONSIDERATIONS
Ms. Keedy explained that her portion of the presentation would cover existing utility service areas and the Mount Plymouth-Sorrento CRA. She recapped that water and wastewater services in Lake County are currently provided mainly by the municipalities, but there are also numerous private utility providers in various sizes, and service is provided through onsite well and septic tanks in much of the unincorporated area. She related that the service areas that are provided water and wastewater service by the municipalities are established through statutory regulations for 180 Districts or Interlocal Service Boundary Agreements (ISBA), a statutory mechanism for city and county planning for public services. She stated that consumption of water is permitted through the Water Management Districts, and certain Homeowner’s Associations in Lake County own and operate small package plants to provide service to their residents. She mentioned that the private utility companies are regulated by the Public Service Commission. She displayed a map showing the public and private utility service areas throughout the county as well as areas that are limited for future development, such as the Green Swamp area. She noted that in response to the expected growth pressures in East Lake County from the construction of the Wekiva Parkway, the County created the CRA along with a CRA Advisory Committee to assist the Board with a redevelopment effort, and the CRA Advisory Board requested in March that the County prepare a feasibility study for the provision of water and wastewater in that region. She also noted that the County has received various ISBA proposals from the cities of Eustis and Mount Dora that could impact the CRA and surrounding areas. She summarized that the areas not currently included in the municipal or private utility service boundaries include those which have development restrictions that would prohibit significant growth, such as the Green Swamp and the Ocala National Forest, and the East Lake County region, which has no planned utility service area and is the most likely unincorporated area to experience significant growth.
legal requirements of creating water and sewer utilities
Mr. Tom Cloud commented that it was difficult to create a utility or get into the utility business without knowing the context of why they should do so, the best way to do it, and whether the County should get involved in the utility industry. He suggested that the Board look at the different reasons other counties have used in the past to get involved in this issue and noted that everyone that has gotten into the utility business has made mistakes. He specified that an edict from the Department of Justice, the Environmental Protection Agency, and the Department of Environmental Regulation ordered Orange County in the late 1970’s to get involved in a utility in order to stop the spread of pollutants to Lake Tohopekaliga in the Shingle Creek area. He related that increasing and diversifying revenue sources and the promotion of economic growth are probably the most cited reasons for going into the utility business, starting in the 1930’s and 40’s when cities first started growing utilities in order to make their communities more vibrant. He added that recently he has seen utilities used for managing and controlling the timing of land development, but he opined that resolving environmental issues is perhaps even more important, since there cannot be commercial growth with septic tanks. He elaborated that a wastewater system is needed in order to handle the loadings from commercial businesses like restaurants and laundromats as well as industrial businesses where pretreatment is needed at the plant site in order to handle those loads. He added that replacing existing management has been cited as a reason in a number of counties for host governments to acquire the systems, and he cautioned that a “turf war” over utility areas while trying to get into the utility business should be avoided if at all possible. He listed several ways to get into the utility business, including designing and building their own system, obtaining abandoned systems after a private utility that is regulated by the Public Service Commission decides they can no longer provide the service and files a petition to abandon that system pursuant to Florida Statute, negotiating to acquire a privately-owned system with obsolete technology through a franchise purchase option made possible by a municipal statute created by the Florida legislature in the late 1890’s, and eminent domain, which he did not think was an option for Lake County.
Mr. Cloud recommended putting together an alternatives analysis for those thinking of doing a design build, which he opined was a solid, logical beginning to determine whether it was best to buy bulk or start their own system, and he opined that the alternatives analysis would not be difficult for a smaller service area. He cautioned about the County buying someone else’s problem system; however, he noted that sometimes counties get put in a position of having to take over a utility for the benefit of their taxpayers when the rate structure of a utility becomes higher than the county’s rate structure and residents become dissatisfied with the bad service and high rates of that system, although he did not think Lake County was currently in that position. He added that they would probably want to have a technical evaluation done as well and referred to a list of things they would look at if they were going to acquire the utility. He commented that it was very hard for a private company to lose money by acquiring a utility because of the way the Public Service Commission is set up. He referred to a list of variables when doing a legal and management evaluation, including customer agreements that are inherited, utility agreements, and facility planning. He opined that the city systems in the county are well run and have low rates compared to many more mature county systems in the state. He cautioned that the selling utility is usually not cooperative. He stated that there were ten financial facets or accounts that need to be funded, which were the purchase price, working capital, deficiencies that may be in an existing system, capital improvements programs for the future, renewal and replacement costs, financing costs, acquisition costs, a rate stabilization fund to keep rates at a level basis, debt service reserve fund, and deferred maintenance costs.
Mr. Cloud gave a description and analysis of six systems obtained by Florida counties, most of which were currently seeing net revenues ranging from $14.7 million to $68 million, showing that the efforts of those counties were now paying dividends to customers and taxpayers. He mentioned that he has determined that a sewer plant needed to have at least 1 million gallons of capacity per day in order for it to break even on costs, which would be service for roughly 3,000 homes, and water plants were much less costly to operate, noting that Lake County currently still had a robust although not infinite water supply. He emphasized that rates were a very important component of government utilities, which strived to provide the most environmentally acceptable and cost effective service that they could. He pointed out that many of Lake County’s 14 municipalities already have their own robust utilities and have claimed their areas pursuant to the statutory regulations for 180 Districts, but there was still some area the County could serve, especially for environmental purposes. He commented, however, that the County has some unique challenges in finding an area in which to build a utility system and listed some questions they should ask to determine whether it was feasible to do so, such as whether anyone has asked them to serve, whether they are currently in the utility business, what the current rates are, if there are contracts between the County and those already serving that address the right to serve, and why they would attempt to obtain and run their own system.
Commr. Parks stated that his research has found that publically-owned utility rates are much cheaper than those that are privately-owned.
Mr. Cloud responded that he did not think that was necessarily so, but he would have to go to the Public Commission website to look up and calculate that, although that may be true in Lake County. He added that some private utilities, especially those that do not have a large service area, end up with very high rates or bad service.
Commr. Parks asked whether the statute requires annexation to a municipal provider for those in the 180 District service area.
Mr. Cloud answered that the statute does not require that, but many cities have adopted linkage ordinances which have been validated in Florida to link the receipt of service to annexation, since home rule power rather than 180 gives them the authority to do so, unless there is an interlocal agreement put in place prohibiting them from annexing.
Commr. Campione commented that the reasons for a County-run system would include preserving the autonomy of the Mount Plymouth-Sorrento area, since the residents in that area prefer to remain unincorporated, and she preferred that they be the provider rather than the municipalities. She expressed concern about residents there getting the impression that they will be forced to connect to the system, and she stated that she was interested in understanding how the statutory requirement regarding connection to an available system would apply should they build the system, lay lines, and were serving the newly-developing areas and whether they would be able to waive the requirement for connection for the lines coming close to existing homes and businesses.
Mr. Cloud responded that there is flexibility in the state statute regarding that issue and added that how they define availability is key. He elaborated that they would need to put that in their extension policy in order to implement it so that it only applied to new connections and specifically waived connection unless requested. He suggested that they consider as a voluntary option a program which enabled people to finance connection into the system over a 20 to 30-year period rather than paying immediately for access to the system.
Commr. Campione asked if they would be able to set up a fund which would allow them to assist residents to make it more affordable in light of the environmental issues.
Mr. Cloud answered that they could do that and related that Orange County had a similar fund at one time for certain package plants that became a nuisance.
Commr. Breeden asked what percentage of counties in Florida are in the utility business.
Mr. Cloud commented that he does not know that figure at this time, but he believed it was less than half. He elaborated that historically counties were not urban centers up until the last 40 or 50 years.
Commr. Campione asked whether Mr. Cloud believed the state would give Lake County special consideration, in light of the fact that this would help address environmental issues.
Mr. Cloud responded that it was worth trying to obtain as much financial assistance as possible, and he opined that septic tanks near springs in Florida have had a deleterious effect, which was why some counties such as Marion County got into the utility business and received financial assistance for that. He elaborated that it would be part of an overall approach to finance a system for the area they want to serve.
Commr. Breeden asked whether he believed that the system could pay for itself even if the County decided to serve only new development.
Mr. Cloud stated that he did not know but commented that it will be a challenge. He added that the closer they get to the 1 million gallon figure he previously referenced, the more financially self-sustaining the system will be.
Commr. Parks asked whether bulk agreements might be better for the County than obtaining a plant.
Mr. Cloud responded that they could negotiate a bulk agreement for a certain period of time, and the best bulk agreements are short-term ones; otherwise, they would become hostage to that bulk agreement over time. He suggested that they actually get in the business if they want a long-term solution, and he commented that he is generally skeptical of bulk agreements, which sometimes resulted in his clients paying twice for connection fees.
recess and reassembly
The Chairman announced at 10:00 a.m. that there would be a fifteen-minute recess.
debt and financing: issuance of utility revenue debt
Mr. Giblin related that financing will be needed if the County decides to purchase or acquire a utility system, and there might be some issues regarding financing that would impact the Board’s decision. He listed the members who normally make up the finance team including staff such as the Fiscal Service Director, County Attorney, Clerk’s Office, and Public Works staff; the Bond Counsel, which is responsible for the preparation of the legal documents, offers an option to the purchaser of the bonds to ensure that they are validly issued and tax exempt, and helps structure the transaction; and a Financial Advisor to help develop a structure for the financing, assist in determining what the best course of action is for selling their bonds, help select an underwriter and bank, and provide the County with options they think are best suited for the County. He explained that the County could also put out an RFP (Request for Proposal) to select a bank. He mentioned that years ago bank loans had been used mainly for interim financing for five to seven years, but that has changed over the last several years to where banks will finance for up to 20 years. He commented that consulting engineers could be a critical element for a utility project to ensure bondholders and the public in general that the system they are acquiring or building is going to be in good condition and suitable and to make sure that the rates they set are going to be sufficient to pay the bonds. He noted that the debt is paid through an enterprise fund and is self-supporting in virtually all of the cities, with the debt secured only by utility revenues, including monthly rates and charges to customers, impact fees to pay for some of the capital charges, and possible special assessments for the pipes and infrastructure for individual homes. He opined that one of the biggest issues is whether the County would have to back up that debt with general fund revenues, which he pointed out could be possible for a new and unproven system and a critical issue that would need to be closely looked into before proceeding.
Commr. Sullivan asked about the different bonds that could be used for a project.
Mr. Giblin explained that there were two types of bonds that a city or county could issue, which were revenue bonds in which the bondholders could only look to a specific revenue source and general obligation bonds that are subject to a referendum and taken from the ad valorem tax base. He also mentioned that bank financing is a lot more streamlined than a public offering, although the banks will still have to be provided information such as a consulting engineer’s report showing what kind of revenues would be generated. He commented that another issue to think about was whether the County was willing to subsidize the system and the rate payers as a policy decision. He stated that the legal documentation needed to move forward would include a bond resolution stating that all of the water and sewer revenues the County collects will be used for that system and to pay the debt, restricting the conditions under which the County could sell the assets, and setting the rates at a given level. He added that the County will have to hire or contract out personnel to be in charge of the system.
Commr. Parks asked whether it was possible to have a hybrid system with the city or county having ownership but everything being outsourced.
Mr. Giblin responded that they could contract out and do a public-private arrangement with private enterprise being responsible for operations and public supervision through staff and the Board.
Mr. Cloud opined that contract operations rarely work for government in the long term, because there is a tendency on the part of the private company once it gets the contract to not perform as well.
Mr. Giblin agreed with Mr. Cloud on that issue and added that the numbers and the deal usually look very attractive in the beginning. He elaborated that the service is fairly good the first year but worsens over time. He cautioned the Board to be careful to structure the contract so that it is beneficial to them and avoids all of the extra costs that could be added on later by the contractor. He then showed a slide of an overview of the bond process to summarize the prior slides, including the initial steps and the bond issuance process.
Commr. Breeden recapped that Mr. Giblin had stated that ideally the rates would pay for the bonds or the loan, and she asked whether that they would have to wait two or three years before that would be the case if they were starting a new system from scratch.
Mr. Giblin responded that they might be able to structure a system that would not require backup monies from the County if they acquire a system with a track record, but building a system from scratch would be a much more difficult proposition for the County, since they would not be able to show a bank or a bondholder what the revenue picture would be like.
Commr. Breeden commented that they would have to start from scratch in the Mount Plymouth-Sorrento area.
Mr. Cloud added that it might be an option in that situation to use a bulk agreement with a company that already has staff for some period of time until the County can put in place either a private company or its own employees to operate that system.
Commr. Campione commented that they could negotiate with the bank as to how their debt service is structured.
Mr. Giblin elaborated that they could come up with a hybrid pledge with utility revenues as the primary source that is pledged to the bondholders and back up those utility revenues with some type of pledge or covenant on the general fund until a specific time in the future.
Commr. Campione added that there could be a loan to the system to indicate that they intended to pay the general fund back.
Mr. Giblin responded that although he has seen in the past situations where it was treated as an inter-fund loan that would get paid back with interest, it was a difficult proposition dealing with a lot of unknown factors. He advised the Board to meet with their financial advisors and the engineers to determine what the effect to the County would be if the worst-case scenario occurred.
Commr. Campione suggested that they could coordinate with a developer showing an interest in the project for seed money or some commitments in exchange for capacity issues.
Mr. Giblin commented that he has not seen nearly as many deals of that sort in the last several years, although it was easier to make those kinds of arrangements when the development community was financially healthy.
Mr. Cloud interjected that they used an MSTU (Municipal Service Taxing Unit) bond in the early 1980’s to finance Orange County’s eastern wastewater plant when there was a lot of pent-up demand, which was set up so that the developers could buy the bonds that they needed for the capacity; however, he opined that doing that today would be much more difficult.
Commr. Campione related that some of the landowners have made inquiries about when utilities would be available to their property, since they cannot develop that land without water and sewer services.
Mr. Giblin stated that when developers were more aggressive about putting money into infrastructure in the past, they had set up a voluntary assessment program for the entire cost of water and sewer plants with the developers. He suggested that they could use impact fees to help finance the systems as well.
Commr. Parks commented that there needed to be utilities and a road network in order to have commercial development.
Commr. Sullivan added that the Minneola Interchange and the Wekiva Parkway construction will make these decisions necessary in the future. He commented that it was a policy decision as to the direction Lake County will go regarding this issue, and this is the kind of information that they need to figure that out.
options for unserved areas
Mr. Rob Ern explained that he would discuss the options for providing utilities in the unserved areas in the county and specifically to the Mount Plymouth-Sorrento CRA, which he pointed out on a map illustrating the existing service areas, noting that there was a proposed ISBA (Interlocal Service Boundary Agreement) to the north and east of the CRA with the City of Eustis, which was a utility provider. He added that there was another proposed ISBA to the west with the City of Mount Dora, which has a proposed innovation district in that area off of SR 46 that extends to the Orange County line and was in the process of extending utilities out to that area. He stated that other utility providers in the area include a small community system owned by FGUA (Florida Government Utility Authority), which does not have any extra capacity and was not in the best physical condition, and the City of Apopka located south of the Orange County line, which has plans to bring utilities up to the county line to serve that growth area. He listed four options for serving the Mount Plymouth-Sorrento CRA, which were creation of a new County utility, coordination of a new utility service with an existing provider by entering into an agreement, allowing developers to construct new and private utilities, and allowing the use of well and septic. He then listed three options for creation of a new County utility, which were creating a new utility with treatment facilities, which would take an estimated three to five years to design and set up the system and obtain a CUP (Consumptive Use Permit); a second option of a bulk purchase agreement with an existing provider in the area while still maintaining County control of that area in the sale of those utilities, which is estimated to take one to two years to put in the infrastructure for distributing and collecting water and wastewater; and a third hybrid option of a shorter term bulk purchase agreement followed by construction of new treatment plants, which would take one to two years to get designed, permitted, and operational for bulk purchase and three to five years to get all of the permits and construct the plants to provide the water and sewer service.
Mr. Ern listed the cost for new utility facilities based on the land uses that are currently found in the CRA, which were about $15 million for a wastewater facility plant treating about a 600,000-gallon per day average flow and large enough to provide advanced nutrient removal levels of treatment required in the Wekiva, including land acquisition, permitting, design, and construction; $4 million for a water treatment plant for 800,000 gallons per day, including the land acquisition and obtaining a CUP from the Water Management District in order to drill the required wells; and $3 million for the capital lines. He added that the County would have to create and staff a new utility department, including operations and maintenance staff, meter readers, and customer service employees. He described the second option of starting a new utility by purchasing bulk service from an existing provider and reselling those services to their own customers, which would require a new County department with operation and maintenance staff and a cost of about $3 million for installation of capital lines and creation of a trunk line system for developers to tie into as they develop their property. He stated that the hybrid third option would allow the County to pay a bulk service agreement rate based on their flows and give the County time to build up a customer and rate base to construct a facility while in the shorter term still provide utilities to their customers. He elaborated that they would eventually need to install capital lines, create a new utility department, and construct treatment plants in the future when the flows were higher for this alternative. He added that another option was to coordinate utility service with an existing provider such as the surrounding cities or FGUA on behalf of the CRA to provide service in that area. He commented that both Mount Dora and Eustis could take over service to the CRA indefinitely as part of the negotiations of the proposed and pending ISBA’s for both of those cities, which would be the end of the County’s involvement other than to ensure that the utilities are being connected as development occurs within the CRA.
Mr. Ern remarked that the choices of well and septic use or allowing developers to provide their own utilities typically with small package plants are currently the status quo in the unincorporated areas. He opined, however, that his experience has shown that the private small utilities were not run or maintained as well as the municipal systems, since the goal of those types of systems was to make money by keeping their costs low and their revenues high. He elaborated that the other alternative for a developer-built system is constructed by the homeowner association; however, those systems start to deteriorate over time, because the developers are not generally putting a lot of money into their systems long-term since they are there just to serve the homeowners. He remarked that because of the sensitive environmental nature of this area, he would not recommend that option for the County. He pointed out that the continued use of well and septic would not allow the County to develop with higher densities for residential development, would not work well for commercial development, and would limit what could be done in that area. He mentioned that there are some potential future rules that will address onsite disposal systems in the Wekiva, and a long study was conducted by the Department of Health, DEP (Department of Environmental Protection), and some private consultants on the performance based systems, although he is not aware yet of any further rules in the Wekiva to require the more expensive and better treatment systems. He stated that one of the financing mechanisms for utilities to keep in mind as they move forward is the state revolving fund program through DEP, and he explained that the federal government puts money in the fund every year to loan out again as other loans are repaid, noting that the rates for that program are currently very good, especially in areas where they can show either a public health or environmental need.
Commr. Parks asked about differences in notification requirements, drinking water standards, and the ways the facilities are run for private and municipal utilities.
Mr. Ern answered that the drinking water standards are the same depending on the size and capacity of the systems, and they have different requirements in regard to the frequency of reporting and the amount of time that operation staff has to be on site. He elaborated that while a lot of the cities’ utilities have staff people working and on call all day, every day, a lot of the smaller utility plants will require one to two visits a week, with the smaller utility’s requirements being less stringent, so things can go wrong in the interim and not get fixed as quickly as they should.
Commr. Breeden asked whether the size of the plant needed in the Mount Plymouth-Sorrento area might not reach the million gallons per day needed to break even regarding costs.
Mr. Ern verified that was correct, since they estimate a use of about 600,000 gallons a day for wastewater based on the current land uses on the land use map for the CRA.
Commr. Blake asked when he projected that to reach that one million gallon point in the future.
Commr. Campione pointed out that there were land uses outside the CRA that could generate higher densities. She also commented that the Wekiva Protection Act will limit the densities in that area, but they could do more conservation-based designs that are clustered with a central system, which she believed would be accepted by the environmental community, rather than trying to change the underlying land use.
Mr. Cloud interjected that another alternative could be to build a water plant and buy wastewater in bulk, noting that the state revolving loan monies are a good way for getting low-cost loans, and it is usually done in conjunction with a conventional bank loan. He opined that he did not think the City of Apopka would serve an area that was located across the county line, given the proximity of Mount Dora and the fact that it would be a political hurdle for them.
Commr. Parks asked if it would be possible to utilize reuse water and whether that would help in negotiating bulk agreements.
Mr. Cloud responded that there was a certain sized plant needed before reuse water could be used, but he believed a 600,000-gallon per day plant would be large enough to do that.
Mr. Ern added that DEP requires that number to be at least 100,000 gallons per day, and anything above that number would result in the Water Management District tying their CUP to reclaimed water in order to reduce their dependence on ground water, especially for irrigation.
Mr. Cloud elaborated that another question to look at is whether they could treat the water sufficiently in order for it not to cause residual pollution issues.
Commr. Parks commented that would be more of an issue in the Wekiva area, but the City of Clermont believes that more water means more reuse for their large plant and was receptive to bulk agreements because it helps their reuse.
Mr. Cloud mentioned that the biggest environmental challenge they will have will be obtaining the CUP.
Mr. Ern opined that he believed obtaining the CUP is usually possible by working with the Water Management District and doing the regional groundwater model with minimum flows and levels on springs and water bodies, and they would have to prove that their withdrawals would not decrease lake levels or spring flow. He added that an upper Floridan well would cost about $200,000, and a lower Floridan well would cost about $1 million and sometimes results in a much lower water quality.
Commr. Sullivan commented that they should start the feasibility study process as soon as possible and to incorporate some of the things that were discussed that day, such as funding and options, as well as to move forward towards a policy-making decision.
Commr. Campione agreed that they have to go forward with the feasibility study in order to have all of the information necessary to make their choices and negotiate a bulk agreement if the Board decided to do that. She stated that the County needs to be able to at least break even and fund the system in a way that it could be a quality system. She concluded that looking at the possibility of a County-run utility would address environmental issues, protect the autonomy of the Mount Plymouth-Sorrento area, and help to ensure good, planned growth and quality activity.
Ms. Catherine Hanson, a former County Commissioner, related that in 1990 Mount Dora was going to put in a sewer plant where there is currently a school and a park, and a study was done in the mid 1990’s by Hartman and Hartman that may be helpful now. She clarified that the state was recommending replacement of the current septic tanks with an onsite treatment facility in Mount Plymouth, which she believed could be a driving force to get other residents to replace their system rather than paying thousands of dollars for an individual replacement system.
Commr. Campione elaborated that residents would spend more money putting in their own wells, especially with the stringent well requirements currently in place in that area.
Commr. Breeden mentioned that the County has looked into this issue three different times in the past, and asked why the County decided not to act at those times.
Mr. Cloud recapped that in the past some people had expressed concern that the County having its own facilities would lead to rampant growth in the county, and the cities expressed concern about being in competition with the County. He opined that this area has a lot of potential because of the developing road network, and they currently have a good opportunity to do something different in an area where septic tanks would not be beneficial.
Commr. Parks opined that a lot of developers do not want to be involved in running a system long-term and added that the City of Clermont has an interest in providing sewer service within the Wellness Way area.
Commr. Sullivan commented that the East Lake County area is unique because of the Wekiva Parkway and upcoming development, which might necessitate some “out of the box” thinking. He suggested that they talk to people affiliated with the utility business as well as doing the feasibility study. He opined that although he believes they should not procrastinate, they also should move forward cautiously, but there is a good opportunity for them to look into this issue.
Commr. Parks asked the Board to continue the discussion regarding the issue of utilities in the Wellness Way area going forward in the future, since that area could run into the same issues as the ones in the East Lake County area that were discussed that day. He opined that the discussion about the issues and opportunities in South Lake needs to be continued as they move forward with the planning for the Wellness Way area, although he realizes that was a separate issue and effort than the East Lake area.
Mr. Heath announced that the County had just been awarded $150,000 by the state for bear resistant containers, adding that Seminole County, which received $159,000, was the only county awarded more than that, and he would be bringing that award back before the Board. He gave a brief summary of what they had discussed that day and what they would do in the future. He summarized that the County was growing and would continue to grow, and utilities would impact land development. He added that the difficulty of permitting and planning utilities was also discussed, as well as the desire of the CRA to explore utilities. He concluded that the East Lake County area is the logical and most viable area to concentrate their efforts regarding the possibility of providing utility service, and he went through the four options previously discussed and the next steps associated with those choices, noting that the key to doing a feasibility study would be to include the financial, engineering, and legal components. He commented that the cities of Mount Dora and Eustis would be competitors for that area if the County decided on the option of coordinating with existing providers, although the CRA has indicated a desire to remain independent and intact, and previous discussions regarding ISBA’s in that area have shown that there are issues with annexations. He commented that the purpose of this workshop was to expose the Board to the issue of utilities and what was involved in establishing a utility, which was not normally referenced during the BCC meetings. He related that the Commissioners have mentioned that they were interested in discussing tax relief, economic development, fire rescue, and the land development regulations at the workshop on January 17, 2017; and he suggested that the Board make a decision about how they would like to move forward regarding utilities and the philosophical thoughts behind that decision on that day as well. He added that if the Board indicates at that time that they are interested in taking the next step of doing a feasibility study, staff will put an RFP out and bring it back to the Board in the spring. He concluded that he wanted to show his appreciation to all of the speakers that day who all gave very informative presentations and who spoke to the Board pro bono.
Commr. Sullivan commented that the presentations were very well put together and presented in a way that everyone could understand.
Commr. Breeden clarified that a feasibility study could encompass options 1 and 2.
Commr. Campione pointed out that once they get proposals back in response to an RFP, they would be in a position to present the actual costs of what they would need during Lake Legislative Days on February 14 through 16, since she believed it would be easier to make requests to the legislative delegation and increase their chances of getting that appropriation if they have a real number to work with.
Mr. Heath pointed out that the money is not currently in the budget to do this, but they could do a budget transfer for the RFP if the Board decided to move forward with the feasibility study and then hope that the County will receive some state grant money in the future.
There being no further business to be brought to the attention of the Board, the meeting was adjourned at 11:42 a.m.
timothy i. sullivan, chairman
NEIL KELLY, CLERK