Public Interest And Acquisition Resolution (Regular) Regarding Utility System And Transition Agreement Between Pasco County And Florida Governmental Utility Authority For Acquisition Of The Lindrick Utility System

1:05:02All right. Um We are on P sixty nine.

1:05:09We approved the publication of this matter on in the Tampa Bay Times January second tw I'm sorry, January twelfth of this year, and we do have folks signed up.

1:05:26Okay? Go ahead.

1:05:28Good afternoon. Mike Carbala, Assistant County Administrator for Public Infrastructure. I'm going to bring up Justin Grant, our Public Infrastructure Business Administration Director, to give the presentation. But before I do, I just uh wanted to acknowledge publicly the hard work that uh our team in public infrastructure, utilities, our fiscal team, uh, Office of Management and Budget, uh County Attorney's Office, as well as folks at FGU. have done to bring this bring this item before you it's been a very very heavy lift um Mr. Grant will we'll give a presentation.

1:05:58It's about ten minutes long. A lot of the points that he has to hit on are statutorily required, so I would just ask uh if possible you could just hold your questions until his presentation is over with and then uh he'll he'll go through what uh what needs to be done.

1:06:16Correct. Thank you. Justin Grant, Director of Public Infrastructure, Fiscal and Business Administration. For you is UT 220126 is a public interest and acquisition resolution between Pasco County, Florida and the Government Fort Florida Government Utility Authority, the Lindric Utility System. There is a number of required actions, but it's important to note that this only requires one vote by the Commission. I'll break these down here. One, determine if the acquisition of the Lindric system from the FGUA is in the

1:06:46public interest. To do that, we must hear public comment and vote on public interest. Two, authorize the use of $24 million in ARPA funds for the purchase and the remaining funds for obligations and transfer expenses. If the board determines it in the public interest. Then three, approve the acquisition resolution, and four, approve the transition agreement. For you is a map of FGA's current and former service areas. As you can see there in the teal color, the aqua system that the county recently purchased last year. is pictured there and the system being discussed today

1:07:17is highlighted in the southwest corner of Pasco. near city of Newport Ritchie in the red box in orange coloring. Lindric System provides potable water services and wastewater services, has a number of different system assets, including eight potable wells, one water treatment plant, and eighteen wastewater pump stations, among another a number of other assets.

1:07:41Here's at a lower altitude of the Lindrick System service area. As you can see, there's approximately uh 3,200 water and 2,700 wastewater accounts. This covers 3.24 square miles, includes communities such as Gulf Harbors, Floor Mar, Gulf Landings, Green Key Park, Shamrock Heights, and businesses along the east and west side of US 19.

1:08:04Section 125.30401 of Florida statutes requires any county purchasing a water, wastewater, or reuse utility serving the public to hold a public interest hearing to determine if the purchase or sale contract is in the public interest. This considers ten factors. It's notable for today that only eight of those factors are applicable to a county purchase.

1:08:24Requirement one of the statute calls for the most recent available income and expense statement for the utility. Upon staff review of the most recent FGOA CAFR, it shows a $546,000 increase in net position for the utility in FY 2020. Requirement two calls for the most recent available balance sheet of the utility, listing assets and liabilities, and clearly showing the amount of contributions in aid in construction and the accumulated depreciation. Bottom line here, there's $3.9 million in net position on the CAFR as of 2020, and $21.3 million in bond debt

1:08:54principal on the system. Requirement three is not applicable to the county. in this transaction. Requirement four of the statute calls for the physical condition of the utility facilities being purchased or sold. Bottom line here is FGA has maintained the system to meet DEP standards and kept from adding more debt to keep rates stable since they acquired it in 2010. However, after thorough work from our county staff, And engineers, the capital needs identified on the system to bring it to county standards are significant. However,

1:09:24Pasco County did negotiate a sub award funding agreement with D P and the FGOA for the three point eight million dollar grant awarded for the Pasco County Lindrick Area Sewer System and Water Quality Upgrades Project. It's notable that that is already underway.

1:09:39Requirement number five. The reasonable reasonableness of purchase or sales price and terms As compared to a similar transaction in June of 2020 when Pasco County acquired the Aqua System, it's notable here that as you can see, there is a larger amount of leverage on the Lindric system spread across a fewer number of customers. This results in approximately a fifteen hundred dollar premium of debt per customer on the Lindric system compared to the Aqua system.

1:10:05Yeah.

1:10:06Requirement six. The impacts of the purchase sale on utility customers, both positive and negative. A draw potential drawback could be seen as the increase in number of projects competing for utility capital investment over the coming years and currently. something the new neutral would be the regional inclusion and promotes ability to allocate the costs or a large customer base just as as Pasco County Utilities has. Positives could be that Linger customers could see a up to a forty two percent decrease in their monthly bill, and if ARPA

1:10:37funding is approved, this could eliminate the need for new financing at this time.

1:10:42Requirement seven. Any additional investment required and the ability and willingness of the county to make that investment. After thorough work from the county and those that evaluated the system, as you can see here below, the five-year CIP and RR that would be called for to bring the system to county standards would be approximately $25.8 million, with $10.7 million of that investment being required within the first 12 months.

1:11:07Requirement eight. The alternatives to purchase or sale and the potential impact on utility customers if the purchase or sale is not made. County staff has identified two alternatives to this transaction today. The county can elect not to purchase the system, or the county can defer the purchase to a future year when the Lindric debt profiles and financial conditions are more ideal for the county to complete the transaction.

1:11:29Requirement nine. The ability of the purchaser to provide and maintain high-quality and cost-effective utility service, whether the purchaser is the county or the entity purchasing the utility from the county. Bottom line is that Pasco County Utilities is financially strong with a track record of regulatory compliance. We maintain a robust renewal replacement and capital investment program. The County Utility consistently implements and maintains multi-year rate plans, and this illustrates the Board of County Commissioners' commitment to financially stable utility. Requirement

1:12:00ten is not required for this transaction.

1:12:05In summary, the Lindric system is currently meeting regulatory requirements. It has a large outstanding debt. and high capital needs. An acquisition will provide significant rate relief to the approximate thirty two hundred customers In the Landric service area. The county has already secured $3.8 million in FDEP grants for the Lindric Area sewer and water quality upgrades. in the Landric System and has an agreement with FGA to complete those repairs. The county is committed to additional capital investment for upfront improvements and needed R and R. And finally, the utility staff has the technical expertise

1:12:35and experience to effectively transition the Lindric system into the county system and provide a high quality, sustainable water and wastewater service to the Lindric System's customers, just as we've done for the Aqua System a short 18 months ago.

1:12:51Action number two, combined in this vote, would be the acquisition resolution. This would state that the county has the authority to provide water and wastewater service and the right to acquire the Landric System. This states that the county has determined that the purchase of the Lindricks system is in the public interest. and that the county will exercise its right to purchase the Landric System from FGUA. In the s summer of twenty twenty two. And it states that the Chairman is authorized to execute the transition agreement and closing documents to complete the purchase process.

1:13:20Third component is the transition agreement. This would be prepared to conform to the terms and conditions of the interlocal agreement. that the purchase price of the utility is equal to the amount of debt on the system and applicable transaction costs. It addresses all the mechanics and details of the transition that we have slated for this summer. This has been complete and reviewed by County and FGA staff, and if approved by the Pasco County BCC, it will be executed by FGA after their public interest hearing, which is currently scheduled for February of 2022 following this hearing.

1:13:51Therefore, recommendations are to accept public comment and find and determine if the Lindric acquisition is in the public interest. Two, to authorize the use of twenty four million in ARPA funds. To purchase the Lindricks system and applicable transaction costs. Three, approve the acquisition resolution to acquire the Lindricks system from FGA. and four approve the transition agreement between Pasco County and the FGA.

1:14:19Right, thank you very much. Um We can take public comment or we can discuss things.

1:14:28Okay.

1:14:29I think you guys have done a phenomenal job. job bringing this together. Uh we've had water trouble For many, many years in this county because of the way the county grew out. Not anyone's fault, it's just the way it happened. So these private utilities that have been backed by the PSC have driven up rates over and over again. And this utility, even though taken by UFG Way, still had a lot of work to do that had to be improved, that still drove up rates. Not as bad as they would have been, but bad. So to actually make this move just like the Aqua system, this is a great move as well. And the more we can keep on doing this type of

1:14:59thing, it benefits all our citizens. Uh so You took a lot of work, it's a heavy lift and I wanna say you did a phenomenal job with it and I think our state legislators did a great job getting us the extra money. 'Cause Commissioner Starkey, you were dynamite up there in Tallahassee working uh whoever had to be worked to uh to get it done as well. So I think this has been a a tremendous accomplishment for the people that uh have to live with this water company.

1:15:27Okay, um we do have people signed up for public comment, so I'm gonna let them uh line up and Right.

1:15:46Good afternoon, Commissioner. Um my name is Skip Geiger. And I live at [address removed] in Gulf Harbors. I'm a 30-year resident of coastal Pasco County and specifically the harbor communities. Over the last five years I have met with each and every one of you commissioners on various issues which pertained to the coastal Pasco County region. Нізюсвоє з important to the ріжен. as the vote you

1:16:17are taking today to complete this action. Twelve years ago residents came to Pasco County to ask that the purchase of the Lindrick Water and Sewer System be added to the list of private utilities that the County was considering as they looked to create a countywide utility system That would be made up of small systems. Instead, the residents were handed off to the infamous FGUA. also known by

1:16:47most as Fugwe, and another more non fairious names that we won't go into. The harbor region has been plagued with by your own staff submission, the second highest water and sewer rates in the entire region. We have endured the worst customer service. We have, as a community, had to deal with continual disruption in service to our system f due to system failures. Low water

1:17:17pressure during peak hours, and when there is a fire in our community, and by the way, there have been two in the last year. The community loses water pressure because the wells can't keep up.

1:17:33But the most important thing is the pollution due to the sewage leakage into the canals. Five times this past summer our beaches were closed to swimming because of fecal coliform levels were too high to swim in the coastal waters.

1:17:52Our citizens Water Committee has met with the county staff and they are ready to fix these problems for us. The time has come. We need each of you commissioners to vote yes today. so that we can protect the future of the coastal Pasco County area. While providing quality water and sewer support for the more than 3,000 customers at a more reasonable rate. Thank you.

1:18:21Thank you very much.

1:18:24And again I'm going to apologize in advance. Paris Mr uh Sir Nichols Sure.

1:18:37Good afternoon, Commissioners. Thank you for inviting us. I was very pleased to hear Commissioner Mariano. Um We have so many accolades for the hard work that was put in by everybody. I'm a relatively new resident of Gulf Harbors. Uh my main complaint was the cost of our water system uh to maintain it and to pay it on a monthly basis. I am thrilled that this is coming to a head and hopefully Everyone

1:19:07will agree and we can move on to something new. Thank you very much. Thank you, Paris.

1:19:14Uh Mitch Kobernick?

1:19:20And if you please give your name and address.

1:19:22Uh you got it right. Mitch Cobernick, uh [address removed]. Uh good afternoon commissioners. Um yes, I'm here to speak in favor of the acquisition of FUGUA, uh the FUGUA system into the Pasco County utility system. Um ever since FUGUA had taken over the utilities, uh our neighborhood has been subjected to some of the highest rates. in the in the region, certainly a lot more than what Pasco County citizens have been paying. Um It would seem to be obvious that every citizen in Pasco

1:19:52County is entitled to pay the same for the same services. Um They should be getting the same quality of water, they should be getting the same price for their water, but because of the nature of some of these private utilities, in particular FGUA, that has not been the case. Паско тук а хюч степ. Uh by acquiring the aqua system. uh huge step towards resolving this uh inequity. Um now the aquasystem arguably was in much worse condition than the Lindric system.

1:20:23The water was was terrible, it was sometimes not even drinkable. So for that reason I'm okay with letting them go first, um, but now it's our turn. Uh the time has come to get the Lindric system into the Pasco system and and have everybody start to pay the same rates, improve the quality of the water. And uh we've been working on this with the water committee for more than a few years and Yes, it's been a heavy lift. But we're here now. We appreciate the opportunity to be able to speak in favor

1:20:53of this and we certainly hope you can see that it's the right thing to do to equalize the service and the prices for all of Pasco residents. Thank you.

1:21:02Thanks, thanks.

1:21:04That concludes those that have been signed up. I believe we may have one online. No, we don't. Okay.

1:21:10Okay, and we have another one here and maybe some more. We'll see.

1:21:14Barbara Wilheite, 6327. Whoops, wait a minute. That's my professional address. Barbara Wilheite, [address removed], a proud resident of Gulf Harbors. Wow, I've watched this for a really long time. You've been involved in local government for I guess 25 years. I started very young. It's taken a lot to get to this point. And the leadership of this board and this staff and administration to put together a plan

1:21:44like that and say this is how we're going to do it and to present that to you today for you to approve it. It was very impressive. Me to me, critical infrastructure is county wide. That's what you do. You have countywide infrastructure and we can see when it's not set up that way all the struggles that you have over time. We struggle with stormwater because stormwater was given off to every homeowner's association. We had to do a stormwater assessment. We did that countywide. Everybody pays the same. No matter where you're at the county, or if I'm

1:22:14saying, look, I'm in my house on 50-20 or Easter Cove and I never have to worry about flooding. I have to worry about water rising, but not flooding. But I pay my stormwater assessment. So if you look at critical infrastructure from a countywide perspective, as you are, as your leadership and you all are doing here, this is the solution. It's the solution to move these issues that have been issues for a very long time forward. to um continue to have an outstanding uh county utility system that we're all gonna be proud to be part of. Thank you.

1:22:44Thank you.

1:22:46That wishes to speak. Okay, it's getting bad, huh?

1:22:52Ken Dabbs, [address removed]. Uh so I live in Gulf Harbors on the Landrick system. Out for twenty years. And uh I just want to echo everything my friends have said. Uh Because ninety-nine point forty four if you remember the old commercial, if you're as old as I am Ninety-nine point forty four percent of the residents, including people in Magnolia

1:23:23Valley, uh Aloha Gardens. I mean I'm I've been collecting information from a lot of people. They're in favor of this. And I just want to thank uh Mike Carbala and his team. And Commissioner Mariano, you and I w we went round and round about this uh well we did we didn't argue. No we were on the same side on aqua. And I know Commissioner Starkey's done a lot of work on this. You've done a great job.

1:23:54Just urge you to vote yes, let's get this done and let's move on and get Aloha Gardens and and Mad Hatter and the rest of these Fukua systems. purchase an on the county system and and do what was it Senator uh Wilton Simpson said a few years ago about Summer Tree. It's and I'm gonna paraphrase him a little bit. It's outrageous or ridiculous that we have people on one side of the street paying

1:24:25for w double what people on the other side of the street are paying for their water. And Wilton Simpson was right, so let's do the right thing today and vote yes. Thank you.

1:24:39Is there someone else coming up to speak?

1:24:41Okay.

1:24:47Hi, my name is Anne Marie Williams. [address removed]. Um I just wanted to make one comment. I was part of the Water Committee, and not only is Gulf Harbor's involved, we did have involvement from a lot of the other neighborhoods, um, the woodlands, seaf the seaforest neighborhoods, um the condos. So I just wanted want you to know that it's not only us that are pushing it. Everybody in that area is looking forward to

1:25:17this. Thank you.

1:25:19Yeah and and so um seeing no one else come up I'll just say you know I have a home in Gulf Harbor's and I have a home in Aristida. One's on county water. And one's on Gulf Harbors, uh one's on FGUA water. And I used to live in Alo with Aloha water. And um It's night and day the the the quality of life experience with the water delivery. Um frequently when I'm driving into Gulf Harbors, I'm on the phone still working and I don't see that sign that says

1:25:49Boil Water. And we have it all the time. And so I I hate to think of what I've what I've done. you know, to me and my family 'cause I didn't even I didn't even notice that we had that boil water line. Boil water sign. Uh there's been times when I've had no water. No water many times. And and here's the sad thing. Because the rates are so high in there already The money that um FGUA has bonded to

1:26:19um to go to fix things. I they just fix band dates. Right? Uh we've had years and years of band-aid fixes that fail all the time. And I don't think they can raise the rate, so I don't think it can ever ever get fixed. So this is the only way, in my opinion, to um to fix this. You know, a long time ago I was against against it. Uh but I have I have done my homework. I've talked to commissioners from

1:26:49other counties. Most of them didn't go down this path and go to FGUA. Um but those that did have systematically worked to get them off. And they do it like this. And I you know, we wait Originally we were gonna do this um with a rate increase, but now we have this opportunity. to do it with the ARP money. plus the capital improvement money that we were able to get from our friends in Tallahassee. So we're

1:27:20in a very, very fortunate position, in my opinion, that we can take this step today. So I hope we'll see a motion for approval.

1:27:29Well with that I'll I'll say um I'll move for approval of it. I thank all the staff for working this proposal up and this is the right thing to do for this community. So

1:27:40I'll second with more discussion?

1:27:41Yes. Um

1:27:43You know Mm-hmm again your team, the residents, um Not only just with the Lindricks system but all over the all the FGA people want to see these transactions happening.

1:27:57Came to the county commission, we had the presentations of all the people stuffing with water. It was something we wanted to try to f find a solution. The Board at the time did not want to buy out the utilities, which I thought was going to be the ultimate way to go. This was a compromise that they had done. Um, yeah. twelve years was too long to be under the FGA. It's tough to take it over as we've seen the way th these contracts are set up. But I want to say uh I I salute this board tremendously for having the courage to keep pushing this thing forward. It's gonna benefit not only this system today

1:28:27like it benefited Aqua uh a year and a half ago, it's gonna benefit the next system coming up behind it and behind because the more we take over, the more we go through this, the more it gets spread out amongst everybody. So those increases are gonna get smaller and smaller. To what they would have been, and you get immediate quality of life improvements for everybody. That gets served by the utility. So I I thank this board so much for making this point.

1:28:48And let me explain something. That 3.8, 3.8, right, that we got from the state? Because we don't own it yet, but you know, we have we're going ahead and fixing we're lining the pipes so that because the Gulf Harbors has so much salt water intrusion it's sinking the New Port Richey wastewater treatment plant. It's a real problem out there. Um But The way FGUA works is they have a parent company. They have a parent company and then they have the company here. And so when we give them

1:29:19money to do something, everybody's getting a piece of the pie and less is going up actually into the capital project because everyone takes their administrative fee at multiple levels. Three levels of administrative fee on that money. Did you have

1:29:34No, just call a vote. I call a question.

1:29:36Okay.

1:29:37Um

1:29:39got a motion

1:29:39and a second. Just You had a there was a second, wasn't there? Just just clarification of of the motion. The motion is the is the recommended board action, which is the multi-tiered

1:29:52Yeah. Yes. And and one note here, you do have two amended pages to the section one twenty-five report. I'm just reading that into record. No significant changes. Just a roll in uh of one of the debt items on the reporting. We spoke with FGA and we modified that. So that reflects accurately. Yes.

1:30:11Okay. All in favor? Aye. Aye. Aye. Opposed? Okay, then we have to take up R S R