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08-12-66 AUGUST 12, 1966. A meeting was held at 2~00 P.M., Friday, August 12, 1966, in the Conference Room at the City Hall in Delray Beach with representatives from the municipalities of ~lfstream, Briny Breezes end Ocean Ridge to discuss preparation of a contract between those municipalities end the City of Delray Beach to provi'de for their use of the Delray Beach Ocean Outfall Sewer System. Those present from Delray Beach were Mayor Al. C. Avery, City Manager David M. Gatchel, City Attorney John Ross Adams and City Clerk R. Do Worthing. Vice-Mayor William F. Koch, Jr., and Town Clerk' William Gwynn re- presented the Town. of Gulfstreem. Briny Breezes was represented by Mayor Hugh David and Town Attorney Evans Crary. Those representing Ocean Ridge were Mayor H. Peirce Brawner, Vice- Mayor Mrs. Vi Holtherg, CounciLman John W. ~mssig and Town Attorney Grover C. Herring. Mr. Brawner asked if officials of Delray Beach had any suggestions to offer concerning the financing of this project, and Mr. Gatchel replied that. although the matter of financing the force main outside the Delray City limits was not a concern of this City, he thought that if the three co~nunities were not prepared to finance the project dividually on a pro rata basis, perhaps a district could be formed, which would encompass the three cities, and the CoUnty area involved, for the purpose of collecting from the sewer connections in order to make amortization on a bond issue. Mr. I~ch stated he felt that today's meeting was solely to dis=uss the contract with Delray Beach and that the financing would have to be worked out by the three communities. ~urther, he said that the Town of Gulfstream was prepared to pay their share of the cost without any sort of obligation or bond issue imposed on its taxpayers. Mayor David of Briny Breezes concurred in this statement and said that his city also was prepared to pay their share of the cost. A question was asked about the location of the force main and Mr. David replied that it would run along the right-of-way of AIA from Ocean Ridge south through Briny Breezes, Gulfstream and the County area to N. E. 8th Street, which is the north City limits of Delray Beach. There was discussion concerning whether this should be a joint agreement or if there should be an individual contract with each com- munity, the general consensus of opinion being that it should be a Joint agreement. The amortization schedule prepared by Mr. Neff of Delray Beach's consulting engineers was reviewed by Mr. Gatchel, who stated that the total amount of $117,000, to be amortized at 3.6%, includes $42,000, which is the estimated cost of the force main within Delray Beach, and ~75,000, being the three communities' determined share of the cost of the outfall line already in existence. Further, that the schedule provides for amortization at the rate of $891 per month, and that of this amount, $239 was estimated as Briny Breezes' pro rata share; $165 - Gulfstream; and $487 - Ocean Ridge. He pointed out that these were minimum charges for the life of the contract and the gal- lonage flow would be metered and charged at the rate of 3¢ per 1000 gallons. Concerning the gallonage rate, the schedule estimated that Briny BreeZes would be charged $87 per month; GN/lfstream - $60; and Ocean Ridge - $177. This schedule had been approved by ali parties at the June 15th meeting., Conf. -8/12/66 'Mr. Brawner pointed out that the basis amortization figure was agreed upon, but that the pro rata share to be paid by each community was to be adjusted as needed in the future according to the number of connections, gallonage flow, etc., of each community. It was also pointed out that the 3~ gallonage charge would also he adjusted, if necessary, to meet changing costs for operation of the system by Delray Beach. Mr. Gatchel stated that Russell &Axon had prepared a sample con- tract, copies of which had been furnished each city, which could be used as a guide in preparing this contract. Mr. Herring stated that he had looked over the form and while the formulas for figuring charges would have to be filled in, he saw no- thing objectionable about the basic form. He asked if Delray Beach planned to put in the outfall system regardless of whether or not the three communities entered into this contract. Mr. Adams replied that the outfall is already in existence, but that a force main connection, which will cost approximately $42,000, will have to be constructed to carry the sewage frem the north C~ty limits to the outfall at Atlantic Avenue. That estimated cost has been taken into consideration in fi- guring the basic monthly amortization charge to the three cities. Mr. Gatchel stated that the City of Delray Beach is prepared to advance the $42,000 necessary to install the force main to connect to the proposed main at the north City limits. This amount will then be recovered over the life of the contract from the $891 monthly amorti- zation charge. Mr. Brawner said he thought there should be some agreement on the figures outlined in the schedule so that the attorneys could incorpo- rate them into the contract. Mr. Koch questioned the size of the force main, and Mr. Gatchel advised that in designing same, the engineers had taken into conside- ration the estimated population growth of all four communities, just as they did in the over-all sewer project in Delray Beach, which could handle a population Of 100,000. Mr. ~mch said he understood that if this contract were executed, no charges would be made until after the system was in operation, and Mr. Gatchel stated he thought thiswas correct. Mr. Adams felt there should be a limit set on the t/me allowed for connection, however. _Mr. Herring~ referring to paragraph 14 of the sample contract, said it stated that the obligations of the City and the customers are sub- ject to their ability to construct the respective facilities mentioned and their ability to issue, sell and deliver improvement bonds or cer- tificates to pay the cost thereof. Further, as had been indicated earlier, two of the three customers are in a financial position at this time to pay their share of the exp. enses involved in getting the line installed. There is a small area in the County that the line would have to go through and per~ssion would have to be obtained from the State Road Department to put the line in their right-of-way, or get an easement, if necessary. He went on to say that if, for example, Gulfstre~mwas not able to go ahead with this p~oject, the other two communities would be cut off. Therefore, he felt there should be a stipulation in the contract that if any of the three towns is unable to raise the necessary funds or otherwise comply with the contemplated plan of development and installation of this main, then th/s agreement would terminate. There could be a certain time limit set up and after that time, the charges would start. After the agreement is signed, it would be the responsibility of each individual community to raise the necessary funds to pay their share of the installation costs. He further stated that Gulfstream and Briny Breezes are alread~ in a sition to put up their share of the money, but in the case of Ocean Ridge, he thought there would probably have to be an ad valorem bond issue, which, of course, would mean a freeholders~ election. -2- Conf. 8/12/66 The matter of who would pay for the cost of the force main through the County area came up, Gulfstream already having stated they would not be res~onaible for anything north of their municipal limits. It was suggested the County be contacted about this cost, and Mr. Koch stated that County Commissioner Warren and County Engineer Frost were present at an earlier meeting and they had advised that the County could not spend public funds on a project such as this as there would be no income from same and only a small number of County residents would benefit. Mr. Brawner stated there were several properties in that area that would-be substantial users and he felt sure they would want to connect. Mr. David confirmed this, saying that he had been contacted by several of the property owners and there was a definite interest shown in the project. Mr. Herring stated he felt there would be nothing wrong in the three towns contacting the individual property owners and working out some sort of agreement by which they would pay their proportionate share of the cost. It was also mentioned that these properties would have to have some t~pe of collection system to get their sewage to the force main and have it metered through one of the three towns. Mr. Rossig asked if perhaps .Briny Breezes might wish to take these properties into their system so they could all be served by one meter. Mr. David replied that this would have to be given some study. Concerning the time limit on getting this project started, Mr. Gatchel stated that Gulfstream and Briny Breezes are in a position to start immediately and asked Mr. Brawner if he had any definite idea of how much time Ocean Ridge would need to hold a freeholders' election, etc. Mr. Brawner said they would have to have a definite cost figure from their engineers and then once this was known, he anticipated no difficulty in getting the freeholders to authorize a bond issue, which could be financed by their present income and the income from the sewer connections. He estimated that it would require approximately four months to get engineering designs for their collection system and several months to draw up the necessary bond papers and have them voted on and through court. He further stated that an ad valorem bond issue might not be necessary, that the property owners might rather have a revenue issue as they would be the ones who were paying this obligation. Mr. Crary .asked if Delray Beach would have to enlarge its outfall into the ocean to take care of this extra sewage or install a larger punching station. Mr. Gatchel advised that the outfall is large enough to handle the additional sewage and that this force main would be a separate installation and solely for the purpose of serving the three towns to the north, and no properties within the City would be affected if it were put in. Further, that the funds are available now for this installation and inasmuch as Delray Beach is considering other issues, one involving a water treatment facility, and as these funds are a pert of the Water and Sewer Fund, which is a dual service utility fund on which the City floats its bond issues, Delray Beach could not allow funds to remain stagnant over an extended period of time unless there was some agreement or commitment from the towns to the north concerning this project. It was asked if the attorneys could, with the information they now have, draw up a complete contract, which could be submitted to each of the cities, for approval. Mr. Herring said the only problem seemed to be the matter of who will put in the line in the County area. Mr. David suggested that since Gulfstream did not want to pay for anything north of their north limit line, which is understandable, Briny Breezes and OCean Ridge split the cost of that County area installation and then later, if the property owners in that area wish to connect, those · owners could provide their own collection system and the two cities could recover the cost of the line by having the sewage put through their meters. Mr. Herring agreed, saying that he felt it was up to the two northern towns to take the line across that area and an agree- ment could be executed between them to share the Cost of the installa- tion. -3- Conf. 8/1.2/66 ' Mx. Brawner asked how the amount of sewage put through the main by those properties could be determined if it flowed by gravity into Briny Breezes' or Ocean Ridge's collection system. Mx. Koch thought that a separate meter might have to be installed for those properties, even though that WOuld recfaire a separate pumping station, which is very ex- pensive. After further discussion, it was determined that this prob- lem is something that will have to be worked out between Briny Breezes and Ocean Ridge. It was suggested that since Delray Beach is the party furnishing the service, City Attorney Adams should draw up the draft of the con- tract for approval by the other attorneys and then the respective City officials. Mx. Adams asked for clarification of the clause in the sample contract that provides for adjustments to the charges. That portion was read, as follows: "It is suggested that allocation of all costa be adjusted retroactively, yearly, with the ratio of all expenses from initiation of contract to total 'flow for the same period." Mr. Rossig explained this as meaning that there would be an adjustment made at the end of each year based on the difference between the timated coat and the actual flow that has been metered from each of the communities' This would apply to both the gallonage charge and the basic monthly amortization charge. Concerning the latter, the total amount of $891 per month would always remain the same, but the proportionate share of each of the three c~-~aunities would be adjusted according to their actual flow. Mx. Koch asked about the length of the contract and if the $891 figure is based on a 30 year amortization period~ further, if after the 30 years, that charge would be dropped and the three towns would then be on a maintenance basis. It was pointed out that the agreement was based on the life of the pipe and the outfall. Mx. Crary. mentioned that paragraph 15 of the sample contract states that the agreement will remain in full force and effect for a period of 30 years, and that there would have to be a stipulation in the contract to provide a re- adjustment if the system should deteriorate and require replacement prior to the'end of the 30 year period. Mr. Brawler stated it had been agreed that the fixed charge of $891 per month would cease when the amount of money that was paid under that charge has amortized $117,000 worth of bonds at 3.6%. Further, that from then on, as long as the outfall and force main within Delray Beach are functioning, the towns would use it without any such charge, except for the gallonage rate. After further discussion, Mr. Gatchel stated he felt the parties present had a common understanding now and that the attorneys could work up a contract to be brought back to the respective Councils. City Attorney Adams will prepare a rough draft and consult with the other attorneys. Mr. KOch advised that Gulfstream's attorney is Mr. Henry Lilienthal. MX. David asked if, assuming all three towns put up the money and built the force main and then one town decided not to build a collec- tion system and connect to the main, the two remaining towns would be responsible for paying the $891 fixed charge. Mr.' Brawner said that Ocean Ridge would be forced to connect as they would probably be fi- nancing their share of the force main cost by a revenue issue, and that it seemed inconceivable to him that any of the towns would spend money to pUt in a force main and then not make use of it. MX. Herring explained that the formula for the fixed charge would apply only if the contract goes into full force and effect. If the system does not go into operation, then. the contract would expire and the remaining towns woUld be free to renegotiate with Delray Beach. He went on to say that he felt 'everything necessary had been covered at this meeting to enable the attorneys to prepare a Contract and that it would be up to Briny B~eezes and Ocean Ridge to contact the pro- perty owners in the County area to determine if they are interested -4-. Conf. 8/12/66 in entering into a side agreement with those two towns for connection into the system. Mr. Crary suggested that since Briny Breezes is a ooL~oration, which owns all the property within its limits, and which was organized for profit, that it would not be limited to its boundaries, an~ it m~ght well be that as a corporation, it coutd encompass within its collection system the entire area from its northern limits to the northern limits of Gulfstream. This would mean that Delray Beach would enter into a contract with two other municipalities and a private corporation to furnish this service, with all three of the legal entities considered customers. All present felt this was an excellent suggestion and that the possibility should be investigated. -5- conf. 8/12/66