Ord. No. 03-87-1275ORDINANCE NO.3-87-1275
nRnTNANCF OF THE CITY OF SOUTH MIAMI,FLORIDA,
0°fDORDINa5cES^N CONFLICT HEREWITH BE REPEALED AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS,the Mayor and City Commission of the City of South Miami,
Florida,pursuant to Resolutions No.106-86-6077 AND 115-86-6085,authorized
the negotiation of the conveyance of the City's Sewer System to Metropolitan
Dade County,Miami-Dade Water and Sewer Authority Department
(the "County");and
WHEREAS,after negotiation,the City and the County have agreed to
terms pursuant to an agreement attached hereto as Exhibit "A";and
WHEREAS,the Mayor and the City Connrission of the City of South Ni«i
find that it is in the public interest to convey the Sewer System to the
County.NOW,THEREFORE,BE IT ORDAINED BY THE MAYOR AND THE CITY COWISSION OF
THE CITY OF SOUTH MIAMI,FLORIDA:
c *•1 That the City of South Miami,Florida,shall convey itsSewerlyf^'the Country prizing the City Manager to execute the
Agreement attached hereto as Exhibit A.
Section That the conveyance of the S-frar^Tta0"^the attached agreement are contingent upon tne recipru
County Commission.
Section 4.It is the In^t^^SfTjSS'Sf*SouthprovisionsofthisordinanceshallbecomeandbemadeapasentenCe orfee^y °be XKE5 orVele'tlereo ^"extent necessary to affect such
^Section 5.If any section,sentence or phase °f this ordinanc^i^held
refl^alTdi^t^*^"^.ordinance.
s
Section 6.All ordinances or pa rts of ordinances in conflict herewith
be and the same are hereby repealed.
Section 7.This ordinance shall take effect immediately at the time
ofits passage.
PASSED AND ADOPTED this 21st day of April ,1987.
ATTEST;
READ AND APPROVED AS TO FORM:
I-
CITY ATTORNEY [
Passed on 1st Reading:4/7/87
Passed on 2nd Reading:4/21/8/
Public Hearing:4/*i/a/
APPROVED:
'1 MAYOR
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Department
Rates
CityRates
Residential
Comercial
Min.Min.
Billccf'sr1
$2.48
$3.51
$3.51
Proposed
rvicTAMgnmi,LCOMPARISON ^.-^^..-revs.C1TVQir-SOUTO^LJSATES
r^^^rTn-^ffectosotOctobei1986,;,
Usaqeinccf'spermonth
1113IS17
$3.12I$4.40$5.69$6.97$8.25$9.53$10.81$12.10$13.38•$14.'•'*'*iS.'1
$3.51$3.51
$3.51$3.51
$3.51
$3.51
$4.61
$4.61
$5.71
$5.71
$6.81
$6.81
$7.86$7.86$7.66'57.8657.8
$7.91$9.01$10.11'$11.21$12.
7.OUTSTANl NGCJT-DKbT
It is the County's oL;eclive lo acquire municipal water
w-r*.--r nftccible bvthe assumption ofa^[Jn^^t^n***^iov^that "there isl^ic^d value*The pub!ic has P^"*^^6*^*n v-.half 0f lts political jurisdiction through payment of ratesandchargesandShouldnot'be charged for »uch «y.ten,.-gain.The City"lists outstanding <5*bt on its ««er .y.t.m staling
1395 395 for two bond issues issued in 1965 and 19b7.on tne»5S5,iS3 tot i»o ^vi,u ..in tne proforma Analysis of
eilrfarA the value indicates 3DO»e in *-,lc 1-i.v*-^^J66 !000 is not sufficient to allow the County to ^r*the
Citv's svstero without adversely affecting rates to the County sYxlstincfcustomer•.However,because the interest rates on theunpidportionsofthetwooutstandingbond*«?«*""loTispecific^3.5 and «2S percent ther..is Potential v.Jh,.to
the Countv in assuming the City s qcdz.'»c »v"
S;«'.,Si.iount co.p,r„v,„cl.Ml,«."•«»•"»1»~
value of $665,000.
8.COUNTY OFFER
The staff recommends making an offer to the City to acquire
the City's sever system in return for the County assuming theCity's outstanding debt,with the following conditions:
1 The City of Coral Gables releases the County,as
successor to the City,from the f.^.^1^^contract currently in effect between the City of Coral
Gables and theCity.
2 The City advises its sewer customers that a substantial
rate increase will be required in order for the City's
sewer system to be self-sufficient as intended,if the
City is to continue providing sewer service for its
cu«toaers.That rate increase would be significantly
higher than the increase to its customers resulting
'from the imposition of the County's uniform rates.
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The primaiy reason that the D*p*i tm«?nt 's lates are higher
;.,,rj ,kp City's rates is that the City's r.itos *i c fartoo low to
.»Hcw it to cover its opeiating,maintenance and debt service
costs According to City officials,oven the City's last rate
increase in 1982 was insufficient for it to cover its costs.
B^ause costs continue to escalate,the City's annual deficit is
co-.tinually increasing.The Department's staff estimates that
the City needs an approximate 45 percent rate increase forthe
City's sewer system to become self-supporting at the present
time.
6.PROFORMA ANALYSIS AT DEPARTMENT'S CJJMIMT_JATZS INCLUDING
Immediate investments required by the department
Operating Revenue (Existing Customers)$310,174
Operating Revenue (Immediate Future Customers)67,824
Less:Loss of Volume Revenue (191,126)
Adjusted Operating Revenue $186,372
Operating and Maintenance Costs 321,467
Net Operating Revenue *65,405
Gross Value of System at 8.5%Capitalization $770,000
Approximate Gross Unit Value of the 3,253
Existing and Immediate Future ERC'S $237
Estimated Costs to be Deducted asa Result of
Immediate Department Investment
1.Gravitysewers cleaning,
testing and repairs $50,000
2.Pumping station improvements 55,000
Total $105,000
RECAPITULATION
Gross Value of System $770,000
Less:Immediate Department Investment 105,000
Value of System $665,000
Approximate Net Unit Value of the 3,253
Existing and Immediate Future ERC'S $204
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4.Ci'hkATlNG KXI'KNSES INDF.R COUNTY OWNKFSH IP
The City reported a significant operating loss for its
lou-st fiscal year.However,under the Department's operation,
the Department's system-wide operating ratio should be achieved.
Therefore,for the purpose of this report,the Department's
typical operating ratio of 65 percent has been utilized.
S.RATES UNDER COUNTY OWNERSHIP
The City's basic rate is $0.55 per hundred cubic feet (ccf)
compared to the Department's basic rate of JO.6411 per ccf.The
City has a cap of $7.86 per month ($23.67 per quarter)on all
residential customer bills.The City's rate for commercial
customers decreases as usage increases.The combination of these
factors means that all customers with greater than 1 ccf per
month water consumption would receive higher bills utilizing
Department rates.
Examples of monthly bills at City and Department rates are
shewn below:
MONTHLY BILL COMPARISON
Usage in Bill at Bill at Increase with
ccf/month CityRates Dept.RatesDept.Rates
RESIDENTIAL
1 $3.51 $3.12 ($0.39)
7 4.61 6.97 2.36
13 7.86 10.81 2.95
19 7.86 14.66 6.80
25 7.86 18.51 10.65
*3.51 $3.12
4.61 6.97
7.86 10.81
7.86 14.66
7.86 18.51
COMMERCIAL
3.51 3.12
7.91 10.81
14.51 18.51
55.16 66,59
243.16 323.03
468.16 643.58
1 3.51 3.12 (0.39)
33 7.91 10.81 2.90
25 14.51 18.51 4.00
100 55.16 66,59 11.43
500 243.16 323.03 79.87
1000 468.16 643.58 175.92
Theadditionalcosttotheaverageresidentialcustomer
using 13 ccf of water per month (39 ccf per quarter)would be
$2.95 per month under Department rates.Even though nearly all
customerswould receive higher billsunderDepartmentrates,the
increase for approximately two-thirds of all the City's customers
would amount to$2.95per month or less.
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....•._.-»«,..*
As of r'fC'-jrler 31,1985,the City listed approximately 860
.•-*•.:•is }«•••<••i v i ng !•*.•«t-r st.ivice.A cons idei able r.j.r.ber of
•.ut t ».-n.i-r s Are laige coio"-tcial or multi-family buildings
resulting in a significantly higher equivalent residential
c-:«to::er cou.it as described hereinafter.
The City cwns four sewage pumping stations.Tvo are air
elector stations and one is a submersible station,each serving a
very small portion of the City.The fourth station is a Can-Tex
wet-well,dry-well,se1f-contained unit with a stand-by gasoline
engine and serves the majority of the City's customers.Sewage
from the other three systems is repumped by the Can-Tex station.
All sewage from the City is discharged through an 18-inch force
main to the City of Coral Gables which,in turn,discharges the
sewage to the Department's interceptor system.
Modifications needed to upgrade the pumping stations to
Department standards would consist of replacing the pumps in the
sub.-.ersible station and converting the two air ejector stations
to suL.-.r-rsible stations.A deduction for the approximate cost of
this work is listed in the Proforma Analysis.
The City's gravity sewers are primarily of vitrified clay
pipe with precast concrete manholes.The sewers are mostly 8
inches in diameter with some larger sized pipe in the vicinity of
the master pumping station.Nearly all the sewers are located in
public rights-of-way.
The staff's inspection of the sewers indicated a fair amount
of infiltration,particularly in manholes east of S.Dixie
Highway,where some significant cracks in manhole walls were
observed.A deduction for cleaning,testing and repairing the
gravity sewers is included in the Proforma Analysis.
An ur.sual feature of the City's sewer system is that no City
personnel are involved in the operation and maintenance of the
City's sewer facilities.Operation and maintenance services are
per formed by the City of Coral Gables on a contract basis.
3.COMPUTATIONOF EQUIVALENT CUSTOMERS FOR REVENUE ANALYSIS
The average monthly water consumption for an equivalent
residential customer (ERC)is approximately 10,500 gallons.
Based on this figure,there are approximately 2,635 sewer ERC'S
in the City's system.
A field survey indicated that 618 ;2RC units are under
cir.st ruction.Potential revenue from these units has been
i .-.-eluded in the Proforma Analysis.
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1.
r.'IAVU DA DC V\Ali>AND STWLR AUTHORITY DL PART MEM
VALUATION REPORT
FOR
CITY CF SOUTH MIAMI
SSaER SYSTEM
October,19 86
SYSTEM LOCATION AND CUSTOMER COUNT
The City of South Miami,referred to hereinafter as the
"City",provides sewer service to customers withina portion of
the City and to a few custcr.ers just outside theCity limits.
Theareasservedbythe City are approximatelyasillustratedon
the sketch below.
Oyj
0
X
^.w.
5>V dO 6T.
A
N
KXH11UT "A"
NMANAI DADC iVAUH AND StWCR AUlHOmi \DIPAHUUM
October 21,1986
Mr.Perry Turner
CityManager
City of South Miami
6130 Sunset Drive
South Miami,Florida
Dear Mr.Turner:
33143
Re:Acquisition ofCityof
South Miami Sower System
We are pleased to enclose two copies of our Valuation Report
for the City of South Miami Sewer System.Included in that
report is our recommended offer,subject to County Commission
approval,to acquire the City's sewer system.In consideration
of such acquisition,the County would assume the City's
outstanding debt on its sewer system,currently approximately one
million dollars.
Our offer is contingent on the City notifying its sewer
customers,prior to the execution of an agreement for such
acquisition that a substantial rate increase would be required in
order for the "ity's sewer operations to become self-sufficient
under continued ownership and administration of the City.
Ke look forward to your response to our proposed offer.
Very truly yours,
GS/RBL/jd
cc:Mr.Joaquin Avino
Assistant County Manager
I*-
Garrett Sloan
Director
^k^
S^.cucn _2_^Resolution No.106-86-6077 is re.idopted and
the Acting City Manager is aphorized to negotiate with Dade
Co-r.ty on such other terms ar.z conditions as are necessary to
ccrplete a purchase agreement.
PASSED AND ADOPTED THIS 15th DAY Or NOVEXBE?,1966.
APPROVED:
c:Sc.t
Hl-.SOLUnvN NO...U^8^608S.
,^nr THE C—:-S10N OF TH.E CITY OF SOUTHA^^Tl OF "EC-•cF THE uFfER yiADE
:,JA>..1 ACTING IN L^Lr/HE THE CITY'S SE*ER SYSTEM*Y DADE ^'uMY TO ^..»<F(jRTH }N EXH1B1T
.N ACCCHDANCE ^-r.-_^1C6_&e-6C77.
"A"AND PLADOPiiNG REbu *
.„..•---rval-aticr.report fcr C.ty
ri.S,Da:e lc-jt..y
,:ami
Sewer System c»-.ei October,1966 l"Evaluat ion
"V ...in a letter fro,.Garrett Sloan,Director of thePepcrt;ar.o in a i -«-^
v.,..-.«c «.t«ana Sewer Authority Department dated October
,,9e6 setter",attached hereto as Exhibit -A-proposes
to\h.City of South Miami an offer to acquire it.sewer system
,,cerebration of the assumption of the outstanding debt on
it.~w«system approximating 51.COO,000.00;and
,nt to Resolution No.106-86-6077,the CityKKEFEAS,pursuant to pesoiui-
v.<„*theCity Xsnager to begin negotiationsCommissionauthorizedtheLity•*
»;~~r,f the Citv's sewer systemwithDadeCountyontheacquisit.on of the City
by Daie Cour.ty:and
irjnr--»6 thata condition prececentKHEREAS,Dad.County has incited that
„*»-hic>-will result ir a purchase-c ccr.ducting negotiations vhic.
lt moires a resection agreeing "in principle"
!'o Vv-,.„,of the offer as ,«forth in the Evaluation Report
and Letter from the City of South Kiami Sewer Department;
,,,,THEREFORE.BE IT RESOLVED BY THE MAYOR AND THE CITY
C.-VISION OF THE C!TY OF SOUTH SI AMI.FLORIDA:
c•„1 The City Commission has reviewed the Letter
Section 1..'ne ul'
.(r>r the City of South Miami Sewer,.,»the Evaluation Report for the city
*h Pbv agrees "in concept"to the offer by Dade CountySystemandherebyagrees
the City's sewer system in consideration of its
toacquirethe city s
........o.-««••—"--***-""T""
.„„.,..«...,..«..«..•.««>•«-—tb-cuv"°""",<«r to t-execution of a purchase agreerent,ls ,.,.=r c;»tomers prior to t...<-
•••that a substantial rate increase wouldrorc;ch acquisition that a sods
.*n^P County in the purchase agreement,the City of South Miami and Dade County
RESOLUTION NO.106-86-6077
A RESOLUTION OF THE CITY OF SOUTH MIAMI,FLORIDA,
AUTHORIZING THE CITY MANAGER TO ENTER INTO NEGOTIATIONS
WITH DADE COUNTY TO PURCHASE THE CITY'S SEWER SYSTEM
FOR FINAL APPROVAL BY THE CITY COMMISSION.
WHEREAS,Dade County has made an offer pursuant to
Exhibit "A"to this Resolution to acquire the City's sewer system in
consideration of its assumption of the debt;and
WHEREAS,it makes fiscal sense for the City of South Miami
to enter into an agreement for the acquisition of the City's sewer system with
Dade County under the terms of the offer set forth in Exhibit "A"and such
additional terms and conditions as may be negotiated between the City and County;
NOW,THEREFORE,BE IT RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF SOUTH MIAMI,FLORIDA:
Section 1.The City Commission hereby authorizes the City
Manager to enter into negotiations with Dade County to purchase the City's
sev/er system.
Section_2.The City Manager shall then report the results
of the negotiations to the City Commission for its final decision.
PASSED AND ADOPTED this 21 day of October ,1986.
APPROVED:
ATTEST: