HomeMy WebLinkAbout2005 10 24 Regular 503
COMMISSION AGENDA
ITEM 503
CONSENT
INFORMATIONAL
PUBLIC HEARING
REGULAR X
October 24,2005
Meeting
MGR f2- !DEPT /4-
Authorization
REQUEST: Utility Department Providing Information Relative to the Fisher Road Water
Main Extension
PURPOSE: The purpose of this Board item is to provide cost and background information on the
Fisher Road water main extension that was constructed by City staff
CON SID ERA TIONS:
This agenda item is needed to respond to requests by the Commission for additional
information on the Fisher Road water main extension. Included in this agenda item are the
estimated costs if this project had been bid out, full force account costs, and the costs billed to
the residents. Also included is the estimates for the single service request (612 Fisher Road) and
the water main confirming labor was included in the estimate for both requests.
The construction costs in the estimated design and construction costs were verified by a
local contractor as being consistent with local water main extension project costs ($40 to
$45/foot) for a project of this size. The cost estimate provided to and paid for by the residents
included labor and materials only. Costs for design, permitting, fees, equipment, overhead,
administration were not charged nor was any profit. The three tables provided are for: I)
Comparison of estimated construction costs to full cost force account (actual cost to the City)
and also the actual costs charged to the residents, 2) Cost proration comparisons based upon if
this project had been bid, and 3) Cost proration alternatives comparisons based on full cost force
account.
Three different cost allocation methodologies are included in Tables 2 and 3. These
rough calculations were done for comparative purposes to give the Commission an idea how the
outcomes vary with the different options. The three alternative cost sharing methods are equal
102405 COMM Regular 503 Fisher Road Water
Regular 503
October 24, 2005
Page 2
share, hydraulic, and frontage foot. Explanations are provided in the tables. The last column of
tables 2 and 3 is the actual cost charged to the residents - $3,177 each of which $943 was for
the connection fee, meter and tap fee, deposit and application fee.
All three methods have advantages and disadvantages and there are other methods and
combinations thereof that can be used none of which is perfect. In this situation where the
participating property owners were requesting the same benefit (potable water service to their
property) we felt the equal share method was the better method.
The issue of the cost difference between the property owner at 612 who requested and
was provided an individual water service earlier this year at a cost of $1,746 and the costs to
each of the six participants ($3,177) for a water main extension was fully explained in the City
Managers letter of September 22, 2005. Both were charged for estimated labor and materials.
FUNDING:
No funding required.
RECOMMENDATION:
Staff recommends that the City Commission uphold the original agreements.
These agreements were entered into on good faith and saved the residents money. Ifthe
Commission is going to change the agreements, staff recommends the full cost using
equal share method be allocated to the residents as shown in Table 3.
IMPLEMENTA TION SCHEDULE:
Future undertakings of this nature would require a formal agreement using Full Cost
methodology.
ATTACHMENTS:
1. Comparison Tables of Estimated Construction Cost if Contracted Out, Full Force
Account Cost, and the Actual Cost Charged to the Residents
2. Reference Map
3. City Manager Letter of September 22, 2005
4. 1/19/05 cost quote for 612 Fisher Road & 4/7/05 cost quote for water main extension
COMMISSION ACTION:
102405 COMM Regular 503 Fisher Road Water
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1 Attachment 2
604
608
610
Blue - Water
--..
Green - Sewer
Existing Fire
;i Hydrant
616
114
A TT ACHMENT No. 3
CITY OF WINTER SPRINGS, FLORIDA
Ronald W. McLemore
City Manager
1126 EAST STATE ROAD 434
WINTER SPRINGS. FLORIDA 32708-2799
Telephone (407) 327-1800
September 22, 2005
Mr. and Mrs. J. Marcum
606 Fisher Road
Winter Springs, Florida 32708
Dear Mr. and Mrs. Marcum:
As per my September 14, 2005 email to you I have completed my review of your
complaint regarding the extension of water service to your home on Fisher Road.
Based upon my review of your complaint there appears to be five concerns as follows:
1. The cost proration method.
2. The cost differential between your project and the water extension project
involving 612 Fisher Road.
3. The amount oftime it has taken to complete the project.
4. Reluctance on the part of the City to extend water service to properties located
within the Ranchlands.
5. The requirements for a back flow prevention device.
Before responding to these issues I want to clarify one point. It is my understanding that
you may be of the belief that paying taxes entitles a resident to water service. This is not
an accurate assumption. The Winter Springs Utility is a separate legal and financial
entity from the General Fund,. and General City Departments. The utility is 100%
financed from utility revenues. As such, the utility is not financed from the General Fund
or property taxes. Relatedly, the payment of property taxes does not entitle Winter
Springs residents to utility services. However, once you become a paying customer of
the water and sewer utility you are then entitled to the services offered by the utility.
The utility does not pay for the extension of local service lines. These costs are paid by
developers when they develop property, or by homeowners who do not have service but
who desire to initiate service. The utility does pay for the installation of major
transmission lines connecting various neighborhoods to the utility system.
JMarcum Water Extension Issue
Page I of5
In your case, the developer of the Ranchlands chose not to hook up to the utility many
years ago when the Ranchlands were developed. Therefore, when water and sewer
services are extended to the Ranchlands, the new customer must pay for that extension.
Proration of Cost
There are numerous methods for financing the extension of water and sewer facilities to
customers who live in areas of the City who do not have service. These methods can
include, but are not limited to, equal proration of cost, front foot property line proration
of cost, hydraulic flow proration of cost, and many others.
Chosen Proration of Cost Method
In your case, you chose to enter into an equal share proration of cost method. This is a
very simple, uncomplicated and fair method of proration, and one which lends itself to
getting residents to share costs voluntarily.
I have not discovered any facts to determine that the cost was not equally shared as you
chose.
If you would like to have the cost prorated under some other proration methodology, I
would suggest that you get with your neighbors and see if you can come up with another
method that you can all agree upon and we will seriously consider it as long as everyone
is in agreement and our materials cost is fully covered.
Amount to be Prorated
The other important decision to be agreed upon is the amount of cost to be prorated.
In your case the City agreed to pay the cost of design, permitting, and labor. You agreed
to pay the cost of materials.
This is a highly unusual. situation resulting in the rate payers of the system subsidizing
your cost. You should consider yourself fortunate to have had this cost saving
opportunity.
There is nothing unlawful about this approach. Indeed, it was common practice in years
gone by. However, in more recent times this practice has been discontinued by most
utility departments due to the fact that it causes some rate payers of the system to
subsidize the cost of other rate payers.
Common practice today is to require new customers to pay the full cost of the extension
of service including design, permitting, labor, materials and overhead. You paid $3,200.
Under the full cost method you would have paid approximately $10,000.
JMarcum Water Extension Issue
Page 2 ofS
Differential In Cost From 612 Fisher Road
As with your group, the customer at 612 Fisher Road paid for materials cost only. The
reason for the difference in cost is that his materials cost was much less than your
materials cost. This was due to the fact that he did not require installation of a fire
hydrant, and 8-inch water line required to meet fire flow requirements to a hydrant. You
did require a hydrant and 8-inch line.
Based upon my review, your concern that the customer at 612 Fisher Road may have
been given some degree of favoritism over and beyond that extended to you is simply not
supported by the facts.
Time of Construction
You state that Utility Superintendent Don Chaney represented to you that the line
extension could be constructed in six to eight weeks.
Based upon my review of the facts, Mr. Chaney's representation to you was reasonable.
Construction of your line took in fact, 8-weeks.
What apparently was not clarified was that time also has to be allotted for design,
permitting, construction, and final acceptance of the improvements by the State of
Florida.
The normal time frame is 8-months as follows:
Design
Permitting
Bidding
Construction
Final Approval
2-months
I-month
2-months
2-months
I-month
8-months
Your project took approximately 5-months as follows:
Design
Permitting
Bidding
Construction
Final Acceptance
I-month
I-month
-0-
2-months
I-month
5-months
I need to point out to you that the State has up to thirty days for final acceptance. We
have no control over the time it takes them. Sometimes it takes the full thirty days.
Sometimes less. In your case it took 24 days.
JMarcum Water Extension Issue
Page 3 of 5
In review of the facts, I have not found anything unusual about the time it took to
complete the job other than the fact that the normal time to complete the job was
shortened by three months as a result of the bidding phase being eliminated, and design
being accomplished in one month rather than the customary two months.
It is quite possible that Mr. Cheney did not clarify all the steps involved in the job. If,
indeed, that was the situation here, please allow me to apologize to you for that oversight.
Reluctance to Extend Service to the Ranchlands
This concern was of great interest to me. Since the City utility is benefited by growth, I
could not imagine why the Utility Director Mr. Lockcuff or Superintendent Mr. Cheney
would have any reluctance to extend water service to the Ranchlands.
I found the answer to this concern to be quite simple. Mr. Lockcuff and Mr. Cheney fully
endorse extension of the utility into the Ranchlands. What they were reluctant to do, was
to tie their forces up doing the work rather than bidding the work out to a contractor. In
your case the project was so small it made absolutely no economic sense to bid the job
out and probably would not have attracted any bid response from contractors. Therefore,
in an attempt to try to help you, they agreed, all be it reluctantly due to their normal work
loads, to do it themselves.
Back Flow Device
In your complaint you allege that Mr. Cheney never advised you that you had to purchase
a back flow prevention device. Mr. Cheney advised that he did. I cannot verify who is
correct in this situation. If he failed to advise you of this allow me to apologize to you.
However, what I do find interesting about this complaint is that Mr. Cheney is the head of
the back flow prevention program, and in all matters which I am aware, extremely
thorough in his administration of this program.
In this case, Mr. Cheney emphatically states that he advised you of your requirement to
install a back flow prevention device if you chose to utilize your well for irrigation. In
this context, I can see where this could have been misinterpreted to mean, you did not
have to purchase a back flow prevention device.
Although, the misunderstanding is unfortunate, the law requires it, and you will be
required to have it.
Conclusion
After review of the facts of this matter it appears to me that in light of the almost certain
inability to get bids from contractors for your project due to the very small nature of the
project, the City utility staff went out of their way to try to help you by utilizing City
forces to do the job.
JMarcum Water Extension Issue
Page 4 ofS
In doing this, the City should have clearly laid out the project in a written agreement
clearly defining the scope of the job, the cost components, and the time line thereby
eliminating any misunderstandings.
Recommendation
The good thing about this type of issue is that it gives us the opportunity to improve:
In this situation I will be requiring all future extensions to be done by written agreements
clearly pointing out the scope of the job, cost components, and project time lines.
Once again let me apologize for any inconvenience this matter has caused you. If you
need any additional information please contact me at your convenience.
Sincerely,
;f~v ?n'J8-r
Ronald W. McLemore
City Manager
/jp
cc:
Mayor and Commission /
Kip Lockcuff, Utility Director
Mr. and Mrs. A. Buteau
Mr. and Mrs. R. Tuttle
Mr. and Mrs. S. Weber
Mr. and Mrs. J. Scheel
Mr. and Mrs. N. Phillips
JMarcum Water Extension Issue
Page 5 of 5
1\
A TT ACHMENT No. 4
City of Winter Springs Utility / Public Works Department
110 North Flamingo Avenue
Winter Spring, Florida 32708
Telephone (407) 327-2669
Fax (407) 327-4751
January 19, 2005
Dear Mr. Smith: b' 1-'
This is the estimated cost to provide water to ~4 Fisher Road.
Maintenance Mechanic 3 days
Maintenance Worker 3 Days
$405.00
$326.64
$731.64
Availability Fee
Tap Fee
Application Fee
Deposit
$518.00
$380.00
$15.00
:! <::). e> G .J2;. Og:...
$938.00
Materials
$76.88
Total
-.
$1746.52
..
onald L Cheney
Utility Superintendent
Cc; Kip Lockcuff
UtilitylPublic Works Director
, .
WINTER SPRINGS UTILITY I PUBLIC WORKS DEPARTMENT
110 NORTH FLAMINGO AVENUE
WINTER SPRINGS, FLORIDA 32708
Telephone (407) 327-2669
Fax (407) 327-4751
April 7, 2005
Ms. Pam Markham
606 Fisher Road
Winter Springs, Florida 32708.
. -RI;; Water Main Installation
Dear Ms. Markham:
Below is the cost estimates you requested for labor and materials to install a water main
to accommodate 6 connections:
Labor...................................... $4,390.40
Materials....... .... ...... ... ........... .... 9,016.55
Sub-TotaL....... ........... _............ $13,406.95
Sub-Total per Connection................ 2,234.50
Available Fee...................... ............ 518.00
T~& Meter. ................................ 380.00
Deposit......................................... 30.00
Application Fee............................ 15.00
TOTAL per Connection............. $ 3,177.50
Please review the above costs and contact me when a decision has been made.
.
Don Cheney
Utility Superintendent
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