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HomeMy WebLinkAbout2006 05 15 Regular 301 Reclaimed Water CITY OF WINfER SPRINGS COMMISSION MEETING 051506_Special_Meeting...Regular_30 C GolC Courses_Rec1aime(C Water_Agreement Page 1 of 3 COMMISSION AGENDA ITEM 301 Consent Informational Public Hearing Regular X May 15, 2006 Special Meeting Mgr. / Dept. Authorization REQUEST: City Manager requesting the Commission to apply existing reclaimed water rates to the Winter Springs Golf Course. PURPOSE: This agenda item is needed for the Commission to apply the existing water rates to the Winter Springs Golf Courses. CONSIDERATIONS: This agenda item is needed to apply the existing reclaimed water rates to the Winter Springs Golf Course. Initially, the City acquired effluent disposal agreements with the Tuscawilla Country Club (TCC) and Winter Springs Golf Course (WSGC) during the acquisition of two private utilities in 1990 and 1984, respectively. Both agreements provided for free reclaimed water as well as operational subsidies such as pump station repair costs and electric bill payment in order to have a place to dispose of sewer effluent. Since that time, the City has constructed the first phase of a reclaimed water distribution system in the city for the purpose of conserving potable water through the use of reclaimed water to replace potable water for landscape irrigation. This program has been very successful resulting in Winter Springs' reducing its per capita potable water withdrawals from the aquifer during a period of rapid growth. In 1995, a new agreement was negotiated with WSGC that included free reclaimed water and City payment of the golf course pump station electric bill but eliminated the City's obligation for repairs and labor costs. In 1996, the City began charging residential customers for reclaimed water and in 2002 began metering reclaimed customers. The Winter Springs Golf Course contract terminated on May 2005. The golf course was advised in 2005 that staff would be recommending that it would have to begin paying for reclaimed water when their contract was renewed. Since installation of the city's reclaimed water system the city has not needed golf courses to dispose of effluent. In fact, the city cannot add paying customers to meet the current demand for reclaimed water. The current system serves only about 15% of the residents of Winter Springs. Yet, golf courses which have been receiving reclaimed water free of charge consume 45% of the current peak demand of the reclaimed water system. The 45% of reclaimed water capacity consumed by non paying golf courses would supply reclaimed water to approximately 1,000 to 1,500 additional paying residences. The revenue currently generated from paying customers is approximately $165,000 annually. The revenue generated by the additional paying residents would amount to approximately $150,000 in additional revenues, or almost doubling current revenue, to help fund the estimated $12,000,000 required to build the new Lake Jesup reclamation water facility and extension of distribution lines to additional reclaimed users, further reducing the City's withdrawal of potable water from the aquifers. Therefore the continuation of providing golf courses on what will probably be perceived by the paying customers as a free ride on the backs of paying residential customers doesn't appear to reflect good public policy, or economic sense. ALTERNATIVES: 1. Continue Providing Golf Courses Free Reclaimed Water. As stated above, the continuation of providing golf courses on what will probably be perceived by paying customers as a free ride on the backs of paying residential customers does not appear to reflect fair and prudent public policy, nor does it make economic sense. 2. Applying Current Rates To Golf Courses. In order to provide for a transition period for the golf courses to adjust to this new cost and at the same time being fair to the current paying customers, the City could impose current rates now and delay the new higher rates for a three to five year period of time. 3. Apply The Current Rates Now And Impose The New Rates When Adopted. This proposal would be fairest to the paying customers. It would however, represent a heavy burden on the golf courses. 4. Delay Imposition Of Rates Until the New Higher Rates Are Adopted Next Spring. As in Alternative 3, this alternative would represent a heavy burden on the golf courses. 5. Disconnect The Golf Courses From The Reclaimed System Altogether And Provide The Total City Capacity To Residents. This alternative would devastate the golf courses. Additionally, when the new reclaimed water system comes on line it will have the capacity to serve the residents and the golf courses. It appears that Alternative 2 is the most prudent course of action. Under this alternative the golf courses would pay as follows based on an 8" meter: $284.00 Monthly Base Fee $0.25 per 1,000 gallons up to 1.6 million gallons per month $0.50 per 1,000 gallons for usage over 1.6 million gallons per month This would cost the Winter Springs Golf Course approximately $14,800 per year based on an average usage of 90,000 gallons per day. This would cost the Tuscawilla Country Club approximately $27,400 per year based on an average usage of 160,000 gallons per day. However, the TCC has a well permitted at 30 million gallons per year that is used to augment the City's reclaimed system that would result in a potential credit of $7,500 (30,000,000 X $0.25/1,000 gallons) assuming maximum use. Therefore, the net cost to TCC would be $19,900. RECOMMENDATIONS: It is recommended that the Commission adopt Alternative 3. It is recommended that the Commission authorize those rates for a period of not less than three, nor more than five years, after which 'the rates in effect at that time would be incorporated into the revised agreement. ATTACHMENTS: COMMISSION ACTION: