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DSAC Minutes 11/07/2001 RNovember 7, 2001 TRANSCRIPT OF THE MEETING OF THE DEVELOPMENT SERVICES ADVISORY COMMITTEE Naples, Florida, November 7,2001 LET IT BE REMEMBERED, that the Development Services Advisory Committee, in and for the County of Collier, having conducted business herein, met on this date at 3:30 p.m. In REGULAR SESSION, in Conference Room "F", Horseshoe Drive, Naples, Florida, with the following members present: CHAIRMAN: Tom Masters, P.E. Charles M. Abbott Marco A. Espinar Blair A. Foley, P.E. Brian E. Jones Dino J. Longo C. Perry Peeples, Esq. Herbert R. Savage, A.I.A. Thomas R. Peek, P.E. Peter H. Van Arsdale, Esq. John M. Dunnuck, III David Correa Bryan D. Milk Dalas D. Disney, AIA Page 1 November 7, 2001 ALSO PRESENT: Jim Mudd, Deputy County Manager Edward Perico James Anderson, Public Utilities Susan Murray, Current Planning Manager David Hagan, Greeley & Hansen Engineers Roger Howell, Greeley & Hansen Engineers Roger J. Ori, PRMG Tom Wides, Public Utilities Joe Cheatham, Director Wastewater Page 2 November 7, 2001 CHAIRMAN MASTERS: Let's go ahead and get started. We have a few things to get through and a couple of members have to leave. Just in case we don't end up with a quorum, let's go ahead. We have some speakers that have presentations. Let's keep moving so we can all stay close to our time on the agenda here. John is going to be a little bit late. Let's just hold off approving the minutes and stick much with the schedule. Ed is going to go ahead and try and give us an administrator update. MR. PERICO: Okay. John told me that they had appointed a new division administrator pending BCC approval. They didn't give me his name, but hopefully. It will be January 3rd or 4th he'll be on board. We still haven't done anything with the planning director at this point, but they did appoint the position for the administrator. Denny, do you have something on permitting that you can give an update on? MR. BAKER: meeting. MR. PERICO: MR. BAKER: Just the follow-up from an issue from the last Denny Baker. There was a couple of issues. One,. There was a concern about -- excuse me -- Denny Baker, sorry -- concern about PIN numbers for the online permitting. We have sent out letters requesting contractors -- licensed contractors to come in if they want a PIN number to do business over the internet; that's in place. Secondly, there is no upcharge for internet purchases -- permits. We are talking about air conditioning, siding, and roofing. So those are available to be purchased over the internet with no upcharge assuming you have got a PIN number. You get a PIN number by coming into contractor licensing and showing ID, and you will be given a PIN number. Page 3 November 7,2001 use? CHAIRMAN MASTERS: Very good. You are having some MR. BAKER: We have four or five PIN numbers already issued. They are doing business. Not a lot, but we are doing business. CHAIRMAN MASTERS: Good. Wave of the future. Under old business, Land Development Code Subcommittee. Bob is not here. We do have a meeting tomorrow at two o'clock will be the first blush of the new revised Land Development Code issues. MS. MURRAY: Excuse me. CHAIRMAN MASTERS: Yes. MS. MURRAY: Susan Murray, current planning manager. I have LDC packets to hand out to the DSAC member, as well as, I understand, some subcommittee members got their packets mailed out. And I just had an announcement to make that we are not going to be considering NAICS conversion, so in your studying you need to eliminate that section of the code requirements. We have got over 100 pages of the amendments, so we thought it was a little bit too much. We had a workshop scheduled with the Board of County Commissioners, and it canceled. So I think we are just going to go with the written amendments exclusive of the NAICS conversion and deal with that at a later time when we go back in front of the board. I just wanted to make that announcement. I have got the packets to hand out. If everybody of the DSAC would just take one of each pile. There are three things there. And that's all that I have. CHAIRMAN MASTERS: subcommittee already has? MS. MURRAY: Exactly. NAICS. That's the same packet that the So that package is missing the Page 4 November 7, 2001 CHAIRMAN MASTERS: All the subcommittee members already have them under construction code. I don't see Dino either. Does anybody know if we have had any progress there? No meeting? Okay. MR. ABBOTT: What was the meeting? CHAIRMAN MASTERS: Construction code. MR. ABBOTT: No, we have not had a meeting. CHAIRMAN MASTERS: How about the Ad hoc committee on fees? Are you on that one as well? MR. ABBOTT: I am, but -- CHAIRMAN MASTERS: No meeting? MR. ABBOTT: -- I was gone for a bit. CHAIRMAN MASTERS: Under Utility Code Subcommittee we did have a meeting. Basically, the only item they looked at was moving forward to technical standards that we didn't review in our last meeting here. The subcommittee approved them as they were presented to them. So that should be coming our way as well probably under the LDC amendments or in the future; that was it for that meeting. Moving on to new business, I think John was going to do Item A, perhaps. MR. BAKER: Tom. CHAIRMAN MASTERS: Yes. MR. BAKER: I asked John to put that in. I thought for the ad hoc -- excuse me. That's on A? CHAIRMAN MASTERS: Yes. MR. BAKER: Yes. Because there has been slack attendance, I put a lot of personally -- a lot of personal work into it. There was only two or three people at the last meeting. I'm not sure we know who the members are, nor do I think we know who the chairman is. So I put that in there for you to review that and to reinforce who the Page 5 November 7, 2001 active members are. CHAIRMAN MASTERS: hoc committee on fees? out. You are primarily looking at the ad MR. BAKER: That's correct. CHAIRMAN MASTERS: I think our only member just stepped MR. DISNEY: No, I'm a member of that as well. It was a carryover from the construction code subcommittee. It was originally established, if memory serves me right, to review some of the costs for the new building addition here, and it simply carried forward. It was primarily made up initially of the construction code subcommittee members, and Tom Peek has been there a number of times, and I think David has been there once or twice, and Blair -- in addition to the subcommittee members. So, I guess, I must admit that I don't ever know when that meeting is from an organizational side of it-- would be good. MR. BAKER: I would like to see -- I will personally take on publishing the agenda for the meeting. If I can get the names of those individuals and who the chairman is -- CHAIRMAN MASTERS: Right. MR. BAKER: -- so we can put some more structure to it. CHAIRMAN MASTERS: How about at your next meeting let's try and get everyone to show up at the meeting. It sounds like you need to select a chairman, perhaps, for that committee. And I think John probably has a list, as well, of people he expects to attend. If not -- MR. BAKER: That's fine. He has got a list. It's a bit out of date. CHAIRMAN MASTERS: Hopefully, we can get full attendance at the next ad hoc committee on fees and try to elect a chairman at that time and figure out exactly what is going on. Page 6 November 7,2001 MR. DISNEY: That has been, again, construction code subcommittee. Dino Longo has been acting as the quasi-chair of that and the carryover. So it has been, to my knowledge, it's the second Wednesday which is next week. CHAIRMAN MASTERS: Okay. Thank you. Moving on to Item B, onsite sewage and disposal system. I see a group. We have -- are you making a presentation on that one? MR. YOUNG: Tom Watkins was supposed to -- COURT REPORTER: Excuse me, sir. Can I have your name? MR. YOUNG: Yeah. David Young, Collier County Health Department. I'm an engineer. Basically, if you look at the cover sheet of the application here, what we are trying to do is we are lacking resources necessary to provide the level of service that the building industry wants. And we have met with the CBIA three times, and we are looking to increase the revenues of our permit fees, which we cannot do at the state level, and we are going to be presenting -- presenting these fees before the county commission on November 27th, 2001. If you look at Point No. 4, some of the coastal counties -- quite a few of the coastal counties have raised their septic fees to local resolution to provide adequate resources and, basically, that's what we are looking to do. We have a flow chart, Attachment 1, where it actually -- right now we are working in a deficient in the program of approximately fourteen-- thirteen thousand dollars. A increase is going to be $165 from the present $165. It will go to 330. MR. ABBOTT: And what do we get for that? MR. YOUNG: Well, what we are -- what we are shooting for, Charlie, we are looking for a one-day turnaround on inspections, call- in inspections, which we don't provide now. We are usually running around five days to a week turnaround on inspections. Page 7 November 7,2001 And this whole -- this whole agenda here was brought up by the CBIA. They weren't happy with the way we have been doing inspections. And so -- And you have been the full committee circle at MR. ABBOTT: CBIA? MR. YOUNG: Yes, we have been to three meetings with them. They suggested we come to the advisory committee. MR. ABBOTT: Who was the chairman of CBIA committee? MR. YOUNG: Ellis. MR. ABBOTT: David Ellis? MR. YOUNG: Yes. ABBOTT: He copies the members of CBIA very well. MR. Okay. CHAIRMAN MASTERS: Anybody else have any questions? MR. ABBOTT: I make a motion that we accept it. MR. FOLEY: I second it. CHAIRMAN MASTERS: in favor say aye. (Unanimous response.) CHAIRMAN MASTERS: (No response.) CHAIRMAN MASTERS: yOU. Second by Blair Foley. All of those Any oppose? Motion carries unanimously. Thank Move on to the Utility Impact Fee. MR. ANDERSON: Roy Anderson, Public Utilities Engineering Director. We have two consultants here. Greeley and Hansen Engineers and Mr. Ori from PR-- MR. ORI: -- MG. MR. ANDERSON: -- PRMG, our rates consultants. We are prepared to give -- get it set up, and we would give a presentation before you today on our proposed impact fee increase for water and Page 8 November 7, 2001 wastewater. So we are ready to go. We are set up to give a PowerPoint presentation if you -- if that would be okay. CHAIRMAN MASTERS: Sure. MR. ANDERSON: Do you want us to proceed? CHAIRMAN MASTERS: Yes. While you are setting that up, we will jump back and take care of a little bit of paperwork. We do now have a quorum, a little after the fact. But does anybody have anything to add to the agenda? MR. ABBOTT: I would like to discuss how we distributed all of our packets. Because when the man brought it to me, he was charging $6, and I'm a close ZIP code. I'm just a mile or so that away. He said he had some rates were delivered to you $25 for these packets. And I think as many times a week that I'm down here anyway on other business, I just as soon be told to go somewhere and pick them up than the county be spending this much money. I mean, that was a lot to distribute this packet of information. If I'm the cheapest at $6 -- seeing it's written in the upper comer. CHAIRMAN MASTERS: If they were ready two days earlier, we could stick them in the mail. MR. ABBOTT: Exactly. But that what -- we can do better, and ! want us to do better. CHAIRMAN MASTERS: Your point is well taken. I think we can save those kinds of comments at the tail end of the meeting. MR. ABBOTT: Well, I won't be here for the tail end of the meeting. CHAIRMAN MASTERS: Okay. With nothing else to add to the agenda as such, anybody -- I would entertain a motion to approve the agenda. MR. ABBOTT: I make a motion. MR. SAVAGE: Second. CHAIRMAN MASTERS: All in favor. Page 9 November 7,2001 (Unanimous response.) CHAIRMAN MASTERS: Any opposed? (No response.) CHAIRMAN MASTERS: Motion carries unanimously. Anybody have any comments on the minutes from the previous meetings? MR. ABBOTT: They were short ones. CHAIRMAN MASTERS: Anybody like to make a motion to approve those -- COURT REPORTER: You're going to have to keep it down over there. I can't hear. CHAIRMAN MASTERS: Herbert Savage has a motion to approve the minutes. Bryan Milk has a second. All in favor? (Unanimous response.) CHAIRMAN MASTERS: Any opposed? (No response.) CHAIRMAN MASTERS: Motion carries unanimously. Okay. That takes us up to speed. The floor is open. MR. ABBOTT: Now that we have Dino here, why don't you ask him real quick about the construction code. MR. LONGO: Well, let's talk about -- have we talked about the impact fees? CHAIRMAN MASTERS: No. Dino, they are setting up to do the presentation on the impact fees right now. We did approve the Health Department request for the septic -- MR. LONGO: I had a chance -- well, let's talk about that first. CHAIRMAN MASTERS: That has already been approved. MR. LONG: No. I'm talking about the presentation. The presentation is a little bit lengthy as far as your impact fees. I will make a suggestion it goes to subcommittee for review. The presentation is not 100 percent. So your bottom line on your impact Page 10 November 7, 2001 fees is not going to be what is shown to you today. So that's up to this committee whether they want to see it today. MR. SAVAGE: You mean the public utilities? MR. LONGO: Correct. I had the opportunity to see it last night. They made a full presentation before CBIA last night. There are lots of issues with it. But I don't think it's in the format that you guys are used to seeing. It's pretty much a synoposis of where they are going with it. It's not broken out in detail. It's how they got there. That's up to this committee whether you want to review that today and see it again in its final, final format after -- we would see it next Wednesday, and then -- if we want to hold a -- I'm sorry. I had to limp all the way here. I'm out of breath. At least I'm not on crutches. But the impact fees are doubling, and we have not seen the rational nexus for it. We have seen their summaries, which on the outset look pretty good. For them to come back to this committee for an approval or disapproval, they -- they still have a couple of line items they need to attack, and they are waiting on those answers. They won't have those answers until -- before next Wednesday's meeting. So for time sake, I mean, it's a lengthy presentation. It's well over an hour. If you-guys have any questions, it's going to take into two hours. Am I right? MR. ANDERSON: You're correct. MR. LONGO: I would suggest you put the time aside from that when they come back with the whole presentation that is 100 percent. When they are 100 percent confident with all the numbers -- which we should have some chance to review next Wednesday to a large degree. If I set the meeting at three o'clock next Wednesday and that's all we do,then we probably should get -- get through it. CHAIRMAN MASTERS: Which subcommittee is that? MR. LONGO: Code. MR. ABBOTT: Ad hoc. Page 11 November 7, 2001 MR. LONGO: Code. Ad hoc is different. MR. SAVAGE: Mr. Chairman, are these gentlemen local people, or do they come from somewhere else? MR. LONGO: Well, that would be my next question. But you are going to have to see that presentation again, I guarantee you. CHAIRMAN MASTERS: Why would we have to see the same presentation? They have -- MR. LONGO: Because they have summary sheets. They have summary sheets. They don't have the detail of how you get to those summaries. That's up to you guys. It's a lengthy presentation. MR. SAVAGE: May I ask a question, Mr. Chairman? CHAIRMAN MASTERS: Yes. MR. SAVAGE: Do we have any great distance of things on the agenda besides this public utility hearing? CHAIRMAN MASTERS: No. This is the last item which -- MR. LONGO: Is this the last item on today's agenda? CHAIRMAN MASTERS: The only remaining item. MR. LONGO: Another five minutes and I would have missed it. It's up to you. I mean, I would ask that if you have a bunch of pertinent questions that maybe write them down and hold them to the end. And if those are things they need to get back to us on, they don't address those today. But that -- that we can address them at subcommittee to a certain degree next week. And if we can come -- you know, the big rush is they want to try and get this in before the end of the year. As an industry-- from an industry side, we are not sure that -- that needs to happen. We would like to discuss that a little bit further. There is a number of reasons I don't want to get into right now. CHAIRMAN MASTERS: Well -- MR. LONGO: That's the pleasure of this committee. CHAIRMAN MASTERS: The bottom line is if we will not be Page 12 November 7, 2001 able to make a decision on it today -- MR. LONGO: You will not be able to make a decision on it today. CHAIRMAN MASTERS: If nothing else, we can get the presentation of an hour of information at least under our belts so that we don't have to go through next week and, perhaps, some folks that have traveled don't have to come back next time around. MR. LONGO: Moving right along to codes and construction, I would -- I would like to have a subcommittee meeting on our proposed building codes to take effect January 1 st. Industry is not in agreement with our one borne premaps, okay. We need to discuss that. The second item is by statute. There is supposed to be a committee set up that allows the building director to set amendments to the new code. It has to go before this committee. And we need to discuss with Ed and possibly John and maybe Tom Olliff that this committee here covers that. Typically, this committee -- anything that's code goes to subcommittee and then it goes back to full committee. Then we make those recommendations and it goes the Board of County Commissioners. The way the new code is written it's up to the building director's discretion as far as amendments. The amendments set -- some set within one year, and they go back before the building commission. If the building commission sees it is a full statewide issue that you can be applied -- say, Collier County changes something or adds something to a plumbing code, and the State Commission says, "Yes, we would like to do it full." They will let Collier County implement that code for up to a year, and then theY will review it, and they will decide whether they want to sunset it or whether they want to actually-- by legislature put it into the code. And so I would like to have a chance to discuss with Ed the -- make sure we are all on the same page on that. And that committee Page 13 November 7, 2001 -- I don't know if you have talked about that, Ed, as far as what that committee should be -- whether it should be another committee or whether it should be this committee that oversees that. MR. PERICO: Well, for the record, the committee is supposed to be the Board of Adjustments and Appeals. We were able to use those as a committee. MR. LONGO: Is that what you want to do? MR. PERICO: Yeah. According to the commission -- yeah, we are authorized to use the Board of Adjustments and Appeals; that's already in place. MR. LONGO: For any amendments? MR. PERICO: Yes. It's open for discussion. MR. LONGO: To look at the proposal of more degree maps and just make sure we are all on the same page with that? CHAIRMAN MASTERS: Okay. That will be your topic of discussion at the next meeting of-- MR. LONGO: Well, the impact fees will probably take up that whole meeting. I would like to put some time maybe toward that and reschedule a side meeting for that. I will get with Ed on that, and we will notify the subcommittee. I will bring you up to date on FEMA. As of this morning, we had not received enough information from FEMA to even start our process for appeal. We need certain information from FEMA. We requested information, and they came back with a price tag of over $19, 000 to give us that information. It is my opinion they are stonewalling us as an attempt to not give us the information or make for us to go back to the county commission, because we are beyond our budget for our consultant, which means that we probably won't get that information on a timely basis to even put it into our scientific analogies, nor to debate the methodology that is shown. So I gave directions to Gene Chartran this morning -- because half the people Page 14 November 7, 2001 that were at that meeting did not show up, including Patrick White, including people from the City and most of the people from the County. So I closed the meeting real early this morning and gave him directions to get us back a time frame of getting the information requested. Thomas is going to request the pertinent information that he needs for me to get an RFP from FEMA as to what that is going to cost. We have some overflow or some reserve monies from our consultant studies that we should be able to apply toward that -- something like $6, 000. We should be able to handle that without going back to the Board of County Commissioners. If it is close to a $19, 000 price tag, we have got to go before the County Commission and request that money. Then we have to authorize FEMA to send us the stuff, and they won't give us a guaranteed time when they are going to send us the stuff. So they're stonewalling us pretty good. I made the threat this morning that I will take it to Representative Dudley Goodlette and let him notify Representative Porter Goss and see what happens. That's the best -- two years of fighting, and they can stonewall us to the point it will just drop in December -- like, December 18th or something like that. We would have spent two years of working -- over two and a half years and over $100, 000 of taxpayers' money, and we will lose; so that's where we are with FEMA as of the moment. CHAIRMAN MASTERS: Okay. Thank you. MR. SAVAGE: Mr. Chairman, I believe -- CHAIRMAN MASTERS: I would like to throw it back on your shoulders. While you were away, Dino mentioned the fact that the presentation that you are about to give is subject to pretty substantial change, I guess, before its final version, and we just want to make sure that it's worthwhile to spend an hour plus watching -- going Page 15 November 7, 2001 through the presentation now and not waste that time. So what is your feeling on that? MR. ABBOTT: Well, you were offering instead the Construction Code Subcommittee that's limited. CHAIRMAN MASTERS: Right. But it has to come back-- MR. ANDERSON: And do it then? CHAIRMAN MASTERS: -- before this committee again. MR. ANDERSON: I understand that. MR. ABBOTT: Are we supposed to watch it next Wednesday? MR. LONGO: For next Wednesday that can be the agenda. MR. ABBOTT: Okay. CHAIRMAN MASTERS: Apparently it's not at the point now we can recommend approval to the board. MR. ANDERSON: Our marching orders are to get it on for the November 27th meeting. But last night Jim Mudd did mention no action would probably be taken on the voting of the rates until the first meeting in December, but the master plan and all the background would be given to them for the 27th. So Jim and Tom are on their way over here. They will be here in about five minutes. We are prepared to give that. Substantially, you know, the -- you know, we would like to give you the substance of the program, and, you know, the actual final number may change -- may or may not change, but the fundamental approach would still be the same, so I think we would like to give the presentation. MR. LONGO: If I might add, it's very short notice for us. They have been given some marching orders, but there is a process we are supposed to go through, and I think we should go through that process when we are talking about doubling of impact fees on the construction for water and sewer, that is a substantial hit. It's over $5,000, okay, total on those two line items. Our impact fees on new Page 16 November 7, 2001 construction are over $15,000. It's the highest in the state and proportionately it is 15 percent on a $100, 000 home. And we add other fees that we have involved, we are talking about 22, 25 percent of government fees are now added to a new price of a home. We just want to make sure as an industry -- and we should be making sure as a committee that our long-term planning is correct. And there is one more issue that I would like to bring up is a couple of months ago when our sewer prices happened on the north end, we determined out of the subcommittee that we would ask for an oversight committee on both transportation and utilities. I have not seen it happen yet. And Jim Mudd brought up a very good point last night that we should be reviewing these type of things year in and year out if not sooner because if our economy goes up and down, those type of things change. It can change your long-term planning. It can change your rate schedules. It can change a lot of things. We are basing all of this on the train is still rolling. So I still want to put out to this committee -- I don't know how to make this work -- is that those subcommittees -- those oversight committees get put in place, and we make that recommendation to the Board of County Commissioner. And I know Commissioner Mac'Kie was going to bandstand that. Since she is leaving, I think that may have gotten dropped. Possibly Mr. Dunnick will find out where that is because he was part of all of that. CHAIRMAN MASTERS: Okay. MR. SAVAGE: Chairman, I would like to hear something today about this so that I can digest it between now and next Wednesday. If you hear it all next Wednesday, you know, that in my view is not satisfactory. I would like to hear some of it today unless there is some reason-- MR. LONGO: We have a heavy day next Wednesday. We have LDC amendments in the morning, and I have the committee that Page 17 November 7,2001 afternoon so ... CHAIRMAN MASTERS: All right. It sounds like we are ready to proceed. Perhaps, if there is something that is subject to change, you will let us know during the presentation. MR. ANDERSON: We certainly will. MR. MUDD: Last night I looked at Dino, and he had shorts on and didn't have any shoes on. He had a crutch. I said, "Man, business is really bad." We are here to talk about today as they set up-- CHAIRMAN MASTERS: Jim Mudd. MR. MUDD' I'm Jim Mudd for the record, Deputy County Administrator, used to be the Public Utilities Administrator. This has been a long year for us. We have started to peel back the onion, as you might say, okay, to see what the problems were in utilities. And we found lots of them. Some people say, "Lift up all the rocks and turn them over," and it has been-- it has been one issue after another. And I think it really culminated in March when we had a series of sewer spills. But we knew we were going to have a tough season back in November when I started asking questions like, "Where are your innerconnects, so you have some valves that you can take the peaks off of one plant and move it to another or move it someplace else?" What I will tell you is after we discovered those, we went to a consent order. When we got to the consent order with FDAT, we went to the table to try to -- we made sure we had the CBIA brief to them to make sure that everybody agreed and we talked to them -- where we were going to make sure -- and it was almost weekly briefs at that particular juncture. I felt like I lived there for awhile. I started to know what kind of sodas you had in your machine -- or in your refrigerator, but we went through that, and we heard the builders and developers and their interest, and at the same time we had to go get Page 18 November 7, 2001 FDAT to understand we were going to rectify the situation. We did all of that stuff. And one of the things that we came back out of besides the consent order, they -- they upped the ante on us a little bit as far as the last increment of expansion on the north plant, the part that we have to provide a plan for in January and have to have built in 2005. And when they get this set up, they will show you what that gives us in the master plan is about eight years of capacity that never gets utilized; that's a bad investment. You don't do that. You bring your utilities on so that they are there when you need it, and you try to do just-in-time delivery. I would like to be a year ahead. Okay. Just in time doesn't really work too well in the sewer business. You will see in the master plan for water that the population projections as far as the customers are concerned in when -- and when the resource comes online, the capacity of the plans come online, you will see they pretty well track around the line. The reason you can stay that close to the line in water is because you can store water. I can store 400 million gallons in an aquifer for storage and recovery on Manatee Road right now. I can pump that up in the dry season. Even though I have a higher demand, I still have the stuff that was made during the wet season when the demand wasn't so high. It was stored in the ground, and I can supply it. So I can get over those peaks and valleys a whole lot better than I can in sewer. The sewer side you can't store it. We will show you the master plan, and we will try and do it briefly for you. We can provide you copies of the water and wastewater master plan. But it's one thing discovering that you have got issues; it's another with laying on -- laying the boilerplate on top, so to speak, to say, "Here is your solution." Then you have got to figure out how Page 19 November 7, 2001 you are going to pay for it; that's the other piece of this process. And so it's been a year-long effort to -- yeah, we've identified it. We have got FDAT to agree to let us proceed as far as development is concerned without going into some kind of a moratorium-- and they were talking about that in March -- and now to make sure that you have the master plan in place. One of the things that I wanted to make sure that our folks didn't get themselves focused like they were before only in a five-year master plan. A five-year master plan doesn't help you very much because when you get to the fifth year then what do you do? If you are not Johnny On The Spot with that plan coming forward, then you are kind of stuck, and you are in a stutter step -- you know, one step forward and two steps back. You don't want to do that process. So what I asked these folks to do at Greely & Hansen is to look out at a 20-year horizon and give me five-year digestible doses. And then "Oh, by the way, before I get to that fifth or sixth year, I want to have some execution matrix-type identifiers that I can adjust based on what population we're actually seeing, what kind of building permits are we actually seeing coming across the desk, how many PUDs have come in for capability agreement" -- I won't call it an agreement -- but basically a check on the capability to make sure that the plans have got it, and the checkbook issue that I briefed the CBIA on -- and some folks in this room have already got that. But we wanted to have that in the plan so we could adjust it, so that we can talk like Dino mentioned, so we can do yearly adjustments to the process. We can make sure that the master plans are functional tools for us, and at the same time use those master plans to take a look at a rate study, and we did that process. And we have got our-- our consultant here to talk about some of those things that went into that process. I also mentioned to the CBIA as soon as I got the information I Page 20 November 7, 2001 would try to get the information out so that we could start that discussion; and that's what this is all about, making sure that we get it to you. Now, I will tell you I still have some tweaks yet to make in the rates and in the impact fees. What you will see in the impact fees is the fact that the last two years we have been drawing about one hundred five to one hundred ten gallons per person in the county; that's what we have been seeing in the water system. When they put that into the rates, they put 205 in as the usage level. I said, "Wait a minute. We were directed by the Board of County Commissioners in March to invert the rates -- invert the water rates." We already had inverted water rates. Okay. But it was so negligible it didn't make much difference in your water bill. Okay. And you will see those numbers and see what I'm talking about. We went in and inverted the rates. Okay. So it's a little bit more painful if you use 250, 000 gallons of water-- you're a single-family resident a month -- and there is about 30 users like that in Collier County -- big houses. They have to be huge. Multiple toilets and they flush them all at the same time. I don't know. But they have excruciating high water usage in their homes. Right now what does that equate to? About $500 water bill a month. Well, if it's your estate and you have somebody monitoring it and they have a $5,000 expenditure thing to keep your home ready, and -- $500 is not a whole heck of a lot. When that water usage gets to be $2,500 to $5,000, then it's a lot, and then some people will change the way they consume. So that inverted rate will force conservation; that's our hope. Hope is not a method. But hopefully the dollars will force it, and the economies of scale will push consumption down. It's done that in Sarasota County. Sarasota County started at around one sixty to one forty-five and in the last three years are now down to eighty-eight. Page 21 November 7, 2001 Okay. MR. ABBOTT: On average water use? MR. MUDD: Yes. And, oh, by the way, when you get up there around 20, 000 gallons, you are paying $10 a gallon -- $10, 000 a 1,000 thousand, okay -- $10 a 1,000, okay, versus what we were paying, which was $2.40. All right. Big difference. Okay. Well, it got painful for those high-use customers, and everybody went (indicating), "We are going to watch what we do with water." I will tell you our version is not as steep as Sarasota County. What it also forces things to happen is if you don't -- if you are using less water and you are using less sewer, then I don't have to bring the plants and the expansions of the new plants on as fast as I would, and I can push it out some. So we have got that adjustment to make from 205 to 185. Okay. And I'm taking a risk. Okay. Oh, by the way, if I get that reduction and I get it even more then it's reason for us to go back into that examination at the yearly basis and say, "Okay, I can start pushing out next planning expansions because I'm getting less water draw, therefore, I'm getting less sewer usage"; that's one. The second piece is the consent order as it sits right now says that I have to have plans for a ten million gallon expansion on the north sewer plant. I have to have it on their desk on 16 of January, and I have to have the ten million gallons online by the first of January of 2005. Well, when we looked at the master plan, it was extra usage -- I mentioned that earlier. We are going to try and get them -- and Tom Olliff has already written a letter last week. I have already gone up two weeks prior to that and talked to Rick Cantrell and Dr. Amatee and all of those folks at FDAT about how this does not make a whole lot of sense from an economic standpoint. It's not a fair thing to do to the taxpayers, the developing community, or anybody else in Collier Page 22 November 7,2001 County, and I think I have gotten them to consider the fact that we will take it in five-million-gallon doses. Bring the first five on at 2005, which we need, and bring the next 5,000 -- or five million gallons on line at a later time. And you will see part of that in that process. So those two things I still have got to do. The sewer plant expansion north, split it up. The other part is to reduce the water consumption. Those will bring the impact fees down, and it will also bring the rate structure down. And what our folks are about ready to present to you is -- give you a more detailed picture -- not in infinitum, okay, but give you a more detailed picture of what they are talking about, and at the same time if you want to get into new -- or where the details are -- (loud noise) -- details are in -- in my previous job I would have been on the floor -- and I was laughing as I got out of the car and Tom Wides, who was driving said, "You know" -- I said, "You know, I feel kind of strange. I still feel -- it has been a year since I have retired, I'm still looking for my cover. The hat you need to put on. Twenty-six years I guess they engrained it in you. You have to put your cap on. Are you ready? MR. SAVAGE: I would like to ask some questions. MR. MUDD: Okay. MR. SAVAGE: You know, I'm not familiar, obviously, with all of this, but has anything been done in our county with gray water usage, et cetera, et cetera? MR. MUDD: Yes. MR. SAVAGE: It may not be the subject today. But... MR. MUDD: No, it's part of the subject. Let me. Tell you why it's part of the subject. In -- we do use gray water. We do use reclaimed water. Collier County is the No. 1 reclaimed water user in the State of Florida for the second year in a row now. Page 23 November 7, 2001 And we want to make that a more vibrate program; that's why we got into that aquifer storage and recovery discussion with Councilman Tarrant where he first got on the paper with me and he said he would not trust me to throw a house, if I remember him correctly -- I have never watched anybody throw a house yet, but I'm waiting for him to do it -- and so we got into that discussion, okay. That whole ASR discussion was about reclaimed water going down into a brackish aquifer in a bubble being stored there during the summer months when I have extra -- when it's raining and nobody wants to use it, I have got to be able to store it and then bring it up in the dry season and using it instead of going to the fresh-water aquifer and using potable water and basically taking some of the pressure off. MR. CHEATHAM: I think the question was about using gray water for, like, recycling your shower water to your yard -- MR. SAVAGE: Yard, yes-- COURT REPORTER: Excuse me, sir. I need your name please for the record. MR. CHEATHAM: Joe Cheatham at the Collier County -- MR. MUDD: Joe, I know exactly what he's talking about in that process. Okay. And I will tell you from that aspect outside of going to the sewer plant and giving you reclaimed water, we haven't got into the second rinse cycle of your washer. You store it in your community, and that's what gets put on your lawn. We haven't gone that far. One of the reasons we haven't gone that far is because the development community hasn't jumped on that bandwagon either. Okay. To have the county force it is a little bit tough. MR. SAVAGE: We are going to be forced to do that some day, aren't we? MR. MUDD: Some day. Absolutely. Okay. But what I'm trying to do right now is at least get the water that is coming out of the sewer plant as a byproduct when the solids are separated to get Page 24 November 7, 2001 that back out on the lawn. Right now we are doing to the tune of about seventeen million gallons a day. That is no small program. CHAIRMAN MASTERS: I think I will point out for you, too, you already have the infrastructure in place to use more of that water than is even available during the dry season. MR. MUDD: So we are trying to make it a more vibrant system. What we would like to do -- and on the utility side and the commissioners has said that more than once to me they would like to make sure there is a dual water system in Collier County, kind of like what they have in Cape Coral, where they have got reclaimed water for a secondary source that is not purified -- it's not potable water -- that they use for lawn watering and irrigation and then a separate system for drinking. If we do it right, you can do that. Okay. And you can -- we can do it, and maybe we can solve some of our stormwater issues, but I would like to take that discussion off side with you. If you can get the ground to be more absorbent in the wet season so that when it does not get super -- or when -- when you totally absorbed all the water, you tend to get all of that sheet flow when you get heavy rain, if you can get that ground to be a little bit more absorbent and you can draw more water in so it doesn't go out into stormwater, you can take that water with an ASR that never hits the surface and take it from the surfical and take it down to an ASR and store it in the wet season and then bring it up in the dry -- that's a discussion. That's where I'm really talking about. If you want to have a dual water system, that's what we will have to do. So I think we are in the right -- we are discussing it. We are examining different places for ASR. We are looking at good places to put those kind of wells. And that's a different kind of thought pattern but one that is under discussion everywhere in Florida. So we want to get there. A long answer to a rather short question, but we will get to it. Page 25 November 7, 2001 MR. SAVAGE: Good. MR. HAGAN: Okay. I'm David Hagan with Greeley and Hansen. And we are going to talk about the water and wastewater impact fees, but first we are going to talk about what the basis of the fees are, and that came through the master plan for wastewater and for water. I'm going to start off talking about the wastewater master plan. As Jim was saying we -- we were asked to look at a 20-year plan. We even looked out 30 years in terms of population projections and looked at what the district boundaries might be for your water and sewer district and what kind of infrastructure might be needed to serve a population out in 20 to 30 years. And this -- this map here shows potential boundaries for that system in the future with the rural fringe areas. I see you have got it on the wall included as part of the water and sewer district. With that population and even -- even if that didn't occur, the population projections within your existing north and south sewer boundaries would exceed the capacity of the two plants, so there is additional plants required sometime out in the future. But with these areas included, we -- and with the commitment that you already have to serve OrangeTree in 2011, that -- we are looking at a five-plant alternative in the future, where we have got the two existing plants, the north and south, and -- and three additional plants at sometime in the next 20 years. Each one of those plants would be constructed to serve those areas as development occurs. So first the wastewater master plan. One of the big things in determining the capacities is the population. And we have the advantage of doing this plan exactly when we did is that 2000 census information had just become available, and so that. Was -- that was our starting point. And you can see we have got what we call a conservative growth, moderate growth line. There is Page 26 November 7, 2001 the county planning department has done projections; that's the green line for your water and sewer district. I will tell you the differences in a moment. Then you have the 201 facilities plan update in 1997. They had the disadvantage at that time -- they were quite a ways out from the 1990 census. You had so much growth going on that they wound up being a little low in their projections compared to the 2000 census. So some of the planning that was done then didn't consider enough infrastructure to support that population. The way we got the conservative growth curve was using the high BEBR projections from the state, and also looking at such things as, perhaps, serving some areas that are now served by septic tanks and areas like OrangeTree that you are going to take over -- but there is existing population here. This represents a service population of your water and sewer district. MR. HOWELL: Really, David, we based everything on the blue line. COURT REPORTER: Excuse me. Sir, please state your name for the record. MR. HOWELL: I'm sorry. I'm Roger Howell with Greeley and Hansen. Everything we have done is based on the blue line that's the conservative line they have talked about. MR. HAGAN: That follows the high DBR curve for ten years, and then we scaled it back to the average BEBR so that in the planning horizon 2030, we were at about the buildup population that the planning department had estimated in their latest 1997 buildup population. So it's consistent with the buildup scenario on that. MR. SAVAGE: I'm going to ask a very stupid question. Assuming we are all very talented and we all know all terms, what is wastewater? MR. HAGAN: Wastewater. Again, that's what you flush down the toilet. Page 27 November 7,2001 MR. SAVAGE: MR. HAGAN: MR. SAVAGE: MR. HAGAN: Sewage. Right. Sewage. Use a word that I recognize. Later on when I said biosolves, I won't say that either. I will call it sludge. MR. SAVAGE: The reason I ask you that -- MR. HAGAN: Right. MR. SAVAGE: -- are talking about sewer plants? MR. HAGAN: Sewer plants. MR. SAVAGE: In your planning and thinking of the future, has anybody ever talked about the fact that we would take the effluent of the septic tank into the sewer system instead of going to an extremely expensive total sewer system? MR. HAGAN: We didn't address in this service -- the specifics of how you would service the septic tank areas. There is a line item in the CIP to do a study of that sometime in the future. MR. MUDD: I will tell you that the governor and the folks in Tallahassee are going through great pain right now because there is some serious septic tank issues in the State of Florida. Serious in the fact that it's a threat to the groundwater source. And there is a lot of conversation that says within a five-year period of time Florida might see a law that outlaws septic tanks and has a ramp-in period as you go into providing sewer, so I will -- I will tell you that we haven't taken the septic systems over in the Golden Gate Estate area, but I will tell you if you look at where those plants were put, if we had to we'd be in a better position to take them over than we would be with only the two plants that are sitting well into the urban area in that process. MR. SAVAGE: Has the governor talked to anybody about what I just mentioned? MR. MUDD: Which is? MR. SAVAGE: Has there been a successful approach giving Page 28 November 7, 2001 the effluent water out of the septic tank instead of into the drain field, which then goes into the earth, into a PUD system into -- MR. MUDD: Sir, the drain field is not the issue. It's the punch- out bottoms of the septic systems that are the issue. MR. SAVAGE: Pumped out? MR. MUDD: Punched out. MR. SAVAGE: Punched out. MR. MUDD: Sir, if you can't put food on the table -- if it's between bringing food on the table and having a septic system that works, you will punch out the bottom of your septic system in a heartbeat. Believe me, in Collier County there are several systems that have been investigated in the past that have been that way. One of the things that I have talked to the Natural Resource Director about is that Collier County have an inspection program for existing systems to make sure that they are in compliance so that we don't get ourselves into that groundwater threat. CHAIRMAN MASTERS: Hang on a second. Let's try and hold our questions until the end, Herb. We have a lot of material to get through and come back. MR. SAVAGE: I will know more about it Wednesday. CHAIRMAN MASTERS: Yes. MR. HAGAN: Okay. Go on to the next slide. This is -- this is looking at the north plant, the projection of flow -- sewage flow to the north plant, and this is using the expansion that is now under the consent order that 10 MGD expansion of the north county plan. You can see that it's many years before you get out to -- close to the capacity of that plant. You go on to the next slide. This is the north plant but with the 5 MGD expansion up front and postponing the other 5 MGD until closer to the time that you need it. MR. MUDD: The previous slide you have too much excess Page 29 November 7, 2001 sitting there ideal. MR. HAGAN: You know, what that translates to is tanks just sitting there empty and equipment that is being unused. Go on to the next slide. This is the same thing that the south -- your existing south plan where you have a 16 MGD -- expansion to 16 MGD about to get underway and will be in replaced by 2004. And you can see right now you're -- you're right there at -- near the capacity of that plant with your wastewater flows. MR. MUDD: Now, what's going to help us this year, and I mentioned it to the CBIA last year when we were having our problems with the north plant, I said, "When the five comes out up north, I'm going to be in dire need down south." And your population that you are seeing and you are servicing, and you see the present capacity of the plant, we have done some things to rerate it. It used to be at eight million gallons. We got it rerated to 9.2 because we are putting an equalization tank on there because I'm converting two of the denitrifications runs on the aeration base, and I'm going to let it go dual purposes, so it can do aeration -- I don't mean to -- it gets into sewer business you have to feed the bugs oxygen. They have to have oxygen to eat. They eat, they settle the solids out. You have got to have more aeration runs. By doing that modification I was able to get -- we were able to get it up to 9.2. The problem is 9.2 just doesn't cut it. So what we are doing right now is we are putting in a temporary innerconnect into Grey Oaks to move sewage from the south to the north, because I will have a little bit extra capacity up there where that five million gallons come on line, so I will take care of that shortfall. We didn't have that innerconnect last year; that's why innerconnects are so critical to this system as we bring on additional capability. MR. HAGAN: This shows a time line that is kind of a limiting Page 30 November 7, 2001 factor of putting on the newer plant. We need to have a needs assessment, site analysis, land negotiations, and design and permitting, and construction. We see -- it's a five-year window before any new plant could be online. Go on. This is the recommendations of the -- of the wastewater master plan to upgrade the north county plant eventually to 30.6 MGD and hopefully we have two increments, upgrade the south to 16 MGD -- those will then be the ultimate capacities of those plants. Ultimately construct up to three new plants as development dictates. Innerconnect existing and new plants, and that will be both the existing plants and the newer plants that come online implement a sludge handling by pursuing a contract with a local private compost facility; that's underway. And upgrade to the transmission facilities in pump stations and force mains to meet growth demands and some of your existing customers as well. With that Roger is going to talk about the water master plan. MR. HOWELL: Roger Howell. This is what you have for water plants. We use the same population-growth forecast for water that we -- same assumptions that we use for wastewater that they just described. The blue line is your water demand out through the planning period of 2021. The gray lines here represent your existing north water plant. It has the capacity of 20 million gallons per day. That plant cannot be expanded any further. The yellow represents your south water plant. That plant is currently undergoing an expansion to 40 MGD, and ultimately that will be expanded to 52 MGD. Then we show two new plants, the northeast plant and the southeast plant. All total when we get out to 2021 we have identified a need for 96 million gallons per day water treatment. You can see right now you are at 32 million gallons per day. That gives you a relative feel for-- Page 31 November 7, 2001 MR. SAVAGE: What is the figure up there? MR. HOWELL: 2021, 96 million gallons per day. Now, I have a similar map that we showed you for the water -- for the wastewater. I will show you where these facilities are. I don't know if you can see this very well in the back. These open stars are your two existing plants. This is your north plant (indicating), and this is your existing south plant (indicating) out in OrangeTree is where we are showing a new northeast water treatment plant. That is the plant that is represented by the blue up there (indicating). The fourth plant would be the southeast plant. That plant would be constructed at a facility that you already own land. You already own 42 acres of land; that's the Manatee pumping station. And it's -- by the way, the OrangeTree Plant would be constructed at the same location as the northeast wastewater plant. The county has already undertaken some steps in initial negotiations for acquisition, I think, of 100 -- MR. MUDD: -- 47 acres. We are doing the appraisal. It's at the appraisal shop right now. We talked to the landowner out there. We can get a good price for it. It's out in the middle of citrus fields, so it makes it a lot easier. It's right by the county fairgrounds facility. It's to the east of it. So it just makes for a good area. There is a bit pond, that is about 96 acres out there. We have talked to this person about donating to the county. We will make a big fish hole and park and link it to the fairgrounds, and we will just have our water and sewer plants to the north of it; so it's a pretty good area. MR. HOWELL: This can be a pretty good field with that growth, the amount of infrastructure that can be required to serve that. Next slide, please. Likewise, with a wastewater plant expansion, water plant expansions there is a new plant, you need roughly about five years; that includes the land acquisition issues. In addition to what you Page 32 November 7,2001 have for wastewater, you have the additional need to site and do studies on your water source, your well fields. And in this case we are looking at our oak treatment for the first -- similar to the same technology that you are using for your new plants, reverse osmosis. Ultimately, for the south plant you will be -- we will be even looking at seawater quality water, lower aquifers. We are using up the RO water sources as we go out in time. Now we have to go down even deeper. The lower quality water is more expensive. Next slide. Just to kind of quickly summarize what the recommendations are in the water master plan. Expand your existing south plant to 32 million gallons per day. Construct two new water plants, one in the northeast and one in the southeast. Make the best use of ASR to minimize plant construction. We were talking a little bit earlier about ASR, Aquifer, storage and recovery, as it relates to reclaimed water. You can also utilize ASR technologies and techniques for water -- water sources; store water, pull water out of better quality aquifers during the wet season and -- and -- but the impact of that is it postpones the need to expand water plants. Right now we have a-one-million-gallon-per-day ASR facility down at the Manatee pumping station site, and -- in the plan we are recommending to study that more and utilize ASR to the greatest extent possible. The impact will be to push out the need for new water plant construction. Also, like, with wastewater we have recommendations in there to upgrade the transmission-- the water transmission systems. Next. What is the result of the water and wastewater master plans? Well, we have dollars on the Y Xs, and five-year increments of cost on the X Xs. And you can see we are looking at 2002 to 2006, 450, 000; 2007 to 11, $450, 000. And then the costs go up as you go out. Page 33 November 7, 2001 And you can see that the amount associated with the water in the light blue goes up even more than the -- wastewater actually comes down a little bit. This is when we start getting into having to use those deep aquifers, more expensive water treatment sources. So the more we can do to conserve, use things like ASR all pushes out the need for this expensive construction, but the plan is based on -- on those assumptions, and these are the dollars that you end up with. MR. MUDD: Now, you said "thousands." I thought you meant millions. MR. HOWELL: Four hundred million. There you go. Sorry. But that compares -- MR. LONGO: Sign us up if it's four hundred thousand. MR. MUDD: Now, the checkbook. One of the things that we were able to do and one of the things that we didn't have based when we got here in October and when I took a look at what was going on is we weren't keeping track of-- of promise capability. When that PUD's coming across and they have to go up to the Florida Department of Environmental Protection, they come in and ask me and ask the engineering department and public utilities, "Do you have enough capacity to bring this new PUD on?" The development committee was doing their job. They were asking, okay, and our folks were taking a look at what was used, okay, and what they had left in present capability, and each time they were saying, "Yep, it fits within that band." The problem is they were not keeping track of the promises that they were making in their checkbook. They were just checking current against the current requisition. What happens about the last four that you have promised away already? How does that fit in? That is where this -- this checkbook gets into it. You can see up there for water, present capability is 32 million gallons a day. You go over to the next Page 34 November 7,2001 column, it says "North wastewater. North sewer plant." 9.5 million gallons goes over to the far right. And it says, "South, "and that is 8 million gallons on the south water plant that is down there in the Lely Community. Then you take a look at peak months production; that is 2000. That will change to 2001 here in the next month when I get all that data in, and those numbers will rise because last year we grew as far as water usage and sewage usage is concerned. But if you take the 2000 maps out against the current capability and take a look at surplus, on the water side we have got 5.6 million gallons in surplus -- if you start taking a look at the north and south sewer plants, you are getting that -- I'm talking thousands, not billions -- I'm talking 400, 000 extra capability in sewer; that is too close to call. I mean, I can get a peak in flow in two days, and I can have it coming out of every orafice of that plant that you can think about. The same thing in the south side -- and that's what happened to us in the north. If you think my peak production is going to be up there around 9.6, I would be in the hole right now as to what happened in 2001. Then you take a look at the average demand. What were the promises made, okay, in '98, '99, '00 and '01 ? Now, if you think about a large PUD building out in eight years, I should have historical records back. I don't have the records. I have looked. I have dug out every box that I can find, okay. As far as they go back is '98. So we are using '98, '99 -- I'm doing the best we can as we move forward. It's better than not having anything. If you take a look at that promise capability out with the PUDs, it equates to 8.5 million up at the water -- on the water side, 7.1 on the north wastewater. 2.3 million promised out itself. Now, the key is how much of that stuff got built out, actually had a CO and connected. That's the next number that you have to get at. You can see those numbers. And you start looking at, okay, what Page 35 November 7, 2001 is really the promise capability outstanding. Now, I should have treatment capability that is being constructed to handle that. Okay. You would like to have it on the ground, but it should at least been-- being built. Current capacity surplus from the third line, brought down. And the demand brought down here (indicating). You can start doing your math. I only have 1.5 million gallons left that I can actually do a permit for a PUD for water. And I'm 4 million gallons in the hole up on the north end of the county. I'm about -- almost 300, 000 gallons sewer in the hole as far as the south is concerned. Planned expansion. Now, it gets into when are you really going to have this? When is it going to be built out? The rule that I have come up with and I talked to the CBIA about this. When I start moving a shovel full of dirt at a plant expansion, I will bring it into the positive column that I have got as a credit, and then I can start deducting from it. I have an 8-million-gallon water plant going on that is reverse osmosis that is a desalination plant that's coming in here (indicating). I have got a 5-million-gallon expansion that is going to come up; that's why my feet are dirty because I was up looking at the plant and looking at the expansion and saying, "Why wasn't it online yesterday?" It will be online by Wednesday of next week. Then I have got an 8-million-gallon expansion on the south sewer that is being constructed right now, too, that they are moving. What does that do when you add the numbers up? That tells you what I have got left. You see right here (indicating) that I'm getting close in the north again. So, yeah, I'm going to have the innerconnection doing the north side in 2003, moving the sewer from the south to the north. But I promise you in '04, '05 based on the permits that I get up on the north end that are coming in, I will be having the stuff flow down to Page 36 November 7, 2001 the south side because the south expansion comes online in 2003. So I'm playing catchup. I'm moving flows back and forth as I'm bringing expansions on so that we are able to keep the system moving; that's why we can't deal with two separate systems. I can't build it fast enough right now. So that's what we have done with the checkbook. Just to make sure you understand how we are keeping track -- and so we don't get ourselves in a pickle like we were in March -- because in March we were in a problem. MR. WIDES: Tom Wides, Public Utilities. Just a comment I want to make that came up last night, Dino, I think, when we were talking. We were talking about this next expansion that is coming out in the next few days, this 5 million gallons that's coming on. We were saying that was growth related, which it is. As you look up there on the board you are seeing a position right now that you're short. However that's on unplanned buildout. That is not actual buildings in the ground. What we are saying is we are funding -- we are putting that 5-million-gallon expansion out there now for when that -- the rest of tat 4 million gallons starts to come in place. Okay. This came up a little bit last night. I just want to remind you what is on this slide. MR. LONGO: If we are going to be so close on the north sewer plant and maybe because we are building in 5 million increments, why don't we go through, like, two and a half instead of the five -- getting them to reduce it from 10 to 5, if they will. MR. MUDD: It will cost you more when you are dealing with the companies with all the mode and demode. MR. LONGO: Do you think they are going to look at that .978 and say no -- MR. MUDD: No. Because the Growth Management Plan shows you the extra capability. MR. HAGAN: That 5 is the 5 that you are put on right now. Page 37 November 7, 2001 MR. LONGO: I realize that. But even at 978, aren't you still close? MR. MUDD: No. I think we are okay. And the key here is -- MR. LONGO: You can move it from south to north? MR. MUDD: You have been pulling this since '98, okay. I don't know what is in '96 and '97 and '95 out there as far as IOUs are concerned. But I will tell you I'm pretty comfortable because you don't totally always buildout your PUD like you think you are going to, okay. There are always a couple of lots that don't get something on them. It depends. MR. LONGO: It's important to mention too that utilities went back to every PUD that they could and downgraded the amount of flow, if you want to say, because of the non-buildouts you have a PUD for 1500 units and the builder was going to build 1,000; that's all he's going to build, Jim went back and adjusted those flows and those capacities for those PUDs, all but eight of them, I think. MR. MUDD: If we didn't do that, the picture I paint for you today would be bleak. Okay. This is rosy. You have got to be on which side of the fence you are into. We had to go back out and talk to every one of them. Not only adjust the buildout numbers, but at the same time adjust their calculations on what -- a lot of folks didn't do the right calculations. So we made sure that everybody was on the same sheet of music as far as that was concerned. And we went back to every one of them, okay, and that was two, three hundred. As we had to go and ask them the question and get their engineers to reaffirm and send back a letter; but it's done. We are still trying to get eight other folks to answer the mail. But we will work on it. Go ahead. Can I get the rates? What we would like to do is we just showed you the buildout, and I would like to say $400, 000, 000 increments for every five years. What we would like to transition now to is what does that Page 38 November 7, 2001 mean as far as rates are concerned and impact fees? This is utilities. Utilities is service based. It is not property-tax based. It's fee for service; that's how -- that's how we have to basically go with the process. MR. ORI: We are talking about rosy. Now to the financial piece. And really get some good discussion going. My name is Robert Ori, Public Resources Manager. What I would like to do for the next half hour or so is kind of give you an overview of the fees and what we are looking at in terms of the level of fees to be charged, provide a brief discussion on the basis, how we calculate the fees. Obviously, you may want to see more detail later. I will tell you we are still in the design phase. What we are going to present to you today are a little bit preliminary. As you already heard from, I think, Dino mentioned the fees we are looking at right now are fairly significant where you are today. But we still have some adjustments to make. I think even Jim mentioned the lower level of service on the wastewater going from 205 gallons to 185 gallons a day. That will have impact on the financial side. It obviously has impact on the capital side. It's going to have an impact on the financial rate side just as well. Essentially we tracked the capital side. So we will talk about the amount of fees we charge and also provide you with some comparability figures, kind of give you an idea what other communities are charging as of today. The purpose of the impact fee -- and I know you all have heard this -- it's very common in the utility industry now. Also every community I know has one. Collier County has had some form of impact fees since I can remember 13, 14, 15 years ago relative to financing water and wastewater improvements. The key is obviously we are trying to shift the recovery of capital dollars from new development, obviously. Why? The long- Page 39 November 7, 2001 term effect is we want to try and dampen the effect on the existing rate payers who are here today, funded their improvements to some degree -- we can't place the whole burden of constructing facilities in advance of growth on them, just the rates to be so high you would have a rate curve that goes like this all the time (indicating.) So we want to make that shift. Obviously, we want to link to capital expenditures for future users and reduce the debt service for the rates for the existing uses. As you have all heard, the road will paid its own way. In terms of where we are today with the capacity fees -- to give you an idea, they were last adjusted back in August of 1998. The current water capacity fee is $1,275 for ERC. And wastewater is a little higher than that, fifteen to one hundred seventy-five for ERC. ERC is very important that that links to the level of service -- and that's really, really critical. In terms of how the fees are applied, I will talk mostly from the ERC standpoint. ERC generally links to a single-family household. I think Dino mentioned about the building of homes. When you think about the impact fees and what I'm talking about -- I generally. Talk about one ERC. We have multiple classes of components that we charge a fee too. Single family is one. If you are a four-bedroom house or 5,000- square-foot home, they kind of convert you to the commercial side. Obviously, as Jim mentioned, they have some guys out there that use 2, 000 gallons of water a month. They are not your typical residential customers. They are probably more like a good-size commercial customer, and the county adjust their fees for that, which I think is proper. The multifamilies based on the number of units served, behind the meter-- and it's graduated based on size of the units that's there -- the theory being the smaller units that usually have smaller number of Page 40 November 7, 2001 fixtures, small number of persons per household. The larger units, obviously, are more kin to a single-family type relationship. Commercial based on meter equivalence; that means is they look at the meter size that serves the commercial customer. It's weighted, like, five-eighths meter is 1 ERC, a two-inch meter is equivalent to eight homes, et cetera. It's based on meters contained values factored published by the American Waterworks Association; that is where they got the data from. Just to let you know the Florida Service Commission also utilizes these standards in terms of the regulations of private utilities. There is a lot of consistencies in the industry relative to this type of information. Say, we are from, an foreman on behalf of the county is not looking at the methodology, not looking at this; we are looking at the amount that should be charged essentially per ERC. That is kind of where our focus will be for the remainder of the presentation will focus on that. As we went forward with the calculations that we have today, we recognized that all fees will be applied uniformly. We did not segregate the system into service areas. You heard north and south plants and innerconnect. We are assuming a total system type of basis here, very common. The utility rates for service are also set out that way, and that was the direction that we went. There are two components for an impact fee to keep in mind -- again, this all links back to the master plan. First is the level of service, how much capacity is in an ERC, and then how much cost it provides to that ERC based on that level of service. In terms of level of service, as Section 9-J5 of the Florida Administrative Code states, "It's the capacity for the demand of units. "From water to sewer, obviously, it's the gallons-per-day capacity. He mentioned-- he referred to early population projection and Page 41 November 7, 2001 growth projection, the reason why they look at that, of course, for planning. We look at that, of course, for the unit demand of an ERC. We looked at a variety of factors relative to what an ERC would be. I looked at the Florida Public Service Commission Chapter 25- 30.020, the Florida Administrative Code, DEP, and Time Standards. We got over a million records of the billing information from the county and looked at historical data to see where those average usages were for a single-family class. The Growth Management Plan of Collier, as well the Code Master Plan that really enhances putting it together. And our ERC factors, we think, are reasonable for this system of water at 350 gallons per day for ERC; that's an average daily demand, not a peak daily demand. It's an average daily demand. And wastewater at about 250 gallons per day. Just to let you know, the last impact fee saved on three years ago and prior, this factor was 280 gallons per day. So we actually have dampened the ERC by that. What does that do? The 1 MGD wastewater plant can serve more ERCs at a lower level of service as the cost of ERC drops a little bit. We have recognized the actual change in the ERC value there. In terms of the dollar values -- I call it use of the improvement driven method. Basically the improvements are for the master plan and whatnot, and that provides the link to the capital expenditures and capacity additions that Greeley & Hansen discussed earlier. We also recognize the availability of any existing capacity. We don't have a lot. But to the extent there was available capacity, we weighted into the calculation. It tends to dampen the possible -- an old cost system compared to a brand new more expensive cost to do the structure. We did recognize that in our analysis that we are doing right now. The capital improvements, obviously, are -- I mentioned the Page 42 November 7, 2001 master plan a lot. Obviously, that's the -- that's the focus of why we are here today. But I looked at the planning-wise 2002 through 2011. You may have heard earlier they went out to 2021 and 2030 to get long-term trends. I didn't want to go out that far for this analysis. Number 1 is you get some uncertainty out there in terms of growth and changes and technology that occur. I wanted to kind of dampen the period a little bit, but I wanted a long enough period so I make sure that I have got full-capacity expansion on the system. For example, when you build a wastewater plant, it generally costs a lot more per gallons to build the first piece, and then when you add the tanks and such as that for the next expansion, that's a cheaper expansion. I wanted to make sure I have got both ones, so I just didn't count the first one which is a higher rate. And I wanted to make sure that I had the second one and blended the two together; that's why I looked at a longer time frame. Second, by looking at a longer time frame, I can get a better link of transmission capacity relative to the facility there. So in that way I would have the best period of certainty, and I have a better match in terms of facilities. I believe that was our plan in the horizon analysis. With respect to the CIP, you remember the bar charts you there, 450. This kind of gives you a little bit better picture. We can show you more detailed numbers later. But we are looking at about 30.8 MGD water capacity annualized daily flow over that 11-year horizon is what is going to be constructed. Also wastewater capacity about 31 MGD annualized daily flow of about 31.7 million. You will recall on the graphing that you saw before you saw some numbers, back-up numbers, and peak data. I went to average day -- and why I converted all the flows to average day, that's the level of service that we require of ERC; that's an average daily flow basis. I have to convert my capacity to an average daily flow basis to provide consistency. Page 43 November 7, 2001 If there was a facility being constructed in 2001 that would benefit the future, we have added those in and added the capacities in as well. It's not online yet. A good example is 5-million-gallons-a- day facility being constructed in the north; that's not online today. We have added that in. We captured the 2001 costs there also to make sure we have the full gamit of what is being constructed and added to the system. Transmissions facilities you can see. Here is the total construction code range of the next 11 years. It's about eight hundred, nine hundred million dollars. It's a lot of dollars here. This is the total capital program, not just the program reflecting the impact fees, just to let you know. What I mean by that -- I'm one slide ahead of myself. In terms of the program, as I mentioned, eight hundred, nine hundred million dollars there, what we want to do is make sure we pulled things out or didn't recognize costs that didn't benefit growth or shouldn't be reflected in the impact fee and things of that nature. For example, we have some costs in the CIP for replacement of certain facilities. They shouldn't be included in impact fees in benefiting existing users. We attempted to recognize that. If there were improvements to benefit both the existing users and future users, we tried to allocate between the two to pull those costs out. Grants received whether they are EPA, Environmental Protection Agency, or transportation grants assisted you see receives for the line of relocation, we pulled those out. And also we have got a debt-service credit. We realized as customers connect they will be paying some debt service cost. And some people argue they are being double accounted." I paid the fee and now I'm paying a debt service." So we reduced the fee for a -- what I called a debt service credit. The reason why we are doing this is trying to get a more fair Page 44 November 7,2001 share approach to meet the natural nexus requirement relative to the benefits and costs charges and fees. These are some of the adjustments that we recognize in our preliminary analyses for you. To give you an idea, though, in terms of the capital costs, the large dollars, here is the water and here is the wastewater. As you can see, of the 376 million dollars for water about 77 percent was allocated to the future column, about 22 percent was allocated to the existing. The Collier proportion for the wastewater was recognized here (indicating). That gives you a feel. And we are still evaluating these numbers as we speak. The point that I wanted to make is that we did not put all the dollars into the fee. We tried to shift them back, if possible. We got over 150 million dollars there on the existence side there. What we are seeing based on our reason analysis and, again, preliminary. We know there is adjustments to be made that will lower these fees -- more of a worst-case scenario. We are looking at a fee right now of about $2,880 for ERC for water; that's about $8 a gallon and about $11.60 a gallon for wastewater or $2,900. Now, your first blush when you look at this is to say, "Gosh, this is so much bigger, yet the debt is not that far apart." Keep in mind the level of service is 350 gallons here (indicating) and 250 gallons here (indicating). That is the reason why when you take that times the price, you can see. These fees will be higher than the neighboring communities as you can see right now, obviously. This gives you a better feel. I mentioned earlier you have $2,850 for the existing fee right now based on what we have today -- and I think Dino mentioned that in your meeting. It's about a doubling of fees. It's about $5,800. Here is the relationships. Again, these are very preliminary numbers, and I think these fees will be dropping as we look at change of capacity of that nature Page 45 November 7,2001 and change of the facilities. But that's not where we are right now. One question that was asked before is, "Gosh, this cost has really gone up compared to three years ago. It's a doubling. How did that happen?" Obviously, the CIP program has significantly increased. From what was reflected in the last impact fee analysis. To give you an idea, it was 23 million dollars of cost in the water analysis done three years ago. I assisted in that, and that was the capital cost provider. Now we have 300 million dollars. Wastewater is about 81 million. Now we are at 400 million dollars. So you can see the relative relationships here. Granted, there is also a major relationship in the amount of the capacity added and the cost of the capacity which is different. You also have a change in the CPI index, obviously, since 1997. The fees have really blasted. We have an increase of 11 percent in costs; that's about 10 percent of the fee that does not explain at all there is the affects in inflation and population growth has been much greater than before. Now we have to deal with the anticipation of that. To give you an idea too -- as I talked a little bit about the finance plan, this is the costs that is going to happen to the county on the rate side. We have got about one hundred and eleven million dollars right now of outstanding principal on our utility system with-- which will be repaid from utility rate revenues -- existing rate customers. When we get done -- as of 2006 we started this new program that could go to as high as soon as 400 million dollars. It's a lot of dollars. As you can see what is going to be happening on the rate side also. We are incurring a lot of financing costs to fund this program, as we see it right now, the way the way it's structured today and the way it stays in. To give an idea on the comparison of fees we are looking at right now -- good -- thank you. Can't miss. Page 46 November 7,2001 This one here -- this is a community on the West Coast of Florida -- except this one (indicating) I had not put this one in. This is a very new one. Right now this is the 20 -- $800 or so, Collier County. The blue represents water impact fees charged by these communities, and the red represents the wastewater side to kind of give you a feel the fee relationships are. As you can see they vary all across the board. Another thing to point out those communities have high customer density, Tampa, for example, generally have lower fees because the amount of service provided per square mile -- that's what you can get from that. Also a lot of these you see back here receive grant funds -- a lot of facilities bill grant funds. It's free money. You take it off the impact fee calculation, obviously. Tampa is a good one. Pinellas County is a good one -- things of that nature. Up here in terms of high-growth counties, Sarasota, your county, Hillsborough, Lehigh Acres in Lee County, for example, the fees are much higher in approaching what we are looking at right here (indicating). Granted, they are still higher in Hillsborough, but Hillsborough right now charges about $5,600 in ERC. That is made of two components; there is an impact fee around $3,200, what they call an allowance for funds per invested, six years of carry time being added on top. Really another charge of a fee on top of that; that's what they are collecting for each ERC of capacity. The proposal that we have right now -- which again is a little bit preliminary for those right here. This is the City of Boca Raton. I wanted to show they have raised their fee recently. I have never seen one in Florida of a rate of $8, 000. We even checked it again today to make sure. It's $8,000. And I know I have heard this is being reviewed. This chart -- this right here is the average of the utilities absent Page 47 November 7,2001 this (indicating) to kind of give you a feel where we are. This is -- this sample I developed -- we just put together. We didn't try and pick them to get all the high ones here (indicating). We wanted to give the counties up and down the West Coast of Florida and kind of show you some of the major communities that are really close to Collier County or the major communities on the west side of Florida. It will give you an idea of what the comparability would be. As I mentioned, we are doing a capital finance plan as part of the utility rate savings at the same time for the county, and I wanted to mention that. The funding for this program -- the master plant program is done from the master plan. We have two sources to it, basically. The existing rate payers are going to fund part of the user fees, obviously. We have to. That's the pledge of revenues to meet our financing up front. Obviously, new development through the impact fees. It's kind of a sharing type of issue here relative to meeting the overall needs of the system. Just to give you an idea, we are looking at potential rate adjustments. These are also being reviewed at this time. Obviously, the affects on the master plan, producing level of service will affect these as the plan get pushed out. This will change materially, obviously. But we are looking at required increases to finance these expansions and meet the other service needs besides the expansion requirements, so we must borrow money in advance of the expansion, obviously. The county has to incur the risk to build these facilities and borrow money. The pledge for that repayment is really existing utility rates. The people who provide the money want assurity that this debt will be repaid. If growth doesn't occur -- you have got to repay your debt, and that's what they look at, the existing rates. Granted they will look at impact fees -- it is a two-part test. You have got to look at the impact fees, you have got to look at the net Page 48 November 7, 2001 revenues. The net revenues is the existing rates. We are looking at some increases to our existing customers. We will also be bearing some of the burden over the whole program. Remember, there was 150 million dollars of the existing costs there. We have got to maintain our existing system to. We are looking at these type of increases right now, 4 to 8 percent water and 12 to 20 percent sewer. Actually we looked out at 2005 -- and this is the one we are really trying to push away. The more plans -- the further we get, this basically starts dampening quite a bit. The point I wanted to make is that it's a two-part issue here, both the new development and the existing rate. MR. MUDD: I want to make sure that you understand what this 2002, 2005 is. 2002 we are looking to raise water -- let's just say its average about 6 percent -- 5 to 6 percent. Wastewater we are talking about an increase of about 16 percent to their water bills. What I'm trying to do on the water side is invert the rate and get most of that increase off the top-end user, okay, and try and hold mom and pop safe so that they can still have that fixed income or social security or whatever it is and make sure that they still have water that they can use in the house and it doesn't cost them an arm and a leg in order to get it. On the sewer side right now it is -- MR. ORI: On residential. MR. MUDD: -- residential is capped at 10, 000 gallons. We are talking about moving that cap to 15,000. What does cap mean? We are basically saying that after ten or after fifteen thousand gallons any water usage in your house after that, you are putting it out on the lawn or you are putting it out in a pool, and it's never going down to the sewer side. Why is the recommendation going fifteen? It's the only way I can dampen this (indicating). Okay. That is the only way I can dampen that ten to twenty thousand, and it still gets the inverted side Page 49 November 7, 2001 of the rates in that process, but you have to shut it down. This is additive. Okay. I just want to make sure that you know based on what he is saying we have to go to the rates back in 2005 to go 6 percent. I will also tell you on the rate side of the house that Consumer Price Index went up 9 percent, okay, from '97 when we put the rates in effect. And I will just -- "I will use I" this time, okay, if I was here, okay, four years ago and was conscious, I would have the CPI going up, and I could have foregone this rate increase. I have told my guys already -- and gals that work for us that we will never ever, ever go from year without having at least a CPI entry as far as rates are concerned, so we don't ever get in this fix again. But I wanted to make sure that you understand based on what we are seeing current dollars this would be an additive increase of 2005. I'm trying to get it so we only have to do it one time and if we are smart about doing it as far as Consumer Price Index is concerned and pushing it out so that we don't have to do that. This is a hard sell to the community. Okay. This is basically saying to the community," You are using collateral -- your user fees, and your collateral is so we can grow, okay, in order to take the loan. "They are going to say," Wait a minute. Now, my user fees are letting you go borrow money so that you can grow. I don't want this county to grow anymore. "So we have got to be very careful about how we talk about that process, okay, so I can at least get out of the room before they start throwing rocks and things. So you have got to understand that. It is dual. It's an impact-fee process plus it's a user- fee process. So this just does not happen. MR. ORI: When you think about it, too, Jim has a real good side on the water side, but if you think about the CPI index on the water, let's say, 9 percent for the past several years, this adjustment is less than the CPI. A lot of inflationary effect here. Page 50 November 7, 2001 You remember the water numbers and the bar graph that was presented. In the first part of this program were very similar in wastewater. We need wastewater dollars. And that's -- that's where you see the adjustments. You tell me we have to fix our problem. And we are -- the other thing to keep in mind is we are utilizing our reserves, and we are using our impact fees. We are using everything to get this program going, and we need to maintain and be financially healthy as we go on. This is what we are seeing right now. And, again, this is under re-evaluation between Jim and I and Tom -- and everybody is looking at it right now as we go forward. I just wanted to point that out to you that it's a double-edge sword. Okay. As we go forward, we will be recommending at some point the fees need to be based on the recommended CIP, and we will ask the commission at some point," Revise these fees or adopt the fees that are presented." We are looking around January 1 effective date at this point in time. And we can ask them to maintain the existing rate methodology but continue to review every year the impact fees and the adequacy and CIP. We want to make sure that we keep the two consistent. And we have to do that. That is something we will be doing. Obviously, in terms of the impact fees collected, I'm recommending priority of use, obviously, and I think we are doing this today, but I want to make sure that everybody understands this. The first thing on the impact fees funds the CIP and avoid that. We have got to do that. The financial plan that I present is the rate increases assume a doubling of the impact fee. So whatever happens there may effect that. Then we want to fund future expansion related to that. Once the facilities are built and growth continues, then we can solidify our rates and keep it flat and everything turns out to be a Page 51 November 7, 2001 very solid system from a financial standpoint. That is kind of where we are going right now in terms of the recommendations I will probably be bringing you more in about two months. CHAIRMAN MASTERS: We need to take a couple-of-minute break and change the court reporters. MR. ORI: I'm actually, I think, on my last slide. I think it's perfect timing. (A break was held from 5:05 p.m. to 5:09 p.m.) MR. LONGO: A couple things I want to point out for the committee. The new areas that you see with some of the planned expansion, potential planned expansion, those are what the urban fringe committee has agreed to as the new areas out there that will -- that you're going to expand beyond the urban fringe, both for water and sewer. That is due to be signed off by the governor, when, Jim? MR. MUDD: Supposed to be in the spring. MR. LONGO: The spring. MR. MUDD: But they've taken some rough drafts out. We've taken them to the environmental community, okay, the Nancy Paytons of the world, to basically run these off of them. What the environmental side of the house is trying to do is to make sure we're clustering. They're not into urban sprawl. They want to try to get away from that. And we've talked to them about providing water/sewer service and moving that process out. So I would say if it's a well thought-out plan, and it gets through -- and so far it has because she's been in every one of those meetings representing that community. You don't have a lot of opposition, and this is a smart plan. So far it's -- it's been getting good reviews. MR. LONGO: And I've been told that the governor's probably going to sign off on that. It's pretty much a done deal. So I just wanted to let everybody know that all your projections are based on this expansion of our urban rural fringe. I have a couple concerns Page 52 November 7, 2001 personally and as an industry leader. And just personally, I would ask that, Jim, next week when you come back-- and I commend him and the staff and the consultants for what they've done. They've spent a lot of time getting to this point. But there's a couple things we need to see. We need to see how they arrived at some of those figures. And we know they got there; we just need to see how they arrived at the figures. If we're at 250 gallons per day for water consumption, then how many future users are supposed to be at 250 gallons a -- those types of things. I see a 500,000 projected growth population. I've never seen that number anywhere in any of our master plan stuff, so maybe that can be shown to us as to where that is and how that equates to the equation, things that just need to be pointed out. You know, almost a $6,000 increase to a new cost-- new home puts a lot of people out of buying a new home. Okay. We have those issues to deal with. I'm not saying that it's going to stop -- make it or break it. I'm just pointing that out. We have two commissioners that are very hot right now on affordable- housing issues that -- I don't know how that's going to fly, but it's really not our job, I guess. We just bring the information to them. Those who need to be at this meeting next Wednesday -- and that meeting starts at three, and we can make it sooner if you think you need more time -- need to be there. There's a handout that -- if you didn't get it today, they can get it to you. That pretty much is that -- that whole slide presentation you just saw and for people to digest and bring to the -- to the table questions. They're on a fast track. They want to get this through. CHAIRMAN MASTERS: Dino, one quick question. The meeting next week at three, that's the -- which -- MR. ESPINAR: That's for the Land Development Code. CHAIRMAN MASTERS: You're talking about the Land Page 53 November 7, 2001 Development Code? MR. LONGO: At three o'clock we have a DSAC subcommittee meeting. At nine o'clock that morning is when your Land Development -- CHAIRMAN MASTERS: Which subcommittee is that? MR. LONGO: Construction. CHAIRMAN MASTERS: That's construction. Okay. MR. LONGO: And the only agenda item that I have on it right now is going to be discussing the -- the impact fees for utilities. And a small portion is going to go to talking to S Group about the (inaudible) debris, and we might resolve that or move that part of it. MR. SAVAGE: So we will not be talking about this at nine o'clock in the morning. MR. LONGO: No. You're doing the LDC amendments at nine o'clock. I'm concerned, the industry is concerned, and you should be concerned that -- not that these guys haven't done a good job -- that the timing of this is -- is critical and that we make sure that we're not doing some of the mistakes that we've done in the past and that our stuff going out 11 years, 20 years is really going to fly. And I asked John, once again, John Dunnuck-- is that we recommended doing oversight committees for transportation and utilities. I'd like to know the status of that. Jim Mudd has made a very good recommendation that this should be subject to review, and I agree with him, and others do too. And just -- if for nothing else, just for edification, clarification, and for the accountability we talked about before and that-- and where we are with that. I would like to see that happen somehow. I know Pam was -- Pam Mac'Kie, Commissioner Mac'Kie, was going to do that, but I don't know where she is with that now since she's leaving. But I think we need to get that established. And -- and maybe it comes before this group at the end, but that's -- that Page 54 November 7,2001 committee at least will be there in place all the time to -- to look at that. We have so many issues we deal with at this committee as far as construction and architecture and land code and all those types of things, I think it's too big of a -- of an issue just for this committee to be brought to all the time. We spent almost four years on our subcontractor issues on utilities and our utility code, and that was just the utility code. So maybe you can give us some thoughts on that, John. But by next Wednesday -- I mean, I'm committed to helping the utilities getting through this, but I'm also committed to getting through it doing the right thing. Okay. So all those that want to be involved need to be there next Wednesday. I know Dalas probably will be, Charlie, and a couple others. And there's probably questions that you-all have that didn't get asked last night and certainly didn't get asked today. And this is -- you know, it's mathematics. A lot of it's math. I just want to make sure that we're on the right track. I asked the simple question, what would happen if we didn't have impact fees to fall on? And the response was, well, your water and your sewer would be, like, ten bucks a gallon or something like that as your user fees. And the certainty is that we want to make sure the impact fees being collected, no matter what they go to or what the final price is, that it is going to, quote, unquote, new plans or new growth. And that's a very -- it's very hard for them to separate that out. So we need those things in place, and those are accounting issues that we want to be able to see year in and year out, you know, how we're doing. And we may be able to adjust up or down accordingly. You know, if we're going into a slowdown, his figures all change. You know, we may not be building three plants; we might be building one. So, you know, it does change, and I think we need to look at that year in and year out. Page 55 November 7, 2001 CHAIRMAN MASTERS: That brings up a good point. I think that's my biggest concern too. I mean, obviously we've underestimated the growth and the costs that we have coming up in the future. I just hate to -- to get ahead of the curve and raise the impact fee to a point where that growth doesn't occur and then suddenly we realize five years down the road that the impact fee was too high. MR. MUDD: I want to take you in the other direction. I want to make sure that we don't do a knee jerk and then all of a sudden -- we say we're going to drop 15 to 40 percent, and all of a sudden we adjust for 15 to 40 percent, and then next year you do a boom of 80 percent, and all of a sudden we got ourselves in a pickle again. And so it's -- it needs to be reviewed annually. I mean, I'm a firm believer in this. I've watched what it's caused us in the past, and I don't like it. MR. LONGO: And actually, if it had been reviewed annually in the past, you would have made your rate adjustments about two years ago. We would have known where we are. We would have known our problems with the north plant as far as getting it started and on- line and all of that stuff. So we are behind. You know, there's no fingers to point. And, you know, we just need to move forward. Jim's done an excellent job of handling the north plant sewer crisis. I think him and staff and consultants have done a great job up to this point. It's our duty and it's our charge to make sure that we're comfortable when we make that recommendation to the Board of County Commissioners. I don't want to get my butt chewed again. Your thoughts on the other side of the committee? MR. DUNNUCK: Yeah. We're --just to keep you-all posted, we're bringing back the annual update of the inventory on November 30th, which was, I think, the opportunity when we were going to discuss some of the options with the Board of County Commissioners. The most prominent option we had talked about was Page 56 November 7,2001 a productivity committee for the county which is made up of a lot of retired businessmen who spend time looking at those specific issues and being that oversight to take a look at the issue and make sure we don't get in the same situation that we were in in the past. But I'll certainly bring something back, and we'll formalize where we are with recommendations for you. CHAIRMAN MASTERS: Are there any other questions for Jim? MR. DISNEY: Just three comments, and I don't need a response. I just want to make sure that at some point we can -- we can get the information out. Dino hit on one of mine partially and mentioned in the -- in the presentation here, it was 1997 buildout population numbers used. Well, we have adjusted those for the urban fringe boundaries. And 500,000 people, I mean, I don't know where that number is coming from. I think it's different than that today. But I just want to make sure that if those numbers have been adjusted downward, that this is based upon the real numbers and our buildout numbers, whatever that is. Whether it's 500,000 or 5 million, it doesn't matter. Just make sure that those numbers match up. The ERC that you were talking about in there, have any adjustments been factored for the ongoing conservation and this -- this tiering of the higher costs with the higher units? If that's in there, wonderful. It's, again, just some comments here for you. And make sure that we're pursuing any grant money that's available. You've got all kinds of grant money that's out there. There's no reason for us to have to pay for -- MR. LONGO: Actually, Dalas, we talked a little bit about that last night. And there was one thing that was not even thrown out on the table and it's actually having a development pay ahead of time for their guaranteed capacity. And, you know, we had a couple representatives from, you know, Lars (phonetic) Company last night. Page 57 November 7, 2001 And it might behoove them, if they're going to do a 3,000-unit buildout somewhere, to put the money up front and have guaranteed capacity. So there are maybe some other areas. And we asked Jim to look at that, and I'm sure they're going to be looking at that. And I'm sure they're going to be pursuing grants and whatever possibly they can. My final comment is impact fees are not the way to go. They never will be the final way to go. We will always be looking for revenue sources, and at some point in time, statutory limits are -- you can only go so far. And that would be my next question. Based on the -- the nexus, I mean, how far can we go with these impact fees, and are you beyond statutory limits already? MR. ORI: Are you asking me the question? MR. LONGO: Yes, sir. MR. ORI: I was -- the case law dictates that the fees charged have to relate reasonably to the benefits received by the party, and that is the property that you're charging the fee to. Obviously, the fees also stay with the property. You can't build a house here, go build a house here, and take the fee with you. We all know that. What I've seen from the case law standpoint is that you can charge a fee as long as it meets this rational nexus test. I think where you're-- what your question, though, is economically how high can you go before there's an economic issue. And I think that's a little different than statutorily, if there's an economic issue, and I think that's where you're going. MR. LONGO: No. Specifically it was statutorily. I know -- I think our road impact fees are as high as they possibly can go statutorily. And I'm not sure about water or sewer, but I thought all impact fees were -- were the same. MR. ORI: I've never seen a cap on them as long as they've met the rational nexus issue, that the benefit received and the cost Page 58 November 7, 2001 incurred equals to the level of service and demand that's related to it. That -- MR. LONGO: That would be -- that would be one of our questions to -- MR. ORI: And that's why I-- that's why I pointed to the two criteria earlier with the -- that's why I spent that time on level of service and the time on the capital. MR. LONGO: Right. MR. ORI: Because you've got to look at both. You just can't say I think there's going to be a hundred thousand people there. Let's get-- let's do it by $25 a person. MR. LONGO: Just as long as you can show it to us in writing somewhere that says you can do it that way, then I can make those recommendations based on what you tell us. If I don't have the backup to that, then it's hard for me to say that what you've done is correct. MR. MUDD: I'm going to interject real quick. I'm Jim Mudd. When Norm Feder says he's maxed, okay, he's at max to where he can be, it's because he needs to do another study to see where the nexus is based on costs that he's got out there. He cannot arbitrarily raise impact fees. There has to be a connection to that benefit. Okay. So when Norm says he's maxed, that fee is as maxed as he can get based on the last nexus test that was done in '98, okay. So Norm is in the process of looking at it again based on right- of-way costs that he's going through and that process, and he's taking a look to see if the impact fees are appropriate. And he's going through the same process that we're going through as far as utilities are concerned, and you've got to be able to do that, and I think that's what he's talking about. CHAIRMAN MASTERS: Okay. Anybody else have any other comments on the presentation? Page 59 November 7, 2001 All right. With that, I thank everybody for coming out and -- MR. DUNNUCK: Tom, I'd like to, if I could, add one more thing. I'm sorry for coming in late. I was detained by a commissioner pretty much most of the afternoon. But I wanted to pass along to you a copy of the resume of your next division administrator for community development. We verbally got a commitment from him today, this morning, and we're looking at a start date of about January 2nd -- from what I could tell, January 2nd or January 3rd. You can look at his background. He has a lot of experience similar to Jim Mudd, in that he's Army Corps of Engineers, last stationed out of Savannah, Georgia. I met the guy last -- MR. SAVAGE: You mean we got another engineer? MR. MUDD: Yes, sir. We're trying help the place out. MR. SAVAGE: I know it. We do. (A discussion was held off the record.) MR. DUNNUCK: But to make a long story short -- besides their little side comment over there -- I met him last week. From my perspective, I think he's going to be very, very good for this division, very personable guy, very professional. And I think he's going to help you get to the next level of where you want to be. Jim, if you have anything to add, you know him better than I do. But I think -- I think you're going to be in good hands. MR. MUDD: They don't get any finer. He's a super individual. He knows business. He listens. He understands there's two ears and one mouth, and you need to listen twice as much as you talk. And he's coming in with an energy. The only bad part about him is he went to the same high school I did. MR. LONGO: I got to say he shook out real well on his interview. I mean, we interviewed all three of the candidates, the last candidates via phone. And even over the phone -- I mean, if you just look at the guy's resume, he's super qualified. He -- all three of the Page 60 November 7, 2001 people that we did interview could have taken this job I think, but he was very well qualified. He answered the questions right on. I mean, he didn't stutter, didn't miss a beat. MR. MUDD: What also makes him unique -- and you'll understand it more than anyone else -- he started out as a private and retired as a colonel. MR. SAVAGE: Just like I did. MR. MUDD: And that doesn't happen every day. MR. SAVAGE: I know. Now, what house is he going to live when he comes down here? The Schmidt house? Oh, wastewater, excuse me. MR. DUNNUCK: With that, that's all I have. CHAIRMAN MASTERS: Okay. Any other member comments from those of you who stuck it out? Thank you, gentlemen. We can adjourn. There being no further business for the good of the County, the meeting was adjourned by order of the Chair at 5:29 p.m. DEVELOPMENT SERVICES ADVISORY COMMITTEE THOMAS MASTERS, P.E., CHAIRMAN TRANSCRIPT PREPARED ON' BEHALF OF DONOVAN COURT REPORTING, INC., BY EMILY C. UNDERWOOD, RPR AND BARBARA DRESCHER, NOTARY PUBLIC Page 61