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Agenda 01/09/2018 Item #16C 301/09/2018 EXECUTIVE SUMMARY Recommendation to approve First Amendment to the Utility System Transition Agreement between the Collier County Board of County Commissioners, as the Governing Board of Collier County, Florida, and as Ex-Officio the Governing Board of the Collier County Water-Sewer District, and the Florida Governmental Utility Authority to delete and replace Section 3.03. (D) Accounts Receivable; Customer Deposits. OBJECTIVE: To remove the obligation on the Collier County Water-Sewer District (CCWSD) to return customer deposits held by the Florida Governmental Utility Authority (FGUA) for the Golden Gate System and place that obligation with FGUA. CONSIDERATIONS: At the November 14, 2017 Board of County Commissioners (Board) meeting, item 9B, the Board approved Resolution 2017-222, The Utility System Transition Agreement, that establishes the terms, conditions and process for transitioning the ownership of the Golden Gate System from the FGUA to the CCWSD in a seamless and expeditious manner. Section 3.03. (D) of the agreement states: “On the Transfer Date, the FGUA shall transfer to the CCWSD a sum of money equivalent to the dollar amount of the customer deposits held by the FGUA for the Golden Gate System. As the CCWSD does not collect and retain customer deposits, the CCWSD will assume the obligation to return said customer deposits to those customers of the Golden Gate System that had paid them.” CCWSD establishes all water/sewer accounts in the name of the property owner, whereas FGUA has established many accounts in the name of the tenant. Each deposit must be returned to the individual who made the payment, requiring research of the payment method to identify the payee. As CCWSD does not have that detailed information, and only transacts with the property owner, this could result in deposits not being returned to the payee. Returning deposits through FGUA billing would ensure that deposits are received by the payees. The following proposed amendment to Section 3.03. (D) of the Transition Agreement, replacing that section in its entirety with the below language, will facilitate the return of customer deposits through FGUA billing: 3.03. (D): As the CCWSD does not collect and retain customer deposits, the FGUA shall credit all FGUA-collected customer deposits as payment against the applicable customers prior to March 1, 2018. If the amount of a customer’s deposit as of the final payment exceeds the amount due on the FGUA’s final billing statement, such amount will be shown as a credit balance or overpayment for such account within the Accounts Receivable ledger. After all customers’ final billing statements, prior to March 1,2018, the cash balance associated with customer deposits held at Wells Fargo Bank under the account name WF CUST DEPOSITS, with the account number ending in 7707, will be transferred to the FGUA’s Golden Gate unrestricted cash account held at Wells Fargo Bank under the name CSH GG REVENUE, with the account number ending in 4102. The FGUA will on the Transfer Date provide to CCWSD the balance of the customers’ accounts as reflected within the Accounts Receivable ledger after application of the final billing statement. FGUA staff and counsel have indicated no opposition to the proposed Amendment and it will be presented to FGUA’s Board for approval at its regular January 19, 2018 meeting. 16.C.3 Packet Pg. 607 01/09/2018 FISCAL IMPACT: There is no fiscal impact associated with this item. LEGAL CONSIDERATIONS: This item is approved as to form and legality, and requires majority vote for Board approval. -SRT GROWTH MANAGEMENT IMPACT: This project meets current Growth Management Plan standards to ensure the adequacy and availability of viable public facilities. RECOMMENDATION: That the Board of County Commissioners, Ex-officio the Governing Board of the Collier County Water-Sewer District, approve the attached First Amendment to the FGUA Utility System Transition Agreement. Prepared by: Peter Lund, Manager, Utilities Customer Service ATTACHMENT(S) 1. Attachment 1: Amendment 1 FGUA 12_2017 (PDF) 2. [Linked] Attachment 2: FGUA Resolution 2017-222 - Agreement - Appendices - Recorded 12_15_2017 (PDF) 16.C.3 Packet Pg. 608 01/09/2018 COLLIER COUNTY Board of County Commissioners Item Number: 16.C.3 Doc ID: 4426 Item Summary: Recommendation to approve First Amendment to the Utility System Transition Agreement between the Collier County Board of County Commissioners, as the Governing Board of Collier County, Florida, and as Ex-Officio the Governing Board of the Collier County Water-Sewer District, and the Florida Governmental Utility Authority to delete and replace Section 3.03. (D) Accounts Receivable; Customer Deposits. Meeting Date: 01/09/2018 Prepared by: Title: – Public Utilities Department Name: Heather Bustos 12/21/2017 9:37 AM Submitted by: Title: Department Head - Public Utilities – Public Utilities Department Name: George Yilmaz 12/21/2017 9:37 AM Approved By: Review: Public Utilities Department Heather Bustos Level 1 Division Reviewer Completed 12/21/2017 9:39 AM Public Utilities Operations Support Joseph Bellone Additional Reviewer Completed 12/21/2017 9:44 AM County Attorney's Office Scott Teach Level 2 Attorney Review Completed 12/21/2017 11:13 AM Public Utilities Department George Yilmaz Level 2 Division Administrator Review Completed 12/21/2017 1:47 PM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 12/21/2017 2:36 PM Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 12/26/2017 9:58 AM Budget and Management Office Mark Isackson Additional Reviewer Completed 12/27/2017 9:26 AM County Manager's Office Nick Casalanguida Level 4 County Manager Review Completed 01/01/2018 10:19 AM Board of County Commissioners MaryJo Brock Meeting Pending 01/09/2018 9:00 AM 16.C.3 Packet Pg. 609 16.C.3.a Packet Pg. 610 Attachment: Attachment 1: Amendment 1 FGUA 12_2017 (4426 : First Amendment to Utility System Transition Agreement CCWSD and FGUA 16.C.3.a Packet Pg. 611 Attachment: Attachment 1: Amendment 1 FGUA 12_2017 (4426 : First Amendment to Utility System Transition Agreement CCWSD and FGUA 16.C.3.a Packet Pg. 612 Attachment: Attachment 1: Amendment 1 FGUA 12_2017 (4426 : First Amendment to Utility System Transition Agreement CCWSD and FGUA 16.C.3.a Packet Pg. 613 Attachment: Attachment 1: Amendment 1 FGUA 12_2017 (4426 : First Amendment to Utility System Transition Agreement CCWSD and FGUA 16.C.3.a Packet Pg. 614 Attachment: Attachment 1: Amendment 1 FGUA 12_2017 (4426 : First Amendment to Utility System Transition Agreement CCWSD and FGUA INSTR 5484249 OR 5458 PG 2984 RECORDED 12/15/2017 3:06 PM PAGES 326 DWIGHT E. BROCK, CLERK OF THE CIRCUIT COURT, COLLIER COUNTY FLORIDA REC $2,772.50 RESOLUTION NO. 2017- 2 2 2 A RESOLUTION OF THE BOARD OF COUNTY COMISSIONERS OF COLLIER COUNTY, FLORIDA, AS THE GOVERNING BOARD OF COLLIER COUNTY, FLORIDA, AND EX - OFFICIO AS THE GOVERNING BOARD OF THE COLLIER COUNTY WATER -SEWER DISTRICT AND EX -OFFICIO AS THE GOVERNING BOARD OF THE COLLIER COUNTY WATER AND SEWER REGULATORY AUTHORITY DIRECTING AND AUTHORIZING THE ACQUISITION OF THE REAL AND PERSONAL PROPERTY OWNED OR UTILIZED BY THE FLORIDA GOVERNMENTAL UTILITY AUTHORITY TO PROVIDE WATER AND WASTEWATER SERVICES IN COLLIER COUNTY, FLORIDA, IN THE GOLDEN GATE COMMUNITY; PROVIDING FOR FINDINGS OF PUBLIC PURPOSE AND NECESSITY; PROVIDING THAT THE ACQUISITIONu,a.TS IN THE PUBLIC INTEREST IN CONFORMANCE WITH SECTIO 1 1: 4W)`LQRIDA STATUTES; PROVIDING AUTHORITY TO COMPLETE T A4 QUISITI0N 1'R DING FOR TERMINATION OF AUTHORITY OF THE FLORIDk� bVERNMENTAL U �;I AUTHORITY TO PROVIDE SERVICE AND INCLUSIO OFA"SERVIC°E ,�, -EAINT CC �LLIER COUNTY WATER - SEWER DISTRICT SERVICE iRE1 , iD P OVII NG�R PPLICABLIITY AND AN EFFECTIVE DATE. BE IT RESOLVED BY M "ABOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, AND IyFICIO AS THE OE1 "BOARD OF THE COLLIER COUNTY WATER -SEWER AND EX-OFFICI i,S THE GOVERNING BOARD OF THE COLLIER COUNTY AND SEEREGULATORY AUTHORITY as follows: s�wE h a SECTION 1. AUTHORITY. Pursuant to Chapter 125, Florida Statutes, and Chapter 2003-353, Laws of Florida, the Board of County Commissioners (the "Board") of Collier County, Florida, and ex -officio as the governing board of the Collier County Water -Sewer District (collectively, the "County") has all of the powers of local self-government to perform County functions and render services for County purposes. Such power includes the authority to provide water and wastewater utility services and to acquire facilities to provide such services within the County. SECTION 2. FINDINGS. It is hereby ascertained, determined and declared: A. The Florida Governmental Utility Authority (the "FGUA") owns and operates a potable water treatment and distribution system and a wastewater collection, treatment and disposal system within Collier County (collectively, the "Golden Gate System"). The Golden Gate System is operated pursuant to Section 163.01(7), Florida Statutes, and the First Amended and Restated Interlocal Agreement Relating to Establishment of the Florida Governmental Utility Authority dated December 1, 2000, as it may be amended (the "FGUA Interlocal"). 1 OR 5458 PG 2985 Prior to its acquisition by the FGUA in 1999, the Golden Gate System was operated by an investor-owned private water and wastewater utility company owned by Avatar Holdings, Inc. ("Avatar"). B. The FGUA acquired the Golden Gate System from Avatar with consent of the County based upon the terms of an interlocal agreement between the FGUA and the County approved by County Resolution No. 99-169/Resolution CWS -99-1 issued on March 9, 1999 (the "Golden Gate Interlocal Agreement"). Section 1 of the Golden Gate Interlocal Agreement reserves to the County the right to acquire all, but not less than all, of the Golden Gate System from the FGUA. C. Section 1(A) of the Golden Gate Interlocal Agreement further provides as follows: "The terms and provisions of such acquisition shall be established pursuant to a utility acquisition agreement between the [FGUA] and the [County], subject to the terms and conditions of the Interlocal Agreementandthe Indenture. Notwithstanding the foregoing and unless otherwise agreed to by ire [County], the purchase price for the x�. Golden Gate Utility Systems e�rihe act ��ed to repay the Bonds and any additional obligations of t o UA] related with Iden Gate Utility System. The - [County] further agrees"to negotiate with the [FGUA] r tl� payment of a pro -rata share of any reasonable, ve ifiedf [F VA expenses at �h e time,of acquisition by the [County]. The [County] shall alsoaq" >vtta11� a�ciatpd with the transfer of the Golden Gate Utility Systtm bye [FCirU tn,e Ko t3']." 3 D. Section 1(B) of the Qoldr kGat *erlbc41A# reemO'ntrav d as follows: "The [FGUA] w. hereby also grants th�oji( aunty] the right to a nme the [I4i�JA's] obligations under the Bonds and the Indenter a f any successor doc t the all pursuant to the terms and conditions set forth in � VII of the Indenture ny such assumption by the [County] shall take place simultanel, %h the tram fe !olden Gate Utility System from the [FGUA] to the [County].'- f,?, r, �,a E. To provide for the public interest and4are, the Board generally is required to address and balance the impacts of growth with the need to provide and plan water production, treatment and distribution facilities and wastewater collection, treatment, disposal and reuse facilities which are necessary to accommodate existing development and anticipated future growth in a manner concurrent with the demand for such facilities. F. Transition of the Golden Gate System to the Collier County Water -Sewer District is consistent with the intergovernmental coordination element of the Collier County Growth Management Plant as such transition represents a cooperative effort between the limited purpose special district, the FGUA, and Collier County in the planning and provision of potable water, reclaimed water and the treatment of wastewater generated by existing and future residents and businesses in the County. Since the Golden Gate Interlocal Agreement was entered by FGUA and the County in 1999, the County has monitored the operation and improvement by FGUA of the Golden Gate System in contemplation of the eventual transition of such System to the Collier County Water -Sewer District. The Golden Gate System currently is surrounded by the Collier County Water -Sewer District's service area. 2 OR 5458 PG 2986 G. Public ownership and control of existing water and wastewater utility systems, including the Golden Gate System, will provide the opportunity for the County to: (1) further develop a regional approach to the comprehensive supply, distribution and treatment of water and the collection, treatment and disposal of wastewater; (2) seek economies of scale resulting from the unified and regional provision of utility services by local government; (3) ensure that current and future users of the Golden Gate System and other County facilities are provided with cost efficient services at reasonable rates by local government; (4) ensure that the operation and maintenance of water and wastewater facilities is done in a proactive and environmentally responsible manner; (5) stabilize rates over the long term, reduce inefficient expansion and extension of service capacities, and avoid the proliferation of smaller treatment facilities and sites; (6) assure the appropriate expansion and interconnection of existing facilities and the construction of future facilities in a coordinated, uniform and non-discrirn tt, manner; (7) promote the protection and environmentally sensitive util q c.vl!aerp,sulies, surface water and groundwater resources in the County and, " ng areas; anti5complish a greater public use and increased public benefit *vha `N°°will result from the op' operation and control of the Golden Gate System b the,�punty H. The provision of water and wastewater-- rvices is a m 'or\component of infrastructure coordination. The pudic+erir} 'c �'°N" Iden date System will enable the County to more effectively Viand Yelfticient fill the County's responsibilities under Florida Statutes to ` � q�� ', cod of fi end water and wastewater utility : services needed to su pot new development are availabte�ncurrent with the impact of 4uisition of the Gel*n �Cif� stem is consistent with the such development. T1 County's comprehensive Ola: I. Based upon the foregoin&,1t e, Board expressly$ ���hat the provision of water and wastewater utility services eMelo%* c inunity by the County constitutes a public purpose and is in the best interests cif the health, safety and welfare of the County and its inhabitants. Further, the Board expressly finds that the acquisition and integration of the Golden Gate System into the Collier County Water -Sewer District is necessary for the fulfillment of the public purpose of providing a County -owned and operated water and wastewater utility, and will provide a greater public use and increased public benefit than the existing use. SECTION 3. PUBLIC INTEREST DETERMINATION OF PURCHASE. In conformance with section 125.3401, Florida Statutes, and Chapter 2003-353, Laws of Florida, the Board has considered the report presented during the hearing from CCWSD staff and retained financial, engineering and legal experts (attached as Exhibit "A" hereto) addressing the following criteria mandated for consideration by the Board with respect to the acquisition of the Golden Gate System: A. The most recently available income and expense statement of the Golden Gate System; OR 5458 PG 2987 C. D. E. F. G. H. I. J. The most recently available balance sheet for the Golden Gate System listing the assets and liabilities and showing the amount of contributions -in -aid -of construction and the accumulated depreciation thereon; A statement of the existing rate base of the Golden Gate System for regulatory purposes; The physical condition of the Golden Gate System; The reasonableness of the amount to be paid and the terms of the Transition Agreement; The impacts of the contemplated acquisition on utility customers served by the Golden Gate System as well as utility customers served by the County, both positive and negative; Any additional investment required and the ability and willingness of the County to make that investment; The alternatives to the contemplated acquisition and the potential impact on utility customers if the Golden Gate System is not acquired; The ability of the County to provide and maintain high quality and cost-effective utility service; and ' A statement prepared by s� f1li tier C x i iter -Sewer District, together with reports from financial an `e eerie experts sli ' d that; 1 the acquisition of the Po �. g Pe � �� () q Golden Gate System Js u`the pubic interest including summary of the County's experience in utility operation", f-2 the Count has th financial ability to provide, now and in the future, high q e services to the Golden Gate COmmuIll ka.r j 3 .,... lxs=a 'rt 5. The Staff Report concludes rccomced�hat� B�,t'find the acquisition o e Golden Gate System by thety to be in the publi�intetest'based upon an analysis of these criteria. SECTION 4. EXERCISE OF RI 'I`0,,PUR.CHASE The�B�ard hereby exercises its right to acquire the Golden Gate System from th6 I- A � ,I s commitment to cause the Collier County Water -Sewer District (the "District�`toTMssue'°Bonds and otherwise render to FGUA such payments as are necessary to refund all of FGUA's existing Series 2010 Bonds, Series 2012 Bonds and Series 2015 Bonds. The County currently intends to refund and redeem FGUA's existing SRF Loans and SunTrust Loan with cash but reserves the right to refund/redeem such Loans through the issuance of other debt of the District. SECTION 5. AUTHORITY TO COMPLETE PURCHASE AND SALE. A Transition Agreement by and between the Florida Governmental Utility Authority, Collier County, Florida, and the Collier County Water -Sewer District (the "Transition Agreement") is attached as Exhibit "B" to this Resolution. The Board hereby approves the form thereof and the Board hereby authorizes and directs the Chair, or the Chair's designee, to execute the Transition Agreement on behalf of the Board in substantially the form of the Transition Agreement attached hereto as Exhibit `B" and to deliver executed copies of the Transition Agreement to the FGUA. The Board further authorizes the Chair, the Chair's designee, members of the Board, officers, attorneys and other agents or employees of the County to do all acts and things required of them by this Resolution and the 4 G•\iZ OR 5458 PG 2988 Transition Agreement, for the full punctual and complete performance of all of the terms, covenants and agreements contained in this Resolution and the Transition Agreement, and each member of the Board, officers, attorneys and other agents or employees of the County is hereby authorized and directed to execute and deliver any and all papers and instruments, asset closing documents, bonds and bond documents, and to do and cause to be done all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution and/or the Transition Agreement. SECTION 6. APPROVAL OF TRANSITION AS EX OFFICIO GOVERNING BOARD OF THE COLLIER COUNTY WATER AND SEWER AUTHORITY. The transition of the assets of the Golden Gate System into the Collier County Water -Sewer District pursuant to the Transition Agreement, having been duly noticed and a hearing held, is hereby found to be in the public interest and approved as of right pursuant to section 134-369(f) of the Code of Laws and Ordinances of Collier County, Florida. Any certificate or- eq ip�previously issued to, or entered with, the FGUA by the Collier County Water, d effective on the date of the completion of the transition of a en Gate Systeii°tq e Collier County Water -Sewer District and the service area oftheGUA related to the Gold Gate System shall become part of the service area of the Collier,. ou ty Nater-Smer-District on ch date. SECTION 7. APPLI construed to affect the ' " 61 olution shall be liberally upon its adoption. ll' OR 5458 PG 2989 PASSED AND DULY ADOPTED at the meeting of the Board of County Commissioners of Collier County, Florida, and acting as the Ex -Officio Board of the Collier County Water -Sewer District and Ex -Officio Board of the Collier County Water and Sewer Regulatory Authority on the 14th day of November, 2017. ATTEST: vy� Attest to a'irman44Y� �.a sipatuftonly � BOARD OF COUNTY COMMISSrONERS""CrF COLLIER COUNTY, FLORH)A, AS THIJ GOVERNING BODY OF COLT,IER COUNT AND EX -OFFICIO BOARD Ola THE C�.dIER - COUNTY WATER -SEWER DISTRICT AND EX T��nB�ARD OF THE CC)LL,IER COUNTY A tRa ._ t SEWER 'OGULATORY,, ON AUTHORITY' qwy: By: " °V� Ap ed as to flpAp d legality:� ns s. tt R. Teach Deputy County Attorney State of Florida County of COLLIER HEREBY CERTIFY '-iATJf1i correct copy of a dQ me qn f11' Board Minutes and:Fcorr-, my Co�JI"puntjl 5 n I�SeaJ this,' h day of DWIGHT E. BROCK, CLERK OF COUfZTS 6 !�-mss--- OR 5458 PG 2990 Exhibit A � d 4 @ A j (3 OR 5458 PG 2991 STAFF REPORT PURSUANTTO SECTION 125.3401, FLORIDA STATUTES TO: Board of County Commissioners Collier County, Florida FROM: Dr. George Yilmaz DATE: October 26, 2017 RE: Public Hearing and Resolution Consid Assets of the Florida Governmental Utility A t RECOMMENDATION: isition of the Water and Wastewater Utility ,system and Establishing Rates Staff of the Collier County Water S6weT tr1 4CC#S ligraCourity, Florida ("County") hereby Presents the Board of Count d"C,,on*tnisioneYs( oac) Ek al.,,rifh0i /)eP rt addressing a proposed Utility System Transition Agreement Tr4hit p`fir' etne Nt,j) rith the orivernmental Utility Authority ("FGUA"). The Transition Agreement contains the proposed terms ofi nveyance to CCWSD of the water and wastewater utility facficomprising the Gold at SYiicurrently owned by FGUA (the "Golden Gate System"). If the Bocfiires to proceed withtthtraction under the presented terms, the Board must adopt Resolution N6�2Q111,,which (a) apprav s heterms of the Transition Agreement and related transfer documents being jserth tMt�e'tollectively, the Transition Agreement and transfer documents will hereafter be` Irerted�to u se Transfer Documents"), (b) directs and authorizes the transition into CCWSD of the real and personal property described in the Transition Agreement comprising the Golden Gate System, (c) establishes the new water and wastewater rates and charges as the same rates and charges applied by CCWSD to its existing customers, (d) modifies the existing CCWSD service area to include the Golden Gate System service area and (e) terminates any pre- existing authorization from the Collier County Water -Sewer Regulatory Authority to FGUA to own and operate the Golden Gate System. BRIEF HISTORY OF FGUA GOLDEN GATE SYSTEM AND COUNTY TRANSITION EFFORTS Collier County has been contemplating the transition of the FGUA System into the CCSWD since 1999 when the owner of the water and wastewater utility then serving the Golden Gate area decided to sell all of the water and wastewater systems it owned, which at that time included the Golden Gate System, to the Florida Governmental Utility Authority. Pursuant to the Florida law applicable to government utility authorities, the FGUA notified Collier County of the potential to purchase the Golden Gate System. The FGUA sought the County's consent to such a purchase. By resolution 199-09 (the "Consent Resolution"), the Board of County Commissioners approved an interlocal agreement with the FGUA (the "Interlocal 1