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Home My WebLink AboutVII (G) Request to adopt Amendments to Ocoee/Orange County Utility Service Area Agreements Agenda 2-06-2001 Item VII G 'EATER GOOR LII'ANO-l/ZIDI'.OF I{'ESTOR:IM;L.. MAYOR IOMMISSEON FR Ocoeo S_SC011 VANDIiRGRII"I' O< F � H3 CITY OF OCOEE �"1�,>RR� ►,r �..i DANNY uOWELL Q 150 N. LAKESHORE DRIVE Scul l nV Pr'RSO;J OCOEF, FLORam 34761 2258 t � RUSTY 1(IIIM1SOR "4. ��` (407)905-3100 NM( V J.PARKER e.Of GOOD�� Ac1w, U INI NA(IR JIM UI.P.ASON MEMORANDUM DATE: January 26, 2001 TO: The Honorable Mayor and Board of City Commissioners FROM: James W. Shira, P.E., City Engineer/Utilities Director Q SUBJECT: Utility Service Territory Amendment a In the late 1980's the City of Ocoee and Orange County entered into two utility service territory agreements, one for water, and one for wastewater. Over the years, the water agreement was amended once and the wastewater agreement was amended twice to change the boundaries of the respective service territories. On February 15, 2000 the Ocoee City Commission approved the Second Amendment to the water agreement and the Third Amendment to the wastewater agreement. The purpose of these proposed amendments was to bring one parcel of land into Ocoee's utility service territory, and provide a mechanism for small adjustments to be made in the future without the need for each adjustment to go before both the City Commission and the Orange County Commission. This parcel is shown on the attached map as Parcel 1. The amendments were then to be approved by the Orange County Commission, but the County Commission failed to take that action because of their objection to Ocoee's requirement for a surcharge on non-resident customers. Recently, Orange County and the Orlando Utilities Commission settled a similar impasse with an agreement by OUC to reduce their surcharge amount from 25% to 20%, and then to further reduce it by 1% per year over five years to 15%. All of the foregoing was a result of our intent to move a single parcel of land from the County's service area to the City's. This action was supported by staff from both the County's and the City's utility departments. In the time since last February, several other tracts of land have been purchased, or have been proposed for development, and these actions have all affected our utility service territory needs. The locations of ese properties are all shown on the attached map. Powers First, we purchased the Coke property. Although this property has always been in our utility service territory, the construction of the Western Beltway effectively severed the majority of the Coke property from the Ocoee water and wastewater system. There is a large tract of land immediately north of Coke that is proposed for development, and this parcel is within Orange County's service area and will be served by Orange County's utility system. Due to the proximity of the two tracts, and the difficulty we would have providing service across the Beltway alignment, we believe it would be more effective for the County to extend their services a bit further south to serve the Coke property, and County staff agrees. There are two tracts in the north part of the city that are proposed for development, and both of these tracts are split by the utility service territory line. Since the majority of each of these parcels is in the County's service area, it makes sense to allow the remainder pieces to also be served by the County. To that end, we have shown on the enclosed map that these remainders are to be transferred from the City's territory to the County's. There is a tract of land lying south of Clarcona-Ocoee Road which is currently in the County's area, but which makes an ideal route for us to construct part of a water main loop from Clarke Road westward to our existing system. We have discussed this with County staff, and they agree that this parcel should be transferred from the County's service area to the City's. We have shown this transfer on the enclosed map. Finally, we have had several discussions with Health Central representatives regarding their long-term expansion plans. They hope to acquire much of the area along Old Winter Garden Road lying east of the current hospital site for future expansion. While the existing hospital is served by the City, the "future expansion area" is in the County's service area. County staff agrees that since it is to become part of the hospital complex, this future expansion area should become part of the City's territory. They do not, however, want to discontinue service to their current customers until the properties are acquired by the hospital, and we agree. This area then, is shown on the map as being transferred from the County's area to the City's, but there will be language in the Amendment that describes the maintenance of existing County services until such time as the various parcels are acquired by the hospital. Since February of last year, we have had several discussions with County staff and elected officials to determine what might be done in order to remove the County's objection, and allow the proposed territory transfers to occur. County staff concluded that if Ocoee would agree to the same reduction in the surcharge as OUC agreed to, the County Commission would probably be amenable to the proposed amendments. To that end, we examined our billing records to see what financial impact there would be from a surcharge reduction. We have 54 County residents who are served by OmerVticrftr : res zr. Ocoee's water system. These customers are all on residential meters, and pay a 25% surcharge on both the base rate and on consumption. The total revenue attributable to the 25% surcharge on the base rate amounts to an average of $103.14 per month, and the total revenue attributable to the 25% surcharge on consumption amounts to an average of $50.22 per month. The current 25% surcharge therefore results in a total average monthly revenue of $153.36, or $1,840.32 per year. This revenue attributable to the 25% surcharge represents less than one tenth of one percent of the total water utility fee revenue we expect to receive this year. If we were to reduce our surcharge to 20%, the annual revenue would drop from an average of $1,840.32 to an average of $1,472.26, for an annual revenue reduction of $368.06. Further reduction of the surcharge by 1% per year would result in a reduction of revenue of $73.61 per year. At a 15% surcharge, we would collect an average of $1,104.19 per year, or $736.13 less than we now collect. This is a total loss of less than five hundredths of one percent of our total expected water utility fee revenue. Because the impact to our projected revenue is so slight compared to the benefit to each system offered by the proposed service territory revision, we believe that the City should offer to reduce our surcharge to 20% and then to 15% at 1% per year, if the County will agree to execute the documents required to effect the changes to the service territory as shown on the attached map. If the City Commission agrees that this is the appropriate course of action, I would suggest that staff be directed to prepare the necessary ordinance revisions to effect the surcharge reduction, and to prepare the appropriate service territory amendments. These would then be adopted by the City Commission, to become effective only upon subsequent approval and adoption by the Orange County Commission. JWS/jbw Attachment POW 8 • o � .. 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