Loading...
HomeMy WebLinkAbout11-23-87 SS . MINUTES OF THE SPECIAL SESSION OF THE CITY COMMISSION HELD ON NOVEMBER 23, 1987 Mayor Ison called the meeting to order at 7:45 p.m. PRESENT: Mayor lson; Commissioners Johnson, Dabbs, Bateman, and Hager; City Manager Ryan; City Attorney Kruppenbacher; City Clerk Catron; City Planner Wagner; City Engineer Kelley; and Special Legal Counsel Andrew Thomas. PUBLIC HEARING ACQUISITION OF PRIMA VISTA UTILITIESS Roger Freeman, 151 W. Silver Star Road wanted to wish the Commission the best of luck with the acquisition of Prima Vista Utilities. Mr. Freeman had been involved in helping the City get into the sewer business since 1980. City Attorney Kruppenbacher stated that since last Monday's meeting, he had reviewed the Purchase and Sale Agreement and Developer's Agreement, as well as the items from Mr. Ade, Mr. Cohen, and Andrew Thomas. He stated that he did not have a problem with the deal and they had the legal authority to proceed. If they desired to proceed with acquisition, then before they made a motion, he would take them through the necessary steps per the Florida Statutes Chapter 180. e Commissioner Dabbs asked City Engineer Kelley for a summation of the engineering details regarding the sewer acquisition. Mr. Kelley said the system was in relatively good repair but that it was an old system and would need some repairs. Mr. Kelley said the estimated cost of those repairs would be about Sl,700,OOO.00 not counting maJor expansions. Stanley Cohen, special financial consultant, factored those costs into the financial feasibility study. Mr. Kelley said the sewer system was not a sophisticated system as far as treatment technology was concerned. Commissioner Bateman asked Special Legal Counsel Andrew Thomas and City Attorney Frank Kruppenbacher specific questions about the financial aspects of the documents. Mr. Cohen had previously told Commissioner Bateman that the City did not stand to lose money by acquiring the sewer company. Attorney Kruppenbacher would not comment on the financial aspects because of a conflict of interest but did say that the document was legally correct. . Commissioner Bateman also asked about page seven, item six, paragraph four which mentioned that certain mandatory requirements would be required of the City to construct additional facilities. City Manager Ryan said the City was required to build the plant that was already permitted for and that the City would have to grant connections to those developers who had already been involved in the new plant. Commissioner Bateman said he did not like the fact that the City was being required to do certain things with the system. 1 J e Page 2 City Commission Meeting November 23, 1987 He said once the City acquires the system, he felt the Seller should not be able to tell the City how to run it or what to do with it. e Commissioner Bateman also was unsatisfied with the language of the contract on page 20, where it mentioned that the Seller would have veto power for 15 years over the hiring of any engineers by the City to work on the system. Commissioner Bateman thought the idea of a cash settlement up front was to get the Seller out of the picture, rather than paying the payments in installments and allowing the Seller to hold some control over the system. Attorney Thomas said the attorneys for the City did not like this statement of the contract either but that the decision to take it out o~ the contract was a business decision and there~ore was up to the Commission to deal with. City Engineer Kelley asked for clarification of the statement and asked if that part of the contract was meant to be taken that literally or whether the language Just made it seem that way. Commissioner Dabbs said that the Commission needed to look at the document in its entirety and see if all the changes and settlements made by both sides presented a document that was favorable. He said the decision should weigh all the factors and in this case, whether or not the Commission could live with that particular part of the document, or whether it was important enough to keep the Commission from approving the agreement. Commissioner Bateman also addressed two sections of the agreement that mentioned attorney fees. He said page 23, paragraph 18, said that the City of Ocoee would agree to pay all reasonable attorney fees incurred by the Seller and page 24 said that if the City of Ocoee did not concur with reasonable fees, any disagreements regarding fees would need to be taken to a court of law. Commissioner Bateman asked why the exact amounts of attorney fees were not spelled out in the agreement, since both sides had good estimates of what the fees were to date. City Manager Ryan said the Seller had agreed to a cap and that the Commission could decide if it wanted to require this figure in the contract. Mayor Ison gave a summary of Commissioner Bateman's concerns with the agreement. He said the areas included tapping fees (page four), how the cash was to be delivered (page five), the obligation to build certain facilities (page seven), the veto power given to the Seller regarding the hiring of engineers (page 20), and the issue of attorney fees (pages 23,24). e 2 -- Page 3 City Commission Meeting November 23, 1987 Commissioner Dabbs had questions on the document he was given but it was not the latest copy and his concerns were all incorporated in the latest document. RECESS: 8:50 p.m. CALL TO ORDER: 9:05 p.m. e City Attorney Kruppenbacher said he spoke with the Seller during the recess concerning the issues that were raised by Commissioner Bateman. Attorney Kruppenbacher said the Seller would not change its position regarding the tap in fees. He said the Seller would require that the $4 million purchase price be arranged by wiring the funds. The issue of the City's obligation to build certain facilities was clarified by the Seller and the Seller said as long as connections were given to those who were promised them, the Seller did not place any further restrictions on construction of facilities. The Seller was not willing to change its position on the issue of veto power on engineers the City hired to deal with the system. City Attorney Kruppenbacher said the final issue regarding a cap on attorney fees could also be added to the agreement and the Seller agreed to a $450,000.00 cap, subJect to providing actual invoices. Barry Goodman said they would try to keep the figure as low as possible. Mayor Ison said the issue of veto power the Seller would hold over the City for 15 years might change after the agreement was signed. City Engineer Kelley asked for clarification of the intent of the language in regards to the veto power. City Attorney Kruppenbacher said that legally the document would allow the Seller to veto any engineering firm that would have anything to do with the sewer system for a period of 15 years. City Engineer Kelley asked if the Seller would qualify what the language said. City Attorney Kruppenbacher said the Seller did not want to comment on the issue and that the Seller wanted to keep the language as broad as it was. City Manager Ryan said the language was placed in at the request of the Seller but had been modified to be generic. The Seller did not want to have PEC do any of the work. e Mr. Kelley had no argument with being named in the contract if the City wanted to change the language from having a veto power to denying any contract work to Engineer Kelley, his firm, or any other firm he held a financial interest in. Mr. Kelley said he was proud of his firm and would be proud to be named in the contract to be excluded from work on the system and he would not hold it against the City in any way. Mr. 3 I ~ e Page 4 Special Session Commission Meeting November 23, 1987 Kelley did dixxicult disposal. mention that he thought the City time xinding engineers who dealt would with have a exxluent City Attorney Kruppenbacher said ix the City was interested in pursuing the agreement, the Mayor and Commissioners would have to make sure it was in the public's best interest, and would have to answer nine questions in the axxirmative: Have you reviewed the xollowing?: 1. The most recent available income and expense statement for the utility Commissioner Hager - yes Commissioner Bateman - no Commissioner Dabbs - yes Commissioner Johnson - yes e 2. The most recent available balance sheet for the utility, listing assets and liabilities and clearly showing the amount ox contributions-in-aid-of-contribution and the accumulated depreciation thereon Commissioner Hager - yes Commissioner Bateman - no Commissioner Dabbs - yes Commissioner Johnson - yes 3. A statement of the existing rate base ox the utility for regulatory purposes Commissioner Hager - yes Commissioner Bateman - yes Commissioner Dabbs - yes Commissioner Johnson - yes 4. The physical condition of the utility facilities which would or may be acquired Commissioner Hager - yes Commissioner Bateman - yes Commissioner Dabbs - yes Commissioner Johnson - yes e 4 e Page 5 Special Session Commission Meeting November 23, 1987 5. The reasonableness of the purchase or sales price and terms Commissioner Hager - yes Commissioner Bateman - yes Commissioner Dabbs - yes Commissioner Johnson - yes 6. The impacts of the acquisitions on utility customers, both positive and negative Commissioner Hager - yes Commissioner Bateman - yes Commissioner Dabbs - yes Commissioner Johnson - yes 7. Any additional investment required and the ability and willingness of the City to make that investment e Commissioner Hager - yes Commissioner Bateman - yes Commissioner Dabbs - yes Commissioner Johnson - yes 8. The potential not made alternatives to the purchase or sale and the impact on utility customers if the acquisition is Commissioner Hager - yes Commissioner Bateman- yes Commissioner Dabbs - yes Commissioner Johnson - yes 9. The ability of the City to provide and maintain high- quality and cost-effective utility service. Commissioner Hager - yes Commissioner Bateman - yes Commissioner Dabbs - yes Commissioner Johnson - yes City Attorney Kruppenbacher said for the record, the City has prepared a statement that said the acquisition of Prima Vista Utilities was in the City's best interest. This conclusion was based on the testimonies of Mr. Cohen and Mr. Kelley. e Mayor lson moved that the Commission agreed that it was in the public's best interest to aquire Prima Vista Utilities, Commissioner Bateman seconded, and approval was unanimous by 5 e Page 6 Special Session Commission Meeting November 23, 1987 roll call vote. Commissioner Hager moved to acquire Prima Vista Utilities subJect to revisions to the Purchase and Sale Agreement by Special Legal Counsel Andrew Thomas, Commissioner Johnson seconded, and approval was unanimous. e Commissioner Bateman moved to amend the motion to approve the Purchase and Sale Agreement with the deletion of paragraph 13 on page 20 regarding engineers. City Attorney Kruppenbacher said the first motion took care of that because it was worded "as revised". Commissioner Bateman said he wanted to hear from Barry Goodman that he verbally agreed to the changes discussed on this part of the document. Attorney Steve Fieldman said on behalf of Prima Vista Utilities, he agreed that the language could be changed to have engineers refer to Professional Engineering Consultants, Inc., Mr. Tom Kelley, or any other firm Mr. Kelley held financial interests in. Commissioner Johnson seconded Commissioner Bateman's motion to delete paragraph 13 on page 20 for the purpose of discussion. Commissioner Johnson said he did not want to see a stalemate on the agreement because of a disagreement between two other parties. He said he would vote for the agreement as it was, but that he was disappointed that it had to come to this. Mayor Ison said that the agreement went beyond this one paragraph and that it was a concern for him, but that it was not one that was going to stop the proJect as far as he was concerned. He said when he put it in context, he did not have such a problem with it. Commissioner Bateman said for the record that there was not a person in the City of Ocoee who had supported getting into the sewer business any longer than he had. He said he supported the idea, but that he found it impossible to think that tonight was the first time he heard of the feud between Barry Goodman and Tom Kelley. He said the main point was that after the City bought the company, the company could still tell the City how to run it and what to do with it and that really bothered him. e City Engineer Kelley reiterated that he did not want to be an obstacle in this process and that he was proud of his company and of the work they had done and would hold the City harmless if it wanted to mention him and/or his firm in the contract. Mayor Ison asked Mr. Kelley if he would draw up a letter of intent to hold the City harmless and Mr. Kelley said yes. Commissioner Bateman then said that if 6 e Page 7 Special Session Commission Meeting November 23, 1987 Commissioner Johnson approved. Commissioner Johnson approved. he would withdraw his motion. Commissioner Hager said that there had to be some give and take and that in negotiations, there would never be a perfect document in everyone's eyes. He said that he thought it was for the betterment of the City that the City control the sewer system. He said he was not satisfied or happy with paragraph 13, and that he was not happy that personal feelings were entering into the City's business, but that he agreed with the Mayor that it was necessary to look at the entire picture. e Commissioner Dabbs said that this was an historic occasion that people should take note of. He said he believed that the City was on the threshold of an era of good feeling with economic opportunity. He said this agreement was not perfect and that it protected both sides so neither party was irrevocably harmed. He said he was proud to be a part of the decision and that morally and ethically he thought it was right. He also said he would have preferred that personal anamosities not be involved, but that he was proud to say he would vote for the agreement and felt it was the closest to a "win-win" situation as they could get. Mayor Ison said it was a matter of principal whether the system was acquired through an agreement or by condemnation. He said for practical purposes the City decided to go the route of coming to an agreement. He said the agreement was not a perfect document but that neither was the Constitution of the United States, it was still being amended. The Mayor was more concerned with providing capacity for commercial and residential development. He said he would support the agreement and was willing to take any criticisms that followed. He said the Commission would long hear the negatives but would long also see the positives (growth). Mayor Ison reread the motion to acquire Prima Vista Utilities. Commissioner Johnson, Commissioner Dabbs, and Commissioner Hager all voted to accept the agreement. Commissioner Bateman voted against the agreement indicating that he refused to vote for a contract that discriminates against any individual or company. . For the record, Mayor Ison asked Commissioner Bateman if he was in favor of acquiring the sewer company. Commissioner Bateman said that he was definitely in favor and had come there wanting to vote for the agreement, but was hit with personality conflicts that prevented him from doing so. 7 e Page 8 Special Session Commission Meeting November 23, 1987 A roll call vote was then t~ken. Commissioner H~ger said he was for the acquisition and for signing the agreement, Commissioner Bateman said he was against, Commissioner Dabbs said he was for, Commissioner Johnson said he was for, and Mayor Ison said he was for. Mayor Ison asked the attorneys when the documents would be revised and ready to be signed. Attorney Kruppenbacher asked Attorney Thomas when he thought the documents would be ready and Mr. Thomas said probably by November 25. The closing would take place sometime in mid- December. DISCUSSION AND DIRECTION TO CITY STAFF REGARDING WASTEWATER SYSTEM OPERATIONS e City Manager Ryan said the City had several options regarding the operations of the wastewater system. He said the City could hire the present personnel indefinitely or for a probationary period; contract the operations out to a private enterprise; or establish a utility commission. City Manager Ryan reminded the Commission that the operations must be managed by someone who was licensed in the State and that the City's Water Department Supervisor, John Cockrell, was not yet qualified for that position. City Manager Ryan said the Staff recommended that the City hire certain members of the present Prima Vista Utilities staff in order to assure a smooth transition period. Everything would operate as usual but under new management. e Barry Goodman said he was concerned with what to tell his employees and wanted to hear something from the City to give him an indication of what was going to happen. Mr. Goodman was especially concerned about the City's plans in regards to Ned DeMarce. City Engineer Tom Kelley and City Manager Ryan agreed that it was in the City's best interest to keep Mr. DeMarce as an employee at least for a probationary period if he was willing. Mayor Ison also agreed that it was in the City's best interest to continue on with the company's present staff, at least for the time being. Mayor Ison said the City could then evaluate if it needed additional staff, or if there should be any cross-training, but that he felt the City could keep the operations inside rather than consulting out for services. Commissioner Dabbs said that he was not interested in making any long range plans with the present Prima Vista employees. He said he would agree to a short term, but that he felt new staff was needed. Commissioner Dabbs also said he thought that ultimately a Utility Commission and/or City operated system would be the best ways to go. Commissioner Hager said he agreed with Commissioner Dabbs. Commissioner Bateman said he was in 8 I ~~~J - Page 9 Special Session Commission Meeting November 23, 1987 favor of a City operated system with the idea that somewhere down the road, there would also be a Utility Commission. Commissioner Johnson said he was still waiting for information on Utility Commissions from City Attorney Frank Kruppenbacher. Commissioner Johnson also said that he agreed with the transition and with keeping the present employees for a probation period of 30-60 days. A workshop was scheduled for Wednesday, December 2, to discuss the operations of the system further, followed by a Special Session in case a policy decision needed to be made. Item four was removed from the agenda and City Kelley said he would present the material at the Commission Meeting on December 1. Engineer regular ADJOURNMENT: 10:30 p.m. _:1Lz__L_________ MAYOR e ATTEST: CITY CLERK e 9