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HomeMy WebLinkAboutItem III (E) Approval and Authorization to declare Kissimmee Avenue Water Storage Tank Surplus Equipment AGENDA 11-15-94 Item III E 0 ofo. <>1 ,f*or Goo, JAMES W.SHIRR,P.E. CITY ENGINEER/UTILITIES DIRECTOR 150 N.LAKESHORE DRIVE•OCOEE,FLORIDA 34761 (407)656-2322 MEMORANDUM DATE: November 11, 1994 TO: The Honorable Mayor and Board of City Commissioners FROM: James W. Shira, P.E. ,7‘QI City Engineer/Utilities Director SUBJECT: Kissimmee Avenue Water Storage Tank In the past few years, the City Commission has authorized several major improvements to Ocoee's water system to increase efficiency and decrease operating and maintenance costs. Our newest plant, the South Water Plant, was designed to provide water to the rapidly developing southern part of the city as well as the area previously served by our oldest plant, the Kissimmee Avenue Plant. The South plant, with its 600,000 gallon storage tank, is now providing a higher quality water than the Kissimmee plant did, with improved volume and pressure. Before taking the Kissimmee Avenue plant off-line, we asked Professional Engineering Consultants, Inc. (PEC) to perform a computer analysis of our water system to determine whether the system's performance would suffer without the Kissimmee plant. The results of their computer analysis were confirmed by our own field testing of the system before and after the Kissimmee plant was taken off-line. We found that the quality and delivery of water throughout the system is actually improved with the Kissimmee plant off-line. We now need to remove the 250,000 gallon elevated storage tank at the Kissimmee plant so that we do not spend any more money to maintain this 27 year old structure. This tank is no longer required for the operation of the water system, and if it remains in place, it will become an increasing maintenance burden. Our auditors have determined that the tank is fully depreciated, and thus has no salvage value. In order to determine the fair market value of the tank, PEC contacted three firms which specialize in the removal of these tanks, and as stated in Mr. Hooper's attached letter, none of the three firms expressed an interest in acquiring our tank at this time. It appeared from his conversations with these firms, that the City would probably not net funds from the sale of the tank. I contacted the cities of Altamonte Springs, Apopka, Casselberry, Kissimmee, THE PRIDE OF WEST ORANGE C Longwood and Orlando, as well as Orange County to find out what value they might have received for tanks taken out of service. Of those agencies which had taken a tank out of service, none were able to net funds on the disposal of a tank. General experience for these agencies has been that it costs money to have a tank removed. However, contrary to experience in the area which indicates a low probability of selling our tank at a profit, I have received inquiries from two agencies, both of which happen to have an immediate need for a 250,000 gallon elevated tank. The first inquiry was from Florida Community Services Corp. (FCSC), a regional utility in Walton County, Florida. The second inquiry was from Pittsburg Tank & Tower Co., Inc. (PTT) a private company engaged in the sale, demolition and installation of new and used tanks. I requested that both agencies submit a sealed offer to me for consideration by the City Commission. I contacted Mr. Randy Hanna, with Bryant, Miller & Olive, our bond counsel for the Series 1993 Water and Sewer System Refunding and Improvement Revenue Bonds. Mr. Hanna confirmed that Section 5.08 of City of Ocoee Resolution 93-02, which authorized the issuance of these bonds, allows for parts of the system to be sold or disposed of, for fair market value, provided that the Consulting Engineer (PEC) certifies in writing that the part of the system in question is not necessary for the continuing operation of the system, and that its disposal will not adversely affect revenues. This written certification is contained in the attached letter from Mr. Ken Hooper. In summary, the Kissimmee Avenue elevated water storage tank no longer serves as a useful part of the City of Ocoee water system, and should be disposed of as soon as possible to avoid additional maintenance costs. The market value for tanks such as this is usually zero, and the City has an unusual opportunity to net funds on the sale of the Kissimmee Avenue tank. I recommend that the City Commission take the following actions: 1. Declare the Kissimmee Avenue elevated water storage tank to be surplus equipment. 2. Accept the highest written offer for the removal of the tank, subject to the offerer's provision of satisfactory proof of liability insurance. WP6OXDO(Syasse p9Nov94\ PEC PROFESSIONAL ENGINEERING CONSULTANTS, INC. November 10, 1994 0E-215 1-1.0 Mr. Jim Shira, P.E. City Engineer City of Ocoee 150 North Lakeshore Drive Ocoee, Florida 34761 Dear Mr. Shira: As requested, we have reviewed the computer hydraulic modeling for the City's potable water distribution system entitled "City of Ocoee Water System Hydraulic Model, Phase II Results, October, 1993". The purpose of the review was to determine the flow characteristics of the City's distribution system with the Kissimmee Ave. Elevated Storage Tank isolated from the distribution system. It is our understanding that the City wants to determine if the Kissimmee Ave. Elevated Storage Tank can be declared surplus and removed according to City policy and procedure. The Cybernet Version 2.08 Hydraulic Model for the City of Ocoee consists of 149 pipes, 110 junction nodes, and 4 (four) pressure sources. The system was modeled as follows: 1. Forest Oaks WTP serving the northeast service area 2. Jamala WTP serving the north central service area 3. Kissimmee Avenue WTP serving the south central and southwest service area 4. South WTP serving the south service area The existing Kissimmee Avenue Water Plant essentially consists of 1 (one) high service well, fluoridation and disinfection equipment, and 1 (one) 250,000 gallon elevated ground storage tank. The tank was constructed and placed into service in 1967. Based on our review of the report, we offer the following regarding the hydraulic need for the existing 250,000 gallon steel elevated storage tank at the Kissimmee Ave. Water Plant. The City can remove from service the Kissimmee Ave. well and elevated storage tank, without adversely impacting the City's ability to provide potable water and fire protection service. The hydraulic modeling indicates fire flows in some areas of the City's distribution system are actually enhanced with the elevated tank off-line from the water distribution system. We have also reviewed the Official Statement for the City's 1993 Bond Issue and note that removal of the Kissimmee Ave. Elevated Tank will not Mr. James W. Shira, P.E. 0E-215 City of Ocoee Page 2 diminish the water revenue of the water system and the elevated tank is not necessary for the continued efficient operation of the water system. We also reviewed our bond notes for the insurance presentations and conclude the rehabilitation or removal of the elevated storage tank was discussed and defined. We suggest that the City's Bond Counsel or appropriate financial consultants review this item to ensure compliance with the bond covenants for the Series 1993 Water and Sewer Revenue Bonds. We have contacted several contractors concerning an estimate of the value of the existing elevated tank. Those contacted include Eagle Tank in Jacksonville, FL., Water Tower Demolition in Warren, MI., and Carter and VerPlanck, Tampa, FL. Based on the input from these corporations, there appears to be a very low value associated with elevated tanks of this size, age, and condition. It appears that the City may not net capital funds from the sale of the elevated tank and may only recover the cost of demolition and removal. The City's policies and procedures for the release of surplus equipment will determine the final value of the elevated tank. Also, as we have recently indicated, the Updated City-Wide Water Master Plan shall be completed and presented to the City Staff for review and comment no later than December 9, 1994. Very truly yours, PROFESSIONAL ENGINEERING CONSULTANTS, INC. CW Kenneth R. Hooper Vice President KRH/KA S/OCOEE/KI S STANK.l@ cc: Ellis Shapiro, City Manager Montye Beamer, Director of Administrative Services Tom R. Kelley, P.E., PEC David W. Hamstra, P.E., PEC