Staff recommends acceptance of the Public Briefing prepared by Boyle Engineering, Inc., relating to the purchase of the water, wastewater and wastewater reuse utility operations at Plantation at Leesburg, as required by §180.301, Fla. Stat. (2006), along with authorization and approval of the purchase of the utilities and execution of the Purchase Agreement attached.
The Plantation at Leesburg operates water, wastewater and wastewater reuse utilities for its residents. The development is nearly built out and the developers wish to sell the utilities.
Staff believes it to be in the best interests of the City of Leesburg to purchase the utilities for several reasons: incorporation of the utilities into the City’s system will facilitate long term improvements of the systems running South along U.S. 27 down to Royal Highlands; acquiring these operations will secure an additional customer base for the City system and the long term revenues associated with the customer base; and the acquisition will also prevent encroachment into the City’s service areas to the South by another utility company which might otherwise purchase these systems and expand them to serve areas outside the Plantation development itself.
After review of the most recent income and expense statements, balance sheets and statements of existing rate base of these utilities, along with an on site inspection of the physical condition of the utility facilities, the City agreed to a purchase price of $12 million, with $4 million down at closing and a deferred payment of $8 million at the end of three years, at an interest rate of 3% payable quarterly, secured by the revenues of the Plantation system only, without creating any lien or encumbrance on other utility revenues of the City and without pledging the City’s full faith and credit or obligating its ad valorem taxing powers.
Staff feels the City has the ability to provide and maintain high quality, cost effective utility service to the Plantation development.
1. Approval of staff recommendation to purchase the utility systems at the price and terms described above and reflected in greater detail in the Purchase Agreement; or
2. Such alternative action as the Commission deems appropriate.
The City is seeking financing by way of a bond anticipation note from a bank or other institutional third party lender, for the $4 million down payment or a significant portion of it. The deferred payment of $8 million at the end of three years is anticipated to come from a larger utility improvement bond issue which in addition to funding the balance due on this transaction will provide revenue to construct substantial improvements to the City’s overall water, wastewater and reuse systems, especially in the South Highway 27 corridor and to serve projected development in the CR 470 corridor.
The City will be required to make the quarterly interest payments from available revenues in each fiscal year, with an anticipated impact of $240,000.00 per year or $60,000.00 per each quarterly interest payment.
Prepared by: ______________________
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________
RESOLUTION NO. ____________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, ACCEPTING AS THE CITY’S STATEMENT UNDER SECTION 180.301, FLORIDA STATUTES, THE PUBLIC BRIEFING DOCUMENT; DETERMINING THAT THE PURCHASE OF THE WATER AND WASTEWATER ASSETS OF THE PLANTATION AT LEESBURG LIMITED PARTNERSHIP IS IN THE PUBLIC INTEREST; AUTHORIZING AND APPROVING THE PURCHASE OF THE WATER AND WASTEWATER ASSETS OF THE PLANTATION AT LEESBURG LIMITED PARTNERSHIP; APPROVING THE WRITTEN AGREEMENT OF PURCHASE AND SALE OF WATER AND WASTEWATER ASSETS, BY AND BETWEEN THE PLANTATION AT LEESBURG LIMITED PARTNERSHIP AND THE CITY OF LEESBURG, FLORIDA DATED JUNE 12, 2006; INSTRUCTING THE MAYOR AND CLERK TO EXECUTE AND DELIVER SUCH DOCUMENTS AND TO TAKE SUCH OTHER ACTIONS AS ARE NECESSARY TO EFFECTUATE THE PURCHASE OF THE WATER AND WASTEWATER ASSETS OF THE PLANTATION AT LEESBURG LIMITED PARTNERSHIP IN ACCORDANCE WITH THIS RESOLUTION.
WHEREAS, the City has the power to provide and regulate waste and wastewater collection and disposal, water supply, and conservation programs pursuant to Florida Statutes and other applicable law; and
WHEREAS, the City has the power to purchase, own, operate and maintain water and wastewater utilities pursuant to Chapter 180, Florida Statutes and other applicable law; and
WHEREAS, the City Commission (“Commission”) has considered the feasibility of purchasing the water and wastewater utility assets of the Plantation at Leesburg Limited Partnership (”Utility System”). In so doing, the Commission has employed engineering, legal and financial consultants to advise and make recommendations, in the form of a Public Briefing Document and other information, to the Commission with respect to the purchase of the Utility System; and
WHEREAS, the Commission has held a Public Hearing and received public comment on the purchase of the Utility System pursuant to Chapter 180.301, Florida Statutes and has determined that the purchase of the Utility System is in the public interest.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
SECTION I: That the Public Briefing Document prepared by Boyle Engineering, Inc. and City staff, which includes a summary of the City’s experience in water, wastewater and wastewater reuse utility operation and a showing of the City’s financial ability to provide such service, is acknowledged and accepted into the record as the City’s statement, as required by Section 180.301, Florida Statutes.
SECTION II: That the purchase, ownership, maintenance and operation of the Utility System is in the public interest and necessary and desirable to maintain and improve the quality of public water supply and sanitary wastewater utility service provided to the residents who live, work, or visit within the City and the businesses that operate within and without the City. In determining that the purchase of the Utility System is in the public interest, the Commission considered information that included, but was not limited to, the following (if applicable):
(1) The most recent available income and expense statement for the utility;
(2) The most recent available balance sheet for the utility, listing assets and liabilities and clearly showing the amount of contributions-in-aid-of-construction and the accumulated depreciation thereon;
(3) A statement of the existing rate base of the utility for regulatory purposes;
(4) The physical condition of the utility facilities being purchased;
(5) The reasonableness of the purchase price and terms;
(6) The impacts of the purchase on utility customers, both positive and negative;
(7) Any additional investment required and the ability and willingness of the City to make that investment;
(8) The alternatives to the purchase and the potential impact on utility customers if the purchase is not made; and
(9) The ability of the City to provide and maintain high-quality and cost-effective utility service.
SECTION III: The Commission hereby authorizes and approves the purchase of the Utility System and further approves the written Agreement of Purchase and Sale of Water and Wastewater Assets by and between the Plantation at Leesburg Limited Partnership and the City of Leesburg, Florida dated June 12, 2006 (“Purchase Agreement”). The Mayor and Clerk are hereby authorized and instructed to execute the Purchase Agreement, a copy of which is attached hereto as Exhibit “A” and incorporated herein by reference, and all documents referenced or contemplated therein.
SECTION IV: The Mayor and the Clerk are further authorized to execute any and all documents, papers or instruments, and to do or cause to be done any and all such other actions advisable or necessary to effectuate the purchase of the Utility System, to carry out the purposes and intent of the Purchase Agreement, to consummate the closing on the purchase of the Utility System, and to enable the City to fully and promptly perform all of its obligations under the Purchase Agreement including, but not limited to, all matters related to the issuance of debt instruments intended to finance the purchase of the Utility System.
SECTION V: This resolution shall take immediate effect upon its passage and approval.
DULY ADOPTED by the City Commission of the City of Leesburg, Florida, this 12th day of June, 2006.
THE CITY OF LEESBURG, FLORIDA
Approved as to form and content:
Lakeutility\Section 180 Resolution 6-01.doc