Staff recommends approval of acceptance of ownership and maintenance of twelve sanitary lift stations in Royal Highlands subdivision.
The original documents (dating from the mid-1990’s) that provided for connection by Royal Highlands subdivision to the City’s sanitary collection and treatment system also required Royal Highlands Home Owners Association to operate and maintain all lift stations except the master lift station at the entrance to Royal Highlands. In addition, a separate agreement required payment of certain presumed operating costs on a monthly basis. The intent was that the developer would bear the cost of operation and maintenance, as well as offset some operating costs of a system that was single-purpose – i.e., provided service only to Royal Highlands subdivision. The agreement also provided that the developer would recover construction costs through a rebate of impact fees on a periodic basis. The City fulfilled this obligation several years ago. The subdivision has been built out and the HOA was conveyed to the residents.
The HOA approached the City some time ago with a request to consider taking over ownership and operations and maintenance of the lift stations in the subdivision. Staff inspected the lift stations and required some rehab and repairs as a condition of acceptance. The Royal Highlands HOA budgeted for the work and completed it in a timely fashion. The contractor they used for the work is one which has also performed work for the City in a satisfactory and professional manner.
Under present-day utility standards, the City no longer allows privately owned subdivision systems to connect to the City’s central sewer system. The reason for this is that such private systems are often poorly maintained and badly operated because of the expense to the residents. In addition, the purpose of the original agreement is no longer valid for two reasons: First, the connection is no longer a single-purpose connection because others have connected in the intervening fourteen years or so; second, the City has, in effect, purchased the lift stations through rebates of impact fees to the developer. Lastly, the City’s wastewater rates are based upon a presumption that the City owns and operates a central sewer system, including lift stations; requiring the HOA to operate and maintain the lift stations effectively causes them to incur excess costs over and above their normal wastewater bills. Arguably, this is unfair to our customers in Royal Highlands.
The City’s liability is the additional cost of operation (primarily electric costs) and the future cost of periodic repair and replacement as the stations go through their normal life cycle. The latter typically calls for pump and motor replacement at approximately fifteen years, with a complete rehab of the lift station at approximately thirty years.
The Royal Highlands HOA has acted responsibly and capably with regard to their ownership and maintenance responsibilities. They have rehabbed and repaired the lift stations to bring them to an acceptable condition; as a result, the stations are in relatively new condition. Therefore, the stations can be incorporated into the City’s routine maintenance system with relatively little cost; the costs that are incurred are offset by utility rate design.
The time is appropriate for the Royal Highlands HOA to transfer ownership of the twelve lift stations to the City. The HOA has prepared legal descriptions for the lift station parcels; these are under review by the City Attorney, including appropriate title work. After recording, these will be formally presented to Commission for acceptance as usual. As is our practice, a formal Warranty Deed and Bill of Sale will also be presented to Commission to formally convey the lift station assets to the City. The purpose of this request is to authorize staff to proceed with these actions to formally convey the twelve lift stations to the City.
1. Authorize staff to accept ownership and operation of twelve lift stations in Royal Highlands subdivision, or;
2. Such alternative action as the Commission may deem appropriate
In the short term, the City will incur additional costs of electric service for the lift stations. This cost will be absorbed by the wastewater fund in its normal operating lines and is offset by wastewater charges to the Royal Highlands customers. Over the longer term, the City will incur repair and replacement costs for the lift stations as they proceed through their normal life cycle. These costs will be funded from Repair and Replacement funds as appropriate.
Department: Environmental Services
Prepared by: R. Sharp
Attachments: Yes____ No X
Advertised: ____Not Required ______
Attorney Review : Yes___ No X
Reviewed by: Dept. Head rss
Finance Dept. _________JB______
Deputy C.M. _________EFS _______
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA AUTHORIZING THE CITY WASTEWATER FUND TO TAKE OWNERSHIP AND MAINTENANCE RESPONSIBILITY FOR TWELVE LIFT STATIONS WITHIN THE ROYAL HIGHLANDS SUBDIVISION; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT City Staff is authorized to accept ownership and operation and maintenance responsibility for twelve lift stations within the Royal Highlands subdivision upon.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _9th____ day of __June______ 2008.