Item 8E - Amend to ABCC Master AgreementAGENDA ITEM:
SUBMITTED BY :
DATE:
STRATEGIC PLAN LINK:
BACKGROUND:
CITY CO MMI SS ION MEETING
STAFF REPORT
AGENDA ITEM II 8E
APRIL 13,2015
Proposed Amendment to the Atlantic Beach Cou ntr y C lub Master
Agreement.
Ne lson Van Lic rc, Ci ty Manager @_
Ma rch 23, 20 I 5
Priorit y 2, Golf Co urse
As repo rted to th e Co mmi ss ion upon the adop ti on of the reu se rate s per ordinan ce fl. H0-14 -85 on July
I 4, 20 14 , the City would need to amend the Master Agreement with the Atlantic Beach Cou ntry C lub
(A BCC) to adop t those rates. T he rat es adopted were mark et ra tes set to e ncourage the usc of th e
rec laimed water vers us a cost ba se d rate that wo ul d likely discou ra ge use. The re use water rates
adopted J-or t he residentia l and commercia l customers we re set at 75% of the potable water rates. Th e
City also adopted a mark et ra te for bulk users of .30 per thousan d ga llons ba sed o n th e rates of oth er
reu se provid ers in our a rea.
The approved Ma ster Ag ree ment with the ABC C required the City to calc ulate the rates based on
projec ted reclaimed water use by all use rs and estimated operating cos ts for each yea r. This provi sio n
is not feasible or de si red for many reasons. Pirst, the cos ts associated with rec laim ed water treatm ent
are not iso lated. Ope rating costs suc h as electri city, chemicals, labor a nd mainten ance arc not ab le to
be sepa rate ly tra cked for reclaimed wate r. The usc of engineering es timate s and assump tions to
de termin e those costs co ul d lead to ques tions and di sagree me nts. Second, opern tin g cos ts would
fluctuat e dep ending on the vo lume of recl a im ed water used, major eq uipm e nt repair s, and c hanges in
supply cos ts resu lt ing in erratic and unpredictable bill s to the cl ub . Third, th e cos t allocations to the
club wou ld s tart high and be red uce d by the homes added to the system, a t a rat e that wo uld be
unpredi ctable an d d ifficult to calculate. Rec laimed water use is hi ghly dependent on the amo unt of
rainfa ll , tempe rat ure a nd other va ri able s.
To avoi d these issues, we have determined that a market rate is the only feasib le way to bill fo r bulk usc
by the golf course.
Ear ly es tim ates of the t·euse need s fo r the AB CC were 40 0,000 gallons per day on average. At $.30 per
I ,000 ga llons, thi s would generate approximately $43,800 in annual revenue . In additi on, per the
Mas ter Agreement, the AB CC was to rece ive a 50% discount for prov idin g t he Re crea tion and
Greenspace Easement . A d isco unt of 50% wou ld reduce the amount to approximntely $22,000 if the
usage was 400 ,000 per clay. More re ce nt modeling by t he AB CC sugges ts t hat th ey may onl y need
260,000 ga ll ons pe r day.
fn an effort to accommodate the AB CC and provide reuse at a market rate tak in g into m.:co un t th e
Recreation and Grccnspace Easement , the AB CC and the C ity ag ree to util ize th e rates adopted by the
City and app ly a di sco unt of $.06 per I ,000 gallons, which is 80% of th e c m rc nt bu ll< mte. This rate
AGENDA ITEM# 8E
APRIL 13, 2015
will provide the revenue both the ABCC and the City had estimated to go towards recovering the City's
operating cost.
The City agrees to charge the ABCC the discounted rate of $.24 per 1,000 gallons. To further protect
the City if the projected reuse volume is not used, the ABCC agrees to pay the City a minimum of
$22,500 on a fiscal year basis.
Also, not included in the otiginal agreement, the City will receive the base rate for each connected
resident to off-set the operational overhead costs. The original agreement only contained a volume rate.
BUDGET: For future years, the City will budget at least $22,500 in reuse revenues from the
Country Club. Budget for the residential revenues will be determined as homes
are added to the system and will be generated from a base and volume charge as
adopted by the City Commission with Ordinance 80-14-85.
RECOMMENDATION: Approve the Mayor to sign the amendment to the Master Agreement
between the city of Atlantic Beach, Florida and The Atlantic beach Country Club
Atlantic Beach Partners, LLC.
ATTACHMENTS: Amendment to the Master Agreement between the City of Atlantic Beach,
Florida and the Atlantic Beach Country Club, Inc. and Atlantic Beach Partners,
LLC.
Excerpts from the original agreement affected by this amendment.
AMENDMENT TO THE MASTER AGREEMENT BETWEEN
THE CITY OF ATLANTIC BEACH, FLORIDA
THE ATLANTIC BEACH COUNTRY CLUB, INC. AND
ATLANTIC BEACH PARTNERS, LLC.
AGENDA ITEM # 8E
APRIL 13, 2015
WHEREAS, the City of Atlantic Beach, Florida, the Atlantic Beach Country Club, Inc.
and Atlantic Beach Partners, LLC. (hereinafter "the parties") entered into a Master Agreement
on or about November 7'1\ 2013, relating to the redevelopment of real property known as the
Atlantic Beach Country Club; and
WHEREAS, Section 8.6 of the Master Agreement provides for the amendments as set
forth herein; and
WHEREAS, the parties now wish to amend the terms and conditions relating to the
calculations of reclaimed water rates pursuant to the amended terms and conditions hereinafter
set fmih.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration, the legal sufficiency of which is
hereby acknowledged by the parties, the parties agree as follows:
SECTION 1. RECITALS. The above recitals are true and correct, are
incorporated as if fully set forth herein, and form a material part of this Agreement upon which
the parties have relied.
SECTION2. AGREEMENT AMENDED. Sections 5(g) and 5(g)(i) of the
Master Agreement are hereby deleted (see pages 17-19). The amended terms and conditions of
Section 5(g) shall be incorporated into the Master Agreement and shall read as follows:
SECTION 5. RECLAIMED WATER TO BE USED FOR IRRIGATION.
g. CHARGE FOR RECLAIMED WATER USE. The COAB established
reclaimed water charges and rates pursuant to Ordinance No. 80-14-85. The COAB may amend
the rates in the future.
i. The Golf Course Property. In recognition of the terms and conditions of
the Agreement, in consideration for the Country Club agreeing to enter into the Recreation and
Greenspace Easement, and in consideration ofCOAB building the reclaimed water portion of the
COAB Water System, the rate the Country Club will be charged for use of all Reclaimed Water
shall be calculated based on 80 percent of the bulk rate as specified in Section 22-365 of the
COAB Code of Ordinances. The Country Club will guarantee a minimum payment of $22,500
annually for the use of reclaimed water, which reflects approximately 260,000 gallons of
reclaimed water use daily at 80 percent of the bulk rate in effect on the date of this agreement.
AGENDA I TEM # 8E
AJ>IllL 13,201 5
(I) Initi al Eig hteen Months: Due to anticipa te d fluct uati ons in need
during the grnss grow-in period <mel the co nstt·u ction pha se of th e go lf co urse
portion of th e Property, COAB will not cll nrge the Cou nt ry Club for delivery of
Rec laimed Water to the Pond for the first eig hteen ( 18) month s.
(2) Th e followi ng Years : After the fi rst eighteen (18) mon ths, th e Co untry
Club wi ll be charged 80% of the bulk rate accordin g to Sect ion 22-36 5 of the
COAB Co de of Ordi nances.
SECTION 3. CONFLlCT. ffany portion of th e ame ndm ent described above in Section
2. is in conflic t with th e Ma ster Agree men t, th e terms and condit ions of thi s amendment to the
Master Agreement shall prevai l.
SECTION 4 . EFFECTIVE DATE. This amendment to the Ma ster Agreement s hall be
effect ive im media tely upon ex ecution by the parties.
IN WITNESS WHEREOF, the parti es he reto , by and through the und ers igned , huve
entet·cd int o thi s Amendment to the Master Agt·ce menl on thi s __ day of, 2015 .
THE C ITY OF ATLANTIC BEACH, FLORIDA
a muni c ip al co rporation
By:
Caro lyn Woods, Mayor
Atte st: Approved as to fonn:
By :
Donna Bartl e, City Clerk
ATLANTIC BEAQli.CO ;fRY CLU~ NC.
a Flo ridu Corpo rat it~)~ ~//r r"l
By: >' _.-. ~~~
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STATE OF FLOR A
CO UNTY OF DUVAL
By:
Ri chard Koma ndo , City Attorney
1 ''t:A. r
S!orn to and subscrib ed before me, th e unders ig11ed authority, on th is .2...J_ day of
w~ I 201 s,~·Mi chael J. Carlin , who is per so nally kn to me, o r produced ~L ·..u~' ·~ u as~ ·• ~ ,,, ~ .......... ;-'", By· ~ •• ••• 1'107'.-.'•., ~~ . ..._ •• ,.~, ... v~
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STATE OF FLORIDA
AGENDA ITEM# 8E
Ar>IU L 13, 201 5
COUNTY OF DUVAL 1 l /JI
'(\(V$'f'Ol'l } to and subscribed before me, the und ersigned autho rity, on thi s J £) da y of
U l~l'l L L 1 , 2015, by James Ricky Wood, who is persona ll y known to me, or pro du ced
as id enti fica ti on. J \1 .'1f\ 1 "' I ,
By: ~A, U I{{ 1(_(_ d 1
Notary Public, State of Florida
[sea l] My Co mmi ssion Expires:
,., ,, ANGElA MI\RO INI l/t~~~·~•~; Notu rv Publi c, Stnte of Ftor!da h i ) Mv Comm. 8 quros Mor.17. 2017
~~ ;;.r :.tt commlecion No. EE 83«87
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AGENDA ITEM# 8E
APRIL 13, 2015
g. CHARGE FOR RECLAIMED WATER USE. COAB will establish,
and amend in the future as needed, volume based rates for the sale of the Reclaimed Water for all
customers of the COAB Water System. Further, the rate for Reclaimed Water will be designed
to equitably share the costs of operation of the Reclaimed Water portion of the COAB Water
System and to equitably amortize the construction costs of the Reclaimed Water system between
all users of the system now and in the future.
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1. The Golf Course Property. In recognition of the tenns and
conditions of this Agreement, in consideration for the Country Club agreeing to
enter into the Recreation And Greenspace Easement, and in consideration of
COAB's commitment to build the Reclaimed Water p01tion of the COAB Water
System, the rate the Country Club will be charged for use of all Reclaimed Water
delivered to the Pond shall be calculated as follows:
(1) Initial Eighteen Months: Due to anticipated fluctuations in
need during the grass grow-in period and the construction
phase of the golf course portion of the Property and in
order to establish a baseline for the projected needs of all
Bulk Users, including the Country Club, COAB will not
charge the Country Club for delivery of Reclaimed Water
to the Pond for the first eighteen (18) months.
(2) The Following Years: After the first eighteen (18) months,
the Country Club will be charged as follows:
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AGENDA ITEM# 8E
AP~IL 13, 2015
(a) Rate: COAB will calculate a rate to be charged for
all Bulk Users which will include the Golf Course.
This rate will be determined by COAB based upon
the projected yearly Reclaimed Water use by all
users, both public and private, and the projected
operating costs for the upcoming year which will
include, but not be limited to, chemicals, testing,
electricity, equipment maintenance and manpower.
COAB shall base the projected yearly Reclaimed
Water use for Bulk Users upon the previous year's
use by all Users, adjusted as COAB deems
necessary and appropriate. The estimated annual
operating cost is $40,800.00.
(b) Calculation of the Country Club's Monthly Charge:
Each month, COAB will calculate the Country
Club's fee based upon the actual use of Reclaimed
Water by the Country Club, as determined by
reading the meter located at the Pond, multiplied by
the established monthly rate. In recognition of the
Country Club executing the Recreation And
Greenspace Agreement, the Country Club will
receive credit from COAB for the first fifty (50%)
percent of the bill and will be responsible for
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AGENDA ITEM# 8E
APRIL 13, 2015
payment of the remaining fifty (50%) percent of the
bill.
(3) Actual Operating Costs: In no case shall the charge to the
Country Club for any given year exceed the actual cost to
operate the Reclaimed Water portion of the COAB Water
System. If it is detetmined that the Country Club's charges
for the year exceeded the actual operating costs, the
Country Club shall be given a rebate or credit towards the
next year's charges.
ii. The Residential Property. The Ultimate Users within the
residential portion of the Property will have individual meters and will be charged
the established volume based rate. That rate will be less than potable water rates
charged by COAB.
h. QUALITY OF RECLAIMED WATER. The Reclaimed Water
delivered by COAB shall be of a quality satisfactory for in·igation of grass and landscaped areas
with umestricted public access in accordance with all applicable federal, state and local laws,
rules and regulations. The Ultimate Users understand and agree that the quality of the Reclaimed
Water is different from normal Potable Water and that the possibility exists that the Ultimate
Users' turf management practices may have to be altered.
SECTION6. ANNEXATION. Selva Marina, the Country Club and ABP have
represented to both the City of Atlantic Beach and the City of Jacksonville that they wish to
annex those portions of the Property currently located within Jacksonville into Atlantic Beach so
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