Item 3D Amendment to ABCC Master AgreementAGENDA ITEM :
SU BM I TTED BY:
DATE:
STRATEGI C PLAN LJNI(:
BACKGROUND:
CITY COMM ISS ION MEET ING
STAFF REPO RT
AGEN DA ITEM #3 0
A I'R IL 27,201 5
Proposed Amendment to the Atlan ti c Beach Count ry Cl ub Master
Agreeme nt.
Nelson Van Licre, City Ma nage r @_
Marc h 23, 2015
Pr io rit y 2, Go l f Course
As repo rted to the Co mm ission upon the adopti on of the re use rates per o rdi nance H 80-14-85 on July
14, 20 14, the City wo ul d need to amend the Mas ter Agree ment with th e Atl ant ic Beach Cou ntry Club
(ABCC) to adop t th ose rates. The ra tes adopted we re mCi rket rates set to encourage the usc of the
rcdaim ed water versus a cos t based rate that wou ld like ly discou rage use. The reuse wate r rates
adopted for th e residen ti al and com mercia l cus tomers we re set at 75% of th e potab le water rates. The
C ity also adopted a market rate fo r bul k users of .30 pe r thousand gallons ba sed on th e ra tes of other
re use prov iders in o ur area.
The ap proved Maste r Ag reeme nt with th e 1\BCC requ ired the City to ca lcu late the rates based on
projected rec lai med wa ter usc by a ll use rs an d est im ated operating costs to r eac h year. T his pro visio n
is not feas ible o r desi red to r many reaso ns. First, the cos ts assoc iated with reclaimed water trea tment
arc not iso late d. Ope rat in g costs s uch as electr icity, chemica ls, labo r and main te nance an.: not able to
be separately tracked tor rec laimed water. T he use of enginee ri ng es timates and ass ump ti ons to
de termi ne th ose costs cou ld lead to quest io ns an d disagree ment s. Seco nd, ope rat ing costs wou ld
fluctua te de pendin g on the vo lume of recla im ed water used, majo r equ ipment repairs, and changes in
s uppl y costs res ulti ng in errati c and un pred ictab le bil ls to the clu b. Third , the cos t allocations to the
c lu b wo uld sta rt hig h and he red uced by the homes added to the system, at a rate that would be
unpred ic tab le and difficu lt to calcula te. Reclaimed wate r usc is hig hly dependent o n the amo unt of
ra in fa ll , tem peratur e a nd othe r va ri ab les.
To avoid these iss ues , we have determ in ed th at a market rate is the onl y feas ible way to b ill for bulk usc
by the go ! f co urse.
Ear ly es tima tes of th e re use need s tb r th e ABCC were 400,000 ga ll ons per day on averagc. At $.30 per
I ,000 ga ll ons, thi s wo ul d generate approxi mately $43,800 in ann ual reve nue. In add itio n, pe r the
Mas ter A!:,Tt·ccmc nt , the ABCC was to rece ive a 50% disco unt fo r prov iding the Recrea ti on a nd
Greem;pace Easeme nt. A di sco un t of 50% wou ld reduce the amou nt to app rox im ately $22 ,000 if the
usage was 400,000 per d ay. Mo re recent mode li ng by tbe ABCC suggests that they may only need
260,000 ga ll ons pe r day.
In an e tfor t to acco mmodate th e ABCC a nd prov ide reuse at n market rate taking into acco un t the
Rec rea ti on an d Grecns pace Ease ment, the ABCC an d the C ity agree to utili ze the ra tes adopted by the
C ity and app ly a d iscou nt of$.06 per 1,000 ga ll ons, whi ch is 80% of the curren t bul k rote. Th is ra te
AGENDA ITEM# 3D
APRIL 27, 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 original 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# 3D
APRIL 27, 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 ?'h, 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 tetms 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 of COAB 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 #JD
APRI L27,2015
(I) In itia l E ight ee n Mo nths: Due to anti ci pa ted flu etunt ions in nee d
during the grass gr ow-i n peri od an d th e const ru cti on ph ase of the go lf co urse
portion of the Property, COAB will not c hmge the Co untr y C lub for delivery or
Recla imed Wa ter to the Pond for the fi rst e igh teen (I R) months.
(2) The following Years: After the first e ightee n ( 18) month s, th e Co untry
Cl ub will be charged 80% o f th e bulk rate acco rdin g to Secti on 22 -36 5 of the
COAB Co de of Ordi nances.
SECTION 3. CONFLICT. If a ny portion of the amendm e nt describ ed nbove in Section
2. is in confli ct with the Mos ter Ag reemen t, the terms nncl conditions o f thi s um cndm cnt to the
Mu s ter Agreement s ha ll preva il.
SECTION 4 . EFFECTIVE DATE. Thi s amendm en t to th e Mas ter Agreement shal l be
effect iv e immed iately up o n executi on by th e parties.
JN WJTNESS W H EREOF, the pa rt ies he reto, by a nd through th e unders ig ned, htwe
entered into this Am e ndm e nt to th e Mns ter Agree ment on this __ day of January, 20 15.
T H E CITY OF ATLANTIC OEAC H, l~L ORlDA
a muni c ip al co rporation
By:
Ca ro lyn Woods, Mayor
1\ttos t: Approved ns to fo rm :
By: By:
Donna Bartle, C ity Cler k R ic hurd Komnnd o, City Attorn ey
ATLANTIC BEA ~ COUN:fRY CLU~ NC .
a Florida Corporat\ n~~~
By: ,· / 'fi
M\of1 nc l J . CsiHn .:
, , , >I;. r
STATE OF FLORIDA
I I 't" .( I
COUNTY OF DUVAL
S!om to and s ubs cribed betoro me, the unders ig ned nuthority, on thi s .2..1-_ d uy of
~ ~ , 20 15, ~tl(,lyl i chae l J. Carlin, who is perso nally kn w to me, or produc ed
S) L us ~~~~W1eLf.',,, ,,, .J. ~ ........... 1'!1 ~ ,, By· -, ~ •••• \'lOr..,·· .• ~~ · .... •• ...,IS'>J·· c..;.:, .. •M ,.., 0 ... -: 1'Co111 ~ ...
(!eat l Jfl"''ll n,, F:~o.'l>k : ; ; <1 \No. l"p~:'/019osj $
ATLANTIC BI%~·~~~~Ji}~S~i LC
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a Florida Limited Liab ility Co mpany
By:
STATE Or PLORlDA
AGENDA ITE M# 3D
APRIL 27,20 15
COUNTY O F DUVAL 1 ) J )1
1/\f\ S:-vo r? to and s ub scrib ed bctbrc me, th e unde rsigned nu th ori ty, on thi s _'_> day of
U ILt j L L 1 , 20 15, by J ames Ricky Wood, who is perso na ll y kn own to me, or pro du ced
ns id e nt ificnti on. j~ 1 '-~--~ /
By: L (I l{t I( l ( I ( f
Notary Public, State of Flo ri da
[seu l] My Com mi ssio n Ex piros:
,., , ANG ElA MAflD INI lfW'' ~~~~·~ No.torv Pullll c, S. tste of Flo lidn ~·( i•) Mv comm. E.xtllro s Ma r. 17, 2011
~· comml esl on No . EE aM<\87 ,ii(.,
AGENDA ITEM# 3D
APRIL 27, 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 pottion 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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i. The Golf Course Property. In recognition of the te1ms 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:
-17-
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AGENDA ITEM #3D
APRIL 27, 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
-18-
AGENDA ITEM #3D
APRIL 27, 2015
payment of the remaining fifty (50%) percent of the
bill.
(3) Actual Operating Costs: In no case shall the charge to the
Countly Club for any given year exceed the actual cost to
operate the Reclaimed Water portion of the COAB Water
System. If it is dete1mined that the Country Club's charges
for the year exceeded the actual operating costs, the
Countty 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 irrigation of grass and landscaped areas
with unrestricted 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' tmfmanagement practices may have to be altered.
SECTION6. ANNEXATION. Selva Marina, the Countty 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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