PUBLIC WORKS DEPARTMENT/WATER AND WASTEWATER SERVICES RECOMMENDS APPROVAL.
Broward County owns and operates the North Regional Wastewater Treatment Plant and related transmission system collectively known as the North Regional Wastewater System. On June 14, 1998 (Item No.13), the Board of County Commissioners approved the Large User Agreement with Parkland Utilities, Inc. for the provision of wastewater transmission, treatment and disposal of all wastewater collected within their defined service area (Exhibit 1). Under the Agreement, the large user reserves a defined treatment and transmission capacity in the system to meet their projected customer average annual daily flow demands in million gallons per day (MGD) for wastewater service (referred to as reserve capacity) to cover estimated demands currently through 2035. On November 10, 2009, the Board of County Commissioners approved the first amendment to the Large User Wastewater Agreement (Exhibit 2) to adjust Parkland Utilities, Inc's reserve capacity. Recently, Parkland Utilities, Inc. contacted the County and requested to incrementally purchase an additional 0.1164 MGD total reserve capacity over the next four years (Exhibit 3). Since there is excess capacity in the North Regional Wastewater Treatment Plant, this reserve increase can be offered without reducing reserve capacity for any other large user.
Per Section 5.3 of the Large User Agreement (Exhibit 1), when there is a change in reserve capacity that affects the large users’ proportionate share of the total reserve capacity, a “square one adjustment” is performed. The square one adjustment is defined as the pro-rata adjustment of costs associated with the additional principal, interest and bond coverage charges attributed to the additional amount of reserve capacity. For the square one adjustment, staff calculates what a large user would have paid in debt service charges since the inception of the system using their new pro-rata share of reserve capacity. This is then compared to what they have paid based upon their previous pro-rata share of reserve capacity to determine their net "square one adjustment" payment. Depending on the exact timing of the phased requests for the total increase in reserve capacity of 0.1164 MGD, the square one adjustment is estimated to be approximately $612,000 (Exhibit 4).
This agenda item has been reviewed and approved as to form by the Risk Management Division and the County Attorney's Office. |