Correspondence 2

(click here for latest correspondence)

Ken, I have given more thought which I summarize below and which I hope creates a fresh perspective on the issues involved.

Background

The City of Crystal River (City) applied for and received an allocation of state funding to expand their sewer system within the City limits and into unincorporated Areas of Citrus County (County) under contracts executed between them. County has enacted Ordinances and created Assessment Districts to enforce collection of related non-ad valorem charges from the property owners.

Ground Rules

The Florida Supreme Court, Case Number 88,218, qualifies what constitutes Special Benefit for the purposes of assessments payable by property owners under Assessment Districts of a Municipal Service Benefit Unit (MSBU):

1. There must be some proof of the benefits other than the dictum of the governing agency.

2. Proof of Special Benefit to the property from the assessment made to finance the cost of providing the service is necessary and must not have been derived arbitrarily.

3. A legislative determination of "special benefit" is a factual finding rather than a conclusion of law.

A Simple Case

The simple case would be for the City to act as any service provider offering sewage collection and disposal service to property owners under contract between the parties, executed with due regard for consideration offered and accepted. Facts represented would include the following:

1. City's sewer system had been expanded and tested at public expense and was available in the public right of way for connection from the subject properties.

2. City's responsibilities would include maintenance of plant and collection system, recovery from interruption of service of whatever kind, provisions to ensure fail-safe operation of the service.

3. Monthly rates payable for collection and disposal service would be calculated as to ERU, metered water usage, and agreed computation method of amount due.

4. City, as the Local Government, should define and administer the Assessment District as provided in their contract with the state.

Permissible Metrics

• Buying into extant infrastructure is neither desired by nor of benefit to the property owners. Connection or Expansion Fees (Impact) are provided so that costs of Growth may be shared with those who benefit from it, which excludes the subject properties as settled communities for decades.

• "Assessments" by contract definition is restricted to loan amounts recoverable from property owners to enable City to repay them to the state, together with fair share in other unpaid invoiced Project costs.

• Vacant lots only qualify for assessment as they are built upon and offer sewage for collection and disposal.

• The Project is defined to accord with the plans and specifications accepted by the Department (i.e. FDEP) and in agreement with the Wastewater Facilities Plan, dated August 2002, Approval of the Project is provided by the Florida Categorical Exclusion Notification dated November 15, 2002. It follows that any amounts assessed to enable City to repay loan amounts and capitalized interest can only be computed after completion of the entire Project (defined as the Service Area comprised of Areas 112, 113, and 114, and the Area known as Harbor Isle).

Recommendation

It is time for the County to support its property owners and withdraw support from City by rescinding the 2009 Interlocal Agreement and allow City to proceed as required by the Clean Water State Revolving Fund Construction Loan Agreement executed by the parties on July 11, 2011.

• County needs to focus upon reducing the continuing risk to water quality of the Outstanding Florida Water on which so much of County depends by curtailing septic system discharges into groundwaters of the Kings Bay springshed.

• City would appear to lack resources sufficient to carry forward such a far reaching plan, embracing the latest modern sewage treatment technologies.

• City has been less than forthcoming in not revealing the Associated Loan funding it has had from the state since November, 2004.

• City perceives as its right to charge excessive amounts to County property owners in order to fund its claim to part ownership of a pipeline to the Crystal River Energy Complex. This is rejected by the property owners as of no benefit to their property and is an unnecessary complication to County's longer term interests.

I look forward to our meeting,

Norman

Ken, Thank you for making your time available for our exchange of views yesterday.

Six years ago to the day, Mayor Ron Kitchen was quoted in the Chronicle:

"Council Members have said one of their top priorities is removing properties from septic systems because many people believe they are a source of pollution for Kings Bay and Crystal River."

It is noted that he expressed the belief without claim to it having been confirmed as fact. (He had confirmed the FDEP $10.1million grant at 85% of "the tab" – as he described the total Project cost – and indicated the assessment to property owners of $1,500 each plus a connection fee. However, he made no mention of any 2004, Associated Loan covering the remaining 15% of the tab).

Mayor Kitchen also referred to phases of the Project and that assessments will vary from area to area based upon costs. My understanding from contract documentation and direct communication with FDEP that there is but one project for which assessments will be calculated after all disbursements have been made so that all property owners will carry the same burden regardless of the phase, or segment of work or area in which their properties reside.

You mentioned that the property owners would need to hire a lawyer. I responded that that was not thought necessary in the context of a Special Benefit of an MSBU as the Florida Supreme Court Case number 88,218 declared that to be a factual concern and not a construct of law.

You also mentioned a class action suit affecting Chassowitska and Homosassa sewer systems. I am not able to say anything in that regard because I have not had that possibility brought to my attention by any of the property owners.

I asked if you were aware of the Hernando County Policy 16-1 which calls for a petition of two thirds of property owners in favor of an MSBU before any proceeding may start with a view to creating an MSBU for any purpose including water and sewer. I remarked that no such activity had been initiated in regard to County property owners in connection with expansion of the City's sewer system into areas in which their properties reside.

You produced documentation in connection with the need for sewer systems in Chassowitska and Homosassa areas which I respectfully declined as having a confining focus upon Kings Bay and Crystal River areas. Although Mr Knight had said to me on 1 July, and 4 August, 2011, that no such studies were available affecting the areas of concern to the County property owners the Foundation had been asked to assist, I would be pleased to have sight of any documentation you may have.

I am expecting to attend a meeting in the Lecanto Government complex on Monday afternoon of 12 March, 2012, and will inquire of Catherine should a copy become available to me by then.

I look forward to our next meeting and to reviewing the document I had prepared for you.

Sincerely, Norman

Mr. Hopkins,

Thanks for stopping in to discuss the project. Although we are probably destined to disagree on most of your arguments, I understand your concerns and will try to shed more light on the process.

Below is a link to the Kings Bay study summary (performed by FDEP), which states on two occasions that septic tank leachate is a major nutrient source for Kings Bay. It also mentions that the City would be working to connect adjacent areas to sewer( paraphrased).

This would explain why FDEP provided grant funds for the project as they sponsored the study that documented the need.

I believe the entire report is available online, or you can request one from SWFWMD. By the way, I found this online in less than 5 minutes, so anyone truly interested in finding out the facts can easily access them.

Also, to clarify what I stated with regard to Homosassa and Chassahowitzka, I said that the method of using assessments for provision or sewer service was well tested. If your assertions that sewer was no benefit to the properties served were correct, a savvy lawyer would have recognized that a long time ago and filed a class action suit on behalf of those property owners statewide who have been included in such assessments - including Homosassa and Chassahowitzka.

http://www.swfwmd.state.fl.us/documents/plans/crystalriver_kingsbay-factsheet.pdf

Finally, while I cannot speak directly for Mr. Kitchen as he has not authorized me to do so, it is typical for a assessing agency to get a loan for the value of the assessment. Most public utilities do not hold funds in reserve for new projects (rate payers are generally very unlikely to favor such reserves), so a loan is needed for the assessment and the cost of financing is included in the total assessed amount. This is standard practice.

I hope this clarifies the facts.

Sincerely,

Ken Cheek

Ken,

I was otherwise engaged yesterday and did not see your e-mail until today. The document you referred me to - Crystal River/Kings Bay Fact Sheet dated November 30, 2004 - is familiar to me. It was written, I believe, by Amy Remley herself who was then a biologist with SWFWMD responsible for Crystal River/ Kings Bay, (in whose honor we named this Foundation after her tragic road accident traveling to a meeting in Crystal River). It was Amy who had first encouraged me to conduct the research into the science literature in which I have been engaged now for more than a dozen years and is exemplified in her final paragraph in the Fact Sheet - Partnering With Residents.

Careful reading under the Nutrient Management section would refer you to the fact that the Nitrate nutrients released into Kings Bay came mostly from spring discharge and from effluent of the Crystal River wastewater treatment plant. Other documentary evidence indicates that this latter was of concern to FDER for at least a decade prior to it being stopped as indicated in the Fact Sheet. Detail in the referenced paragraph was based upon the findings of Jones and Upchurch, 7/7/94, "Origin of Nutrients in Ground Water Discharging from the Kings Bay Springs" to which I had been referred.

A 1986, SWFWMD report previous to the Fact Sheet and preliminary to Jones /Upchurch, certainly identifies, "primary threats, septic tank/wastewater treatment plant effluent, urban and agricultural stormwater, conflicting recreational uses, and sediment/ aquatic vegetation", but, in reference to the 350 septic systems within the City limits and the twelve different soils upon which they were situated, concludes that, "treatment efficiency and relative contribution of nutrients to Crystal River/ Kings Bay from these systems has not been quantified". The 1986 report lead comment reads, "The exact causes of the degradation of the Crystal River /Kings Bay system have not been thoroughly documented".

I do not entirely follow your reasoning in your e-mail below. We can at least recognize and agree facts.

Sincerely, Norman

Mr. Hopkins,

Another SWFWMD study (available online) that clearly documents that the septic tanks in question are in direct proximity to the River. In fact, it references partnership between the City and County for the current project. This is excerpted from page TS-4:

Crystal River/Kings Bay

Technical Summary

1966 - 2004

Surface Water Improvement and Management Program

Resource Management

• The City of Crystal River (City) has been implementing the transfer of commercial and residential septic tank systems within the City limits to municipal wastewater treatment. In coordination with the County, the City will extend municipal wastewater treatment services to County residents and businesses located within the immediate Kings Bay watershed. This program will reduce the amount of nutrients entering ground water and surface water through septic tank leachate

It looks to me like there are sufficient study references to septic tank leachate as a source of nitrates (and in this case specifically in the areas within the City and in the immediate Kings Bay watershed), that the need for the current project is well documented. I'm not sure how the above could be otherwise interpreted.

Sincerely,

Ken

Ken,

You will, no doubt, have noted the similarity in text between the two documents you have quoted to me which is not so surprising as they originate from the same source, which incidentally supplied original copies of them to us for our research and analysis.

Although I do not subscribe to your conclusion that it affects our discussions, being directed to the bullet on page TS-4 is appreciated. However, it would appear to me that the context for that bullet shows on pages 4 of 34 through 7 of 34 of the same document.

• Quantum was given there of kjeldahl nitrogen, nitrite/nitrate, total phosphorus and chlorophyll-a affecting water quality in Kings Bay from City's STP discharges which had been of concern to FDER over decades as cause for algal blooms in Kings Bay.

• Source proportions were also given for those excess nutrients from both spring and City's STP releases at the 97% level, as opposed to 2% for possible direct septic tank leachate.

• Confirmation was given that southern parts of Kings Bay (County) contributed little to degradation in the northern parts. Albeit, the Kate Hammett report I have quoted previously is the more convincing in my view.

In the circumstances the subsequent FDEP funding was fortuitous. But, in regard to County property owners over-paying City for connecting to their expanded sewer system, one might ask whether it is a fair price to pay for such a City/County partnership?

Hopping from one snippet to another is like looking for meaning at a phantasmagoria. I shall try to help by submitting a more concise cogent case for our review.

Sincerely, Norman

Ken,

As promised in my e-mail of 14 March, 2012, I attach a document addressing the issues of concern to the County property owners and look forward to discussing it with you.

Sincerely, Norman

KKC16March2012.pdf

Ken,

Earlier this week I received confirmation from FDEP that the maps supplied to me of the Project's unincorporated areas of the County were taken from the Wastewater Facilites Plan (WFP), dated August, 2002.

They differ from the County GIS Map dated 23 November, 2010, handed to me by Bob Knight on 1 July, 2011, which showed that a work element included in the WFP area, which we now know as 114, had been attached to Area 113. Not only would that move render it outside the scope of the state funding of Areas 112, and 113, it would unfairly inflate assessments on property owners in those areas if it were to be assessed separately from Area 114.

However, I have already observed that it would be impracticable to assess Areas 112 and 113 separately from the Project completion which must necessarily embrace Area 114. (I have noted Lou Kneip's anticipated timetable reported on their website.)

A question has also arisen with property owners as to why a Vacuum system had been chosen for Areas 112, 113 and 114, when a Pressure system had been adopted for the City and for Homosassa and Chassahowitska reportedly in preference to a Vacuum one in each case. (I am aware of the theoretical benefits of vacuum sewers but do not yet have cost parameters to hand with which to assess immediate and longer term comparative financial consequences to the property owners).

Sincerely, Norman

Dear Mr. Hopkins,

Thank you for your recent email correspondence with regard to the City of Crystal River’s sewer expansion project. I believe all of the issues relevant to the County’s implementation of the sewer assessment, as mentioned in the attachment to your email, have been addressed by either Mr. Knight or myself in previous correspondence and meetings.

To summarize:

The County’s position is that the project is well justified by past water quality studies and the necessary procedures for implementation of the assessment were followed in accordance with applicable sections of the Florida Statues. Further, the County is satisfied that provision of sewer service is well-accepted as being a benefit to the properties receiving such service.

The County does not control, nor do we dispute, the City’s right to charge sewer expansion fees for all properties that connect to the City system, including the properties encompassed by the project in question. Such fees are an accepted and normal cost for connection to a water or wastewater system that are charged by virtually all water and sewer service providers. However, if you still feel compelled to dispute this issue, the proper forum for expressing your concerns and opinions is the City of Crystal River City Council, which conducts regular public meetings.

Due to the availability of State funding, the value of the proposed assessments are significantly less than the actual cost to provide sewer service to the affected area. If the property owners were being required to bear the full cost of the project through an assessment, the cost would be several times the proposed assessment amount. Thus, the County considers the assessment costs to be very reasonable. The value of the applied assessment will be reviewed by the County and adjusted based on the final project costs, plus assessment administration costs and financing fees; less the amount of the State funding. These costs will then be divided equitably between the benefiting properties on a per equivalent residential unit (ERU) basis. This procedure has been used by the County on several past utility projects in other areas.

I realize that you are very earnest in your assertions and wish that I could have helped to resolve them. However, it is apparent to me that your interpretations and opinions are not likely to change. Thus, if the foregoing summary is not sufficient to address your concerns, I do not believe that I have anything further to offer you in that regard.

Sincerely,

Ken Cheek, P.E.

Interim Water Resources Director

Ken,

I appreciate your no-nonsense response in your e-mail of 28 March, 2012.

Of course, we shall disagree; after all, it is I who has been called upon to conduct the extensive research on behalf of the targeted County property owners who see things differently.

I respect your position, and hope that I will be better placed to help after the weekend.

Sincerely, Norman

Further to my interim response of 29 March 2012. I thought that you ought to see the attached .pdf file, which shows just how far the facts have separated us from each other. The dialog has not progressed that far. We have tried.

Hopefully, the content of the attached can communicate some measure of the sincerity and depth of the property owners' concerns which have not yet been addressed in our dialog to date. Personally, I cannot see much middle ground as you intimated to me yourself in your e-mail of March 28.

Nevertheless, we continue to evaluate new information recently to hand but I have to say that, at first sight, it tends to harden rather than lessen resolve. Especially against any possibility of coming to an accommodation with the City as you suggested.

As the Petition of County property owners illustrated - they seem only be able to bring themselves to recognize the County stepping to the plate to bring about the needed changes. Is the question really - how far can the County rely on the City's ability to resolve such major issues facing the County or is it too small an entity as the City Manager averred to the County in his 2008 appeal in regard to the 1997 Inter Local Agreement imposing too big a responsibility upon them?

Sincerely , Norman Hopkins

Nutshell_presn_April_2012.pdf

Ken,

I must now address more thoughtfully your e-mail to me on 3/28/2012, and further to my e-mail to you of 4/4/2012, to which you have not yet replied. I do this to further the dialog which were entrusted to conduct.

You state, "The County's position is that the project is well justified by past water quality studies (and our verbal and written exchanges)". It is my understanding that the reports you have quoted to me are informative as to facts contained within them but in their totality have no specific mandatory imperative. If I may take this a step further please consider this:

1. The legal basis of the state's Anti-degradation Policy in regard to the Outstanding Florida Water (OFW) of Crystal River/Kings Bay is established by Rule in Chapter 62-302.700 F.A.C.

2. The "Origin of Nutrients in Groundwater Discharging from The Kings Bay Springs, Revised 1998", by Gregg W. Jones et.al. p101, estimates discharge of nitrate into ground water from septic tank effluent from 17,000 such systems in the study area in 1990, at 320 tons per year.

3. I am informed that the 2012, number of septic tank systems has risen to 67,000 systems which by simple mathematics suggest that currently 1,261 tons of nitrate per year joins the groundwaters entrained to be discharged from the Kings Bay springs from that source in due time.

4. By comparison, discharges from the County's target septic systems of the Project, say, 420, account for only a negligible two (2) tons nitrate a year, or only 0.16% of total nitrate spring discharge originating from the septic systems. Assuming all residual nitrate enters to the OFW whether or not submersed by flood water.

5. Do not these facts suggest that County, in deciding to ignore them, and having sanctioned the septic tank systems instead of insisting that the growth since 1990, should have been accompanied by AWT systems paid for by developers under the state's Impact Fee Law, and thus they have chosen to go against the state's Anti-degradation Policy enforceable under the F.A.C?

6. Furthermore, documentary evidence suggests that the City has also been responsible for the degradation of Kings Bay waters over several decades since 1926 and certainly since 1983, when the state's Anti-degradation Policy came into effect for the OFW? How can anyone believe, in the circumstances, that it is right to compel property owners against their will to buy into the City' s infrastructure as contended by Mr Knight in his correspondence?
   

Sincerely, Norman Hopkins

Since your request before the Commissioners on 13 December, 2011, that I should enter into dialog on behalf of the property owners with your Water Resources Director to resolve financial issues that had become manifest, I have attempted to do just that and submitted written contentions on behalf of the property owners to each director and replied in writing to specific items as they have arisen, posting the written exchanges to our website for information of the property owners.

Unfortunately, neither Director has addressed the written contentions put to them.

I have this week been furnished with a copy of an Inter local Agreement between the County and the City dated 7 April, 1992, obtained by a property owner from County staff which appears to offer a way forward. It contains agreed provisions for majority consent by the property owners and for the recovery of acceptable charges from them. Both of these provisions are absent from the County's chosen enforcement instruments.

I write this looking forward to further the dialog to which we have been committed.

Thank you for your help.

Sincerely, Norman Hopkins