Submission to the Citrus County Commissioner, 14 November, 2011.

Analysis Summary

Process

This Foundation, following a City Council meeting on 13 June, 2011, was requested by a group of egregiously distressed property owners to conduct research and ascertain the facts leading to the assessments they had received from the County. (Dozens of County residents had appealed to the City Council against the City's sewer assessment charges to no avail - they had no vote in the City's game!)

Extensive documentary evidence has been assembled, an open meeting with property owners has been held, discussions have taken place with individual property owners, and both verbally and in writing with staff of the County and the City, and at state and local levels, with FDEP, FDOH and the Governor's Office, and also with the regional EPA office. A time line analysis has been undertaken.

Introduction

Degrading the water quality in the river system began with the advent of the City of Crystal River, as chain drag lines and dredging destroyed wetland forests that had cleansed the waters to give the river its name.

The City's Sewage Treatment Plant (STP) was installed in 1926. Decades later in 1991, FDER discovered an illegally dredged connection from it to a stream which had been continuously draining its treated but toxic effluent into Kings Bay. The City complied with a state Consent Order in May, 1992, to stop the discharge into the stream. (How long sediment and biota of the stream and the Bay suffered the pollution and would retain or incubate the toxicity is unknown.)

In September, 2008, the consensus among Citrus County commissioners was to work together with the Crystal River City Council to negotiate a new InterLocal Agreement (ILA) to supply sewer service to areas of Citrus County, replacing an unworkable ILA drafted in 1997.

Funding Sources

DSC grant: On 22 July, 1999, the City applied to FDEP for a grant to complete the conversion of septic systems in the City to the sewer system and to extend the system on the public right of way into some unincorporated areas of the County.

On 29 June, 2000, the City was awarded a Disadvantaged Small Communities (DSC) grant as "an 85/15 percent match". The 85% grant amount was $10,900,000.00, (a total of $12million including the matching and contingency amounts).

The DSC Grant Agreement (SG583140), dated 2 October, 2000, provided for an optional Associated Loan to assist financing of Construction Related Costs. The City availed itself of that Associated Loan (WW58316S) which was executed by FDEP on 8 November, 2004. Thus funding with public money 100% of the authorized Project costs from that date.

The funding of 100% of project costs with public money for each segment of work in the County's unincorporated areas uses the procedure of Principal Forgiveness Loans (PFLs) .

A PFL is authorized by FDEP to cover 100% of estimated costs of a segment of work. The City would keep 85% of the agreed final total costs actually incurred by the City (the part forgiven). The remaining 15% of those agreed costs does have to be repaid in 40 half yearly installments of the loan repayable over 20 years at a per annum interest rate of 2.52%. Of course, adjustments are made to account for over or under estimation of the PFL quantum. (Note that assessing property owners for their part of the 15% means that what was originally to be found by the City as match for the DSC grant is paid by the County property owners instead.)

(Note that FDEP has confirmed by e-mail dated 7/22/2011, that the long term low interest Associated Loan was to reduce burden upon property owners assessed to repay their part of the 15% sum over the long term as opposed to a lump sum up front. FDEP also suggest that the County would qualify and could apply for a Community Development Block Grant (CDBG) to pay the connection charges which is a specified purpose for a CDBG - which was the objective of our petition to the Commissioners submitted on 27 July, 2011.)

The Florida Categorical Exclusion Notification (FCEN) dated November 15, 2002, had declared that, "The proposed project is a collection system to eliminate failing or marginally operational septic tanks."

Note: The supporting documentation, described in it as a "general study", dated, 8/22/2002, describing the process avers, "Under proper site conditions, conventional on-site sewage systems are capable of nearly complete removal of biodegradable organics, suspended solids, and fecal coliforms (Florida HRS and Ayres Associates, 1993). Particular failing or marginally operating septic tank installations were never determined but only that on average some installations fail to operate to design standards with age and poor maintenance.

Bond Issues: The City's Water and Sewer Bond issue, Series 1992, was replaced by their Ordinance 02-O-01 with a 2002 Bond issue with effect 28 January, 2002, which omitted a clause restricting sewer service only within the City limits.

In addition, the Section 11.16 in the Article XIV Miscellaneous Provisions of the Bond ordinance provided for any funds received from state or federal sources to be deposited by the City as Issuer into a choice of specified Bond operating accounts. Thus ensuring that the public money paid to reimburse the the Project costs (otherwise payable from the Bond proceeds) would replenish the Bond accounts, even to excess.

County and City Joint Meeting - 31 March, 2009

The joint meeting was convened, inter alia to discuss three combined issues:

B1. Interlocal Agreement for Utility Services,
B2. proposed extension of sewer service into unincorporated areas of the County adjacent to Plantation Resort, and,
B3. proposed annexation of Crystal River Airport into the City of Crystal River.

Issues that were discussed according to the minutes, which were beyond the scope of the approved plan to which the public money could be applied included:

• The supply of reclaimed water to the Progress Energy Complex, and,
• "Over time, sewer systems will go all the way to Ft. Island Beach."

The following issues were not recorded in the minutes as having been addressed :

• The provision of 100% funding of agreed Project costs and expenses with public money.
• The Florida Categorical Exclusion Notification (FCEN) dated November 15, 2002.

Note that the minutes faithfully record the words of a City spokesperson, "Christmas has come early!".

InterLocal Agreement

The Interlocal Agreement (ILA), between the County and the City government entities, negotiated by staff, was entered into by the parties on 11 August, 2009.

Facts upon which the ILA are alleged to have been based have been determined to be false. (Letter to the County, 19 October, 2011)

It is now not clear which septic systems in the County areas were determined to be failing or marginally operational at the time the application for state funding was made and would have required to have been replaced with the expanded sewer system.

The property owners' egregiousness stems from insufficient due diligence having been exercised on their behalf during the ILA negotiations; their concerted pleas to the City Council on 13 June, 2011, were simply ignored as the ILA had been a fait accompli since August, 2009.

The elective Expansion Fees of $3,425.00, enrich the City by $1,452,200.00, when all costs of system expansion to their service area are to be paid in full from public money.

Research has shown that the quantum of such fees reflect legacy amounts based upon the City's former provision of sewage, plus water, police, fire and garbage collection services, which do not apply to the County properties.

Municipal Service Benefit Unit (MSBU)

The County set up the Municipal Service Benefit Unit (MSBU) using the Ordinance 2010-04, to enforce its commitments to the City under the provisions of the ILA.

The County had relied upon an Attorney General Butterworth opinion (contained in AGO 96-09) which ignored a previous opinion by Butterworth in (AGO 90-75) pointing to conditions precedent for an MSBU which are not qualities of the Ordinance 2010-04, conditions of being essential and financially beneficial to the property.

Conclusion

Absent of its two major premises (community health/welfare and OFW water quality) the ILA is seen simply as a way to enforce transfer of money from a group of County property owners to benefit the City.

Causing unnecessary financial stress, and hardship to those property owners impacted by the sewer expansion project by another government entity, and denying County residents recourse or vote in protest is unconscionable.

The abrogation by the County of its jurisdictional authority, conveyed to it by F.S. 381.00655(2)(a), in favor of the City by the terms of the ILA, and the fact that no public hearing was considered necessary in spite of restricting how the property owners may use their property, is unworthy of this Board of County Commissioners.

Research reveals misinformation aired before the commissioners concerning, for example,:

• the proportion of system expansion costs to be reimbursed from public resources, (as above),

• the false "determination" of health reasons to eliminate septic systems, (as above),

• falsely concluding that eliminating target septic systems would improve water quality of the OFW, (ignoring the science of Jones and Upchurch, 1994, and Hammett, 1996,)

• the City's assertion that "septic systems do not work" flies in the face of the science, (Onsite Wastewater Treatment Manual, and Florida HRS/ Ayres Associates 1993),

• unjust enrichment (permitted by the ILA and enforced by the MSBU),

• state Attorney General Opinion would favor mandatory connection, although AGO conditions precedent may well have precluded setting up any MSBU. (e-mail to the County 10/24/2011).

Recommendations

The County must take back its jurisdictional authority from the City of Crystal River without delay and amend the ILA and the MSBU enforcement of it:

1. Avoid punishing property owners impacted by the ILA by the charging of unwarranted Expansion Fees, administrative overhead, and connection costs.

2. Concentrate upon the FDEP agreed plan to expand sewer service only into the planned designated areas.

3. Ensure the awarded public money is used solely for its authorized purpose.

4. Seek a CDBG to cover connection charges payable by affected County property owners.