CITY OF HALLANDALE BEACH

MEMORANDUM

DATE: June 6, 2007

TO:                  D. Mike Good, City Manager

FROM:            Earl S. King III, Acting Director of Public Works, Utilities and Engineering

SUBJECT:     CAD #013/02 Consideration of Resolution of Large Users Issues with the City of Hollywood

PURPOSE

Provide an update to the City Commission on the various outstanding wastewater issues between the City of Hallandale Beach and the City of Hollywood; obtain authorization for the City Manager to enter into the necessary agreements and make required payments to settle the outstanding wastewater issues with the City of Hollywood.

BACKGROUND / DISCUSSION

Over the past seven years, there have been several major issues that have developed between the City of Hallandale Beach and the City of Hollywood pertaining to the Southern Regional Wastewater Treatment Plant, which is located in and operated by Hollywood.  The City of Hallandale Beach is one of six (6) Large Users that send wastewater to the plant for processing.  The other Large Users are:  Broward County, Dania Beach, Miramar, Pembroke Park and Pembroke Pines.

The first major issue pertains to an undercharge to the City of Hollywood and an overcharge to the large users based upon inaccurate meter readings of effluent (water leaving the plant).  The second major issue pertains to an undercharge to the City of Hallandale Beach at the City’s northernmost meter.  The third issue pertains to the procurement of additional reserve capacity for the City of Hallandale Beach.

Staff have been working toward a settlement that would resolve all three of the issues.

Undercharge to the City of Hollywood and Overcharge to the Large Users

The inaccuracy of the effluent meter resulted in the undercharging of the City of Hollywood and the overcharging of the Large Users. The proposed resolution of this matter includes costs associated with a bond refinance.  Between January 2004 and September 2006, the City of Hollywood reached an agreement with all Large Users except Hallandale Beach. Hollywood has offered to pay the City of Hallandale Beach $1,940,000.00 to settle the effluent meter discrepancy.  Staff recommends accepting this offer as it is a fair amount based on the sewage that was not accurately recorded.

Undercharge to the City of Hallandale Beach

On September 14, 2004 Hollywood announced that the Fletcher Street meter was under-reading the flow from Hallandale Beach.  Hollywood discovered a bypass valve was opened allowing the wastewater to bypass the meter.  Hallandale Beach was not involved with the opening of this bypass.  The bypass valve has been buried under asphalt to assure that it will not be opened in the future.  Hollywood calculated the undercharge to be $1,145,419.  Hallandale Beach and Hollywood staff conducted further analysis pertaining to the meter flows and $435,100 is owed to Hollywood which is an amount that was justifiable to both cities.   It should be noted that regardless how the sewage flow arrived at the Hollywood Sewage Plant unrecorded, the City of Hallandale Beach did produce the sewage. Accordingly, staff recommends paying $435,100 to resolve this matter. 

Please refer to the attached June 5, 2007 letter from the Hollywood Public Utilities Director pertaining to the proposed settlement.

Procurement of Additional Reserve Capacity

The City of Hallandale Beach is in need to increase the City’s reserve sewer capacity.  Since the City of Miramar has reduced its capacity by 4 mgd (million gallons per day) by diverting flow to its own wastewater treatment plant, some of the reserve capacity that had been Miramar’s can be transferred to the City of Hallandale Beach.  The issue has been one of quantity.  The City of Hollywood and the City of Hallandale Beach agreed that Hallandale Beach would be granted 30%, or 1.2 million gallons a day (mgd) increased capacity. 

With this additional reserve capacity, the City’s total will rise from the current 6.65 mgd to 7.85 mgd.  Based upon projected levels of growth, staff estimates this will be sufficient to accommodate growth in Hallandale Beach for the next five (5) years.  Furthermore, during this 5-year period, the City of Hollywood anticipates re-rating the treatment plant capacity from the current 50 mgd to 55 mgd.  This will result in additional capacity.   Finally, modifications are planned to the plant which will assure additional capacity is available for all Large Users to substantially reduce the risk of any moratorium due to sewer capacity needs.

RECOMMENDATIONS / CONCLUSION

The City Commission:   

Ø Authorize the City Manager to execute the Settlement Agreement in the amount of $1,940,000.00 to settle the effluent meter discrepancy; and,

Ø Authorize the City to pay $435,100.00 as settlement for the Fletcher Street meter adjustment; and,

Ø Authorize the City Manager to enter into an agreement with the City of Hollywood for the transfer of 1.2 million gallons a day (mgd) of reserve wastewater capacity and to pay the debt service and operation and maintenance expense as required by the Large Users Agreement.

Prepared by:______________________________________

                     Gordon Dobbins

                     Assistant to the Director of Public Works/Utilities & Engineering

Reviewed:

_______________________________                      __________

D. Mike Good, City Manager                                              Date

_____Approved                          _____Disapproved                   _____Hold for Discussion

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