During a Monday workshop Port St. Joe commissioners received the information they have long sought from the owner of the sewer system serving Gulf Aire in St. Joe Beach.
They have up to three months to make a decision on whether to purchase the system or walk away from a deal discussed on and off for at least six years.
The owner of the system, Frank Seifert, provided two possible options after an approach to the city to buy the system five years ago failed to advance beyond offer.
The second of those proposals Monday was an updated version of that initial offer; the city would pay $850,000 outright to purchase the entire system.
The other proposal, one that has only surfaced in recent months, seemed the most attractive to commissioners, however.
That would have the city assuming treatment of all effluent out of the system at a set price, with Seifert’s company maintaining the billing.
Either option would have to be approved by the Public Service Commission due to changes either would bring in rate structure, said Seifert’s attorney Gene Adams.
Seifert noted that if the city were to favor assuming treatment responsibilities only, any approval from the PSC could take up to two years.
But, commissioners seemed completely disinterested in purchasing the system in its entirety.
The idea has been floated for years, with Seifert at one time offering the system to the city for $900,000.
He contended Monday commissioners had cost taxpayers dollars in the seven figures by not accepting the deal basing his estimation on the value of the system’s infrastructure and lost revenue.
The current price Seifert is asking is over $1.2 million, with the Board of County Commissioners providing the city $400,000 in the form of RESTORE Act funds.
Seifert provided a report from an independent engineer hired by Florida Rural Water who inspected the system and issued a report last updated two years ago.
Corrections and deficiencies cited in the report were addressed, he added, including overhauls of two of the system’s three lift stations, though there is no report on the state of the plant since 2017, and certainly not after Hurricane Michael.
The valuation provided in the report put the system’s value at $1.5 million with the cost of replacing the system from scratch at $2.5 million.
Seifert said he currently had 255 customers with two more due to be online soon after Hurricane Michael destroyed their homes.
The system has a capacity for more than 400 customers.
The county would like to eliminate the plant, located near the coast, for aesthetic and economic reasons.
With the wastewater lagoons gone and plant offline, there would be over three acres for development of up to 31 single-family dwellings, building the tax base.
“There is a value in getting rid of that lagoon,” said City Commissioner David Ashbrook, noting the odious smells coming from the plant many times of the year.
“I would love to see it go away and it gets us some customers.”
A key question for commissioners is whether those customers bolster or erode utility revenue.
The proposal from Seifert is to pay the city $5.28 per 1,000 gallons; that is a wholesale price for the city, which the city does not actually have within its rate structure.
The city charges $7.28 per 1,000 gallons, on top of a $33.39 base rate, for residential customers.
With Barrier Dunes on St. Joseph Peninsula, the city has an arrangement to that proposed by Seifert.
The major difference is city charges consumers in Barrier Dunes the base rate and per 1,000-gallon fee all residential customers pay.
The proposal from Seifert includes no base rate for those customers coming over from Gulf Aire, which, City Manager Jim Anderson noted, could open the city for legal action from property owners in Barrier Dunes.
Last year, the Gulf Aire system handled more than 13 million gallons of wastewater, Seifert said.
“Accepting that much effluent is going to increase the chemical costs for the city,” Ashbrook said. “How much (revenue) is it going to generate for the city and how much will it cost?”
Another question looming over a decision is whether or not the city would have to install a new lift station, which is not yet clear in either a practical or financial sense.
The county’s RESTORE funds were originally to help finance purchase of the system; county commissioners would have to determine if they would allow the money to be used on a lift station.
City Commissioner Scott Hoffman asked if Seifert could offer commissioners time to make a counteroffer.
As the report provided commissioners was already two years old, Hoffman also asked about receiving the most recent inspection reports from Florida Department of Environmental Protection.
Seifert said another party was interested in purchasing the system, though he was vague about the urgency.
He agreed to Hoffman’s request to wait at allow the city at least three months to make a decision.
Hoffman noted some of his constituents were suggesting there was a press on to finalize a deal before next month’s municipal election.
More importantly, however, Hoffman said commissioners needed time to digest a considerable amount of information in making an important decision with public money.
“We need to do our research, we need to do a lot of research,” Hoffman said. “And it won’t be something that will be done in a couple of weeks.”