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Home My WebLink AboutMinutes Council 092360CITY OF PALM BEACH GARDENS SPECIAL MEETING OF CITY COUNCIL Upon call of the Mayor a special Council meting, of the City of Palm Beach Gardens was held at 2:00 PM on September 23rd, 1960, at 1001 Park Avenue, Lake Park, Florida. The Clerk announced a quorum to be present, and waiver of notice by all Council members. HOUSTON TEXAS GAS & OIL CORPORATION: SERVICE AGREEf7NT: R. J. Morgan, presented to u- tion of natural gas to the City and its residents and industries. After discussion the following Resolution was un- animously enacted: RESOLUTION WHEREAS, the CITY OF PAIM BEACH GARDENS, Florida, a Florida municipality incorporated under the laws of Florida on June 20, 1959, and WHEREAS, it is the desire of the City Council to provide natural gas utility service to the residential, commercial and industrial establish - ments in the City, and to that end has had an engineering and economic feasibility study made of the proposed natural gas distribution system, and WHEREAS, said study shows that the construction and operation of such a system would be economically feasible, can be financed and will produce extensive benefits to the City and its inhabitants, now therefore ES IT RESOLVED that the Mayor of the CITY OF PALM BEACH GARDENS be and hereby is authorized to execute a Service Agreement for General Service with Houston Texas Gas and Oil Corporation for the quantities of natural gas shoran for the third year in said engineering report. The meet" g then adjourned. -- Norman D. Rowl d, City Clerk Herbert B. Thompson, Mayor z �_ ENGINEERING REPORT AND FEASIBILITY STUDY FOR A NATURAL GAS DISTRIBUTION SYSTEM TO SERVE THE CITY OF PALM BEACH GARDENS, FLORIDA i� OCTOBER 1, 1960 r Cf �- CITY OF PALM BEACH GARDENS, FLORIDA 1001 PARR AVENUE F LAKE PARK, FLORIDA TABLE OF CONTENTS Page I. THE SERVICE AREA . . . . . . . . . . . . . . . . . . . . . 1 II. BASIS OF STUDY Numberof Customers . . . . . • • • • • • • • • • . • • • 2 Gas Consumption . . . . . . . . . . . . . . . . . . . . . 2 Maximum Day Requirements . . . . . . . . . . . . . . . . 3 Revenue. . . . . . . . . . . . . . . . . . . . . . . . . 3 Operating Costs. . . . . . . . . • . • • • • • • • • • • 4 Description of Distribution System . . . . . . . . . . . 4 Financing . . . . . . . . . . . . . . . . . . . . . . . . 5 Feasibility . . . . . . . . . . . . . . . . . . . . . . . 5 SCHEDULES 1. Number of Customers and Gas Requirements . . . . . . . . . 6 2. House Construction Schedule and Estimated Number . . . of Residential Gas Customers . . . . . . . . . . . 7 3. Operating Costs and Net Revenue . . . . . . . . . . . . . . 8 4. Proposed Natural Gas Rates . . . . . . . . . . . . . . . . 9 5. Proposed Natural Gas Rates - Comparison With Other Florida Natural Gas Rates . . . . . . . . . . . . . 10 6. Natural Gas Distribution System Cost Estimate and Required Investment ($) . . . . . . . . . . . . . . . 11 7. Schedule of Debt Service Requirements. . . . . . . . . . . 12 8. Debt Coverage Ratio . . . . . . . . . . . . . . . . . . . . 13 THE CITY OF PALM BEACH GARDENS '1_1 PROPOSED NATURAL GAS DISTRIBUTION SYSTEM I. THE SERVICE AREA The City of Palm Beach Gardens, Florida was incorporated as a municipality on June 19, 1959, and comprises approximately 6.5 square miles located approximately five miles north of the City of West Palm Beach, Florida. It is bounded on the west by the Sunshine State Parkway, on which the Houston Texas Gas and Oil Corporation's main natural gas pipeline is located, and is bounded on the east by the Atlantic Ocean resort areas of North Palm Beach and Lake Worth. The City is presently under development and has five miles of paved streets, eight miles of water lines, and eight miles of sanitary sewer lines. When completed, it will provide for 12,000 residential lots and 1,000 acres for industrial sites. The sanitary sewer and water supply plant has already been in- stalled with capacity for approximately 25 per cent of the ultimate re- quirements. There are numerous manufacturing plants located in the surrounding area. The Radio Corporation of America has a plant under construction in the City of Palm Beach Gardens. The floor space of this plant comprises 210,000 square feet, and the plant will commence operations in January of 1961 with a complement of 1,000 employees. This complement will be in- creased to approximately 2,500 by January of 1962. Since the inception of the development, prospective residents and prospective industries have repeatedly requested natural gas service such that now, with the construction of residences and industrial plants under way, it is imperative that natural gas be made available as quickly as possible. - 1 - II. BASIS OF STUDY Number of Customers: The number of natural gas customers was es- timated on the basis of 50 per cent of the houses constructed, as shown on SCHEDULE 2, which was conservatively estimated to have 1,250 houses con- structed by December of 1963. The commercial customers were estimated on the basis of the construction schedule for the shopping center which will provide the basic commodity requirements for the residents of the houses. Gas Consumption: The natural gas sales quantities were determined by months for a full three -year period, again based on the house building schedule for the number of natural gas users for each month. A minimum of four natural gas burning appliances will be installed in each house, with some provision for selection on the part of the prospective home buyer. It was estimated that this selection will result in the following composite average customer consumption: Consumption No. of Appliances Total Annual Type of Appliance Therms per Year Per 10 Customers Consumption Cooking 60 9 530 Hot Water Heating 80 10 800 Refrigeration 175 9 1,575 Space Heating 220 5 1,100 Clothes Dryer 40 4 160 Gas Light 150 4 600 Incinerator 150 1 150 TOTAL 42 4,915 Average No. Appliances Per Customer - 4.2 Average Consumption Per Customer Per Year - 491.5 Therms The monthly consumption of natural gas by customers along the lower East Coast of Florida is unique in that it does not adhere to the degree day incidence. This can be attributed somewhat to the fact that natural gas cus- tomers with some other type of fuel for space heating will depend upon certain 2 - of these natural gas appliances for "chill chasers" for limited periods, while others will use their natural gas cooking stove to supply all of their space heating needs. The monthly consumption for normal humanistic requirements, expressed as a per cent of the annual consumption, was used in this study in resolving the annual customer consumption to a monthly basis. These percentages were: Month Per Cent of Annual Consumption January 12.4 February 10.6 March 9.8 April 8.6 May 7.3 June 6.8 July 6.2 August 6.4 September 6.7 October 7.0 November 8.2 December 10.0 100.0 Maximum Day Requirements: The maximum day requirements were deter- mined on the basis of a 66 per cent load factor for the maximum month, which was determined from a detailed analysis of natural gas system send out for the Lower East Coast of Florida. Commercial customers' monthly and maximum day consumptions were determined in a similar manner as the above for resi- dential, with the small commercial customers using 705 therms per year and the large commercial customers using 1,540 therms per year. The actual load characteristics used for the R.C.A. plant were determined from consultation with company representatives. Revenue: SCHEDULE 3 shows the revenue and operating costs. The revenue was determined by applying the rates from SCHEDULE 4 against the monthly consumption quantities for each class of service. SCHEDULE 5 is a - 3 - comparison of these proposed rates with those of three other Florida nat- ural gas companies. Companies "A" and "B" are situated along the Lower East Coast of Florida, while Company "C" is farther north in the approxi- mate center of the State. Operating Costs: The operating expenses were determined to be $50.00 per customer for the first year; $40.00 per customer for the second year; and $30.00 per customer for the third and subsequent years. The same personnel will also operate the other utilities of the City. The present effective rate of the Houston Texas Gas and Oil Cor- poration provides for 5.5 cents per therm for firm gas; an application is pending for increasing this rate to 5.9 cents per therm. The net revenue has been determined under two conditions, each based respectively on these rates. �.. Description of Distribution System: The cost of the proposed sys- tem is shown on SCHEDULE 6. The city gate will include odorization facili- ties and provide space for future pressure regulators. The 6 -inch and 4 -inch welded steel feeder main to be installed prior to January of 1961, has been designed for high pressure operation. This main is so located, and its capa- city is such, that it can supply gas to all areas proposed to be served. It will provide high pressure service as may be required to all commercial and industrial areas. The residential areas will be served through a system of plastic mains and plastic yard service lines at pressures under 50 psi. through district pole -type regulators from taps along this high pressure feeder main. All materials required for the initial construction period are on hand. Construction crews, presently engaged in other work in the City, are - 4 - ready to commence construction at the prices used in determining the costs of the proposed system. Financing: The plan of financing, as shown on SCHEDULE 7, has been agreed to by both the City and the bond purchasers on the basis of 5 per cent interest, with complete bond retirement by the end of the 22nd year of operations. The first three - years' interest will be included in the bonded debt, and the first three- years' financing requirements will be made available as needed. Feasibility: Economic feasibility was determined on the basis of debt coverage, which is shown on SCHEDULE 8. The debt coverage ratio is conservative in view of the conservative number of customers estimated and the relatively high bond interest rate. The proposed natural gas rates are slightly lower than those presently in effect in the Lower East Coast of o.� Florida, which will make them attractive to new residents. U - 5 - SCHEDULE 1 CITY i0F PALM BEACH GARDENS NUMBER OF CUSTOMERS AND GAS REQUIREMENTS 1961 1962 1963 Number of Customers (Year End) Residential 125 325 625 Commercial Small 3 6 10 Commercial Large 2 3 5 R.C.A. 1 1 1 TOTAL CUSTOMERS 131 335 641 Annual Sales (Therms) Residential 40,880 115,910 257,700 Commercial Small 1,300 3,440 6,205 Commercial Large 820 3,410 6,290 R.C.A. 9,365 9,365 9,365 TOTAL SALES 52,365 132,125 279,560 Unaccounted for (3%) 1,595 3,945 8090 TOTAL PURCHASES (Therms) 53,960 136,070 287,950 MAXIMUM DAY REQUIREMENTS (Therms) 445 985 1,710 u M:E v - 7 - SCHEDULE 2 CITY OF PALM BEACH GARDENS HOUSE CONSTRUCTION SCHEDULE AND ESTIMATED NUMBER OF RESIDENTIAL GAS CUSTOMERS Month 1961 1962 1963 Houses No. Natl. houses No. Natl. houses No. Natl. Completed Gaq Cust. Completed Gas Cust. Completed Gas Cust. January 100 50 275 137 800 400 February 110 50 300 150 850 425 March 120 60 330 165 900 450 April 130 65 360 180 950 475 May 145 72 400 200 1,000 500 June 160 80 450 225 1,050 525 July 175 87 500 250 1,090 545 August 190 95 550 275 1,130 565 September 205 102 600 300 1,170 585 October 220 110 650 325 1,200 600 November 235 117 700 350 1,225 612 December 250 125 750 375 1,250 625 v - 7 - SCHEDULE 3 CITY OF PALM BEACH GARDENS OPERATIN� COSTS AND NET REVENUE Operating Costs: as ( /Therm Operations(l) TOTAL OPERATING COSTS NET REVENUE At Gas Cost of 5.9G /Therm: as Operations TOTAL OPERATING COSTS NET REVENUE 2,960 7,500 15,800 6,650 13,400 19,200 9,610 20,900 35,000 35,000 35,000 730,510 2,786 11,831 33,595 35,000 35,000 713,212 3,176 8,045 17,000 6,650 13,400 19,200 9,826 21,445 36,200 37,000 37,000 770,471 2,570 11,286 32,395 33,000 33,000 673,251 (1) Operating costs to include Operations and Maintenance; Customer Accounting and Collecting; Sales; General and Administrative; $50.00 /customer, first year; $40.00 /customer second year; and $30.00 /customer third year. - 8 - Total For 1961 1962 1963 1964 1965 22 Years $ $ $ 7--s Revenue: Residential 10,290 29,790 64,450 Commercial Small 306 772 1,402 Commercial Large 307 676 1,250 R.C.A. 1,493 1,493 1,493 TOTAL REVENUE 12,396 32,731 68,595 70,000 70,000 1,443,722 Operating Costs: as ( /Therm Operations(l) TOTAL OPERATING COSTS NET REVENUE At Gas Cost of 5.9G /Therm: as Operations TOTAL OPERATING COSTS NET REVENUE 2,960 7,500 15,800 6,650 13,400 19,200 9,610 20,900 35,000 35,000 35,000 730,510 2,786 11,831 33,595 35,000 35,000 713,212 3,176 8,045 17,000 6,650 13,400 19,200 9,826 21,445 36,200 37,000 37,000 770,471 2,570 11,286 32,395 33,000 33,000 673,251 (1) Operating costs to include Operations and Maintenance; Customer Accounting and Collecting; Sales; General and Administrative; $50.00 /customer, first year; $40.00 /customer second year; and $30.00 /customer third year. - 8 - M LMWA SCHEDULE 4 CITY OF PALM BEACH GARDENS PROPOSED NATURAL GAS RATES (Available to All Classes of Service) Minimum Monthly Charge - $12.50 First 5 Therims used per month $2.50 Minimum Next 20 Therms used per month @ .25 Per Therm Next 975 TherSms used per month @ .17 Per Therm Next 1,000 Therms used per month @ .14 Per Therm Next 3,000 Therms used per month @ .11 Per Therm All Over 5,000 Therms used per month @ .08 Per Therm Monthly Consumption Total Average Rate (Therms) Monthly Bill p /Therm 0 $ 2.50 5 2.50 50.00 10 3.75 37.50 15 5.00 33.30 20 6.25 31.20 30 8.35 27.80 40 10,05 25.10 50 11.75 23.50 75 16.00 21.30 100 20.25 20.25 200 37.25 18.60 500 88.25 17.65 1,000 173.25 17.32 2,000 313.25 15.15 5,000 643.25 12.85 loM 1,043.25 10.43 25m 2,243.25 9.00 50M 4,243.25 8.50 loom 8,243.25 8.24 - 9 - u SCHEDULE 5 CITY,OF PALM BEACH GARDENS PROPOSED NATURAL GAS RATES COMPARISON WITH OTHER FLORIDA NATURAL GAS RATES Consumption Palm Beach Gardens Therms Per Month Proposed Rate Co. "A" Co. "B" Co. "C" RESIDENTIAL- 2 $ 2.50 $ 2.10 $ 1.75 $ 1.75 5 2.50 2.68 2.00 1.97 10 3.75 4.13 4.00 3.07 20 6.25 6.73 7.10 5.27 30 8.35 9.33 9.10 7.07 40 10.05 11.63 11.10 8.87 50 11.75 13.93 13.10 10.37 75 16.00 18.43 16.70 14.07 100 20.25 22.93 20.30 17.57 COMMERCIAL SMALL: 10 3.75 4.13 4.00 2.77 20 6.25 6.73 7.50 4.47 50 11.75 14.53 16.75 9.57 100 20.25 27.53 30.50 18.07 200 37.25 52.03 55.50 35.07 500 88.25 111.03 112.50 83.07 1,000 173.25 201.03 207.50 163.07 COMMERCIAL LARGE: 100 20.25 150.00 50.00 60.00 500 88.25 150.00 90.00 60.00 1,000 173.25 175.00 170.00 120.00 5,000 643.25 535.00 770.00 570.00 10,000 1,043,25 985.00 1,250.00 1,100.00 u - 10 - u SCHEDULE 6 CITY OF PALM BEACH GARDENS NATURAL GAS DISTRIBUTION SYSTEM COST ESTIMATE AND REQUIRED INVESTMENT ($� Construction Period 1961 1962 1963 City Gate 3,500 Mains 48,400 19,890 17,465 29,020 Services 1,160 9,685 11,185 18,580 Meters 1,500 5,360 5,830 9,890 Regulating Equipment 4,000 2,000 Sub -Total 54,560 38,935 34,480 59,490 Contingencies (10 %) 5,500 3,900 3,500 6,000 Engineering and Supervision (10 %) 6,000 4,200 4,000 6,510 TOTAL CONSTRUCTION 66,060 47,035 41,980 72,000 Tools and Work Equipment 2,000 2,500 Office Furniture and Fixtures 1,940 1,465 520 Sub -Total 70,000 51,000 42,500 72,000 Escrowed Interest 6,400 9,000 13,200 TOTAL FUNDS REQUIRED 70,000 57,400 51,500 85,200 ACCUMULATED 70,000 127,400 178,900 264,100 11 - U (1) Interest estimated @ 5 per cent. First three years` interest to be borrowed and included in the debt. - 12 - SCHEDULE 7 CITYiOF PALM BEACH GARDENS SCHEDULE OF DEBT SERVICE REQUIREMENTS Principal Plus Year Debt Interest(') Principal Interest 1. 1961 $ 1,27,400 $ 6,400 $ $ 6,400 2, 1962 178,900 9,000 9,000 3. 1963 264,100 13,200 8,300 21,500 4. 1964 255,800 12,800 8,700 21,500 5. 1965 247,100 12,400 9,100 21,500 6. 1966 238,000 11,900 9,600 21,500 7. 1967 228,400 11,400 10,100 21,500 8. 1968 218,300 10,900 10,600 21,500 9. 1969 207,704 10,400 11,100 21,500 10. 1970 196,600 9,900 11,600 21,500 11. 1971 185,000 9,300 12,200 21,500 12. 1972 172,800 8,600 12,900 21,500 13. 1973 159,904 8,000 13,500 21,500 14. 1974 146,400 7,300 14,200 21,500 15. 1975 132,200 6,600 14,900 21,500 16. 1976 117,300 5,900 15,600 21,500 17. 1977 101,700 5,100 16,400 21,500 18. 1978 85,300 4,300 17,200 21,500 19. 1979 68,100 3,400 18,100 21,500 20. 1980 50,000 2,500 19,000 21,500 21. 1981 31,000 1,600 19,900 21,500 22. 1982 11710( 600 11,100 11,700 TOTAL 171,500 264,100 435,600 U (1) Interest estimated @ 5 per cent. First three years` interest to be borrowed and included in the debt. - 12 - 1W SCHEDULE 8 CITYIOF PALM BEACH GARDENS DEBT COVERAGE RATIO I. Based on 5.5 cents per Therm Gas Cost: Total Net Revenue ($) 713,212 = 1.64 Total Debt Service Requirements ($) II. Based on 5.9 cents per Therm Gas Cost: Total Net Revenue ($) 673?251 _ 1.55 Total Debt Service Requirements ($) 435,600 - 13 -