City Council: Work Session

110 SE Watula Avenue Ocala, FL 34471 www.ocalafl.org Ocala City Council: Work Session Minutes 12:00 PMTuesday, December 13, 2022 1. Call to Order 2. Roll Call Mayor Reuben Kent Guinn Council President James P. Hilty Sr Council Member Kristen M. Dreyer Pro Tem Barry Mansfield Council Member Jay A. Musleh Council Member Ire J. Bethea Sr Present: 3. Public Notice Public Notice for the December 13, 2022 City Council Work Session was posted on November 22, 2022 4. Public Comments 5. Topics for Discussion 5a. Water Treatment Plant #2 City Engineer Sean Lanier introduced Lou D’Angelo, Bureau Chief with Saint Johns River Management District. Mr. D’Angelo stated the project is the cornerstone in the prevention strategy for Silver Springs, and he is present to reaffirm the District’s long-term commitment for the construction of this project. He also introduced Joy Copejohn, Regional Water Supply Planner, and Pat Burger, Project Manager. Mr. Lanier provided a history of Water Treatment Plant #1. He explained the design service life of the plant is 50 years; it was built in 1972. Water Treatment Plant #2 will be constructed at 3744 South Pine Ave, and will blend the Lower Floridan and Upper Floridan Aquifers. He does not intend to decommission WTP#1 until required, after the new plant is completed. He explained the new plant will be located further from the springs, and will have a lesser direct effect on the flow of the Upper Floridan. He reviewed the timeline for WTP#2, and provided a handout detailing the expected phased construction. Mr. Lanier reviewed the funding, which will be shared between the City ($35,983,068), SJRWMD ($17,991,534) and FDEP ($17,991,534). Phases 1 and 2 are complete. The project is currently in Phase 3. Phase 4 funding has been awarded, and grants will be applied for to partially fund Phase 5. He discussed funding strategies and concerns. City Manager Lee stated Council would have no surprises as the project progresses. Page 1 of 4

City Council: Work Session Minutes December 13, 2022 Options will be presented to Council. Council Member Musleh commented one option previously present for funding was a rate increase. Mr. Lee concurred, noting another option is utilizing the State Revolving Fund. He recommended discussing the options at a future workshop as needed. Mr. Lanier discussed additional costs that may be considered in the future for expansion to increase the treatment to up to 30 MGD. The plant design is estimated to cost $5 million and will be designed based on 30 MGD capacity. He recommends a Construction Manager at Risk (CMAR) for the procurement. The estimated Return on Investment is 7-10 years. The FDEP and SJRWMD are committed partners. It is estimated it will cost approximately $3.1 million annually to maintain WTP#2. Currently, WTP#1 costs approximately $2.4 million annually. To date, SJRWMD and FDEP have invested nearly $5 million in the development. Mayor Guinn questioned when WTP#1 was taken offline. Mr. Lanier responded WTP#1 is still online; it is the only water treatment plant in the City. He explained Water Reclamation Facility #1 had been taken offline and has been decommissioned in phases. Currently, it has been repurposed for water harvesting. Council Member Dreyer asked if funding includes anything related to the 3M/PFOS lawsuit. Mr. Lanier responded no. He explained there is PFOS contamination in the aquifer, and if the lawsuit is successful and damages are awarded, the City could be reimbursed for costs associated with plant construction or cleanup associated with the contamination. It could be a funding source but is not included in the current calculations. Council Member Bethea expressed concerns about security and questioned if that is being considered in the construction, citing a recent hacking attempt near Tampa. Mr. Lanier explained cybersecurity implementations, as well as physical security and extra redundancies that keep the water safe and clean for the City. Contracting Officer Daphne Robinson discussed procurement, risks, benefits and considerations as they relate to the Construction Manager at Risk (CMAR) project delivery method. 5b. Annexation Policy Growth Management Director Tye Chighizola discussed the updated annexation policy. He explained there are three way to annex property: voluntary, by referendum (for non-voluntary/enclaves more than 110 acres), or interlocal agreement (only enclaves 110 acres or less). He reviewed previous mission statements and policies. He noted previous Councils had wanted to minimize/eliminate enclaves within the City, as well as increase the City limits into the existing utility service and grow the population. Page 2 of 4

City Council: Work Session Minutes December 13, 2022 Since 1980, the City limits has grown from 26.3 square miles to 47.5 square miles, and all property annexed into the City since 1975 (excluding 9 small enclaves annexed by an interlocal agreement in 2010) have been voluntary petitions. He reviewed some remaining enclaves in the southwest area of the City. Mr. Chighizola discussed possible revisions to the Comprehensive Plan: change “shall/must” to “may” in Policy 5.1 for Potable Water/Sanitary Sewer sub-elements, and within the Future Land Use Map Series, eliminate the Water/Sewer Service Area Map and create an Urban Growth Boundary Map. Other policy decision recommendations: continue with the City’s voluntary annexation efforts on a case-by-case basis; revise the staff annexation report to address city-wide impacts; revise the Comprehensive Plan to allow flexibility; address water/sewer connections outside the city limits; review enclave annexation options; monitor referendum annexation options. City Manager Lee opined the logic in the past was dangerously simplistic. If it doesn't generate revenue, it should not be annexed. Developments in midtown, downtown, etc. will out-perform any development on the outskirts. Annexation should benefit the citizens. He believes the City needs a strategy to handle enclaves and annexations, and to have a full ROI understanding as it pertains to each annexation. Council Member Dreyer asked if there has been an analysis of previously annexed properties to understand the true cost. Mr. Lee responded no, but he would be interested to look into that. Council Member Dreyer requested for staff to research it and report back. Mr. Chighizola provided an example of a recent 300-apartment development; it will be approximately $300,000 in annual tax revenue, but he doesn’t know the cost of utilities. Council Member Dreyer questioned whether the City would have provided utilities to the property whether it had been annexed or not. Mr. Chighizola responded yes. Council Member Musleh noted the example is a unique property; many of the annexations in Southwest Ocala aren’t yet being developed so there is not yet an additional strain on fire, police and other services. Mr. Chighizola noted OPD has responded to car accidents in those areas. Mayor Guinn commented Ocala Palm residents may be more open to annexation now. President Hilty asked when the City can revisit that referendum, and has the City done any further outreach to the community? Mr. Chighizola discussed the history of the referendum vote. Council Member Musleh asked if the roads within Ocala Palm are private or public. Mr. Chighizola responded they are private; in order to make them public, they would have to remove the gate, which they were against. Mr. Lee advised Council he would like to bring back a policy that would have staff do a Page 3 of 4

City Council: Work Session Minutes December 13, 2022 cost analysis on every annexation prior to annexation. Mayor Guinn agreed with Mr. Lee. Mr. Lee explained a development downtown, on a per-acre basis, are some of the biggest taxpayers in the City. Council Member Dreyer asked for clarification on the water & sewer annexation policy language. Mr. Lee stated it would allow for the City/Council to make the decision whether to annex the property based on fiscal calculations. Mr. Chighizola noted there are multiple properties that have entitlements through the County that may not want to be annexed. Mr. Lee discussed subdivisions with private roads in disrepair. Council Member Musleh asked for an example. City Engineer Sean Lanier explained the agreement recently made with Hidden Village; a 5-year plan wherein the City repaired their roads with no interest and the HOA has repaid the City in that time period. Mr. Lee expressed concern the roads are now public roads and the City now has further long-term costs for maintenance. Council Member Dreyer asked if there is a “boundary” for future annexations. Council President Hilty asked if there is a possibility a non-annexed property on City services may need to be taken off City services in order to service annexed property. Mr. Lanier explained the property would have purchased capacity. Mr. Lee stated it would be a situation he would avoid. Mayor Guinn left meeting 1:20 pm. Council Member Bethea questioned when West Ocala was annexed into the City. Mr. Chighizola responded in 1975. He expressed concern the land has been annexed for decades and a focus needs to be placed on revitalizing the area. Mr. Lee explained there has been updates to roads, sidewalks and lighting, and there will be further improvements as part of the Ocala 2035 plan. Council Member Bethea noted many of the improvements haven’t been done correctly. There being no further discussion, the meeting adjourned. 6. Adjournment 1:25 PM _______________________________ ________________________________ James P. Hilty Sr Angel B. Jacobs Council President City Clerk Page 4 of 4