The Board of County Commissioners of Brevard County, Florida, met in special session on March 8, 1996, at 9:00 a.m. in the Government Center Multipurpose Room, Building C, 2725 St. Johns Street, Melbourne, Florida. Present were: Chairman Mark Cook, Commissioners Truman Scarborough, Randy O?Brien, Nancy Higgs and Scott Ellis, County Manager Tom Jenkins, and County Attorney Scott Knox.

APPOINTMENT, RE: EMPLOYEE BENEFITS ADVISORY COMMITTEE

Motion by Commissioner Scarborough, seconded by Commissioner Ellis, to appoint M. Rene Davis, 2577 S. Park Avenue, Titusville, Florida 32780, to the Employee Benefits Advisory Committee replacing Debbie Edwards, with term of appointment expiring November 28, 1996. Motion carried and ordered unanimously.

PUBLIC HEARING, RE: ORDINANCE FOR TAX ABATEMENT FOR TRU-MENSION MANUFACTURING, INC.

Chairman Cook called for the public hearing to consider ordinance for tax abatement for Tru-Mension Manufacturing, Inc.

There being no objections heard, motion was made by Commissioner O?Brien, seconded by Commissioner Ellis, to adopt Ordinance granting an economic development ad valorem exemption to Tru-Mension Manufacturing, Inc., 1885 Armstrong Drive, Titusville, Florida; specifying the items exempted; providing the expiration date of the exemption; finding that the business meets the requirements of F.S. 196.012; providing for proof of eligibility for exemption; providing for an annual report by Tru-Mension Manufacturing, Inc.; and providing an effective date. Motion carried and ordered; Commissioner Scarborough abstained.

INTRODUCTION AND OVERVIEW, RE: BREVARD COUNTY SOLID WASTE MANAGEMENT

Solid Waste Management Director Richard Rabon introduced members of the County?s project team that put together the Request for Proposals for solid waste disposal services in the South County Service Area, including the County?s consultants Post, Buckley, Schuh & Jernigan representatives Omar Smith and Sam Levine; the County?s legal counsel for the contract issues Jim Jackson with Verner, Liipfert, Bernard, McPherson and Hand; David Dee, Environmental and Permitting Counsel, who handles issues about the permitting facility and other environmental issues; Lisa Barr, Project Coordinator; and Rick Patterson who handles the financial issues.

DISCUSSION, RE: RFP BASE PROPOSAL FOR SOLID WASTE DISPOSAL

Omar Smith, representing Post, Buckley, Schuh & Jernigan, Inc., stated the base proposal is the base agreement which they are asking vendors to submit a price proposal on; and they have the option of submitting alternate proposals to any provisions of the base proposal. He noted the term of agreement existing base proposal is a ten-year term with three five-year renewal periods; several of the vendors have requested the term of agreement be increased to 20 years; task table number one gives a list of typical terms of agreements where landfill agreements usually run five to ten-year terms; waste energy agreements usually run 20 years or greater; and the reason County staff and the project management team wanted a 10-year agreement was because they felt it gave the County the flexibility after 10 years to get out of the agreement if there was a cheaper disposal alternative. Mr. Smith stated if the Board decides to increase the term from ten years, there are certain provisions in the contract that staff wishes to remain in there; and if the agreement increases more than 10 years, there will be a 20-year total aggregate amount over the $20 a ton aggregate amount over the term of the agreement. He noted the maximum price index of 6% per year remains; and the Favored Nations Clause remains intact for the hauled out contracts, and those out-of-County disposal contracts are all protected by such clause.

Commissioner Higgs noted if the Board were to alter the current provisions or parameters and make the 20 years the base, it could say alternates of lesser time which offered the County greater flexibility could be provided under the alternatives; and inquired what is the down side to this; with Mr. Rabon responding there may not be any vendors who propose an alternate. Mr. Rabon stated all the vendors would like to have as long of a term of agreement as possible; and if the County goes with these provisions that remain in effect, the 6% a year cap for more than 20 years is more risky to the vendors than it would be if they proposed an alternate 10-year agreement.

Commissioner Ellis stated if the Board chooses a 20-year contract, it needs to change the termination period with a price increase. Commissioner O?Brien stated he has difficulty going for 20 years. Commissioner Ellis advised there are three counties with 20-year agreements. Commissioner Higgs stated if the County goes to the base bid as a 20-year, it is not precluding that it would say it likes the flexibility afforded by the 10 years. Commissioner O?Brien stated a lot of people are going to propose a bid that meets all the County?s parameters and then propose an alternative bid as well. Commissioner Ellis stated the County needs to be flexible also. Commissioner O?Brien stated the 20-year contract is best for the vendor, but not the County; with Commissioner Ellis responding many times the long-term contracts are in the County?s best interest to stabilize the economy.

Jeff Kohout, representing Augden & Martin, stated the issue is to put their best alternate proposal on the table, they have to submit a bid based on a base bid document; such document is now the 10, 5 and 5-year; they would have to assume that 10 years is going to be the length of the contract; and they have to recoup their capital investment in that 10-year period which makes their tipping fees extremely high. He noted by putting a 10-year term on the base bid proposal, the County has basically shot his Company out of the picture.

Warren Smith, representing Waste Management, stated the way the RFP reads, all vendors are required to agree to sign a contract when their bid is submitted; and some vendors feel their alternative would be their best price and best bid, but they have to commit to the base proposal. Commissioner Higgs stated what is in the vendor?s best interest may not always be in the County?s best interest; and the Board has to get the proposal and analysis that is best for Brevard County. Commissioner Ellis stated it would make more sense to take the 20-year base and the alternates will come in for less; and the preferable thing would be to get a realistic base and look at the alternates.

Mr. Rabon stated the base bid set a foundation to the County?s equalization of all the costs coming in; if a vendor does not give a base bid price and just gives an alternate proposal, it is very difficult to see where they may shift some of the costs around in comparing it to other people who may give a base bid price; and it would be more difficult to evaluate without a base bid to see how they are affecting or changing their alternate. Discussion ensued on base bids, alternative bids, and length of contract.

Commissioner Higgs stated if the County says a 20-year base, it is most likely going to get a lower price; and she feels confident the County will get someone competent at 10 years. Mr. Rabon stated by going with the 20-year term, the County takes away the options to go to possibly a cheaper alternative at the end of the 10-year term of agreement. Chairman Cook stated even though the base bid would be difficult, vendors would have the option of submitting an alternate which would be over 20 years; and the Board could still consider that.

David Dee, representing Landers and Parsons, stated if the Board sets the term of the contract at a 10-year period, at that point it is over; and it then has the option to decide whether it wants to renew or extend it. Chairman Cook noted there is going to be more risk on a 10-year contract.

Commissioner Scarborough stated if the County is going to include the waste energy, it needs to go to the 20-year term.

Motion by Commissioner Scarborough, seconded by Commissioner Higgs, to approve a 20-year base term of agreement.

Commissioner Ellis stated he would like to offer an amendment to the motion to include the $10 in 10 years provision.

Commissioner Higgs stated the County would have a maximum price index of 6% per year with a cap of $10 in 10 years.

Jim Jackson, representing Verner, Liipfert, Bernard, McPherson and Hand, stated the $10 with respect to changes in law and things of that nature is not with respect to inflation which is supposed to be ordinary business; if the County wants the $10 to cover the inflation, it will; that would be another change in the contract; landfill requirements change; and different things have to be done for the landfill which increases the cost. He noted the $10 protects the County on most things, but not on inflation-type things.

Commissioner Higgs stated the 6% is high on the normal index on cost of living and whatever those factors are; with Mr. Jackson responding they capped it at 6% to prevent the Carter inflation; it is whatever it actually is; and it could be 0%, 1% or 2%.

Commissioner Ellis stated the fixed costs are repaying debts on the capital, and that will be fixed costs over the life of the plan; and although the nation may be experiencing 5% or 6% inflation overall based on the consumer packet of goods, he is not going to have a 5% or 6% operating cost at the waste energy facility, even though that is the inflation rate.

Assistant County Attorney Kathryn Harasz stated the CPI is subject to proof; one of the characteristics for index inflations is that the vendor has to show how their costs have increased; in some projects there might be cost increases with hauling and labor; and with some other projects it is always subject to proof.

Commissioner Higgs inquired is the cap on the life of the contract 10 years. Rick Patterson, representing Public Financial Management, stated he is the financial consultant for the project; if the Board chose to set the annual limit at 6% and a 10-year limit of not to exceed $10 increase, the $10 amount becomes the constrain; and if you assume the contract price at year one was $40 and over 10 years at 6%, that would increase to $71.63 which obviously exceeds the $10 cap.

Attorney Harasz stated as the contract is written now, the $10 cap does not apply to the 6% increases; such cap applies to raises from changes in law; and if the County wants to rewrite the contract so the $10 cap applies to any price increase for whatever cause that is allowed in the contract, it can do that.

Commissioner Ellis stated if you go with the changes in law, something has to be presented to the County to prove there has been a change in law to make the capital investment; and inquired could there be one $10 cap due to changes of law and a $10 cap due to cost of living; with Attorney Harasz responding affirmatively.

Omar Smith stated when someone goes to 20 years and caps inflation and the change in law, they substantially increase their risk going to the 20 years; they have that long period of time with a very limited ability to increase price; it affects the business risk and pricing; having a short term allows someone to take more risks; and over 20 years it is hard to take the risk of what the federal government and inflation might do.

Chairman Cook noted it would be a good incentive to come back with a shorter term; his concern about going 20 years is the flexibility issues; and the County does not have someone coming back and giving it flexibility of the 10-year term. Commissioner Ellis stated they can still come with that as an alternate.

Commissioner Higgs stated everyone wants the County to share the risk, but no one wants to share their profits. Attorney Harasz stated the only provision the County has to address that is the Favored Nations Clause; and it provides that if there are other vendors or customers using the facility and they have similar-type contracts and a lower price, they have to offer that lower price. Commissioner Ellis stated the cost-of-living adjustment is where they have to show the increasing cost. Chairman Cook stated by going 20 years, the County is decreasing the risk to vendors; and on the other hand, flexibility is a very attractive point in this also.

Chairman Cook advised there is a motion on the floor. Commissioner Ellis stated he had an amendment which was to keep the 6% and have $10 over 10-year maximum increase for regulations and $10 over 10-year maximum increase cost-of-living. Attorney Harasz inquired does Commissioner Ellis want it to be a rolling 10; with Commissioner Ellis responding it has to be. Chairman Cook stated there should be some business risk involved on this if the County can get better protection for the rate payer; he is willing to shift that risk to the vendor if it is necessary in order to get more protection to the rate payer; he does not like the rolling idea; and the County should cap it.

Commissioner O?Brien stated the Board?s purpose is to get the best deal for Brevard County; and its goal is to get the best price per ton over the long haul.

Commissioner Scarborough stated the $10 is a termination provision; the maximum price increase of 6% is a maximum; that limits their ability to increase; and the County is talking about two things, maximum increase and rate capacity to terminate. He noted the County is dividing in its language the concepts of a price driven, environment regulation driven increase. Omar Smith advised the $10 as it stands in the contract now is regulation driven. Commissioner Scarborough stated it is important to go the 20 years; and 10 years is not long at all.

The meeting recessed at 10:35 a.m. and reconvened at 10:50 a.m.

Mr. Rabon stated the Board may want to consider allowing a 10-year term for landfill alternatives and a 20-year term for waste management; and it can get the best of both worlds. Chairman Cook noted it sounds reasonable. Commissioner Ellis stated if there is not a legal problem with that, he has no problem with it. Commissioner Higgs noted she has a problem with that; and if you go to multiple bases, there is not the same comparison. Chairman Cook stated the County is not comparing apples to apples; waste energy is a whole separate category; and it still has what the cost will be if it breaks it out. Commissioner Ellis noted the landfill people propose a 20-year alternate; with Chairman Cook responding they have the option of preparing an alternate. Commissioner Higgs indicated if there is a 20-year base and the Board encourages alternates, it has allowed a standard. Chairman Cook stated Mr. Rabon explained another option the Board may wish to consider; there could be a 20-year base for waste energy and a 10-year for the landfill; with two different bases it would allow for waste energy to bid; and the Board can decide whatever it wants to do.

County Manager Tom Jenkins stated from a practical solution, if the County can get the landfill on a 10-year basis, that is clearly to its advantage; and on the other hand, the Board has been told it is not feasible for the other process to come in with a 10-year proposal.

Commissioner Ellis stated there are some very practical sides to having a longer term contract. Commissioner Scarborough inquired are the prices fixed for the 20 years; with Omar Smith responding under the 20-year, the vendor has to stay with the same prices.

Chairman Cook stated the whole basis was to allow waste energy to bid on the project; 10 years was not feasible for them to make a bid; the County split it up; it still has the 10, 5 and 5 on the landfill; and it has waste energy at 20 years and can look at both options. He noted it still leaves it wide open and does not exclude anyone from the process; he does not understand why that is a problem; and it would accommodate everyone?s needs and allow the process to move forward. Commissioner Ellis stated it would be just as simple through a 20-year base and have 10 years as the alternate. Chairman Cook inquired why would it be more simple; with Commissioner Ellis responding everyone bids on the same base.

Commissioner O?Brien reiterated the Board?s purpose is to try to get the best deal for Brevard County; the base bid at this given period of time is not working to the County?s best benefit; the vendors are forced to make a financial commitment rather than to keep this as an RFP; and when it started, all the County wanted to see were all the proposals out there. He noted they may all be different; and there may be nine totally different proposals that do not compare to each other. Chairman Cook stated it is clearly in the County?s best interest with the 10, 5 and 5; it does exclude the waste energy people; and if the County wants to include them in the process, it needs to allow them to bid on the 20-year. Chairman Cook reiterated by the County maintaining the largest degree of flexibility, it protects the rate payer; the Board can be as accommodating as possible to the vendors, but it is not necessarily in the best interest of the rate payer in the long run; and inquired what is wrong with splitting it out.

Omar Smith stated the County will get a lot of alternative bids; they need to be evaluated; the more risk someone takes, the more they can make and the more they can lose; and there is not going to be just a price to look at on these alternatives. Mr. Jenkins stated the more risk a vendor takes, the more the County pays.

Commissioner O?Brien stated the County can leave it as an RFP with nothing more than a bid bond or performance bond; and it can look at its best proposal. Commissioner Ellis stated there needs to be some kind of reasonable base for everyone to bid; many times there are advantages to longer terms versus short terms; and there are advantages to certainty. Commissioner O?Brien noted the County started out in search for the best way to take care of the problem; now not only does it have to search for the best, it has to lock in all the people who want to make a proposal by saying they must make the base bid; it can tell them to make a proposal; it does not mean the County has to accept it; and the proposals can then be evaluated as to which one is the County?s best benefit. He stated people have come to the County with ideas and concepts which it needs to look at; and it needs to take a long look at all the ways of doing this.

Mr. Jenkins stated when the County goes to the evaluation process, it is extremely important that it has some very formalized and structured criteria to measure; if it does not, it can be contested in court by the loser immediately; and there is a history of that in this industry where the loser will challenge the County, unless it is real crisp in how it evaluates and based on what criteria.

Chairman Cook stated the Deseret site is something the County needs to decide on if it wants to pursue it; the consultants originally thought the land could be purchased and the County could operate its own landfill on such site; that is still 3,000 acres sitting there which the County paid millions of dollars for that it is not using; and if it is not using that as an option, the site needs to be sold back to Deseret. He noted the County has not eliminated the option of doing its own landfill.

Commissioner Higgs stated the Board needs to continue down the path it is on and receive bids and responses; then it will have a base to evaluate from so people have an opportunity to propose their alternates; and such alternates will probably be very strong.

Chairman Cook stated the County could get all the RFP?s back and still decide to pursue the Deseret site and do its own landfill; the one luxury the Board has is time; and it is not under a crisis. Commissioner Scarborough noted he would like to conclude this matter within the next few months; and it has to be done by this Board. Commissioner Ellis stated there may be three new Commissioners; and he would like to see it done now. Chairman Cook noted he does not want to rush through a decision that may not be in the County?s best interest. Commissioner O?Brien stated he does not mind trying to resolve this within the next few months; with Chairman Cook responding it may be very doable to conclude this in the next few months; he is not saying it is not; and the Board has to have a level of comfort because the decision it is making is very important.

Mr. Jenkins stated this is an RFP; the reason is that the County has the ability to negotiate; an RFB is something the County cannot negotiate; it is requesting proposals which gives it the opportunity to negotiate through the contract process; it has an RFP which includes an extensive list of requirements and criteria based on the expertise it has purchased through consultants who have done these before; and if it concludes the criteria are too restrictive and it wants to open it up to higher flexibility, it needs to decide which criteria it is and which requirements it has of the current RFP that it wants to eliminate. He stated the process becomes convoluted if the County does that; and the fairly strict RFP is to avoid problems down the road.

County Attorney Scott Knox stated Commissioner O?Brien?s point is that the process the County is involved in now involves a legal risk once they sign on the dotted line under the current criteria the Board has established; it is causing problems for some of the vendors because they cannot see themselves bound to a legal risk from something they cannot do at the market place; if the County eliminates such risk, maybe this whole process will open up; and people can comply with the criteria re-established through the consultants. He noted they can submit their proposals on that basis, but they are not going to be bound to a specific problem if they bid a 10-year contract that is not realistic. Commissioner Scarborough stated if the Board goes that route and went to competitive negotiations and short list, it would allow them a greater flexibility.

Mr. Jenkins stated staff recommends going with a 10-year landfill and two County discretionary five-year renewal options which would be a total of 20 years; there is a 20-year landfill at the County?s discretion with pre-established rates or a 20-year waste energy; that way there is a 20-year landfill compared to a 20-year waste energy; however, if at the end of 10 or 15 years the County wishes to cancel its landfill, it can get out of it; and it is strictly the Board?s choice.

Sam Levin stated the most common place to put a new landfill site is where the old landfill site already is; and the hard battle is putting in the first cell for that landfill.

David Dee, representing Landers and Parsons, stated the landfill contract includes a provision that they have to provide a 25-year site plan; it is a long-term plan; and the whole idea of getting the site plan up front is to try to confirm this is a long-term buy.

Commissioner Higgs noted the terms of the agreement could be 20 years for the base bid; and the Board can encourage shorter terms and weigh that favorably in its consideration.

Chairman Cook stated he would like to move for staff recommendation which is the 10-year, 5-year and 5-year, and 20-year for waste energy.

Mr. Jenkins stated actually it is 20-year and 20-year; and it is mandated to go 20 years on the landfill. Chairman Cook stated it gives the Board the option and more flexibility if it decides to do that; and it is reasonable and addresses the concerns with regard to the 20-year life of the contract, plus allows waste energy to bid.

Jerry Gresh, representing Waste Services of America, stated they are proposing an alternate site to the Deseret Ranch site; and as a landfill operator, they would prefer a 20-year contract over a 10-year contract.

Chairman Cook stated 10-year, 5-year and 5-year is in the best interest of the County; it may not be in the best interest of the vendor; and he supports staff?s recommendation. Commissioner Higgs noted it is not fair to change the rules for one technology. Commissioner Ellis stated the 20-year is in the best interest of the County. Commissioner Higgs noted the 20-year and allowing alternates and the flexibility is attractive to her; and the best deal she can get and the flexibility is what she is going to look at.

Mr. Jenkins stated the 10-year, 5-year and 5-year is practical for the waste energy; and the question to ask the landfill operators is if they had a 20-year contract, could they give the County a better price and would that be of higher value to it than having the 10-year, 5-year and 5-year. Commissioner Scarborough advised that was his original motion, and the County encourage the shorter terms as alternatives. Commissioner Higgs noted she likes Commissioner Scarborough?s original motion. Chairman Cook stated Mr. Jenkins makes a good point that by extending it out to 20 years, the County is not necessarily going to get a better price because it is being more cloudy as the terms go up. Commissioner Scarborough stated if the County does 20-years for everyone, it is dealing with the same parameters for everyone; and inquired if the County breaks parameters here, what is to stop them from defining their own parameters on other elements of this as it goes through it.

Motion by Commissioner Higgs, seconded by Commissioner Ellis, to approve a 20-year base term of agreement with alternates being allowed and encouraged. Motion carried and ordered; Commissioner Cook voted nay.

Motion by Commissioner Higgs, seconded by Commissioner Scarborough, to approve the $10 in 10 years provision, and not increasing more than 10% for regulations in any one year. Motion carried and ordered unanimously.

Motion by Commissioner Ellis, seconded by Commissioner Scarborough, to approve the maximum price index of 6% per year with a cap of $10 in 10 years. Motion carried and ordered unanimously.

Commissioner Higgs suggested the Favored Nations Clause be included in the contract. Commissioner Ellis inquired what is the Favored Nations Clause; with Attorney Harasz responding the fee charged to the County shall not exceed the lowest fee charged to other customers on a contract basis. Commissioner Ellis noted there is no cause to have it. Attorney Harasz stated this is the only mechanism to have the County?s contract price lowered once it is locked in; and the clause could be refined so that it applies to comparable contractors. Chairman Cook stated the Favored Nations Clause should be included. Discussion ensued on the Favored Nations Clause. Commissioner Ellis inquired if the Favored Nations Clause only applies to the County; with Ms. Harasz responding yes.

Motion by Commissioner Higgs, seconded by Commissioner Scarborough, to include the Favored Nations Clause.

Jeff Kowall, representing Audrey Martin, stated they understand the Board putting caps on and certain requirements; it is the Board?s prerogative to do that; it is limiting some of the things vendors can do at the waste energy; and his Company is trying to bring the County its best proposal. He noted by limiting these things, Audrey Martin is going to have to make a decision on whether or not it can live with the requirements being placed on it by the County; if the Company has to do that in the base bid, it may elect not to submit such a bid; the goal is to submit its best price; and requested the Board consider deleting the Favored Nations Clause and allow his Company to negotiate with other communities to make the facilities as large as possible so the County can benefit from those economies of scale also. He noted either that or the County eliminate his Company from having to submit the base bid proposal with all the requirements; and Audrey Martin would like to give the County its best price on the table and an alternate bid to evaluate.

Chairman Cook called for a vote on the motion. Motion carried and ordered; Commissioner Ellis voted nay.

Motion by Commissioner Scarborough, seconded by Commissioner O?Brien, to approve five years for price structure of the agreement. Motion carried and ordered unanimously.

Tim Ogden stated his Company would like to put its best price on the table; and if it is required to submit a base bid, it will probably not be able to bid.

Ron Kaplan, representing Waste Management, stated the vendors? position is that it does not want to take the County?s negligence as their responsibility.

Motion by Commissioner O?Brien, seconded by Commissioner Higgs, to delete the word ?sole? under the risk sharing indemnification language. Motion carried and ordered unanimously.

Motion by Commissioner O?Brien, seconded by Commissioner Ellis, to include that the County will not be an adversary in the regulatory process under the risk sharing level of County support during permitting. Motion carried and ordered unanimously.

Motion by Commissioner Ellis, seconded by Commissioner O?Brien, to approve July, 1998 under termination of agreement and damages. Motion carried and ordered unanimously.

Chairman Cook inquired if the Board wants to establish a due date; with Commissioner Higgs responding how long will they need.

Tim Mills, representing Augden, expressed appreciation to the Board for taking on this difficult task; stated the County?s consultants have made a marvelous effort in shifting the risk to vendors; they put in a base proposal and ramp up the price to accommodate that risk; and not only do they have to accept that risk, but the bonding agency does also. He noted he has serious reservations that his Company will be able to secure that with them; it may force the Company not to bid; it would like to give the County the best price, but with that commitment, it may be unable to do that.

Chairman Cook inquired if there are any ideas on the due date; with Mr. Rabon responding they need one month and April 15, 1996 would be a good due date. Chairman Cook stated the County can establish May 1, 1996 as the proposal due date which will give the vendors sufficient time.

Upon motion and vote, the meeting adjourned at 1:15 p.m.

MARK COOK, CHAIRMAN
BOARD OF COUNTY COMMISSIONERS
BREVARD COUNTY, FLORIDA

ATTEST:
SANDY CRAWFORD, CLERK
(S E A L)