Title
Manufactured Gas Plant (MGP) Remediation - Funding Update (NB)
GRU has been notified by the Florida Department of Environmental Protection (FDEP) that recent state budget changes have affected the availability of funds from the Petroleum Cleanup Preapproval (PCP) Program. GRU had anticipated obtaining FDEP authorization for approximately $3,000,000 in funding from the program by July 2009. Due to changes in the program, it is now unclear when PCP funding will be made available for the GRU MGP Remediation. A number of other critical projects are dependent on the MGP Remediation being completed on schedule; these include the proposed Cade Museum of Innovation and Technology, the Depot Avenue Reconstruction - Segment Three, the Depot Park Stormwater Ponds, the Depot Park Improvements and a portion of the FDOT's Main Street Improvements project.
Explanation
In 1990, GRU purchased the assets and liabilities of former Gainesville Gas Company (GGC). In 1992, a FDEP Consent Order was issued to the City to investigate and remediate the environmental impacts attributable to the Manufactured Gas Plant formerly operated by GGC. At this time GRU has finalized the remediation design, obtained the necessary FDEP and ACEPD approvals and has executed a contract with ECT as the specified source contractor.
On May 14, 2009, the FDEP published modifications to the PCP Program which immediately affected the availability of funds for the GRU MGP remediation project. Rather than a direct legislative appropriation from the Inland Protection Trust Fund, the FDEP PCP Program now has to obtain bond funding. Therefore the anticipated $3,000,000 in FDEP funds will not be available and authorized by this July 2009 as planned. Furthermore, at this time FDEP can confirm neither when nor how much funding might eventually be available for the GRU project from the PCP Program. Should GRU proceed with the work prior to the funds being authorized, then completed work is not eligible for state reimbursement as the PCP program is presently administered.
Recommendations
The City Commission: 1) hear presentations from GRU Staff on recent developments in the availability of Florida Department of Environmental Protection (FDEP) funding and other possible funding alternatives; 2) authorize the General Manager to make the final decision to either wait for reinstatement of all or part of the FDEP funding or to proceed with the project to be funded fully from utility resources. Further, in the event that the General Manager determines that utilization of utility resources is in the best interest of the City, the City Attorney is hereby authorized to prepare and the Clerk to advertise an ordinance revising the MGP capital cost recovery factor to reflect the new revenue requirements.
Fiscal Note
This project was to be funded jointly by the GRU-Gas Utility and by the FDEP's Petroleum Cleanup Preapproval Program. Loss of the FDEP funding will increase GRU's fiscal obligation by approximately $3,000,000. GRU's portion of the costs could be funded through the Cost Recovery Factor charged to all Gas System customers. In order to replace the FDEP funding, the Cost Recovery Factor (CRF) would need to be raised $0.006 per therm and the average residential gas customer's monthly bill would increase by about $0.15. The present CRF is $0.037 per therm.
Drafter
Prepared by Ed Regan, Assistant General Manager for Strategic Planning
Submitted by Robert E. Hunzinger, General Manager