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Lake City News

Fire Study Approval Tabled; Anderson Columbia Negotiating Gas; United Way Gets $158,000

LAKE CITY, FL – The City Council was two members short last night as Council members Ward, Jefferson, and Mayor Witt took care of the evening's business. In a shade under 20 minutes, the Council agreed to begin negotiating with Anderson Columbia for a City financed 6 inch gas line extension with a capital cost estimated to be $1.35 million. (File Photo: Wendell Johnson)

The Council approved City Manager Johnson's recommendation to donate a piece of City property which cost $158,000 in 2010, now valued at $77,000, to the United Way.

City Councilman Ward moved to table the recommended action of the City's top brass to approve a $33,650 fire rate study after learning that Tindale-Oliver & Associates and Columbia County agreed to a fire rate study at $24,978.

The City Fire Assessment: $33,650 - tabled

On March 7, 2013, Columbia County contracted with Tindale-Oliver for a fire rate study to determine the yearly County fire assessment fee. The final agreed-to price for the study was $24,978.

Every indication is that the City's 2014, $33,650 Tindale-Oliver proposal, which Councilman Ward moved to table, was not put out for a competitive bid.

The Lake City Purchasing Department, the department responsible for advertising for competitive bids for the City, did not respond to a phone call.

The Gas Line to Anderson Columbia: $1.35 million

Documents and meetings show that Anderson Columbia, one of Florida's largest road builders, is desirous of increasing its gas service line to 6 inches. The City Utility Committee approved the upgrade and the route. Initially, the cost was to be funded by the City's Natural Gas Utility Unrestricted Reserve Fund.

Last night, the City explained that the project will now be funded by both the Natural Gas Utility and General Fund unrestricted reserves.

There are three components to the project:
• the building of the line
• the transportation of the gas through the line
• the purchasing of the gas

According to City Manager Johnson, the agreement being negotiated between the City and Anderson Columbia is for transportation of the gas, and not to purchase it.

This will leave Anderson Columbia free to negotiate its own price for the gas which it uses.

City Manager Johnson told the Council, "They [Anderson Columbia] will pay a flat fee per month [to the City] for a certain length of time to pay back the capital cost of the line extension and then once that has been paid for, obviously, they'll keep paying the same rate. It will be a fixed rate."

CM Johnson added, "But in order to determine whether or not we can do this, we had to hire our own engineer... We've had to pay that engineer some money upfront, which is built into our Florida Gas Utilities Contract – not the contract – we just added a small amount on to that, we're still within the budget for the engineering services, but that will build as we move forward."

Mayor Witt said that approving the gas line will "allow the City to add other customers down the road. It's expanding our system, which will be a great thing."

CM Johnson added that the City has two additional customers looking to hook up to the gas line, once it is completed, and that he is expecting other customers to hook up.

Post Meeting

After the meeting your reporter asked the City Manager, "The City is paying for the line. Anderson Columbia is not paying anything toward the line; they are just paying the transportation cost?"

Mr. Johnson explained the City's position, "We don't know that yet. We're negotiating. The intent is for the City to provide the capital cost of the line. Anderson Columbia will enter into a contract with the City to repay that capital cost within a reasonable time – three to four years. Once it's paid for they'll still be paying for the transportation."

The Observer, "As other people come on to the line will that cost be prorated?"

CM Johnson answered, "That's what we're asking – they may not agree with that. They may want to pay for the line themselves."

The Observer followed up, "Then so far they are just paying for transportation."

CM Johnson got right to the point, "So far they are not paying for anything. We are in negotiation."

The Observer, "Thanks, I just wanted to make sure I got that right."

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