As most of the Polk City residents know now, the Cardinal Hill Waste Water Treatment Plant located off of Stevens Drive is currently permitted as an Interim, or Temporary, facility by the Department of Environmental Protection, also known as the DEP. The DEP permit was issued on 2/27/07 for 5 years and is due to expire on 2/26/12. According to the May 13, 2008, City Council Meeting Minutes, the newly named "Cardinal Hill" plant came online that week, approximately 6 months behind schedule. According to the June 10, 2008 City Council Meeting Minutes, this delay cost the city $91,000 in liquidated damages.
Back on November 23, 2005, City Council adopted Ordinance 1089 to take out a Capital Improvement Revenue Note, Series 2005, in the stated principal amount of $2,000,000 for a revolving line of credit with SunTrust Bank. What were these funds to be used for at the time? Where did this money go? On October 2, 2007, nearly 2 years later, Ordinance 1235 was adopted to amend Ordinance 1089 to increase the line of credit from $2,000,000 to $4,000,000 to pay for the construction and other costs regarding the temporary waste water treatment plant located off Stephen Drive. Here is a link to Ordinance 1235 from Polk City's archives. In December of 2008, the City converted this Series 2005 Capital Improvement Revenue Note line of credit into a term loan that bears interest of 3.06% with semi-annual principal and interest payment of $83,749 on June 1st and December 1st with a final maturity on December 1, 2023.
According to the 2008 Audit on numbered page 25, actual document page 40, it states that the City is currently leasing the parcel of land the Cardinal Hill Plant is on and has worked out a deal with the land owner to credit the property owner with one water and sewer impact fee per month of the six year lease, which began on 2/1/2006, in lieu of a cash lease. In this same lease the City also GUARANTEED complete removal of the waste water treatment plant operation no later than July 1, 2012. This deal also mentioned that the City will continue to credit the owner with one water and sewer impact fee per month plus an additional monthly cash payment of $1,000 until the operation has been removed. Florida State Statue 108.08 (1) states, "that such mortgage revenue certificates or debentures shall not impose any tax liability upon any real or personal property in such municipality nor constitute a debt against the municipality issuing the same, but shall be a lien only against or upon the property and revenues of such utility." Since the City clearly does not own this property on which the facility is located, is the city in violation of this statue?
On printed page page 46, actual page 65, of the same 2008 Audit the Auditor states an issue of Non-Compliance with this Series 2005 Capital Improvement Revenue Note under item (c). Item (c)(2) states, "Pursuant to Ordinance 1089, the City shall not issue additional debt secured by the Series 2005 Capital Improvement Revenue Note’s pledged revenues without approval of the note owner. The Series 2005 pledged revenues include the net revenues of the water and sewer system as well as sewer impact fees. We noted the City has entered into a state revolving fund loan agreement with the Florida Department of Environmental Protection that pledges sewer net revenues and sewer impact fees. This agreement was entered without approval of the owner of the Series 2005 note." The Management's response on this issue as stated in the audit states, "We concur. The city’s engineering consultant was to ensure all conditions were met for the SRF and the city relied on the consultants’ assurances that everything was completed properly. The Lender in this case has been notified and the city is awaiting response." Was this ever followed up on or would SunTrust be surprised to hear about this?
Another interesting fact about this Ordinance 1235 can be found on page 10 of 12, printed page number Exhibit C-1. The law firm on record representing the "Bank" is Gray Robinson P.A., the same law firm Polk City's own Interim City Attorney, Mr. Tom Cloud is a PARTNER of. The "Bank", SunTrust, was paid $2,500 in Bank Council Fees in connection with issuance of this Series 2005 Note. If the City consults Mr. Cloud on any of these issues regarding this 2005 Note or the deal with the Cardinal Hill plant, there would surely appear to be some sort of Ethics violations due to Conflict of Interest. It would be interesting to see how the State Attorney General's Office would feel about Mr. Cloud's participation in any of these negotiations now that the City has decided to get an appraisal on the property of the Cardinal Hill Plant in preparation for future expansion? A statement made by Mr. Cloud at the October 28, 2010, Special City Meeting, made it very clear that Mr. Cloud is already quite involved in the Cardinal Hill Plant discussions. Mr. Cloud made it clear the City has every intention of keeping this Temporary plant functioning well past the current DEP permit expiration date of 2/26/2012.
Research on this article was done in conjunction with Polk County resident J. W. McElwee, who resides in the neighborhood adjacent to the Cardinal Hill plant off of Steven's Drive.
Furthermore, this additional information below was posted on our blog in a comment buy Anonymous on November, 1st, 2010. This information brings up additional legal questions about the Cardinal Hill WWTF:
"The temporary WWT plant located on Steven Drive was constructed and built in violation of DEP rules and regulations.
Below is the text copied and pasted from DEP form DEP Form 62-604.300(8)(a) number 3 under General Requirements.
“The project is designed to be located on public right-of-ways, land owned by the permittee, or easements and to be located no closer than 100 feet from a public drinking water supply well and no closer than 75 feet from a private drinking water supply well; or documentation is provided in Part II.(5)B., showing that another alternative will result in an equivalent level of reliability and public health protection. [62-604.400(1)(b) and (c), F.A.C.]”
The form was found at this link:
http://www.dep.state.fl.us/water/wastewater/forms/pdf/604form8_a.pdf
The governing law for this form is Florida Administrative Code 62-604 located at this link:
http://www.dep.state.fl.us/legal/Rules/wastewater/62-604.pdf
Applicable sections cut and pasted below:
“62-604.400 Design/Performance Considerations.
(1) All new collection/transmission systems and modifications of existing systems for which construction permits are required by the Department shall be designed:
(a) In accordance with the provisions of Rule 62-604.300, F.A.C.;
(b) To be located on public right-of-ways, land owned by the permittee, or easements;”
Anyone familiar with codes and standards knows the word the definition of should and shall. The word shall, allows no leeway in compliance with the code or standard.
The City of Polk City applied for an individual permit for a domestic wastewater/collection system on April 13, 2006. The cover letter, as well as the application was submitted by Craig P. Ormanski P.E., an employee of PBS&J. PBS&J is an engineering firm hired by the City to engineer the project, to Mr. Mike Lukowich Permitting Supervisor for Florida DEP. The cover letter addresses only the construction of the forcemain, and pumpstation. It also states the Permanent WWTP will be “located east of downtown Polk City near Smith Road.”
The attached Permit Application list under “Project Name” states “ Polk City Interim WWTF, Forcemains and Watermain”
Under “Connections to existing system or treatment plant” states “New Interim Wastewater Treatment Plant” Curious this facility was not in service at the time of application for connection, Page 10 of 11 of the application.
On page 3 of 11 in this application “General Requirements” Initialed by CPO Craig P. Ormanski initialed this document stating the land was owned by the permitee, furthermore; on page 10 of 11 of the document under “Owner of Collection/Transmission System” the application is signed by Cory Carrier and dated April 6, 2006 and states “ The undersigned owner or authorized representative* of”, the star denotes the DEP request a letter of authorization, handwritten in the block is “ Interim WWTP and Future WWTP” and again signed and dated by Cory Carrier April 6, 2006. Page 11 of 11 is the “Professional Engineer Registered in Florida” signed by Craig P. Ormanski P.E. and dated April 6, 2006.
I have stated all of this to simply to state this; the facility does not comply with Florida Administrative Code 62-604.400. The information was gained from documents supplied by the City via a public records request. I have no mechanism to post them to the blog.
For further verification contact thr DEP or the City."
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