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DFS City Council approves 30-year gas contract

Mar 3rd, 2011 | 0


The Defuniak Springs City Council approved a letter of intent to participate in a 30-year contract with Florida Gas Utility (FGU) to receive 20 percent of its natural gas supply at a $.50 discount below market price. The city has been a member of FGU, the fourth largest buyer of natural gas in Florida, since May 2010. FGU General Manager Katrina Warren explained the city would assume no risk or debt by committing a letter of intent and obligatory $1,100 for attorney fees, listed as continuing development costs, FGU incurred in procuring the contract. FGU will issue the bonds for the pre-paid natural gas supply, with Goldman Sachs as guarantor.

Councilman Don Harrison questioned why FGU would commit to a fixed discount rather than a percentage, considering the market price for natural gas over a 30-year span could increase drastically.

Warren answered Goldman Sachs is willing to discount the amount that is prepaid, which locks in a number of units of natural gas and a finite dollar amount discount.

City Manager Kim Kirby interjected, “It eliminates any and all risk for the city…we would always get $.50 savings on 20 percent of our gas supply [for the next 30 years and that savings would be directly passed to our customers].”

Harrison noted based on the city’s daily usage, it would equate to $900 in monthly savings for natural gas customers.

Mayor Pro-Tempore James Huffman added, “To risk $1,100 for a savings as long as 30 years is minimal.”

The Council agreed drawing a letter of intent to participate in the contract was a means of direct savings for customers. When the vote came to call, the motion passed 4-1, Wayne Graham objecting.

In light of a request to reconsider survey requirements for all new construction, Planning Director Greg Scoville brought three suggestions for the appropriate requirement of a new survey or use of existing one. The recommended amendments to the land development regulations regarding survey requirements include: new construction requires an initial boundary survey with complete legal description, total acreage, flood zone certification, surveyor’s certification, and must be prepared within the last two years by a surveyor registered in the state of Florida; in the case of additions and location of accessory structures, an existing survey may be used if no other permanent construction has been added since the original survey was prepared;  a foundation survey is required at the time a foundation inspection is requested and an “as-built” survey is required at the time a final inspection is requested.

The Council, excepting Harrison, approved a contract to determine whether the city is eligible for a settlement from the BP oil spill. City Attorney Clayton Adkinson explained, “[The city doesn’t] pay a dime for experts…fees come out of the settlement.” Should the city receive a settlement, 20 percent will be paid to legal fees.

The Council unanimously authorized staff to move forward with negotiations with URS Corp. for general airport consulting services, as well as a professional services agreement with Preble-Rish, Inc.

Kitty Whitney addressed the Council on behalf of the Walton Area Chamber of Commerce, noting a record number of new members and retention of members this January and February. Likewise, last year’s chamber-sponsored Taste of the Beach, which donates proceeds to children’s charities, netted a record breaking $125,000. Whitney announced the chamber has released a new smart phone application for military residents, “My military discounts,” detailing which businesses in Walton County provide military discounts on products and services. Whitney along with Scarlett Phaneuf of the Walton County Economic Development Council both offered their assistance to the Council and requested questions and input on how to keep Walton County thriving.

The next DFS City Council meeting will be March 14 at 6 p.m. at City Hall.

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