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DFS City Council continues talks on feasibility of compressed natural gas fueling station

Jun 27th, 2014 | 0

New revenue projection reports regarding the city of DeFuniak Springs’ long- and oft-discussed compressed natural gas fueling station gave the City Council more information to chew on before making its decision.
The board did not put the matter to the vote on the night of its June 23 regularly scheduled meeting, but Councilman Mac Carpenter’s assessment of the three-part report was echoed by the rest of the Council members.
“I think we’re much closer than we have been with the information we’ve gotten here,” Carpenter said.
Baskerville-Donovan rep Ric Delp presented the Council with three tables’-worth of cost and revenue analysis, all revised for readability and including some new information not found in the reports previously submitted by the engineering firm. The first spreadsheet operates on the assumption that the city would directly purchase the fueling station without factoring in a return on investment – that is, it serves as a yardstick by which to measure the other options. Tables two and three differ in that the second, which also assumes using non-restricted reserves, includes a 15-year projection of the return on the investment of direct costs of the project and the required engineering services, while the third assumes a 15-year loan at 4.25 percent.
Some common overriding elements to the report include figures like the difference of approximately $10,000 between a new gasoline-powered truck and one equipped to run on compressed natural gas (CNG). A 50-percent rebate is available for the first five years of the Capital Improvement Program, bringing it down to a $5,000 working difference between each kind of vehicle. Also, retail value of the CNG by unit is figured at $2.25 per therm (essentially a gallon in volume), while the gasoline cost comparison uses the June 2 reported national average of $3.44 per gallon, and diesel comes in at $3.78 per gallon.
Other elements of the reports include but are not limited to the numbers of vehicles to be given the CNG treatment, with the purchase of CNG trucks for the city fleet being factored at two per year for 10 years. The city police department plans to convert a total of 13 patrol vehicles over the same time span, while county vehicles, including those of the Sheriff’s Office, are assumed to be one vehicle per year, though that could change as they realize fuel cost savings. The conversion of school buses was provisionally capped at 18 for the sake of the report, as there is yet no definitive agreement with the Walton County School Board as to CNG conversions for its own fleet.
The biggest difference between the three tables is the first year in which the city would conceivably realize a positive revenue stream from the CNG fueling station. The soonest the city could start to make money on the station is three years’ time due to the cost of construction and the conversion of at least four vehicles per year.
The first table shows the plant operating at a loss for the first two years but then bringing in revenues for the remainder of the 15 years included in the projection. The projected annual overage for 2029 comes in at $183,516, or $113,203 in revenue from non-city vehicles and $70,313 in fuel savings for the city fleet. Table 2, which includes a $61,733 annual return on investments as part of the Capital Improvement Program, has the city in the black by year four, while the final table shows a period of seven years in which the station would operate in the red, due mostly to debt service on the loan.
Bids on the project to construct the CNG fueling station will open July 9, and Delp said contractors have already expressed interest in having a look at the plans. In related news, the city’s budget workshops will begin July 15.
While talks on the CNG station occupied most of the Council’s time, the board members did vote on a variety of measures, including the possibility for a new tenant at the municipal airport and a revised ordinance for dealing with the issue of businesses selling their wares on sidewalks.
First, Michael Percy, owner of Airtime Aircraft, Inc., approached the City Council about renting space at one of the airport’s hangars as the first phase of expanding his businesses, currently based in Fort Walton Beach. Airtime Aircraft produces ultralight-style recreational two-seat aircraft capable of landing and taking off from water, with the average cost of a new vehicle starting around the $60,000 mark. Percy reported that he and his team of six full-time employees can put out about one new vehicle per month, with 100 of their aircraft having already been sold.
The Council voted 5-0 to collect more information regarding Percy’s long-term projections for a DeFuniak branch of his business, with the primary areas of discussion revolving around how to share the cost of upgrading the hangar with a new central air conditioning system. The information will be presented to the Council at its next meeting with the board to deliver its decision at that time.
Next, the Council voted unanimously in favor of the first reading of the ordinance amending the municipal code to allow current businesses adjacent to public sidewalks to display merchandise, excluding alcoholic beverages, on those sidewalks. Merchandise displays may not impede the flow of foot-traffic.
Finally, the last main item discussed at the meeting was a proposed plan for relocating the sports recreation park on Gene Hurley Road to the Wee Care Park on Walton Road. The plan, which factors in moving the Gene Hurley park’s three baseball diamonds, playground equipment and basketball courts, will be presented by City Manager Sara Bowers to the Board of County Commissioners at its July 1 meeting. The councilmen expressed their approval for the basic concepts of the proposed relocation plan, but they asked Bowers to take into account maintaining an equal open space for playing soccer, as several local teams regularly use the Wee Care Park as their meeting place.

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