County Decides To Pay Miami Buy Cooling Plant
Written by Charlotte Libov on March 23, 2006
By Charlotte Libov
Miami-Dade commissioners voted to ante $300,000 for the City of Miami when the county buys an air-conditioning plant, saying increased efficiency will save the county more than $7.2 million over 15 years.
Commissioners approved the payment as part of a $9.3 million contract after they postponed the vote for two days because of concern that, as Commission Chairman Joe A. Martinez put it, it was a "bailout" for the city. The vote was 10-1, with Mr. Martinez casting the sole dissenting vote.
Although Commissioner José "Pepe" Diaz said Tuesday that he shares the concern, he voted last week for the contract because, he said, in the long run, it’s a good deal for the county.
"To me, any time we can save money and not lose money in the process is a win-win situation," he said.
The objection about payment to the city, he said, was because county officials feel the city reneged on an agreement on the financing of Parrot Jungle Island.
"One really had nothing to do with the other, which is why I said, ‘Let this go forward,’" Mr. Diaz said.
Commissioner Dennis C. Moss concurred. "I think it’s a good deal for the county," he said.
Commissioner Katy Sorenson said there will be other opportunities to deal with the city, and "in the long run, there will be a balancing-out of responsibilities."
In February, the county unanimously agreed to buy the cooling plant at 1110 NE First Ave., which would allow plant owner TECO Thermal Systems, a subsidiary of Tampa Electric Co., to get out of a contract with the city. But commissioners balked later when they learned the price was raised to include $300,000 to assist TECO in getting out of the contract. The agreement is subject to the City of Miami’s approval.
Pete Hernandez, deputy county manager, said the additional $300,000 will be compensation for franchise fees that would have amounted to $1.1 million over the length of the contract. TECO had agreed to pay the $1.1 million if the county agreed to increase its purchase price $300,000.
"It’s obviously a good deal because without it, we’d have to do upgrades on our existing plant for more than $7 million, and we’d still be left with a plant that isn’t that efficient," Mr. Hernandez said. "The TECO plant is much more efficient from a business standpoint."
The plant will serve three new county buildings, he said, and "we’re getting it at a price that is below the appraisal value," which ranges from $10.2 million to $10.5 million, according to commission staff.
The new plant outperforms the old one, Mr. Hernandez said, because it "can make ice at night," which can be used for air conditioning during the day. The old plant, which does not make ice at night, will be used as a standby, he said.
According to the commission staff, it costs about 25% less to operate the TECO plant than the current facility due to the lower cost of electricity by operating it during off-peak hours.