Lake Apopka Natural Gas District was established pursuant to the provisions of Chapter 59-556, Laws of Florida, Acts of 1959, which became law on June 20, 1959, to provide natural gas within its defined area of service. The District operates under a commission form of government with the commissioners being appointed by the District's member municipalities of Apopka, Winter Garden and Clermont.
Officials of Apopka, Clermont and Winter Garden and certain investment bankers and engineers, recognizing the great growth potential of West Orange and East Lake Counties, began in 1957 to study the possibility of bringing natural gas into the area. The proposed natural gas system was to be built for the comfort and convenience of the public and to add to the general economic growth of the communities. Because of the relatively low earnings potential, the project was not attractive to private enterprise investors. The area to be served had not been sufficiently developed economically or population-wise in the late 1950's to the extent that the project did not contain considerable risk to the investors. The main factors under consideration were the relatively large investment per customer and the necessity of competitive rates in relation to other forms of energy. In order to attract investors, a tax free body was proposed wherein authority would be vested to finance, construct and operate the proposed natural gas project.
Thus in agreement, the three largest cities in the proposed service areas of Apopka, Clermont and Winter Garden joined together to form a gas utility district. The legislature of the State of Florida was petitioned and subsequently introduced special legislation known as House Bill No. 2195, "Act of the Florida Legislature Creating the Lake Apopka Natural Gas District." House Bill No. 2195 was passed and under due process, June 20, 1959, was recorded as Chapter 59-566, Laws of Florida, Special Acts of 1959.
Each of the three member municipalities entered into a 30-year franchise agreement granting the District the right to construct and operate a gas distribution system within the confines of the respective member municipalities. Further, the franchise agreements provided for the payment of an annual fee equal to 6% of the gross revenue received by the District from gas sales within a specific member municipality's boundaries excluding income from sale to interruptible (excess gas at reduced rates) customers. In addition to the franchise granted by member municipalities, the district was also granted franchises by non-member municipalities within the area it operates. These include Montverde, Mascotte, Minneola, Groveland and Windermere (and now Ocoee as well). These franchises also provide for an annual payment of 6% as outlined for the member municipalities. In addition to the incorporated municipalities, the District provides service for customers located outside the corporate limits of various municipalities.
As provided in the act establishing the District, a Board of Directors was appointed to administer the affairs of the District. The Board of Directors consists of five (5) members, two members each from the Cities of Winter Garden and Apopka and one director from the City of Clermont. These Directors are appointed by their respective city councils and the directors elect their officers.
Immediately after the appointment of the original board, they retained the engineering firm of Harry Hendon & Associates to design the system, estimate its cost and arrange for construction and a gas supply. After the engineering work and the contractual arrangements with Florida Gas Transmission Company for a gas supply had been completed, the financing stage of the project began. A fiscal agency contract was signed with Leedy, Wheeler and Allerman and preparations were made for the sale of $3,900,000 Principal Amount Natural Gas Bonds. These bonds were to bear 5¼% interest, with the principal amount to be retired over a period of 35 years beginning in 1968. These bonds were secured by a bond resolution approved by the District's original board of directors on October 17, 1962, on authority granted by the legislature of the State of Florida. There were a number of delays before the financing was completed. Subsequently, upon sale of the bonds in late 1962, the bond resolution and documents of authority constituted a legal and binding contract between the District and owners of the bonds.
The bonds were purchased by a syndicate of investment bankers headed by Alvis and Company of Jackson, Mississippi and then resold to investors throughout the United States. The financing of the natural gas project was accomplished without cost by taxation or otherwise to the inhabitants of the service area or the State of Florida. The bonds issued and sold by the District were payable both as to principal and interest entirely by the income of the District's gas system. The taxpayers of the service area or the State of Florida have not incurred any liability for the support of the District or its indebtedness.
Although the system was not fully completed, the District began gas service to a limited area on November 1, 1963. It was not until April 1964 that the entire system was completed and placed into full operation.
By the end of August 1965, the District had connected its service to approximately 2,200 customers. The District then estimated it would have 3,450 customers on its lines by November 1, 1966. For the fiscal year ended October 31, 1966, the District estimated gross revenues of $325,000, with a corresponding profit (before debt service) of $100,000. It was also estimated that corresponding franchise payments would be $7,500. In contrast, the District currently has approximately 14,718 customers (residential, commercial, industrial and transportation). For the fiscal year ended September 30, 2007, the District had revenues of $13,558,044 with a corresponding profit of $1,797,686. Franchise fees paid to municipalities were in excess of $280,000. Additional distribution to member municipalities was $125,000. Finally, the District returned to the communities more than $2,600,000 in salaries and utilization of local merchants and utilities. As the District continues to grow, it continues to be a source of increasing revenue to its cities, to its counties (Orange, Lake), to the State of Florida, and to area businesses.
The system is constructed of high tensile strength steel welded pipe and heat-fusioned plastic pipe, ranging from 8" in diameter to 1½" in diameter. There are currently 630 miles of mains in the ground, with 16,000 service lines connected to the system.
In addition to the pipeline system, the District has a main office located in Winter Garden, as well as branch offices in Apopka and Clermont. In March 1998, the District built a new facility, increasing both administrative and warehouse capabilities. It has modern billing, accounting and communications systems. The physical properties of the system are maintained in excellent operating condition, meeting all regulatory criteria. A trained and experienced organization provides both operational and administrative depth, which allows the District to provide the best, most efficient and safest natural gas service to its customers.
Considering the large investment per customer, which was originally necessary to bring natural gas to the area, the District's current rates are fair to customers as well as competitive. Recent rate comparisons indicate that the District continues to rate well against other natural gas systems in the State of Florida.
The District's current board of directors, along with its appointed general manager and staff, continues to serve the area well. In addition to growth in terms of pipe in the ground and customer base, the District continues to provide more than natural gas to its customers: it provides SERVICE.