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CCWWA Minutes 03/27/2017 March 27, 2017 MINUTES OF THE MEETING OF THE COLLIER COUNTY WATER AND WASTEWATER AUTHORITY Naples, Florida, March 27, 2017 LET IT BE REMEMBERED, that the Collier County Water and Wastewater Authority in and for the County of Collier, having conducted business herein, met on this date at 2:00 P.M. in REGULAR SESSION at the Collier County Growth Management Department Building Conference Room 609/610, 2800 N. Horseshoe Drive, Naples, Florida, with the following members present: CHAIRMAN: Patricia Sherry VICE CHAIRMAN: Lowell Lam Jerry Morgan Dr. Sherwin Ritter Eloy Ricardo (Excused) ALSO PRESENT: Scott Stone, Assistant County Attorney Heidi Ashton-Cicko, Managing Assistant County Attorney Ken Kovensky, Director - Operations and Regulatory Management Ashley Lang, Senior Management/Budget Analyst 1 March 27, 2017 I. Call to Order(Determination of Quorum) and Roll Call Chairman Sherry called the meeting to order at 2:00 PM. Roll call was taken and a quorum established. Also present were: F. Marshall Deterding, Attorney for Ave Maria; Cynthia Yapp, Rate Consultant, Ave Maria;Jeff Dykstra, Rate Consultant, Collier County;Jason Vogel, Ave Maria Utility Company (AMUC);Jamie Lopez, AMUC; Paulina Perez, AMUC; David Gensen, AMUC. H. Approval of Agenda—Meeting of March 27,2017 Dr. Ritter moved to approve the Agenda. Second by Mr. Lam. Carried unanimously 4- 0. III. Approval of Minutes—Meeting of May 9,2016 Mr. Morgan moved to approve the minutes of the May 9, 2016 meeting as presented. Second by Dr. Ritter. Carried unanimously 4-0. IV. Items Requiring Action by Authority A. Annual Election of Officers Mr. Morgan moved to appoint Lowell Lam as Chairman of the Collier County Water and Wastewater Authority. Second by Dr. Ritter. Carried unanimously 4—0. Mr. Lam assumed the Chair Mr. Lam moved to appoint Jerry Morgan as Vice Chairman of the Collier County Water and Wastewater Authority. Second by Dr. Ritter. Carried unanimously 4—0. B. Ave Maria Utility Company Public Hearing All those testifying were sworn in by Assistant County Attorney Scott Stone. Mr. Kovensky presented the Memorandum "Authority Agenda Item—March 26, 2017 Ave Maria Utility Company, LLLP—Application for Increase in Rates" for consideration. He noted: • The Utility Company has filed an application for increased water and wastewater rates for its customers based on a historical year ending December 31, 2014. The use of the test year was previously approved by the Authority on January 25, 2016. • The request will be heard over a series of three public hearings culminating on March 31, 2017. • The hearing held on March 30, 2017 at the Collier County University of Florida Extension Office will be an opportunity solely to entertain public to comment on the request. • Staff has reviewed the application and found it to be acceptable for a hearing before the Authority. Mr. Stone reported the hearings are quasi-judicial proceedings and all parties testifying in the case were sworn in. Authority Members present confirmed they had no "ex parte"communications in regards to the application. Mr. Deterding,Attorney for Ave Maria Utility Company noted: 2 March 27,2017 • The request was filed by the Utility Company on March 4, 2016 and confirmed 2014 was utilized as the test year for the case. • The Utility has been consistently losing money year over year and the request is for a 5-year phased increase. • The proposal is a 5 percent base rate increase(25%total), plus the annually allowed price index adjustment. Also, included in the request over the first 4 years is recovering 25%of the cost of preparing the case. • The request is justified as the Utility is allowed to obtain a fair return and to this point in time,the Utility has realized no "return on their investment." • The increases are being phased to ease the financial burden on the customers. During Authority discussions, Mr. Deterding stated"Ave Maria" does not anticipate any expansion beyond their current boundaries (at a subsequent meeting held on March 31, 2017, he corrected the statement and noted he could not say for sure there are no plans for expanding beyond the current boundaries). Chairman Lam reported the meeting will be continued to March 30, 2017 where public comment will be taken by the Authority. Each speaker will be limited to 3 minutes, unless the Chairman authorizes additional time and they will be required to fill out a speaker slip and "stay on topic. " Dr. Ritter moved to continue the hearing to Thursday March 30, 2017. Said hearing to be convened at 6:00pm at the Collier County University of Florida Extension Office, 14700 Immokalee Road,Naples FL. Second by Ms. Sherry. Carried unanimously 4—0. The hearing was continued at 2:16pm The hearing was reconvened on March 30, 2017 at 6:00pm at the Collier County University of Florida Extension Office, 14700 Immokalee Road, Naples FL. Authority Members Lowell Lam, Eloy Ricardo, Dr. Sherwin Ritter and Jerry Morgan were present. Members of Collier County Staffpresent were Ken Kovensky, Ashley Lang and Scott Stone. All those testifying were sworn in by Assistant County Attorney Scott Stone. Speakers Charles Hand expressed concern on the request as the costs borne by the customers are already some of the most expensive when compared to other utilities. The anticipated monthly bill after five years will be $125 - $135 and it will be a financial burden on some residents. He recommended the request be denied. John Stuart noted the area is growing and hopefully prices will remain reasonable and the rates will stabilize over time. His current water bill, with a swimming pool is $125 monthly. Bob Vetera noted more information is required to fully analyze the application as the March 16, 2017 letter distributed by the Utility does not provide sufficient data on the request. The request is not equitable as the area is only 5%"built out"and it includes the existing residents contributing to the $10M incurred by the Utility for the construction of capital facilities with the cost spread over only 1,400 users at this point in time. Additionally, he expressed concern 3 March 27, 2017 on the venue as many residents could not attend and the meeting should have been held in Ave Maria. Ralph Schiffer expressed concern the Utility is attempting to recover past financial losses with the proposed increase and recommended the request be phased over 10 years as opposed to the 5-year plan currently proposed by the Utility. Chairman Lam addressed the public noting: • The Authority appreciates the public comments and the Members are appointed by the Board of County Commissioners to oversee the private utility companies in the County. • The Utilities and Authority are governed by State of Florida which allows rate increases if they are justified under the requirements of the Statutes. • Ave Maria Utility Company has been losing money and has not taken the full amounts of the Annual Price Index Adjustment rate increases they have been entitled to over the past years. • The case will be continued to March 31, 2017 for deliberations and the meeting is open to the public. Dr. Ritter moved to continue the hearing to 10:00am, Friday,March 31, 2017. Said hearing to be reconvened at the Collier County Growth Management Department Building Conference Room 609/610, 2800 N. Horseshoe Drive,Naples, Florida. Second by Mr. Morgan. Carried unanimously 4—0. The hearing was continued at 6:24pm The hearing was reconvened on March 31, 2017, at 10:00am at the Collier County Growth Management Department Building Conference Room 609/610, 2800 N Horseshoe Drive, Naples, Florida. Authority Members Lowell Lam, Eloy Ricardo, Sherwin Ritter and Jerry Morgan were present. Authority Members present confirmed they had no "ex park"communications in regards to the application. Members of Collier County Staffpresent were Ken Kovensky, Ashley Lang, Heidi Ashton- Cicko and Scott Stone. Also present were: F. Marshall Deterding, Attorney for Ave Maria; Cynthia Yapp, Rate Consultant, Ave Maria;Jeff Dykstra, Rate Consultant, Collier County;Jason Vogel, Ave Maria Utility Company(AMUC); Jamie Lopez, AMUC; Paulina Perez, AMUC; David Gensen, AMUC; Andy Burnham, Stantec;Allen Morgan,public. Mr. Deterding responded to the public comments offered at the March 30, 2017 meeting highlighting: • The water bill, following the rate increases will not be the largest as compared to other areas in the State, but somewhere in the middle range. • The venue for the public hearing was chosen to ensure a large audience could be accommodated if necessary. • The Utility has not requested the full annual price index increases allowed in past years. 4 March 27, 2017 • The request does not incorporate the cost of the$10M initial infrastructure improvements, those funds are repaid with fees from builders, customer connection fees,meter installation fees, etc. • Even after the 5th year of the rate increase, the Utility will still not realize a return on investment,with an anticipated loss of 7—8 percent. • The Utility is entitled to the proposed increase under the Statute and could request a higher increase if they so desired. • The Utility is not allowed to"make up for lost time"and recover past losses. • The 5-year phasing was chosen to allow the Utility to get close to obtaining returns on investment and keep pace with inflation. The Authority noted: • The Utility has delivered a good product over past years substantiated by the various awards they have received even while losing money. • In the future, a venue to hold public meetings in Ave Maria should be identified to address the speaker's concern. • The request meets the requirements of the Statute. Dr. Ritter moved for the Collier County Water and Wastewater Authority to approve Final Order No. 2017-01 as presented. Second by Mr. Morgan. Carried unanimously 4-0. V. Staff Discussion • Staff reported: • A meeting of the Authority will be scheduled on or before May 15,2017 to consider the 2017 Annual Price Index. • They are anticipating a Petition being filed by the North Marco Utility Company that will need to be heard by the Authority. VI. Open to Public None VII. Authority Member Discussion None There being no further business for the good of the County,the meeting was adjourned by the order of the Chair at 10:20AM. COLLIER COUNTY WATER AND WASTEWATER AUTHORIY • • I Lam,Chair, ' These Minutes were approved by the Authority on , as presented V , or as amended 5 ATTACHMENT"A" Final Order No.2017-02 RE: Establishment of 2017 Price Index Factor May 1,2017 Collier County Water and Wastewater Authority ATTACHMENT "B" Final Order No. 2017-03 RE: North Marco Utility Company Price Index and Pass-Through May 1,2017 Collier County Water and Wastewater Authority