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CCWWA Minutes 05/01/2017 May 1, 2017 MINUTES OF THE MEETING OF THE COLLIER COUNTY WATER AND WASTEWATER AUTHORITY Naples, Florida, May 1, 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: Lowell Lam VICE CHAIRMAN: Jerry Morgan (Excused) Dr. Sherwin Ritter Eloy Ricardo Patricia Sherry ALSO PRESENT: Ken Kovensky, Director - Operations and Regulatory Management Scott Stone, Assistant County Attorney Ashley Lang, Senior Management/Budget Analyst 1 May 1,2017 I. Call to Order(Determination of Quorum) and Roll Call Chairman Lam called the meeting to order at 2:00 PM. Roll call was taken and a quorum was established. II. Approval of Agenda—Meeting of May 1,2017 Dr. Ritter moved to approve the Agenda. Second by Ms. Sherry. Carried unanimously 4— 0. III. Approval of Minutes—Meeting of March 27,28 and 31 Dr. Ritter moved to approve the minutes of the March 27, 28 and 31 meeting as presented. Second by Mr. Ricardo. Carried unanimously 4—0. IV. Items Requiring Action by Authority A. Final Order 2017-02—Annual Price Index Staff presented a Memo dated April 17,2017- Subject: "Authority Agenda Item—May 1, 2017 Final Order No. 2017-02"and requested the Members review the request and approve the Final Order establishing the 2017 Price Index Factor as approved by the Florida Public Service Commission on December 12, 2016 establishing a rate of 1.51 percent. Dr. Ritter moved to adopt Final Order No. 2017-02 as presented by Staff. Second by Ms. Sherry. Carried unanimously 4—0. B. North Marco Utility Company, Inc. Price Index and Pass-Through Application Staff presented a Memo dated April 19, 2017— Subject: "Authority Agenda Item—May 1, 2017 North Marco Utility Company Price Index and Pass-Through Application. " They noted: • The application is for an increase of 3.56 percent to the Utility's wastewater rates. • The request is based on the 2016 Price Index Factor for 1.29%; an increase of 2.20%, for the purchased waste water treatment provided by the City of Marco Island and an increase of 3.00% for the surcharge on purchased waste water treatment provided by the City of Marco Island. • The increase in rates will provide an additional $13,293.44 of revenue annually to the Utility. • Staff and consultants reviewed the application and supporting documentation and recommends the request be approved by the Authority. Dr. Ritter moved to adopt Final Order 2017-03 as presented by Staff. Second by Mr. Ricardo. Carried unanimously 4—0. C. North Marco Utility Company, Inc. Regulatory Assessment Fee Payments Staff presented a Memo dated April 20, 2017—Subject: "Authority Agenda Item—May 1, 2017 North Marco Regulatory Assessment Fee Payments. " • In October of 2016, they received the 4`h quarter Regulatory Assessment Fee (RAF)report from North Marco Utility (NMU)without an accompanying check reflecting the 2.0 percent RAF for the Utility's gross revenue in the quarter. • When they contacted the Utility, they were informed the flow meter which calculates the number of gallons received by the City of Marco Island for 2 May 1,2017 wastewater treatment broke and was not recording the flows for a period of time (approximately Feb—Aug). • After the meter was repaired and the charges due the City of Marco Island were reconciled,the gross revenue was "negative" for the quarter and the Utility requested a credit. • Investigation revealed the Authority charges the RAF based on gross revenue of a Utility, when NMU was originally developed, their wastewater was treated by Florida Water,(a Utility also regulated by the Authority) and was charging NMU for the service. • The determination at the time (as confirmed by a May 13, 1999 letter from Bleu Wallace to the NMU) was NMU's RAF should be based on"gross revenue" which deducted fees paid to Florida Water to avoid a"double"taxation on the treated water given Florida Water was ultimately paying an RAF fee based on their gross revenue which included the monies they received from NMU to treat the their water. • In 2003, Florida Water was transferred to the City of Marco Island who did not pay an RAF to the Authority and the NMU should have begun paying a RAF based on their"gross revenue" and not deducting the costs paid to the City of Marco Island. • In the next series of years,NMU continued to pay the RAF based"gross revenue" which deducted the charges from the City of Marco Island for treating the water from the Utility. • In 2015,the RAF was reduced from 3 percent to 2 percent and NMU was notified of the change however the RAF gross revenue discrepancy was not discovered until the credit requested in October of 2016. • Staffs recommendation is for NMU to begin paying the RAF based on"gross revenue"which does not include deducting charges from the City of Marco Island and a determination be made by the Authority on any charges due for the arrears. Mr. Woodward reported: • The NMU was established in 1971 and was regulated by the Florida Public Service Commission who utilized the same rule on allowing deductions of pass through costs before paying their fees. • The flow meter broke from February through August and when the charges due the City of Marco Island were reconciled, it created negative"gross"revenue for NMU's quarter. • When the issue was brought to their attention on paying on the gross revenue they researched the discrepancy and discovered the confusion on the ability to deduct costs for treatment services paid to the City of Marco Island. • The deductions historically and currently allow a deduction for interest earned on funds and impact fee revenue. • He expressed concern on requiring payments in arrears as for many years they have been basing the gross revenue payments on the previous determination by the County, unaware there was a discrepancy. • He will file an application for the new 2017 Price Index and incorporate the ability to collect the 2 percent due for an RAF based on the new gross revenue determination going forward. 3 May 1, 2017 The Authority discussed the options available to rectify the issue: • Ms. Sherry recommended the 2 percent RAF be imposed beginning upon notification received by NMU from the Authority on the fee change in 2015. Other Utility's have been paying the RAF based on the true definition of gross revenue throughout the years and it would be an equitable resolution to the issue. • Others Members expressed concern the current users may bear some of the cost and the County did not recognize the deficiency when reports were historically filed by the NMU. • Other options include requiring the fee be paid when the discrepancy on the definition of"gross revenue"(which does not include the costs paid to the City of Marco Island for services) was discovered in the fall of 2016; or starting with NMU's next billing cycle. Mr. Ricardo moved to direct Staff to apply North Marco Utility's Regulatory Assessment Fee based on their gross revenue effective the next billing cycle. Without a second, the motion was not considered. Mr. Ricardo moved to direct Staff to apply North Marco Utility'Regulatory Assessment Fee based on their "gross revenue"effective April 1, 2017. Second by Dr. Ritter. Motion carried 3 "yes"— 1 "no." Ms. Sherry voted "no." Ms. Sherry left the meeting at 3:25pm. V. Staff Discussion None VI. Open to Public None VII. Authority Member Discussion Chairman Lam directed Staff to remind Ms. Sherry on the requirements for meeting attendance based on her recent absences. There being no further business for the good of the County, the meeting was adjourned by the order of the Chair at 3:35PM. COLLIER COUNTY WATER AND WASTEWATER AUTHORITY -, Yt 7 .� .2,71 LAweil Lam,•Chairrn These Minutes were approved by the Authority on 07((C' 17 ,as presented X , or as amended . 4 ATTACHMENT "A" Final Order No.2017-04 RE: North Marco Utility Company Pass-Through July 10,2017 Collier County Water and Wastewater Authority FINAL ORDER NO.2017-04 COLLIER COUNTY WATER AND WASTEWATER AUTHORITY A FINAL ORDER OF THE COLLIER COUNTY WATER AND WASTEWATER AUTHORITY ("AUTHORITY"), PURSUANT TO SECTION 1-6 (J), COLLIER COUNTY ORDINANCE NO. 96-6, AS AMENDED, APPROVING PASS- THROUGH INCREASES IN WASTEWATER RATES FOR NORTH MARCO UTILITY COMPANY, AND REQUIRING THE UTILITY TO NOTIFY ITS CUSTOMERS OF THE INCREASES IN RATES. WHEREAS, North Marco Utility Company (UTILITY) is the holder of a certificate for the provision of wastewater service to certain portions of Collier County; and WHEREAS, Section 1-6 (J), Collier County Ordinance No. 96-6, as amended, provides for pass-through adjustments; and WHEREAS, the UTILITY has historically paid their regulatory assessment fee (RAF)on gross receipts after deducting purchased wastewater treatment costs; and WHEREAS, the AUTHORITY, at its May 1, 2017 meeting, approved the UTILITY's application for price indexing and pass-through increases to increase wastewater rates by 3.56%; and WHEREAS, the AUTHORITY, at the same meeting, also directed to have the UTILITY change their future calculation of the RAF to include the purchased wastewater treatment costs, consistent with Ordinance No. 96-6, as amended; and WHEREAS, the UTILITY submitted an application on May 12, 2017, and a revised application on June 12, 2017, for recovery of increased pass-through costs related to the payment of the RAF on gross receipts without deducting purchased wastewater treatment costs; and WHEREAS, STAFF recommends approval of the UTILITY'S application for a pass-through increase to thereby authorize a 1.23% increase to wastewater rates, which is anticipated to increase UTILITY'S annual revenues for wastewater service by$4,613.04. NOW, THEREFORE BE IT ORDERED by the AUTHORITY in public meeting assembled,that: 1. The pass-through application, which seeks an additional $4,613.04 in annual wastewater revenues resulting in a combined 1.23% increase to wastewater rates, is hereby approved and authorized. 2. The wastewater rates, as depicted in the Tariff Sheets, attached hereto as Attachment "B", and by this reference incorporated herein, are approved and authorized,effective July 1, 2017. 3. Pursuant to Collier County Ordinance No. 96-6, as amended. the UTILITY shall provide written notice to its wastewater customers of the authorized increase and the basis for the increase. This Final Order adopted this 101h day of'July 2017. after motion, second, and majority vote favoring the same. Approved as to form COLLIER COUNTY WATER AND and legalit : WASTEWATER AUTHORITY Scott Stone _LOWELL LAM,cg N Assistant County Attorney ATTACHMENT "B" RE: North Marco Utility Company Pass-Through July 10,2017 Collier County Water and Wastewater Authority NORTH MARCO UTILITY CO., INC. WASTEWATER TARIFF Twenty-Third Revised Sheet No. 16.0 Cancels Twenty-Second Sheet No. 16.0 MULTI-RESIDENTIAL SERVICE-RATE SCHEDULE MS AVAILABILITY-Available throughout the area served by the Company. APPLICABILITY-For wastewater service for all master-metered customers including but not limited to Condominium,Apartment, and Mobile Home Parks. LIMITATIONS- Subject to Collier County Ordinance No. 96-6,as amended,and Supplemental Rules of the Collier County Board of Commissioners. BILLING PERIOD-Monthly RATE- Base Facility Charge $ 10.01 Gallonage Charge $ 8.16 (Per 1,000 gallons) MINIMUM CHARGE- Base Facility Charge to be billed per unit. TERMS OF PAYMENT-Bills are due and payable when rendered and become delinquent if not paid within twenty(20)days. After five(5)working days, written notice is mailing to the customer,separate and apart from any other bill, service may then be discontinued. EFFECTIVE DATE-July 1,2017 TYPE OF FILING-Adjustment of rates to reflect the Regulatory Assessment Fee on total Gross Receipts. Craig R.Woodward Issuing Officer Title: President COLLIER COUNTY WATER & WASTEWATER AUTHORITY APPROVED Final Order No. C,-T_C Approval Date i tt(t1 Effective Date Cl �G t Executive Director Collier County Water & Wastewater Authority NORTH MARCO UTILITY CO.,INC. WASTEWATER TARIFF Twenty-Third Revised Sheet No. 16.0 Cancels Twenty-Second Sheet No. 16.0 RESIDENTIAL SERVICE- RATE SCHEDULE RS AVAILABILITY-Available throughout the area served by the Company. APPLICABILITY-For wastewater service for all master-metered customers including but not limited to Condominium,Apartment, and Mobile Home Parks. LIMITATIONS-Subject to Collier County Ordinance No. 96-6, as amended, and Supplemental Rules of the Collier County Board of Commissioners. BILLING PERIOD-Monthly RATE- Base Facility Charge $ 10.01 Gallonage Charge $ 8.16 (Per 1,000 gallons) Maximum Gallonage Charge $48.96 * Maximum charge based on a cap of 6,000 gallons, as described within the City of Marco Island Residential Services Wastewater Tariff. Gallons cap may be adjusted to mirror the City of Marco Island Residential Services Wastewater Tariff upon proper notice to the Collier County Water and Wastewater Authority. MINIMUM CHARGE - Shall be equal to the Base Facility Charge. TERMS OF PAYMENT-Bills are due and payable when rendered and become delinquent if not paid within twenty (20) days. After five (5) working days, written notice is mailing to the customer, separate and apart from any other bill, service may then be discontinued. EFFECTIVE DATE July 1, 20I7 TYPE OF FILING—Adjustment of rates to reflect the Regulatory Assessment Fee on total Gross Receipts. Craig R. Woodward Issuing Officer Title: President COLLIER COUNTY WATER & WASTEWATER AUTHORITY APPROVED Final Order No. C'¢___ Approval Date C°7 (a (7 Effective Date, 07 0 Xe.*-44_ Executive Director Collier County Water & Wastewater Authority NORTH MARCO UTILITY CO.,INC. WASTEWATER TARIFF Twenty-Third Revised Sheet No. 16.0 Cancels Twenty-Second Sheet No. 16.0 GENERAL SERVICE-RATE SCHEDULE GS AVAILABILITY -Available throughout the area served by the Company. APPLICABILITY-For wastewater services to all customers for which no other schedule applies. LIMITATIONS-Subject to Collier County Ordinance No. 96-6,as amended,and Supplemental Rules of the Collier County Board of Commissioners. BILLING PERIOD-Monthly RATE - Base Facility Charge Meter Sizes per month 5;'8" x314" $ 10.01 1" $ 25.07 12" $ 50.16 2" $ 80.26 3" $ 150.47 4" $ 250.78 6" $ 522.53 Gallonage Charge (Per 1,000 gallons) $ 8.16 MINIMUM CHARGE- Shall be equal to the Base Facility Charge for each meter size. TERMS OF PAYMENT-Bills are due and payable when rendered and become delinquent if not paid within twenty(20)days.After five(5)working days,written notice is mailed to the customers, separate and apart from any other bill, service may then be discontinued. EFFECTIVE DATE—July 1,2017 TYPE OF FILING-Adjustment of rates to reflect the Regulatory Assessment Fee on total Gross Receipts. Craig R. Woodward Issuing Officer Title: President F:Worth Marco Utility Company,Inc 2017,Wastewater Tariff Sheets 2017-23nd Revised COLLIER COUNTY WATER & WASTEWATER AUTHORITY APPROVED Final Order No. ` C . Approval Date Q7 Effective Date c` - Executive Director Collier County Water & Wastewater Authority