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BCC Minutes 05/29/1987 S Naples, Florida, May 29, 1987 LET IT BE REMEMBERED, that in accordance with action taken on May 26, 1987, the Board of County Commissioners in and for the County of Collier met on this date at 9:00 A.M. in SPECIAL SESSION in Building "F" of the Courthouse Complex, East Naples, Florida, with the fOllowing members present: CHAIRMAN: Max A. Hasse, Jr. VICE-CHAIRMAN: Arnold Lee Glass John A. Pia tor Burt L. Saunders Anne Goodnight ALSO PRESENT: Neil Dorrill, County Manager: Maureen Kenyon, Deputy Clerk; Bruce Anderson, Assistant County Attorney; and Tom Crandall, Utilities Administrator. AGENDA Report on Collier County Water-Sewer District Special Act and consideration of possible amendments to the Act. CONCEPTUAL APPROVAL OF AMENDMENTS TO THE COLLIER COUNTY WATER-SEWER DISTRICT SPECIAL ACT TO TAKE BACK JURISDICTION FROM THE PUBLIC SERVICE COMMISSION AND TO RECOGNIZE THAT PROPERTY RIGHTS OF UTILITIES THAT HAVE EXCLUSIVE FRANCHISE WOULO NOT BE TAKEN WITHOUT COMPENSATION _ APPROVED Assistant County Attorney Anderson stated that the purpose of this meeting is to conceptually approve amendments to the Collier County Water-Sewer District Special Act that is pending before the Legisla-' ture. He stated that he is asking that the Board give conceptual approval to these amendments to take back jurisdiction from the Public . ··':.ÌSenr4ce W:;OJlUlLœs.u:onqead ·.tto ~1Jti¡at'~e..property>~.i'9ht.s !I Q,f'.Jt:hose Page 1 aOOK 104 FAr,[ 537 ",' i \ ,'\ j! ¡;; aDOK 104 rA~f 538 utilities which hold a 31-year excl~9ive written franchise would not be taken without just compensation when their franchises expire. He stated that if the Board approves conceptually of these amendm~nts, he would ask that he be authorized to conduct further negotiations. He r-epoxr,tedi-, thlrtt: t:h~: .ê.i::.t! Sti' s-e~oB:. amendment'st, woui'dt,takerb'adcIIr,:fr.nritsdlù:'t!i'on, " from the PSC two years earlier than would otherwise be permitted under general law, but otherwise the County would comply with the general law that would be applicable when any County takes back jurisdiction from the PSC, which would include fOllowing the PSC rules and regula- tions. He noted that the amendment would give the County authority to levy and collect a rate regulation fee not to exceed the PSC's current regulatory fee to pay for the costs of rate'regulation. He stated that this amend~ent would also permit the Board to ,take itself out of ~ , MAY 29, 1987 rate setting of private utilities by appointing a hearing officer or a rate regulation board to hear and decide rate cases. He stated that orders of the hearing officer and the rate board would be directly appealable to Circuit Court, bypassing the County Commission, adding that this is an important provision. He reported that the other part of the amendment would deal with those utilities that have in the past received exclusive 30 year written franchises from Collier County, adding that there are only four such utilities operating in the County; Deltona, which has two franchises, one for Marco and one for Marco Shores: a sIRal1 utility called North Marco Utilities; and Avatar Utilities which serves Golden Gate. He stated that these utilities " Page 2 .. ""~--,_._'''"..''',..._,_., ---------'" ~.~>. . ..~.._.. ,~"",""'··".'~_h~__,·,_'" ..____ , : MAY 29, 1987 seek written assurance in the Act that when their current franchises expire, which would be between 1994 and the year 2000, that the County would not be able to simply take their property without compensating them un~er the provisions of the Act that permits the County to endorse mandatory connections to the County's system. He indicated that the County does not currently have that right with respect to those privately owned and franchised utilities today, adding that when the franchises would expire, he would doubt that the County would be able to do this. He stated that he has argued this over and over in Tallahassee with the lobbyists that this Special Act cannot authorize the County to do an unconstitutional act. He stated that due to the experiences that Deltona has had in the Marco Shores area in the past with the State, they do not want to be involved in an inverse condem- nation situation where they have to take the offensive and sue and prove that a taking has oCcurred. He noted that there are three dif- ferent methods of valuation recognized by the Courts when a utility is: condemned; revenue flow, replacement cost, and original cost, and the Courts have said that any of these three methods might be appropriate or a combination of the three, but the end result is to arrive at what is just compensation. Commissioner Saunders questioned if the Special Act restricts the ., ..coun,ty .i.n.aQ,~'MI.ay ,in t:ecms o£ .what ,;,,is .incJ..ude.ð ,in ·.c.a.te'Abase ..andw.hat procedures are followed or does the County follow general laws that relate to rates? Assistant County Attorney Anderson stated that aDOK 104 PA\,[ 539 Page 3 aOOK 104 PAr.: 540 MAY 29, 1987 general laws that relate to rates are followed except that the County would be able to authorize, without the necessity of a rate hearing, any private utility to charge rates equal to the County's. He stated that this p.ravis.ion. ,is. in·'Ø\a.n~,a.f., the....contract.a.,..tha.t".tbe..,Cou~,has.. entered into already. Assistant County Attorney Anderson stated that the franchised uti- lities are concerned that the language of the Act would prohibit reve- nue flow from being considered in determining what the value of the utility is in the event that the County either condemned or negotiated an acquisition. He stated that the question that is present is pro- bably, why is this Act needed and what will happen if it is not adop- ted? He stated that in the first place, the County would have to wait until 1989 to take back Jurisdiction from the PSC. He noted that the Statutes that the PSC operate under tOday permit them to violate a local government's Comprehensive Plan, adding that they are the only State agency that has that authority. He indicated that even after a newly adopted comp plan has worked its way through all the channels, all the way up to the DCA, the PSC would still be free to violate the Comprehensive Plan, and past history indicates that when there is a dispute between a public agency and a privately owned utility, that the PSC has a bias in favor of the private utility. He stated that one of the chief purposes of this Speèial Act is to make the boun- daries of the County Water-Sewer District the same as the urban growth area designated in the Comprehensive Plan so that a uniform set of "'\ . Page 4 .. .. .. "'-'"_'_0""__._."""",._-.. ---i>it---.__····..._*__",..........o.~, MAY 29, 1987. rules would apply in thir high growth area. He noted that the alter- native to this would be to hold referendum elections to create separate water-~ewer districts in the future and then later merge them into one. He stated that this Act, in his view, is a homerule Water and Sewer Act that is necessary to protect the water quality in the County from pollution by the excessive number of private sewage treat- ment plants, package plants that are operating in the County and impose a potential contamination threat to our groundwaters. Commissioner Pistor stated that he thought that the PSC"rate regu- lation fee was only 2% of the gross revenue, to which Assistant County Attorney Anderson stated that h~ checked the Statutes and it autho~i- zes a charge of 2.5%, adding that if this amount is not needed it would not have to be levied. Utilities Administrator Crandall stated that with regards to the 2.5% regulatory fee, h~ has the feeling that services may be required that will exceed the 2.5%, adding that he is basing this on past Collier County Utility Rate and Regulation Board meetings that were held and some data that was received with regard to how many staff hours were spent. He stated that 1984 was the biggest year for staff time which was l,443 hours for rate regulation, which equated to $14,256.00 of staff's time. He indicated that staff time tends to be less than if an outside regulatory agency is used. He stated that ,,':1t:.heŒ!:rere 1128'i7.:~e.s .Q;n .~e ~iorii.t3a"1At'hl1ini:stœLive'~Code ,1:.ha.t ,;reJ..a.t:.es '. to the PSC which indicates that it is a bureaucratic agency and a lot of .page 5, aDOK 104 PAG[ 541 aODK 104 PAr.r 542 11 ,f: " I MAY 29, 1987 PSC staff devoted to rate regulation. He stated that he knows that the PSC regulates electric utilities, gas, and transportation as well as water and sewer, adding that there is a great deal of time needed fun the:'pu.~sel;oã, ::rðt_'~,abi."Or»_andI¡.'iNi.t;. iSlido~'~¡;IeOgl~th~' , are paid out of the regulatory fee, that 2.5% regulatory fee may have to be raised in the future. Commissioner Saunders stated that the way the legislation is pro- posed, the fee would be capped at 2.5\. Mr. Crandall stated that he would suggest that this fee be subject to revisions at a later date by local ordinance rather than by legislative action. Assistant County Attorney Anderson stated that he does not think that this would pass in Tallahassee, adding that when the Collier County Utility Rate and Regulation Board was dissolved, there was money left over. He stated that the CCURRB was also talking about lowering the rate regulation fee at the time that they were dissolved. C~mmissioner Hasse questioned what happens if the 2.5% is not enough, to which Mr. Anderson stated that at that point it may have to be subsidized with ad valorem revenues, but that problem did not exist before. Commissioner Pistor stated that up until 1985, the Commission did have jurisdiction over the rates and a firm from New Jersey was hired to figure the rates and the County always came out fairly safe, adding that the number of utilities customers is continually growing and the Page 61 .. MAY 29, 1987 size of the County-owned utility is continually growing. He stated that a fund could be set up for Possible rate investigations, but he does not feel that any further changes should be made to this Act. He stated that Mr. Anderson has done a fine job in Tallahassee to this point and if there are too many changes involved, it may not be passed. He stated that it is quite important for the County to have the right to run the utilities. Mr. Crandall stated that he feels that there would be a conflict of interest if Utilities were to be a part of the rate regulation. Commissioner Glass stated that he feels that it is the intention of the Board that Mr. Crandall would not be involved in it. Commissioner Saunders stated that if rate consultants were hired to analyze rate cases for the CCURRB, those fees become part of the rate base of the utility which is not included in the 2.5%. He stated ! I rate case expenses that could be passed on to the customer through the' that if there are expenses that exceed the 2.5% some of them may be rate base, adding that the 2.5% should be more than sufficient. He stated that the CCURRB seemed to work very well and questioned if they should be reinstated instead of a hearing officer? Assistant County Attorney Anderson stated that he is not prepared to make a recommendation either way at this time. Commissioner Pis tor stated that the option is in the Act and that could ,.be detecmined ..axa .laxer date. Commissioner Saunders stated that the advantage of using a Board " , . 1, Page 7 j . ~ BOOK 104 PAr,[ 543' ----.-..'" aDOK 104 PAr.r 544 Ii , . j' MAY 29, 1987 to hear these cðses instead of ð hearing officer is that the jurisdic- tion of that Board could be expanded to be an ðdvisory board to the Board on other water and sewer mðtters that may be of concern. He stated thðt if the Legislature approves this Act'W'íth'in the nex~'week, the County may have jurisdiction back from the PSC very quickly and they should be prepared. He stated that he would suggest that when this languðge is approved, that Mr. Anderson and Mr. Crandall also be directed to come back to the Board to recommend how the rates should be set. Commissionec Pistor stated thðt he would like this deferred until it is determined whether this Act passes. He stated that in all pro- bability it may not be effective until July and there are no rate applications coming in at this time. He stated that the whole method of operation will have to be changed. He noted that he would like to have Mr. Anderson proceed with this Act to see if it passes and then discuss the other matters later. Assistant County Attorney Anderson stated that he wants to make it, clear that the Board does not have an agreement as to this specific language. Commissioner Pistor moved, seconded by Commissioner Glass that the conceptual approval to take baok jurisdiction trom the PSC be approved, and to recognize that the County cannot take the property rights ot these written franchiseð utilities without compensation. In answer to Commissioner Hasse, Mr. Anderson stated that if the Page 8; - - .. MAY 29, 1987 County does take back jurisdiction, anything that is pending before the PSC has to be disposed of by them, so if there are any private utilities that are thinking about filing a rate case, they had better do it now. Commissioner Saunders stated that he would like to see this brought back before the Board on June 23, 1987, and have Mr. Anderson report what the alternatives are in terms of setting up a hearing officer, CCURRB, or some other agency to deal with a rate case if one came up on July 2, 1987. He stated that he does not see any reason in delaying such discussion. Mr. Anderson stated that {f the County takes back the j~risdic- tion, he would like the Board to hire Someone from the PSC to come to Collier County to organize the department. Commissioner Saunders stated that this is no problem, but he'would like to know what the needs are so they can be acted upon. Upon call for the question, the motion carried unanimously. Commissioner Saunders questioned if the Commissioners need to do anything in Tallahassee with regards to telephone calls or correspon- den~, to which Assistant County Attorney Anderson stated that the Commissioners could make a telephone call to Mr. Meffert, who is the Chairman of the Committee on Regulated Industries., '\.\-... , *** , ". \ ·~~v . ';~ . ';- ," ..,I1~ ".'V:~ I'')~~ ), f' . ~, ~ .~ I ,', ¡ ,.'.",' :-,:;~ \ J ¡ ! " , , aDOK 104 I'A,;r 545 Page 9; , ' . !! eoo~ 104 P~r,( 546 MAY 29, 1987 There being no further business for the Good of the County, the meeting was adjourned by Order of the Chair - Time: 9:30 A.M. l ~".' .f)j: 'Æ ~i"· ~;" ì ~~ . ;' :., "''''','','''''''': -'1 ~' ATTE$'Z"!, "...J A,~IIJ. ",,; 1 J~.:$. ·~;~'~~;~r~'.~~RK i .ß~{;;fL:'ell};j_~..&c ]~ ':. .~."'.... ',_ .~,...;/.: (-J : ,. ~: . %"" ../.) 1.\\(., . ,. : :-~f. .... 1" ·-)U'. s;",.,. ".. " ," , " ...., 1', ·eQ'~ ~m"i!1u't'es a'pproved by the Board . ;I . ~ . . . .. , r as pie~eritè(f\'.~ or as c'orrectect BOARD OF COUNTy COMMISSIONERS/ BOARD OF ZONING APPEALS/EX OFFICIO GOVERNING BOARD(S) OF SPEC'J.TA~,·D1'S[\u(;J..'SUIND.E8fI'I.'13:"'" CONTROL"· ". ~A4~~ on ~P'l/6J /9i7 '/ . ; Page 10 lilt. ... "J