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BCC Minutes 04/12/1983 S ¡"'~,'j'~ " ~ c::.:J ~.......,ill Napl.., Florida, April 12, 19R3 LET IT BE R£MF.MO£R£D, that the Board ot County Commi..loner. in and for the County of Colll~r, and al.o acting I. the Board of Zoning App.al. and a. the governing board(8) of .uch .peclal dl.tricts aa have b..n created according to law and havinq conducted bu.ln... h.reln, met on thl. date It 1.30 P.M. In Oua.I-Judlclal ....Ion in Building .,. of the Courthou.e Complex, Ea.t Napl.., Florida, with the to110wlnry lumber. pre.ent r CH~IRM~NI Mary-Franc.. Kruse VICr. CH~TRM^Nt David C. Brown John A. Phtor Frederick J. Voss C. C. -Red- Holland ALSO PRESENT. Jame.C. C; I h., FI.cal Officer, M.ur.en Kenyon, De pu t y Clerk, ßurt Sa unders, County Attorney, Bruce ""r1erson, A..htant Co un t y Attorney, C. William Norman, County Manager, I rv i ng Ber zon, UtllltJe. Arl~inlstrðtor' Craco Spðul~lnq, Ad~lnlstratlv. ~Ide to the Board, and Chief r.puty Pay narnett, Sheriff's Department. AGENDA Marco ISland Utllltle. - Work.hop Tap. .1 QUASI-JUDICIAL HEARIHC OPENED AT 1r30 P.M. TRIS DATE AND CONTINUED TO APRIL 27, 19ft), 9rOO A.M. RECARDINC MARCO ISLAND UTILITIES County Attorney Saunders Atftted that he received a letter trom ~arco ISland Utilities, Inc. which provide. In substance that the County Cor-,IIs.lon mfty Issue Ita final "'l"ltten ord.r on or before May 3, 1983, II 0ppo.ed to any earlier date that may have be.n contained In their franchls. aqreoment. Mr. Gilbert Retz conflrm.d for the røcord that such I. the c~se. County Attorney Saunders .tated that there wa. a petition to Intervene tiled hy the ~ðrco Island Civic .....oclatlon and the Marco II1and Taxpayers Association, ad~ln9 that ~r. Arvld Jons.on , ",tJ 07'A ~ ',"\':1 ~O~K orr-fACE ~ 'ag. 1 ,;~ .~1(i , ','.,,' - - -- - - - - - - - - - - - - - - -- -- --------,",1\1:1":',"\ "~'~ . ',~ I ~ . r . ,,', . ,,~ ,,~Î.: ------------ :....- "'...."''''~('''':'II.... ~..... . . ..,., <~ ,.,' ", ,~ .. .;. , . ,.. .~ ,t"þ,., .:,,' . ¡,.'; .' .....if' , i1t\1'.....~....", ' '''''..'1.""""",'~' .~"",..,:. ,~ "-",. , . .-...~. .(.~,.~;, ." . ---------------------------- ----..------ &OaK 074- PAG£ ~ 1.prll 12, 1983 and Mr. Edward Clark are repre.entSnq those a.socSatSon.. H. .tated that .tter the P.tltlons are pre.enterl, It will be n.cfts.ary for the Board to d.clde whether these organizAtions fthoul~ be permitted to Interv.ne, Id~ln9 that once ft petition Interv.ne II granted, It m.an. that the two associations are treated 18 partJ.s having the sam. rSght. a. the County Staff ftnd the Utility Comp~ny would have al a party. ß. .tlted that this means that testimony can b. presented and cro.s .x.mlnatlon ot the wltne.leø can he made .. w~ll ftS argument. Mr. Edward Clftrk, rr~sldent of the MftfCO ISland Taxpayers Association which repre.ents about 50n resldonts ot M~rco Island and custom.r. of Marco ISland Utilities, submitted the joSnt petitio" to Intervene and partlcSpate In the proceeding. He not.d that the joint p.titlon Is a¡so tor the ~^rco I.lan~ Civic Association whSch r'pre- ..nt. ov.r 1000 ro.l~ents of ~arco Island ftnd customer. of Marco Island Ut I 11 t I.. . Mr. 8etz stated that he has no problems with the participation of M'rco Island Civic Association or Marco I.land Taxpay.r. As.ocSltSon tor this h.arlng adding that, due to the lack of notSce, he would lSk. to r,s.rv. the right to object at a later tlm.. Co..I..loner PI.tor moved, ..conded by Co.-I..loner Vo.. Ind c.rrled un.nlmously, th.t the petition to Int.rv.ne by the M.rco Island T.xpayer. A..oclatlon and the Marco I.l.nd CSvSc A..oclltlon be IcC.pted. · 'J!'" ."",..ar. Mr. Clark st.ted that h. wSsh.d to move for the d.ni.l of the petition ot Marco ISland UtSlltlel tor an Incr.... Sn their water .nd sever r.t.. on the ground. that It S. not verified and doea not Include ,udlt.d Information, adding that the report ot the con.ult.nt. to review the utilities .PPlicatlon Is In.ufflcl.nt bec.us. St Icknov- ledge. thlt it S. not bas.d on an audited .x.mln.tlon. Re .tlted that '; . . ------------------------------------- 'a9' ~~ : '. "I' . r.:'.:.:J? ;';'" [:=J c::J ¡--- r--- r-! .. . ... 'O. Apr 11 12, 1983 -- - - - - - - - - - - - - - - - - - - - - - - - - - - -- -- -. - -.- - - -- -- -. It i. the le9al obligatSon of the petitioner to present .uch evidence that wSll enable the Commission to render a fair ftnd just decision, which has not hoen done. He atatod that he would like the hearSng continued for a p.rlod of two weeks In ord.r to enable their con.ultønt to co~pl.te hS. study and report. County ^ttornoy Saunders .tated that he would recommend that the rat. ca.e hearln9 be hear~ this date as much as posslblo and then continue It for a .hort perJod of time In order that all parties can review all d~cu~ents that have been sub~ltted. It v.a the general con.ensua of the Board to hear the testimony thh date. County Attorney Saunders stated that the procedur.. that are .......4.". .....t' t,... ~ recommended to b. followed art the procedures that are followed by the Florida Admlnlstratlv~ Aqlncles that utilize the Florl~a Admlnlstratlv. Procedure Act. He noted that Marco Island Utllltle. experts wS1l present their ca.. and the County and the Intervenors will hay. an opportunity to cross-exa~lne th.lr wltn....s. He noted th.t once Marco Ialand Utllitle. has concluded with theSr case, the County will pr...nt Ita exp.rt testimony and Its case, addinq that Marco Island Utilltle. Ind the Int.rv~nor· will have an opportunity to cro.ft-~xamSne the County's wi tn.s.es. lie rl:port.~ that once the County has concluded, the Intervenors wJ!l he qlvon thø opportunity to present whatøver evJdence that they have and ~arco Island Utilities .nd the County vSll be p.rmltted to crosS-ex~mln. tholr wltne..ea, add In? that at the concluaSon of aU the evidence, Marco ISland lI't:IlStSea ahould be 91ven an opportunity to present any rebuttal evlðence that th.y would like to baaod on the ca... presented by the County and the intervenor. Øe .tlted th.t It the conclusion ot ~ll evldenc., the member. of the pUblic Ire permitted to apeak tor I brief period of tSme, lðdin9 thlt eO~K 074- fACE 640 -- -- - -- -- -- - - - -- - - - -- --.- - -- - - - - - -------"" Pa9' 3 , , . .·,~~Þ,.. '.'.' .. ~~rt..·(·,,· .',,'-; .....;,. '¡þ-' "í,,~~... " aoaK 014 PACE 641 Aprll !'-, 1983 ------- - - - - - - - - - - - -- - - - - - - - - - - ---.-------- at the conclu.lon of all public comment, Marco Island Utllltle., the County, and the Int.rv.nor would be permStted to provide 80me closing rem.rk. to the Board. flo not~d that at that po Int, tho Board would consider drattlng a R~t. Order to reflect whnt has boon presented. He not.d that the FlorSdn Rules ot Evidence should be adhered to as cloS.ly .s possible, addlnq thnt this Is an admlnl.tr.tlve h.arlng and the rul.s will be relaxed to n certain extent. Mr. Betz and the intervenor stated, for the record, that they have no objection to the proc.dure. In answer to CommJftøloner Vo.., ^ttorney ~^undor. stated that the cro..-examinatlon could be reserved until th. next meetinq i. recon- ven.d, adding that h. woul~ like to conduct cro'ft-~xamlnfttlon ot ~r. Ars.nio Milian, Presl~~nt of ~arco Island Utilities, this date. He said that Jt would help the County and the consultants In preparing tor the reconv~nlnq of the hearlnq. County Attorney ~~unr1er. Introduced the following docu~.nts Into the record a. County's F.xhlblts 1-8. 1. PetltSon to Intervene by the Marco Island Civic .....oci.tion and the ~arco Island Taxpayers AS,oclatlon. 2. Water Fr~nchl.e Aqre.ment with Marco Island Utilities, Inc. ). Sewer Franchise Aqreement with Marco Isl.nd Utilltie., Inc. 4. Application and Petition of Marco IsI.nd UtllitSe., Inc. tor the rat. Increa.. and the attachment. to that petition and applJcatlon. 5. Report by As.oclated Utl1ltle. S.rvic.., Inc. dated April 1, 1983, the preli~Snary draft along with the att.ched .chedul... 8. M'Morandum dated April 11, 19R3, trom the County AttorneY'a office to the Board of County Comml.sloner. Sub.tStutlng certain schedule. In the preliminary draft and .l.o PfovSdln9 certain alternate schedules to that dratt. 7. Brochur. d..cribSng the As.oclftteð Utillti.. Servlc.., Inc. conaul tSncjJ f1 rM. 8. Marco IsI.nd Utllltl.s, Inc. .n.wer. to tnt.rrog.torl.., Part. "'. 4 - - --- - -.- - - - - - - - - - - - ------- -.--------.--- "ge 5 ,í;. ----- -- -- ---- - -- -- - - -.- ---- --- -------------, ..",._,~,..,.""--~ ...........J _......J - 'J'-, . .,' ...- .---- ---- - - -- - - - -- -- - -. - - - - - - - - - -- - - - - - -- ----,-. . , April 12, 19"3 A , B .ubm1tted by Associated UtllltSes ServSce., Inc. Mr. Betz and the Intervenor stated that they have no objectSon. to the above item. b.Sng Introduced tor the record. County Attorney Saunders aske~ that all people reqardlng the hearSng be Introduced tor the record addlnq that, at the conclusion, h. would like to have the OPPortunity to qualify certain people as expert. . County Attornoy Saun~er8 Intro~uce~ the County's consultants ð. M~. Dtuart MCDaniel, Mr. John n. Palko, an" Mr. David O. Weller, who will be testifying as experts In various I.Iroaa throuqhollt the rate case. He Sntrodu~ed his a..latant County Attorney, Bruco Andorson. Mr. 8etz Introduced Mr. Ara~nlo Milian, President of Celtonð Utlllth., Inc., Oehorah !iwaln, rate analyst, Mr. Walter Lee Hunt, consultant with Main Harrlml.lnl Mrltza Comez, CPA with n.loltt~, Uasklns, , Sal.., Joyce fabelo, Comptroller of Deltona UtS1ltJ~s, Inc., Mr. Con McNelley, Treasuror ot D!ltona Corporation, Mr. Cene Linton, Vice President of ~ltona Utilities, Inc. and Chi.f of Operation. and Construction of UtlJltles, Mr. Raltael Tarrero, ChJer r.ngln~er of Celtona Ut1.1lths, Inc., Mr. Dltv. Denny, Project Managar of Marco Island Utl1Itl.., and Mr. ell Compton, tho OffJce Manager ot Marco Island Utllltle.. The Intorvenors stated that their consultant I. Mr. Robert Tarr.l. County Attorney Saunders statod that h. would lika to Introduce .. expert. the three Individuals thftt will testify tor the County, explaining the areas that they will te.tily in, adding that there I. In agreement with counsel for the Utility co~pany to stipulate to thes. Sndlvldu'l'. qual I ficatSonn. He noted thl.lt Rtuart McDaniel will be testifYing In revenues, oxpen3ea, rate bas., calculation of rev.nue deficiency and general wat.r and .ewer utility accounting practSce.. aO~K 074 fACt B42. >; ------------------------------------ April 12, 1983 ~O~K 074 PACE 643 R. reported that Mr. John Palko wSll be teststySn9 in the areas of rate d~.Sgn, rate ba.., r.venue. ftnd e~pon.~. ~nd Mr. ~v1rl Wfl~er wS11 b. t..tlfySng Sn the aru of rat. of r.turn. "e stated that Sf there i. no ohjectSon he would like ~ motion to ðccept tho three SndlvSdual. .. exp.rt. In tho.. ar.as. Th.re Wft. no obje~tlon from M~rco Island UtilitSes or the Intervenor. CO..S..lon.r PI.tor mov.d, .econded by Co~mS..Soner Vo.. and carrSed unanSmou.ly, that Mr. DavSd Weller, Mr. Stuart MCDaniel, 'nd Mr. John Palko, be acc.pted I. export witn...... Mr. Betz stAteð that his pre..ntatlon S. InformatSonal only, adding that during th. testimony all hi. flqur.. wSll be veritled. He r.ferr.d to varlou. chart. showSnq the rate of return over the pa.t fSve y.ars, which has ðeclSne~. He SndScðted that Sn 1977 the rat. ot utur.n w.n e.u, S.U In 1978, 8.0' Sn 11)79, S.ti, Sn 1980, 4.11;, In 1981, and 4.4' In 19R,. Ho noted that these percentages ar. prSor to d.bt .ervSce, adding that thoy are trying to g.t . rate of return on inve.t...nt that I. us. and u.etUl in t.he publlo ..rvSce. ... .t.ted < If- th.t '0.. of the factor. that ~ake thS. rate of r.turn deo1ine ar. the Increa.lng cost. In w.ter and .ewer. f~ noted t.hat the total op.rating *xpen.e. over a five year per Sod has Incr....d 224', adding that revenu.. have Increa.~d ~urin9 that time too b.cau.e th.re .re lIore cu.tomer. and more water I. heSnq uS'd. He .tated that the r.venu.. h.v. Sncr....d 112'. H. referr.d to ð chart .howln9 the percent.g. of oper.tlng .xpen.e. to revenue., adding th.t the revenue. have b..n Increa.ing rIght .long as ~ll as the operating .xpen.... He report.d that the oper.tlng expen.es S. a amall portSon but another probl.. II n.t Inve.tment which Ss actual cash outlay, adding that the rate of return I. half ot what It WIS five yeftr. ago. H. Indicated that thl. . , .' PI". 4 :,;.~þ'. "II .' )<!i~''''i;1 --~--- - -- - - - -- -- - ---------- - ----------' ""." . . . ,æ~,t,,'11 ' . r:=ì c=:J c:::I ':"~~,I',,",":" ' . , . , ~ ' . .. ., ~j.\t j' '(I:.: '..'·'}r """'f,t!l::. ""8,\7',.. }~r;:~~t.',lfi~;:';:~':~·:::'" ,':... '~ "Ii,' . ~.~..,_..~,..^.."....._., .,,,.,,' < - ..' 'f\~ .. ~ ~ , a::J ~,"'" -.~ -- - -'- - - - - - - - _. - - - - - - - - - - - - - - - - - - - - - - - - --.-..:-"--: 'l '. ~pr 11 12, 198) conclude. the openSng statement and he 18 ready for tho tir.t wStn.s.. County Attorney ~aunder8 requ.sted that Mr. Retz have all the wltnesse. stand Sn ord.r to have them sworn In at on. tSm. by the Court R.porter. Th. Court R.porter .d~SnS.t.red the oath to ell vi tn..... repr..entlng Marco Island UtllltSes, Inc. Mr. ArlenSo MilSan, President of Marco ISland UtSlitSe., Inc., stated that he Sa a protessSonal engineer with a bachelor'. degr.. in CSV11 Engine.r and a mnster'. d.qree of £nvSronmental EngSneer trom the UnlverlSty ot Florida. He .tated that he has boen a registered prot...Sonal enqineor Sn the State ot Florida since l~7'-. He stated that he I. pre.Sdent of Marco Island UtilStieø, Inc. ~nd also Sn charg. of all .ccountSn9, bllllnq, and rate ~akSnn. ... -".pe '2 In ansver to Mr. ßetz, Mr. Milian state~ that there are about 45,000 vater customera and '0,000 sewer customers throughout all the utSlltSe. that are owned. Al~o, ~r. MllSan stated that he Is . m.mber of the FlorSda PollutSon Control Federation, the American Society tor ClvSl Engineers, ~nd the ~erican Water Worko ^asocJatlon. He .tated that In addition to hS. profesftlonal reaponslhl1lties, he has been ft .ember of the Planning Advisory Roar" tor the City of ~4tam1. ne not.d that h. ha. qualSfi.d and testified before the PUblSc ServSce Commi.slon on several occaølons and certain County CommSs.ion. other than Colll.r County. He reported that the franchise agreement wa. grante~ to Marco Island UtIlStJes In )q~4 and started servSng the fSr.t customer Sn 19~~. He atated that the fJrst rate Increas. was apPIS.d for Sn 1971 which was approvod In 1973, addSng that another 'PPllcation vas fSled for a rate Increase In 197~ which was approved In 1977. County ^ttorney Saundera Itate" that he objected to that que.tion and answ.r as beSnq tot~lly Irre1evftnt to the matter before the Board &a~1( 074 rACc'au 'it} '~1·.. ,";~ P"g8 7 ;/:,; ------.--. -.--- -.-. -"- --.--- -. ----- - --- -,. --- --.---------......:4 '~~·I"~; ",. , ' " ' tH.- " . . t', --------------------------------------- aæx 074. PAct 645 Aprll 12, 1983 thl. date, addSng that he would ~ak the Boarð to remove It and be Instructed not to go Jnto pa8t rate hearln?s as thoy are o( no value to thl. particular hearSng. Hr. Beta .tated that he would allow the Commission to rule on St, but not.d that It 1ft not a hlq matter of concern, further statSng that he cannot ~rque the relev~ncy. Co~ml.aloner PI.tor ~oved, seconded by Commls.lonor Voss and clrrSod unanimously, that the evSdence of prSor rato incr.as.. I. In.d_i...ble a. b.lng Irrel.vant. Mr. Betz stated that ~r. Ml1San will testJly a. an expert Sn utSllty .ngineerlng, use and useful ðSS~tft, and qen.ral utility ",atter.. County Attorney Saunders qU.8tlon~d If Mr. Milian il curr.ntly employed by Marco Ialand UtllltSes, to whSch Mr. MilSan replied · US rD'llt I vel y. lie IIta ted tha t he h.'IS no objftctlons to Mr. Milian qUllSfylng a. .n expert tor tho area. mentlon.d above, 'ddlng th.t the Board .hould take offScSal actSon to r.cognSz. Mr. MSllan .. an expert. Coaml..Soner PJ.tor mov.d, ..conded by Co.-I..loner Brown and c.rrled un.nSmously, that Mr. Ar..nlo MSllan be recognSzed a. .n export wltn... Sn tho ar.as of .nglno.rlng ph.s.. ot UtllStle. 'nd goner'l Intorm.tlon wSth r..pect to how bueSn... I. conducted in utllltl... In response to Mr. Retz, Mr. Millin stated that the applSc.tlon to Incr.... rate., date~ ~eptomb.r 30, 1982, and tho exhibits .ccomplnying St, was carried out under his supervSson. He noted that the operltlng rev.nu.. for tho teat year were Sl,SO~,OOO wSth oporatlng earning. of $302,526,000. He .tated that the sewer operating r.venue. v.r. $598,445 wSth operating .arnlng. ot $235,4n~, adding thlt the op.rltlng .arnSng. are prior to Income tax or Sntereat. To the que.tSon of whether the operating cost. ar. reasonable, Mr. HSllan r.plied ---;J--.- --- - - - - ---___ _____ Œ:J c::J fIB .._-~- -_."........,.""-",,,,,,_..... "",,,,,.~..,,,,.,.,,,,,,,,,,,....,,>,.,. ~ ~ c.:::J c::.:D ---- --- - - -- - __ 0- _. _ _ __. - _. - -- - -- - -- --- - ----- April 1', 1983 afflrmatlv.lY, addin~ thnt most of tho materJals and chemScals that ftr8 purchasftd for ~arco I9land Utilitios ~n~ their operation has tho advanta98 of lower cost hnc~use of the volume. ne IndScated that the exhibits show that tho water dl~trihutSon syntft~ and sewer collftctSon eyatem that. I. pro~ently in oxlstonce in Marco Island has heen Installed by the utility. To ~r. Ret%'~ question rc~nrdln~ use ðn~ useful, Mr. Mlliftn stated that In ord.r to rl~termSne the rato base, the us. and uS.fulnees of the asnetø that are In srrvlcn h~ve to bn dotermln~rl. He ftt~ted that all tho facllStles that ~ro necessary to ~rovJde adequate service to the exSstlng customer a are use And uOftfulness. ~r. ~ill~n ~tfttcrl that the gross Invostment of the utility Is t,l~,nln,ooo which WAft at the end of 19Q2, adding that ~12,~~~,RA3 Is the rate basft. To Mr. netz's question ro~ardln~ any I~provem.nta on the system, Mr. Milian stated that thera are ~OMe Improvements belnq ~one ~t the present tSme, with Gome th~t muat he completnd hefore the end of the year, and Some npxt Y~ftr. He statpd that the Improv~m.nts are the raw water expanftlon facility which has bo~n completed, a sewaqe effluent lSne will be reqllJr~d In tho area north of ~1l1rco Shorea which la In cOMpliance with the nr.n, addln~ that tho cost will exceed sr,~n,ono, and the water treat~ent plllnt Slu1qe Ilnrs will have to be expanded whSch will exceed S30o,oon. Ifl! !Stnte~ that In thft thlr~ quarter of this year, they pl~n to huli1 n two million qallon ~tor~ge tank at the south en~ ot the Island, whJch will cost approxiMately ~5~O,ooO. He noted that there will h~ ~ np.~d to ~xpAnrl on th~ raw w~t.r lines which will be a '4- lSne ~nd ryo s~v~n miles, ~drtJnq that the fSlter tanks In the old water chambrr pl~nt h~ve to hp ovprhaUlert complptely. ~r. Retz que.tS~ned If ðll these S~provem~nt8 are justSfSed and necessary, to which Mr. ~llJðn r.plled ðfffrmatively. &O~K - - - --- . - .__~ __ .0_- ,__ __. _., __ _ -_.. ._- '"--·0_ __ ..._ _ _h _ _. _. "-..--., ...._'~~. '.. . I. ~ . ----------------------------------------- April 12, 1ge3 aO~K 074 PA~t 847 County ^ttorney Saun~.rs stated that Mr. Milian teltStied th.t the rat. ba.e It this ti~e Is $1,,594,~ß3, questioning It that i. a co~bined water and sewer tlqure, to which Mr. Milian replied aftlr~atively. Mr. Milian st~ted that in the InitJal tSlln1 there wa. a rat. base or ~13,11~,ono for water an~ Sower. County Attorney Saunders questioned what mft~es the difference In the figures, to which Mr. Milian stated that there were s~v.ral adjustments mad., 80me Positive, some n~9atlve, adding that the rate analyst could answer th.t much better. Ta pe . J County Attorney Saunderø qu.atloned why there Is a $~Oo,noo dltference, to which ~r. Milian statod that, alter revSewlng the report troll the consultants, there were ar..s that were not Included al well .. IntorlllatSon trom the consultants that reduced Items. County Attorney Saunders stated that Mr. Milian testlfSed th.t the booster pUmp was built In 19BO, and questioned when the plan. tor Marco Shores Development were done, to which Mr. Milian atated he did not ~. recall. As.Istant County ^ttorney Anderson questSoned how much the nev r.v w.ter lSne would cost, to which Mr. Milian stated approximately.] mSlllon. "e stfttod that ~r. MIlJan t..tlfled earlSer that the operat- Sng expenses at Mðrco ISland Utilities were reasonable, questlonl"9 if there w.re any studJes or comparisons done, to which Mr. MIIS.n at.ted that he telt that Marco Island Utilities would be compared very flvorebly wSth all utilities, adding th.t the Public Servic. Colll_i.llon hI. ..de th.t COlllparlson In the paat. AI.t.tent County Attorney Anderaon queatloned It .ny of the exp.n.Son. th.t were lIIade to the water and .ewer plantl that ere be1n9 U.ed now end Included in the rftte b... were m.ndated by qovern.ent'l ---:- - - - -;::;..:;:::...-:- - - - - - - -- - --~----- ----- - -.,------- __·.._.~o..."._ -.-- - - - -- - - - -- - ----- - - - -- - -- --------------- Apr 11 l2, 19" 3 luthorStle., to which Mr. MSllan replSed th.t It I. ~.ndat.d thlt one. you re.ch I certaSn capacSty you have to expan~ the tacllStle.. In re.ponse to ~S.I.tðnt County Attorney Ander.on regardSng charging the Marco Island golf cours.s for the treated .ewage eftluent, Mr. MSlSan .tated that Marco Island UtJlStSes does not charge tor the trelted ..wage thst the golf courses receive, addSn, that the amount of the ~.Sntenanc. at the golf cour.e Ss SncreasSng becaule ot the effluent disposal due to the maintenance of the .prinkler he~d., pu~p., etc. A..Stant County Attorney Anderson qu.stloned when the inltSal decl.lon. were ~ade to expand the Wftter and sewer facllltSes, to which Mr. Milian .tated that the .ewage treat~ent plant was put Sn operfttlon 8Q~K 074 fA~c' 648 at the end of 1981 and the rleclslon would have been ðbout 1-1/2 year. prior to that, addlnq that the same thing aPPlSe. to the water. He SndScated that the exact d~te coul~ be provlrled at the n.xt hearSng. In response to Asslatant County Attorn~y An~eraon, Mr. Milian InrlScated that the Sower treatment plant has more than exc.eded what wa. projectod for the year, but the water treatment plant ha. been very close to what wa. projocted. As.S.tant County ~ttorney Anderson qu..tSonert how much un~eveloped land I. owned by Oeltona or controlled by them or any of St. lub.ldl- arl.., to which Mr. MJIJan stated that this I. a corporate question. Mr. Betz Itated that he would objoct to the relevancy of the que.tSon but, It for .ome unknown reasons It Is necessary, he would brSng In a wStness that could testify, addSng that the qrowth on the I.land I. not from built or owned Steml on the Illand by Oeltona. County Attorney ~aunders Itated that the answer could walt until the next meeting convened If Mr. Petz would h~v~ the wStne.. .vallable, whereupon Mr. Retz agreed. --------------------------------------- '.g. 11 . , " ----------------------------------------- Tape .4 80~K 014- rAtt' 649 April D, 1~8J ..... Commis.loner Krus. left the room at 2155 P.M. .nd return.d atter the r.ce.s. ..... Asøl.tant County Attorn~y ^n~eraon questioned, when the decision wa. made to expand the system, St the rates and the customer's abSlity to pay tho.. rates Were tftken into consideration, to which Mr. MSISan replSed that the aystem was ~Kpðnded blcause the n~.d WðS there and the expansion cost would be ~proa~ throughout all the CU9tomers, adding that those that ðre outside the franchl.e ar.a 3re charged an Impact, te.. To A.slstant County ^ttorney Anderson's questJon, Mr. MSlSan indScated that there w~. no stu~y rtone or consideratSon taken ot the CU.tomer'. abSlity to payor the affect on the rates until after the tact. A.sistant County ^ttorney "nderaon qu.stloned why Marco ISland UtllStie. waSted so Ion? to come In (or an increase In rate., to which Mr. Millan stated that after 19BO, there Wert .xpanllonl mad. whSch cr.ated ~ore operatJng expenses. Mr. Detz stated that County Attorney Saunders mad. an objection to hSstory, addSng that he t..l. that thS. questSon Ss irrelevant as to why Marco ISland Utllltle. I. her. now or yesterday. A.sistant County Attorney Anderson stated that It w.. very r.levant and the consultant raSsed thSs question Sn hS. report, .ddlng th.t he would like to know why Deltona Utilltle. waited so long to CO.e In to a.k tor a rate Increase. Mr. Betz stated that the mentioning of something Sn a r,port doe. not make It relevant to the lasue. at hand. County Attorn.y Saunder. stated that a rullnq of the Bo~rd would be nece.sary to d.ter~ine Sf thl. lln. of que.tionln9 would be relevant, adding that the question deal. with why there wa. a walt tor thS. particular apPlScation. Co~S..Soner Pi.tor moved, .econded by CommS..ion.r Roll.nd and carried 4/0 (Co.mS.aSoner ~ru.. out of the room), thlt the line of P"9. 12 r--, ....... ~ April l2, 1983 ~.'" -, - - - - -' - --- - - - -. -- -- -- - - - - - - - -- - - - - - - -- - -- -- --. que.tlonlng regarding why there w.. I d.llY In thS. particular 'Ppllcltton tor a rate Sncr.... S. relevant. Mr. MSli.n atated that, to answer the question, the hSfttory would hive to b. reviewed, addin~ that tho amount of expansion that the utility haa Sncurr~d made it necessary to Come In and ask tor the increa.e. He noted th5t there i. going to have to be money tor the exp~nslon Sn the ne~r future for the existing customers. Also, he .ald that it WftS not until 1981 and 198'- before the major portion of ..pansSon took placo, addln~ that there has to he a complete year of hlstorScal data compiled before 8 rate Increas~ can he requested. ..... Rece..t 3r10 P.M. - Reconvened. 3'25 P.M...... County Attorney Saunders Itated for the recor~ that he spoke with Mr. Bet. concernlnq the very brief absence of CommSssSoner ~ru.e trom the he.rin~ prec.s. ftnrl explftlneð to Mr. Retz that Co~~tssloner Kruse had listened to the hearlnq in her office. He note~ that Mr. Beta has no objection to Comml.sloner Kruse continulnq on aB a member of the body that will be votlnq on the roquest. Mr. Aeta confSrmed ..me for the record. CommlaøJon.r Kruse stated that she was listenSnq on the .peaker and did hear the whole matter. A..iatant County Attornoy Anderaon Itated that Hr. MllSan hid earlJer stated that, within tho Mftrco III~nd franchise area, there I. no S~p.ct fee charqed, to which Mr. Milian stated that thS. Is correct tor sewer connection an~ no Impact feaø for the water connection .Sther. Hr. Beta statod that the seWer frftnchl.e agreement S. .maller thin the water (ranchSa. agreement and there are no Impact t.e. charged wlthSn the frftnchla. area. In re.ponse to AsSistant County Attorney And.rson, Mr. Milian .tated that the rationale for the Smpact fees Is to defray the cost ot 60~~ 07~ FA~t S5D ---- ---- - - -'.- -- -- -- - - - -.- --- -- - - -- -- - --------- P.g. 13 ------------------------------------------ &O~K G7 4- rA~t 651 ^prl1 1:1, 1983 the Snve.tment the utility has to make, whSch reduce. the rate ba.e of the CU.tomers ~nd recov~rs the Inve8t~~nt .up (ront-. Mr. MSllan .tated that the pre.ent r~te. are the type ot rate. that were Sn existence a nu~ber oC year. ago ^nd are now outdated which I. why a new rate structur. Is heinq implemented In order Cor the entSre invefttment ðn~ ~ntir~ cost to he shared equally by .11 Customer., Sncludlng tho.e thAt Are .~a.onal. He stated that the ba'e facSlity charge I. bAsed on the metor size which determSnes the demand that S. beSng put on the .yatem, addlnq that a customer S. not beSng ch.rged for a m~ter. Ife noted that the chArge to chantJe " meter S. the actual co.t to the utility, which consS.t. of the labor. ASRløtant County ^ttorney Þ~derson stAted that there is . tappIng and .ervlce charg. listed un~er the proposed rate .tructure and que.tloned If this Is different than a proposed Smpact t.e? ~r. MSllan .tated that st Is con,Sdered a. contrlbutSon. Sn constructSon but Its I separate chlrge for the tapping of the water main and brSngSng the .ervlce to the property line and the box of the .eter. Re SndSc.ted that the S~O that had be.n charged doe. not cover the cost of the fSttlng. and the necossary equipment or the co.t ot the $35 per.lt that has to be paid to the County for the right-of-way Sn.tallatlon, Iddlng that a study has been made of the actual cost ot In.t.ll.tlon. County Attorney ~aunders stated that they have no turther quo.tion. It thSs tJme, but may have a~dltlon.l question. when the .eetSn9 reconv.ne.. The Intervenor stAted that he would like to re.erve cr~..- examSnlng '1~ witness.., to whIch County Attorney Saunder. and Mr. Beta indicated that they h~ve no objectSon to ..me. Mr. Beta que.tioned Mr. Millin I. to whether it would be good engine.ring or managemont practlc. to walt untSl there was . vSol.tlon --~---(';'----------~c'1----------1~ P.ge 14 ',,:,,": c+r,"1'IJ,~"~>.\7.::~.i(",:~;, ,'," ,;,.~.':\',:"~;.'~~~'y:;:tiL;:",t< ,,:':i:" , -_.~.._--- -----_... ~ c=J c::E) ------------------------------- ------- ----- Aprll 12, 19R3 of DER a. far as planning or installation ot an addStSon to a plant, to which Mr. Millan .t~ted ab.olute1y not, ~dðlnq that a vS.ble utility .hould be 'lway. looking ahsad for the tuture and expandSng Iccordingly to .erve not only the oxisting customers hut alao the tuture customer. whSl. k.eping the economy and the Inve.tment Sn mind. T. pe " There beinq no further questions for Mr. Milian, the next witne.. for the Utility was Mrltza Gomez. MI. Comez IndScated that she work. tor DeloStt., HI.klns , S~le8 a. Supervising ~anaqer, adding that she has been an auditor for Deltona CorporatJon. She saSd that she S. a graduate from the Unlver.lty of MIami with a Dachelor'. of Buslne.s AdmlnSstratSon and a major In AccountSng, addSng that .he 1. . CPA In the State of Florida. She noted that .he Is a member of the ~erlc.n Institute of CPA'. and the rlorJda Institute of CPA's. To Mr. øetz question regarding whether she had been previously qualltl.~ .. an expert witness t.o teetlty In courts of law In accountlnq, ~s. Comez replSed affirmatively. County Attorney Rðunders qu..tloned what type of accountSnq the witness would be qualified lor, to which Mr. Retz replSed specSfScally utility accountSng, which Ja specSftlized. County Attorney Saunders questlonød whether Ms. Com'l had qualified a. an ~xp.rt In utility accountinq or Sn qeneral accountln~, to whSch M.. Comez replied accountlnq and audItInq Sn general ter~s, adding that she was designated by the tir~ as a wator and .ever apecS.lSst In 19A1. County Attorney 5ðun~ers questsoned It ~.. Co~el had prepared reports anrl account. for water and .ever utllStS.s .Inc. 1981, to which Ms. Cornez replied affIrmatSvely, adding that she h.. prepared four utilities In the capacity of the .enlor accountant. She noted that all lour utilIties wero an examSnatSon with generally eoa~ 07,. PAtt 65Z -- -- -- -- - -- - --- - -- -'----- -- -- - -- -- ---------- :. - I" . ~.; . . -.-..------- --- --- - - -- - --- - - - -- -- - - --------.---- J 1 ,', ~O~K 014 rA~I:' 6õ3 April 12, 1983 accepted ~ccountSng principle.. County ^ttornoy ~under. stated that he haa no objection to ~a. 00... qualstySnq a. an expert Sn accounting aa it relate. to water and aewer utSlitles. The intervenors Sndlc~te~ that there wa. no objection to M.. Co~ea quallfyln9. Co.mia.Soner Vo.. ~ov.~, .econded by Co~ml..ioner PI.tor .nd c.rrled unanimoualy, that Ma. Comel be qualSfSed aa an expert witne.. in .ccountlng a. It rel.te. to water and .ewer utllitSes. Mr. Beta que.tlon.d Sf MR. Comea was famllSar wSth the opSnlon rendered by Celoltte, H~sklnft, , Salea on the ,r.th day or rebruary, 1983, relative to the financial status of Dtltona UtilStSe., Inc., It. _~b.ldS.ry and Its dlvl.lons tor the year endIng r.cemher )1, 19~2, to which Ma. Co~e% replied affirmatively. County Attorney ~aunder. objected to te.tSmony concernin9 the audit that Mr. Betz Is referrSng to without havSnq a full copy of It, .ddlng that he reserve. the right to object to te.ti.ony concernlnq the .udit untSl after he has had an opportunity to review It. Mr. Beta .gr.ed to .upply the Cull report which he gave to County Attorney S.undera and the Intervenor. Mr. Beta questJone~ whether Ma. Comea was Sn charge of the .udlt. nece.aary, to whSch Ms. Comea replSed affirmatively. In re.pon.. to Mr. 8etl' que.tlon rogardSng what procedure Ss u.ed to audSt a utility lSke Deltona UtS1Stie., Inc. and to produce a report, ~.. eo.e. .t.ted th.t generally accepte~ audltSng standard. are followed .. de.crlbed by the AmerScan Inatltute of CPA's. She noted that in her c,p.city .. auditor of n.ltona Utilltie., Inc. ahe i. f.mSll.r vlth the .ccountlng .y.te., the prlncSple. and practice. utllSzed by Celton. Utllltle., Inc. for It. utility operation. throughout its dlvl.lona. MI. eo... 8tlted th.~ In h.r opinion the fln.ncl.l condition of Dalton. ::. ... Ii· P19. 18".; ----- -- - - - -- - - - -...-- - -- -------------- 81!!1 L':Œ:J a::I ..... .. l' .....·,__...._"~...o........,._....~~,.....,,'''''___ - --..¡ .------.-.-- '. _... -. ._ _. _'.. n _ _ __ _ ~ ^pril 1~, Inlq ----- .-- --- -~- -- -- ------.. Utilities, Tnc. nnd its 3ubsidl~ry ~nd itn rllviøions ~re ~ccurftt.ly reflcctorl by th6 nccountinq ~ynt~m thðt it UftP.8. ~hft reported th^t neltonll IJtil1tS"s, Inc. follows q~norðlly .1ccepted accountSnq principles, ~rldln, thnt thi~ report pro~ucr.~ n f.~lr rictur. of its tin~nclðl ~ffðlre inc¡u~ln~ those relatlnq to th~ utility ~lvi~lons. ~r. [11!t:7. rrut"stlon~1 whrn T'clton., lit lUton, Tnc. ~oqan c1lpltal1zSng Intoreftt on construction work In pro~ro~s, to whJch ~ft. ~nmez øtate" ror thO!' floc1I¡ Y~lIr f!'nrlJnt'} l'~c"rnhp.r '1, 1"pn, .'I'!c1ln., th/.lt she revlow~rl th" cllpit~l Interest c"llculntlon "uflnt:J ,thrt l'Iurf!t of nt'lt()n... UtSl1t1es, Inc. ~nd Jt Is c~lculat~rl with thn qpn"rlllly IICCGpto~ a~countln? principlos ~nd pr~ctlcon. County ^ttornt'y ~l\lln,1I'r" Inll~lIt,." t.hllt h" woulr! lIktt to ~sk It r.w questions now, hut WOIJj1 j\(,. tl') cro!ls-,.x"mlno th(' witn"~!I when the meetlnCJ l!t rt"convf"nt'rl, t." '..hlc-h "'r. netz ,'qr",.". County ^ttorncy r:"un~"r!l r¡uC'nttonnd what metho1 T'IIltona Utilities, tnc:-. USes t.> (,"c1rlt.'lI~. Int"rC'!lt r1lJrln'1 con!ltructlon, to '.mlch ~s. COIIIOZ statl"d th"t tho '"utth"" unftrj I!I the .>no pre"cr herl hy f inancSlIl 1tccountin1 stllnr1<'1rr1:ï, 'o"r1 ~:IJ"'h~r ,,,. County ^ttnrnfOY ~ðunrlers queDtl~n~r1 Ir IntorQ~t ·~n ~~µlt~llzl'r1 rIOt of incomo tax 8Avlnqa, to whlc:-h ~9. ~o~~z ~t~t~~ t~~t It hð~ no ~e~rlng on tho ~~tho~ of interest ~~plt~¡i~ðtl~n In ~r~~r~~n~e with ~~nor~ily ~cc('p~Qd nccountlnq rrlnclplf'lIi,"!;!1nr¡ th"r ':." ¡In"iw"r the "'\Jostlon, It Is -'In". In answer to C~unty ^tt.>rn~y ~~und~r~, ~~. ~OMOZ ntðted that the rata unerl In tqn2 W~a ~p~r()xl~lItQly 1~'. l~LJnty "tt,,,rncy C:lIlIn'!t"rs 1it.H"c! thllt on ""ryo , t)f th... lIuditors r~p.>rt thorc 1~ op~r~tin~ r~YOnUes of water, ~ew.r, ðnrl ~IIS combined, "nrl '1ueontionr.d W~!lt uSe! th.., r"ounty will hl)y/t for the ch"rts anr.t thø rpport ,1n the ~nø on.ration 1~ ",¡so Inclu~e~, to whSch Ys. Co~.z replI~d that Mlln"aemf"nt ~houl1 r~&~on~ to t.hllt ~ue~tion. ÞO~~ 0 74 rA~c 654 . - --, . ~ .- - ..- - -"'~ -_.- - . -- ~- ." ._. - -- -- .-- rag. 17 ""W"~.."''''_·''","....."_".,,,,,,,, ,~~;.i.: f;i',r~ n'~ , 1:1' fe, ¡" (!~."r"H" ("1('.7 r, I' ,'. ---- - -- --- - - - - - - - - - -- -- --- - --.- - -------- . . April 12, 19R3 "I ~O~K cn~ FACt G55 County Attorney Saunder. stated that It I. be.t to Iccept the report and d.termlne whether there S. any objections to the entSre report becaus. ot relevancy or other possible objections, adding that at the reconvenln9 of the hearln~, st would be determined wh.ther the . . objectSon. would b. interposed. n. noted that Mr. eetz has no obj.ctlon to breakSng the hearSng at thS. poSnt and reconvenSng at I future date, adding that the Sntervenors have r.quested a two week delay in ord.r to review ~ll of th. documentation. He stated that he would lSke to .chertul. this for April 27, 8t 9100 A.M., to whSch the Board agreed. There beSng no further hUGlne.s for the qood of the County, the ...ting wa. r.c.s..d by Order of the ChaSr - Time 4110 r.M. BOARD 0' COUNTY COMMISSIONERS/~OARD or tONING APPF.ALS/r.X OFFICIO CQVtRNING nOARD(S) OP SPECIAL DISTRICTS UND~R ITC CONTROL ~ / '~~-~.....,~ ~-«.. "- ARY-fRANCES . SE, CHAIRMAN ATTEST. WILLIAM J. R!ACAN, CLr.RK ~;~j- '-ffi-;;~~ &1;-<- :' Th... .Snut.. approved by the BCC on ?*Y3", 1'1,. J .. pre.ented " ~ or a. corrected . , . '" '. "',,",t.,,· ~ '-9- 11 ----------------------- -------......_--~ '....J. .i~: .'~-:.~.,;. .., ....~ t.·, i:~1t';', '....¡. "~7' .. .~....¡. ,."" . '~. ~, tv'r'f~ '.' ',.~', I ·~,¡·)X '\~\<i'~~ :;~:~,:~~