Agenda 06/13/2023 Item #17D (To update existing Water, Wastewater, Irrigation Quality Water and Wholesale Potable Water user rates and fees)17.D
06/13/2023
EXECUTIVE SUMMARY
Recommendation that Board of County Commissioners, Ex-officio the Governing Board of the Collier
County Water -Sewer District, adopt a Resolution repealing and replacing Schedules One and Two of
Appendix A to Section Four of the Collier County Water -Sewer District Uniform Billing, Operating, and
Regulatory Standards Ordinance No. 2001-73, as amended, increasing user rates for Water, Wastewater,
Irrigation Quality Water, and Wholesale Potable Water User Rates by 7.07%, with effective date of July 1,
2023.
OBJECTIVE: To update existing Water, Wastewater, Irrigation Quality Water ("IQ"), and Wholesale Potable
Water user rates and fees for the Collier County Water -Sewer District (District). In accordance with the 2023 price
index issued by the Florida Public Service Commission date December 27, 2022.
CONSIDERATIONS: On September 14, 2021 (Agenda Item 17.E), the Board approved Resolution 2021-187
providing for scheduled adjustments to user rates to maintain alignment with increasing commodity and operational
costs. Based on the recommendations in the Fiscal Year (FY) 2021 User Rate and Fee Study (`21 Rate Study) the
approved user rate adjustments were as follows:
Effective Date
Water
Wastewater
IQ
Combined
10/1/2021
2.9%
2.13°
2.9%
2.9%
10/112022
4.0%
5.0%
9.(Y%
4.7%
10/1/2023
4.0%
5.0%
9.0%
4.7%
On May 23, 2022, (Agenda Item 1 LE) the Board directed the County Manager to advertise a Resolution for future
consideration amending user rates increasing Water, Wastewater, Irrigation Quality Water, and Wholesale Potable
Water user rates, and directed the County Manager to advertise a resolution to amend the rate schedules.
Recent dramatic increases in inflation have resulted in the planned rate adjustments being insufficient to support the
increasing cost of system -wide operation, maintenance, and required capital replacement and rehabilitation projects.
Since Fiscal Year 2021 the Consumer Price Index ("CPI") for the Miami -Fort Lauderdale -West Palm Beach region
has increased 17.5% and is expected to increase through Fiscal Year 2024 to approximately 23%.
The graph below depicts the cumulative comparison between the adopted rate increases and CPI.
40%
35%
317%
25%
20%
15%
1D%
5%
0%
Comparison of Cumulative Change in Utility
Rates and Inflation
22.8%
2.
FY21 FY22 FY23 FY24 est
—*—Adopted Rates + Inflation CPI
Packet Pg. 1880
17.D
06/13/2023
Examples of inflationary increases affecting District commodities, and capital replacement and rehabilitation costs
include:
• Electricity increased by 15% and is anticipated to increase another 10.1% in FY 23.
• Chemicals necessary to produce water, treat wastewater, and treat irrigation quality water have
increased between 10% and 150%.
• Utility parts including meters, backflow devices, and petroleum -based PVC pipe and fittings have
increased by 20% to 25%.
• Labor cost has increased by 20%.
• Critical operating equipment, such as utility trucks, cranes, forklifts, and pumps, in some cases, have
had cost increases of more than 100%.
• Capital project costs have increased by 30% or more.
Recommended Inflation Adjustment:
The strategy for closing the overall funding gap including created by inflation -driven commodity/operating and
capital cost increases includes:
• a mid-FY 23 price index adjustment to user rates.
• a formal rate study update to be presented to the Board.
• a rate study derived adjustment for FY 24.
• Board adopted rate adjustment strategy for FY 25 and FY 26.
The Florida Public Service Commission calculates an annual price index specifically for water and wastewater
utilities. This price index allows water and wastewater utilities to adjust rates based on current specific expenses
without a rate case. On December 27, 2022, the Florida Public Service Commission issued the 2023 price index
calculated at 7.07%.
The recommended interim District user rate adjustment is 7.07%. This adjustment is modestly lower than the
Miami -Fort Lauderdale -West Palm Beach region CPI of 9.0% (April 2023) and is consistent with the Florida Public
Service Commission 2023 price index being adopted by other area utilities including Sarasota County. The
recommended adjustment will serve to offset a portion of the rate adjustment that will be identified by the rate
study currently underway and expected to be presented in late summer or fall.
The recommended user rate adjustment enables the District to address the increasing cost of operations and
maintenance. In addition, it modestly improves operating margins allowing for the continuation of critical capital
replacement and rehabilitation projects as well as providing for financing of long-term capital facilities through the
preservation of a strong financial position that supports cost-effective access to credit markets and long-term
financing rates at the lowest cost for the utility.
FISCAL IMPACT: At the proposed rate increase of 7.07%, the potable water and sewer utility bill for the
average residential customer will increase by $7.77 per month, less than 26 cents per day, from $109.90 to $117.67.
The incremental user fee revenue generated by the rate increase will be approximately $1.1 million per month in the
Collier County Water -Sewer District Operating Fund (408).
GROWTH MANAGEMENT IMPACT: There is no growth management impact for this action.
LEGAL CONSIDERATIONS: This item is approved as to form and legality and requires majority vote for
Board approval. -SRT
RECOMMENDATION: That the Board of County Commissioners, Ex-officio the Governing Board of the Collier
County Water -Sewer District adopt a Resolution repealing and replacing Schedules One and Two of Appendix A to
Packet Pg. 1881
17.D
06/13/2023
Section Four of Collier County Water -Sewer District Uniform Billing, Operating, and Regulatory Standards
Ordinance No. 2001-73, as amended, increasing user rates for Water, Wastewater, Irrigation Quality Water, and
Wholesale Potable Water User Rates by 7.07%, with an effective date of July 1, 2023.
Prepared by: Joseph Bellone, Director - Utilities Finance
ATTACHMENT(S)
1. Final Reso w Schedule 05.25.23 Final (PDF)
2. legal ad - agenda ID 25672 FINAL (PDF)
3. Public Service Commission Water and Wastewaster Utilities Price Index (PDF)
Packet Pg. 1882
17.D
06/13/2023
COLLIER COUNTY
Board of County Commissioners
Item Number: 17.D
Doc ID: 25672
Item Summary: Recommendation that Board of County Commissioners, Ex-ofiicio the Governing Board of the
Collier County Water -Sewer District, adopt a Resolution repealing and replacing Schedules One and Two of
Appendix A to Section Four of the Collier County Water -Sewer District Uniform Billing, Operating, and
Regulatory Standards Ordinance No. 2001-73, as amended, increasing user rates for Water, Wastewater, Irrigation
Quality Water, and Wholesale Potable Water User Rates by 7.07%, with effective date of July 1, 2023.
Meeting Date: 06/13/2023
Prepared by:
Title: Manager Corp Compliance and Continuous Improvement — Corporate Compliance and Continuous
Improvement
Name: Megan Gaillard
05/30/2023 6:33 PM
Submitted by:
Title: Department Head - Public Utilities — Public Utilities Department
Name: George Yilmaz
05/30/2023 6:33 PM
Approved By:
Review:
Public Utilities Department Andrew Youngblood Additional Reviewer
Public Utilities Department Drew Cody Level 1 Division Reviewer
County Attorney's Office Scott Teach Level 2 Attorney Review
Public Utilities Department George Yilmaz Level 2 Division Administrator Review
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review
Corporate Compliance and Continuous Improvement Megan Gaillard
Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review
Office of Management and Budget Laura Zautcke Additional Reviewer
County Manager's Office Amy Patterson Level 4 County Manager Review
Board of County Commissioners Geoffrey Willig Meeting Pending
Completed 06/01/2023 9:25 AM
Completed 06/01/2023 9:33 AM
Completed 06/05/2023 9:11 AM
Completed 06/05/2023 4:01 PM
Completed 06/05/2023 4:16 PM
Additional Reviewer Completed
06/05/2023 5:06 PM
Completed 06/06/2023 8:28 AM
Completed 06/07/2023 10:11 AM
Completed 06/07/2023 4:47 PM
06/13/2023 9:00 AM
Packet Pg. 1883
17.D.1
RESOLUTION NO.2023-
A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS
OF COLLIER COUNTY, FLORIDA, AS THE GOVERNING
BODY OF COLLIER COUNTY AND EX OFFICIO THE
GOVERNING BOARD OF THE COLLIER COUNTY WATER
SEWER DISTRICT, REPEALING AND REPLACING
SCHEDULES ONE AND TWO OF APPENDIX A TO SECTION
FOUR OF COLLIER COUNTY ORDINANCE NO. 2001-73, AS
AMENDED, TITLED THE COLLIER COUNTY WATER -SEWER
DISTRICT UNIFORM BILLING, OPERATING AND
REGULATORY STANDARDS ORDINANCE; AMENDING
PROPOSED RATES FOR WATER, WASTEWATER, IRRIGATION
QUALITY WATER, AND WHOLESALE POTABLE WATER; WITH
AN EFFECTIVE DATE OF JULY 1, 2023.
WHEREAS, Collier County uses water and sewer user rates to recover system
operation, maintenance, renewal, enhancement, replacement and debt service costs from system
users within the boundaries of the Collier County Water -Sewer District (the "District"); and
WHEREAS, on September 14, 2021, the District approved Resolution No. 2021-187
establishing a scheduled adjustment to the District's user rates to maintain alignment with
increasing commodity and operation costs based upon the recommendation of the County's
retained expert, Raftelis Financial Consultants, Inc., who at that time recommended that the: (1)
existing water user rates be adjusted by implementing an increase of 2.9 percent effective
October 1, 2021; 4.0 percent effective October 1, 2022; and, 4.0 percent effective October 1,
2023, for Fiscal Years 2022, 2023, and 2024, respectively; (2) existing wastewater user rates
be adjusted by implementing an increase of 29 percent effective October 1, 2021; 5.0
percent effective October 1, 2022; and, 5.0 percent effective October 1, 2023, for Fiscal
Years 2022, 2023, and 2024, respectively; (3) the existing Irrigation Quality (IQ) water
user rates be adjusted by implementing an increase of 29 percent effective October 1, 2021;
9.0 percent effective October 1, 2022; and, 9.0 percent effective October 1, 2023, for Fiscal
Years 2022, 2023, and 2024, respectively; and (4) the existing wholesale potable water user
rates be adjusted by implementing an increase of 4.9 percent effective October 1, 2021; 4.9
percent effective October 1, 2022; and, 4.9 percent effective October 1, 2023, for Fiscal
Years 2022, 2023, and 2024, respectively; and
WHEREAS, Collier County approved, implemented, and has been adhering to the rate
schedule adjustment established in Resolution No. 2021-187 but as a result of dramatic increases
in inflation those previously planned rate adjustments have been insufficient to properly support
the increasing cost of maintaining system -wide operations, maintenance, and required capital
replacement and rehabilitation projects in the District; and
Packet Pg. 1884
17.D.1
WHEREAS, examples of the inflationary increases impacting the District's operations
include the following: (1) electricity increased by 15 percent and is anticipated to increase
another 10.1 percent in FY 23, (2) chemicals necessary to produce water, treat wastewater, and
treat irrigation quality water have increased between 10 percent and 150 percent, (3) critical
utility -related meters, parts and devices have increased up to 25 percent, (4) the costs for labor
and service -related repairs have increased by 20 percent, and (5) essential operating equipment
costs have had costs increases in excess of 100 percent; and
WHEREAS, the Florida Public Service Commission calculates an annual price index
specifically for water and wastewater utilities that allows utilities such as the District to adjust
its rates without a rate case, and the most recent annual price index issued by the Florida Public
Service Commission on December 27, 2022, was calculated at 7.07 percent; and
WHEREAS, County staff recommends the implementation of a 7.07 percent user rate
increase effective July 1, 2023, with the understanding that the proposed rate increase to the
existing Water, Wastewater, Irrigation Quality water, and Wholesale Water user rates for
Schedules One (1) and Two (2) of Appendix A to section four of Collier County Ordinance No.
2001-73, as amended, is an interim rate adjustment subject to the completion of a current
ongoing rate study that is anticipated to be completed in the late summer or fall of 2023, at which
time a further adjustment of user rates may be warranted; and
WHEREAS, the Board of County Commissioners finds that it is in the best interest of
the health, safety, and welfare of the District's users to accept staff s recommendation to
implement the Florida Public Service Commission's recent annual price index of 7.07 percent
as a proposed user rate increase to the existing rates.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF COLLIER COUNTY, FLORIDA, AS THE GOVERNING
BODY OF COLLIER COUNTY AND EX OFFICIO THE GOVERNING BOARD OF
THE COLLIER COUNTY WATER SEWER DISTRICT, that:
The Board of County Commissioners, after an advertised public hearing:
1. Accepts staffs recommendation for updated District -wide Water and Wastewater
rates, Irrigation Quality Water rates, and Wholesale Water rates. Accordingly, the Board hereby
approves the attached Schedules One and Two to Appendix A of Ordinance No. 2001-73, as
amended, titled the Collier County Water -Sewer District Uniform Billing, Operating and
Regulatory Standards Ordinance, which replaces the current Schedules One and Two, which
are hereby repealed. The revised rates on the attached Schedules One and Two will take effect
at 12:01 a.m. Saturday, July 1, 2023, until further repealed and revised.
Packet Pg. 1885
17.D.1
2. Proclaims that the annual price indexing rate of 7.07 percent issued by the Florida
Public Service Commission on December 27, 2022, provides a lawful and reasonable basis for
the proposed adjustment of the District's Water and Wastewater rates, Irrigation Quality Water
rates, and Wholesale Water rates. The implementation of this rate increase shall become
effective as provided herein and those rates shall continue as established herein until otherwise
further repealed and revised.
THIS RESOLUTION ADOPTED after motion, second, and majority vote favoring
adoption this day of dune 2023.
ATTEST:
CRYSTAL K. KINZEL, CLERK
, Deputy Clerk
Approved as to form and legality:
Scott R. Teach,
Deputy County Attorney
BOARD OF COUNTY COMMISSIONERS
OF COLLIER COUNTY, FLORIDA, AS THE
GOVERNING BODY OF COLLIER COUNTY
AND AS EX OFFICIO THE GOVER-KING
BOARD OF THE COLLIER COUNTY WATER
SEWER DISTRICT
Rick LoCastro, Chairman
IL
Packet Pg. 1886
17.D.1
1. WATER
PUBLIC UTILITIES DIVISION
COLLIER COUNTY WATER -SEWER DISTRICT
UNIFORM BILLING, OPERATING AND REGULATORY STANDARDS ORDINANCE
APPENDIX A- FEES, RATES AND CHARGES
SCHEDULE I -DISTRICT-WIDE WATER RATES Page 1 of 3
Existing Monthly Rates Pranosed Monthly Rates [11
Effective Effective
10/01/2022 07/01/2023
WATER SERVICE BASE CHARGES
(Residential, Multifamily, Commercial, and Irrigation -Only)
Meter Size:
5/8"
$ 25,78
$ 27.60
3/4"
$ 25.78
$ 27.60
1„
$ 40.62
$ 43.49
1-1/4"
$ 52.37
$ 56.07
1-1/2"
$ 77.42
$ 82.89
2"
$121.74
$ 130.35
3"
$ 336.06
$ 359.82
411
$ 742.31
$ 794.79
6"
$1,481,22
$ 1,585.94
8"
$ 2,589.38
$ 2,772.45
10"
$ 4,690.21
$ 5,021.81
12"
$ 6,952.84
$ 7,444.41
VOLUMETRIC CHARGE PER 1,000 GALLONS [2]
(Residential, Multifamily, Commercial, and Irrigation -Only)
Block 1
$ 3.48
$ 3.73
Block 2
$ 5.25
$ 5.62
Block 3
$ 6.98
$ 7.47
Block 4
$ 8.71
$ 9.33
Block 5
$ 10.46
$ 11.20
Block 6
$ 13.93
$ 14,91
Wholesale Water Rate
Per 1,000
Gallons (All Usage)
$ 4.82
$ 5.16
EXISTING BLOCK RATE STRUCTURE
(Residential, Multifamily, Commercial, and Irrigation -Only)
Consumption
Block (Thousands of Gallons)
Meter Size:
Block 1
Block 2
Block 3
Block 4
Block 5
Block 6
518"
0 to 5
6 to 10
11 to 20
21 to 30
31 to 50
Over 50
3/4"
0 to 5
6 to 10
11 to 20
21 to 30
31 to 50
Over 50
1,,
0 to 8
9 to 16
17 to 32
33 to 48
49 to 80
Over 80
1-1/4"
0 to 11
12 to 22
23 to 44
45 to 66
67 to 110
Over 110
1-1/2"
0 to 17
18 to 34
35 to 68
69 to 102
103 to 170
Over 170
2"
0 to 27
28 to 54
55 to 108
109 to 162
163 to 270
Over 270
3"
0 to 75
76 to 150
151 to 300
301 to 450
451 to 750
Over 750
4"
0 to 167
168 to 334
335 to 668
669 to 1,002
1,003 to 1,670
Over 1,670
6"
0 to 333
334 to 666
667 to 1,332
1,333 to 1,998
1,999 to 3,330
Over 3,330
8"
0 to 583
584 to 1,166
1,167 to 2,332
2,333 to 3,498
3,499 to 5,830
Over 5,830
10"
0 to 1,057
1,058 to 2,114
2,115 to 4,228
4,229 to 6,342
6,343 to 10,570
Over 10,570
12"
0 to 1,568
1,569 to 3,136
3,137 to 6,272
6,273 to 9,408
9,409 to 15,680
Over 15,680
Footnotes:
[1] Proposed rates to become effective with service rendered on and after July 1st of fiscal year 2023.
[2] All water is billed based on water consumption per block based on the size of meter in service.
Packet Pg. 1887
17.D.1
PUBLIC UTILITIES DIVISION
COLLIER COUNTY WATER -SEWER DISTRICT
UNIFORM BILLING, OPERATING AND REGULATORY STANDARDS ORDINANCE
APPENDIX A - FEES, RATES AND CHARGES
SCHEDULE 1 - DISTRICT -WIDE WATER AND WASTEWATER RATES Page 2 of 3
2. WASTEWATER
Existing Monthly Rates Proposed Monthly Rates [11
Effective Effective
Description 10/1/2022 07/01/2023
WASTEWATER SERVICE BASE CHARGES
(Residential, Multifamily, and Commercial)
Meter Size:
5/8"
$ 39.17
$ 41.94
3/4"
$ 39.17
$ 41.94
1"
$ 62,98
$ 67.43
1-1/4"
$ 81.81
$ 87.59
1-1/2"
$121.97
$ 130.59
2"
$193.04
$ 206.69
3"
$ 536,70
$ 574.64
4"
$1,198.12
$ 1,272.12
6"
$ 2,372.96
$ 2,540.73
$"
$ 4,149.87
$ 4,443.27
10"
$ 7,518.54
$ 8,050.10
12"
$ 11,146.64
$ 11,934,71
VOLUMETRIC RATE PER 1,000 GALLONS
(Residential, Multifamily, and Commercial)
All Usage [2)
$ 5.51
$ 5.90
Footnotes:
[l I Proposed rates to become effective with service rendered on and after July 1 st of fiscal year 2023.
[21 Monthly individually metered residential usage charges are capped at 15,000 gallons.
CAO
Packet Pg. 1888
17.D.1
PUBLIC UTILITIES DMSION
COLLIER COUNTY WATER -SEWER DISTRICT
UNIFORM BILLING, OPERATING AND REGULATORY STANDARDS ORDINANCE
APPENDIX A- FEES, RATES AND CHARGES
SCHEDULE 1 -DISTRICT-WIDE WATER AND WASTEWATER RATES Page3 of
3. Water Restriction Surcharge:
Percent Reduction Goal Flow charge Rate
Water Shortage Phase* In Overall Demand Ad'ustment Percentage,
Phase 2 - Severe 30% 15%
Phase 3 - Extreme 45% 30%
Phase 4 - Critical 60% 40%
* Per the South Florida Water Management District (SF WMD) Water Shortage Plan
Pursuant to Chapter 40E-21 of the Florida Administrative Code (FAC)
The surcharge will be applicable to the volume charge for all single family and multi -family residential accounts
for all consumption greater than Block 2, to non-residential accounts for all consumption greater than Block 1,
and to irrigation accounts only for consumption. The Block Structures are specified in Section One above.
The surcharge is not assessed against the service base charge.
The water restriction surcharge will start on the first billing cycle of the month following the imposition of the
restrictions. The surcharge will cease on the first billing cycle of the month following the revocation or lining of
the restrictions.
Packet Pg. 1889
17.D.1
PUBLIC UTILITIES DIVISION
COLLIER COUNTY WATER -SEWER DISTRICT
UNIFORM BILLING, OPERATING AND REGULATORY STANDARDS ORDINANCE
APPENDIX A- FEES, RATES AND CHARGES
SCHEDULE 2 - IRRIGATION QUALITY WATER RATES Page 1 of I
Existing Monthly Rates Proposed Monthly Rates [11
Effective Effective
Description: 10/01/2022 07/01/2023
SERVICE BASE CHARGES
Meter Size
5/8"
$ 10.00
$ 10.71
3/4"
$ 10.00
$ 10.71
1"
$ 16.71
$ 17.$9
1-1/2"
$ 33.31
$ 35.67
2"
$ 53.32
$ 57.09
3"
$ 150.07
$ 160.68
4"
$ 333.45
$ 357.02
6"
$ 667.02
$ 714.18
8"
$ 1,167.26
$ 1,249.79
10"
$ 2,115.60
$ 2,265.17
12"
$ 3,137.00
$ 3,358.79
VOLUMETRIC CHARGE PER 1,000 GALLONS
Customer Type:
Bulk
$ 0.58
$0.62
Pressurized
$ 0.77
$0.82
Pressurized and Distributed
$ 1.49
$1.60
Footnote:
[I ] Proposed rates to become effective with service rendered on and after July 1 st of fiscal year 2023.
CAO
Packet Pg. 1890
1Sb7)m
17.D.2
8D 1 THURSDAY, JUNE 1, 2023 1 NAPLES DAILY NEWS
NOTICE OF PUBLIC HEARING
Notice is hereby given that a public hearing will be held by the
Collier County Board of County Commissioners commencing at
9:00 a.m. on June 13, 2023, in the Board of County Commis-
sioners meeting room, third floor, Collier Government Center,
3299 East Tamiami Trail, Naples, FL, to consider:
A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS
OF COLLIER COUNTY, FLORIDA, AS THE GOVERNING BODY OF
COLLIER COUNTY AND EX OFFICIO THE GOVERNING BOARD OF
THE COLLIER COUNTY WATER SEWER DISTRICT, REPEALING
AND REPLACING SCHEDULES ONE AND TWO OF APPENDIX A
TO SECTION FOUR OF COLLIER COUNTY ORDINANCE NO. 2001-
73, AS AMENDED, TITLED THE COLLIER COUNTY WATER -SEW-
ER DISTRICT UNIFORM BILLING, OPERATING AND REGULATORY
STANDARDS ORDINANCE; AMENDING PROPOSED RATES FOR
WATER, WASTEWATER, IRRIGATION QUALITY WATER, AND
WHOLESALE. POTABLE WATER; WITH AN EFFECTIVE DATE OF
JULY 1, 2023.
A copy of the proposed Resolution is on file with the Clerk to
the Board and is available for inspection. All interested parties
are invited to attend and be heard.
All persons wishing to speak on any agenda item must register
with the County Manager prior to presentation of the agenda
item to be addressed. Individual speakers will be limited to 3
minutes on any item. The selection of an individual to speak
on behalf of an organization or group is encouraged. If recog-
nized by the Chairman, a spokesperson for a group or organi-
zation may be allotted 10 minutes to speak on an item. Writ-
ten materials intended to be considered by the Board shall be
submitted to the appropriate County staff a minimum of 7
days prior to the public hearing. All materials used in presenta-
tions before the Board will become a permanent part of the re-
cord.
As part of an ongoing initiative to encourage public involve-
ment, the public will have the opportunity to provide public
comments remotely, as well as in person, during this proceed-
ing: Individuals who would like to participate remotely should
register through the link provided within the specific
event/meeting entry on the Calendar of Events on the County
website at www.coI[iercountyfl.gov/our-county/visitors/calend
ar-of-events after the agenda is posted on the County website.
Registration should be done in advance of the public meeting
or any deadline specified within the public meeting notice. In-
dividuals who register will receive an email in advance of the
public hearing detailing how they can participate remotely in
this meeting. Remote participation is provided as a courtesy
and is at the user's risk. The County is not responsible for tech-
nical issues. For additional information about the meeting,
FIlease call Geoffrey Willig at 252-8369 or email to Geoffrey.Wi
ig0colliercountyfl.gov.
Any person who decides to appeal any decision of the Board
will need a record of the proceedings pertaining thereto and
therefore, may need to ensure that a verbatim record of the
proceedings is made, which record includes the testimony and
evidence upon which the appeal is based.
If you are a person with a disability who needs any accommo-
dation in order to participate in this proceeding, you are enti-
tled, at no cost to you, to the provision of certain assistance.
Please contact the Collier County Facilities Management Divi-
sion, located at 3335 Tamiami Trail East, Suite 101, Naples, FL
34112-5356, (239) 252-8380, at least two days prior to the
meeting. Assisted listening devices for the hearing impaired
are available in the Board of County Commissioners Office.
BOARD OF COUNTY COMMISSIONERS
COLLIER COUNTY, FLORIDA
RICK LOCASTRO,
CHAIRMAN
CRYSTAL K. KINZEL, CLERK
By: Merline Forgue, Deputy Clerk
(SEAL)
June 1, 2023 #5719167
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17.D.3
STATE OF FLORIDA
Commissioners:
Andrew Giles Fay, Chairman
Art Graham
Gary F. Clark
Mike La Rosa
Gabriella Passidomo
DIVISION of
ACCOUNTING AND FINANCE
ANDREW L. MAUREY
DIRECTOR
(850)413-6900
Public Service Commission
February 17, 2023
All Florida Public Service Commission
Regulated Water & Wastewater Utilities
Re: Docket No. 20220005-WS - 2023 Price Index
Dear Utility Owner:
Since March 31, 1981, pursuant to the guidelines established by Section 367.081(4)(a),
Florida Statutes (F.S.), and Rule 25-30.420, Florida Administrative Code (F.A.C.), the
Commission has established a price index increase or decrease for major categories of operating
costs. This process allows water and wastewater utilities to adjust rates based on current specific
expenses without applying for a rate case. The intent of this rule is to insure that inflationary
pressures are not detrimental to utility owners, and that any possible deflationary pressures are
not adverse to customers. By keeping up with index and pass -through adjustments, utility
operations can be maintained at a level sufficient to insure quality of service for the customers.
Pursuant to Order No. PSC-2022-0421-NOR-WS, Rule 25-30.420 F.A.C. has been
amended to allow the Commission's Division of Accounting and Finance to provide the
Proposed Agency Action order establishing the index for the year and the Price
Index Application to water and wastewater utilities by email. An electronic version of the
Price Index Application is also available on the Commission's webpage at
https://www.floridapsc.com/water-wastewater-filing-forms. Utilities may also contact
the Division of Accounting and Finance to request a hard copy of the application.
Pursuant to Rule 25-30.420(1)(a), F.A.C., all operation and maintenance expenses shall
be indexed with the exception of -
a) Pass -through items pursuant to Section 367.081(4)(b), F.S.;
b) Any amortization of rate case expense; and
c) Disallowances or adjustments made in an applicant's most recent rate proceeding.
Packet Pg. 1892
17.D.3
All Florida Public Service Commission
Regulated Water & Wastewater Utilities
February 17, 2023
Page 2
Please note that all sludge removal expense should now be removed from operation and
maintenance expenses for the purpose of indexing. Incremental increases in this category of
expense may now be recovered using a pass -through request.
Upon the filing of a request for an index and/or pass -through increase, staff will review the
application and modify existing rates accordingly. If for no other reason than to keep up with
escalating costs, utilities throughout Florida should file for this rate relief on an annual basis.
Utilities may apply for a 2023 Price Index anytime between April 1, 2023, through March 31,
2024 by mail or by emailing Applications@psc.state.fl.us. The attached package will answer
questions regarding what the index and pass -through rate adjustments are, how to apply for an
adjustment, and what needs to be filed in order to meet the filing requirements. For your
convenience, the Commission -approved Price Index is reflected on Form PSC 1022,
attached. While the increase for any given year may be minor, (see chart below), the long -run
effect of keeping current with rising costs can be substantial.
Year
Annual
Commission
Approved Index
Year
Annual
Commission
Approved Index
1998
2.10%
2011
1.18%
1999
1.21 %
2012
2.41 %
2000
1.36%
2013
1.63%
2001
2.50%
2014
1.41 %
2002
2.33%
2015
1.57%
2003
1.31%
2016
1.29%
2004
1.60%
2017
1.51 %
2005
2.17%
2018
1.76%
2006
2.74%
2019
2.36%
2007
3.09%
2020
1.79%
2008
2.39%
2021
1.17%
2009
2.55%
2022
4.53%
2010
0.56%
2023
7.07%
Please be aware that pursuant to Section 837.06, F.S., whoever knowingly makes a false
statement in writing with the intent to mislead a public servant in the performance of his or her
official duty shall be guilty of a misdemeanor of the second degree. Our staff is available at (850)
413-6900 should you need assistance with your filing. If you have any questions, please do not
hesitate to call.
Moreover, additional rate relief mechanisms are available to water and wastewater utilities as
alternatives to full rate cases. Water and wastewater utilities whose total gross annual operating
revenues are $300,000 or less for water service or $300,000 or less for wastewater service, or
$600,000 or less on a combined basis, may petition the Commission for staff assistance in
alternative rate setting. Please refer to Rule 25-30.456, F.A.C., for additional details.
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Page 3
17.D.3
Regulated Water & Wastewater
Utilities February 17, 2022
Furthermore, water utilities whose total gross annual operating revenues are $300,000 or less for
water service and wastewater utilities whose total gross annual operating revenues are $300,000
or less for wastewater service may file an application for a limited alternative rate increase of up
to 20 percent applied to metered or flat recurring rates of all classes of service. Please refer to
Rule 25-30.457, F.A.C., for additional details.
In addition, the Commission reminds water and wastewater utilities that the Utility Reserve Fund
exists to help address concerns over deferred maintenance of critical infrastructure and delays in
necessary repairs. The availability of the reserve funds may allow a utility to avoid or defer the
need for a future rate case, the expenses of which are ultimately borne by customers. Please refer
to Rule 25-30.444, F.A.C., for additional details.
jjirecior
Enclosures
Packet Pg. 1894
FILED 12/27/2022 17.D.3
DOCUMENT NO. 12287-
FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Annual reestablishment of price increase DOCKET NO. 20220005-WS
or decrease index of major categories of ORDER NO. PSC-2022-0438-PAA-WS
operating costs incurred by water and ISSUED: December 27, 2022
wastewater utilities pursuant to Section
367.081(4)(a), F.S.
The following Commissioners participated in the disposition of this matter:
ANDREW GILES FAY, Chairman
ART GRAHAM
GARY F. CLARK
MIKE LA ROSA
GABRIELLA PASSIDOMO
NOTICE OF PROPOSED AGENCY ACTION
ORDER ESTABLISHING 2023 PRICE INDEX FOR
WATER AND WASTEWATER UTILITIES
BY THE COMMISSION:
NOTICE is hereby given by the Florida Public Service Commission that the action
discussed herein is preliminary in nature and will become final unless a person whose interests
are substantially affected files a petition for a formal proceeding, pursuant to Rule 25-22.029,
Florida Administrative Code (F.A.C.).
Back-2ronnd
Since March 31, 1981, pursuant to the guidelines established by Section 367.081(4)(a),
Florida Statutes (F.S.), and Rule 25-30.420, F.A.C., we have established a price index increase or
decrease for major categories of operating costs on or before March 31 of each year. This
process allows water and wastewater utilities to adjust rates based on current specific expenses
without applying for a rate case.
We calculated the 2023 price index by comparing the Gross Domestic Product Implicit
Price Deflator Index for the fiscal year ended September 30, 2022. This same procedure has been
used each year since 1995 to calculate the price index. The U.S. Department of Commerce,
Bureau of Economic Analysis, released its most recent third quarter figures on October 27, 2022.
Since March 31, 1981, we have received and processed approximately 3,948 index and
pass -through applications. We have jurisdiction over this matter pursuant to Section 367.081,
F.S.
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17.D.3
ORDER NO. PSC-2022-0438-PAA-WS
DOCKET NO. 20220005-WS
PAGE 2
I. Price Level Adjustment Index
In 1993, the Gross Domestic Product Implicit Price Deflator Index (GDP) was
established as the appropriate measure for determining the water and wastewater price index. At
the same time, the convention of using a four quarter fiscal year comparison was also established
and this practice has been used every year since then.' The GDP is prepared by the U.S.
Department of Commerce. Prior to that time, the Gross National Product Implicit Price Deflator
Index (GNP) was used as the indexing factor for water and wastewater utilities. The Department
of Commerce switched its emphasis from the GNP to the GDP as the primary measure of U.S.
production.
Pursuant to Section 367.081(4)(a), F.S., this Commission, by order, shall establish a price
increase or decrease index for major categories of operating costs incurred by utilities subject to
its jurisdiction reflecting the percentage of increase or decrease in such costs from the most
recent 12-month historical data available. Since 1995, the price index adjustment has been
determined by comparing the change in the average GDP for the year ending September 30,
instead of the original December 31, in order to more easily meet the statutory deadline.'
In Order No. PSC-2021-0463-PAA-WS, issued December 17, 2021, in Docket No.
20210005-WS, we, in keeping with the practice started in 1993, reiterated the alternatives which
could be used to calculate the indexing of utility revenues. Past concerns expressed by utilities,
as summarized from utility input in previous hearings, are:
1) Inflation should be a major factor in determining the index;
2) Nationally published indices should be vital to this determination;
3) Major categories of expenses are labor, chemicals, materials and supplies,
maintenance, transportation, and treatment expense;
4) An area wage survey, Dodge Building Cost Index, Consumer Price Index, and the
GDP should be considered;
5) A broad measure index should be used; and
6) The index procedure should be easy to administer.
Based upon these concerns, we have previously explored the following alternatives:
1) Survey of Regulated Water and Wastewater Utilities;
'Order No. PSC-1993-0195-FOF-WS, issued February 9, 1993, in Docket No. 19930005-WS, In re: Annual
reestablishment of price increase or decrease index of major categories of operating costs incurred by water and
wastewater utilities pursuant to Section 367.081(4)(a), F.S.
'Order No. PSC-1995-0202-FOF-WS, issued February 10, 1995, in Docket No. 19950005-WS, In re: Annual
reestablishment of price increase or decrease index of major categories of operating costs incurred by water and
wastewater utilities pursuant to Section 367.081(4)(a), F.S.
Packet Pg. 1896
17.D.3
ORDER NO. PSC-2022-0438-PAA-WS
DOCKET NO. 20220005-WS
PAGE 3
2) Consumer Price Index;
3) Florida Price Level Index;
4) Producer Price Index — previously the Wholesale Price Index; and
5) GDP (replacing the GNP).
Over the years, we rejected using the Survey of Regulated Water and Wastewater
Utilities because using the results of a survey would allow utilities to pass on to customers all
cost increases, thereby reducing the incentives of promoting efficiency and productivity. We
have also rejected using the Consumer Price Index and the Florida Price Level Index because of
their limited degree of applicability to the water and wastewater industry. Both of these price
indices are based upon comparing the advance in prices of a limited number of general goods
and, therefore, have limited application to water and wastewater utilities.
The Producer Price Index (PPI) is a family of indices that measure the average change
over time in selling prices received by domestic producers of goods and services. We rejected
using PPI because it measures price change from the perspective of the seller, not the purchaser.
The bases for these indices have not changed, and the conclusions reached in Order No. PSC-
2021-0463-PAA-WS continue to apply in this case. Since 1993, we have found that the GDP has
a greater degree of applicability to the water and wastewater industry. Therefore, we will
continue to use the GDP to calculate water and wastewater price level adjustments. We will
calculate the 2023 Price Index by using a fiscal year, four quarter comparison of the Implicit
Price Deflator Index ending with the third quarter of 2022.
The following table provides a historical perspective of the annual price index:
Table 1
Historical Analysis of the Annual Price Index for Water and Wastewater Utilities
Year
Commission
Approved Index
Year
Commission
Approved Index
2011
1.18%
2017
1.51%
2012
2.41 %
2018
1.76%
2013
1.63%
2019
2.36%
2014
1.41%
2020
1 1.79%
2015
1.57%
2021
1.17%
2016
1.29%
2022
4.53%
Packet Pg. 1897
17.D.3
ORDER NO. PSC-2022-0438-PAA-WS
DOCKET NO. 20220005-WS
PAGE 4
The following table shows the historical participation in the index and/or pass -through programs:
Table 2
Percentage of Jurisdictional Water and Wastewater Utilities Filing for Indexes and
Pass-Throughs
Year
Percentage
Year
Percentage
2011
43%
2017
37%
2012
30%
2018
42%
2013
41%
2019
60%
2014
39%
2020
43%
2015
49%
2021
52%
2016
38%
2022
57%
II. Rate for the 2023 Price Index
The U.S. Department of Commerce, Bureau of Economic Analysis, released the most
recent third quarter 2022 figures on October 27, 2022. Consistent with our establishment of the
2022 Price Index last year, we are using the third quarter amounts to calculate the 2023 Price
Index. Using the third quarter amounts allows time for a hearing if there is a protest, in order for
us to establish the 2023 Price Index by March 31, 2023, in accordance with Section
367.081(4)(a), F.S. The percentage change in the GDP using the fiscal year comparison ending
with the third quarter is 7.07 percent. This number was calculated as follows.
GDP Index for the fiscal year ended 9/30/22 128.177
GDP Index for the fiscal year ended 9/30/21 119.712
Difference 8.465
Divided by 9/30/21 GDP Index 119.712
2023 Price Index 7.07%
III. Notice of Indexing Requirements
The package in Attachment 1 shall be sent to every regulated water and wastewater utility
after the expiration of the proposed agency action (PAA) protest period, along with a copy of the
PAA order once final. The entire package shall also be made available on our website.
In an effort to increase the number of water and wastewater utilities taking advantage of
the annual price index and pass -through programs, Attachment 2 from the Director of the
Division of Accounting and Finance shall be included with the PAA Order in order to explain the
purpose of the index and pass -through applications and to communicate that Commission staff is
available to assist them.
Based on the foregoing, it is
ORDERED by the Florida Public Service Commission that the Gross Domestic Product
Implicit Price Deflator Index shall be used in calculating price level adjustments. We calculate
Packet Pg. 1898
17.D.3
ORDER NO. PSC-2022-0438-PAA-WS
DOCKET NO. 20220005-WS
PAGE 5
the 2023 Price Index by using a fiscal year, four quarter comparison of the Implicit Price
Deflator Index ending with the third quarter of 2022. It is further
ORDERED that the 2023 Price Index for water and wastewater utilities shall be 7.07
percent. It is further
ORDERED that the Division of Accounting and Finance shall, after the expiration of the
Proposed Agency Action protest period, send each regulated water and wastewater utility a copy
of the PAA order establishing the index containing the information presented in Attachment 1
along with a cover letter from the Director of the Division of Accounting and Finance. The entire
package shall also be available on our website. It is further
ORDERED that, upon expiration of the 14-day protest period, if a timely protest is not
received, the decision shall become final and effective upon the issuance of a Consummating
Order. Any party filing a protest shall be required to prefile testimony with the protest. However,
this docket shall remain open through the end of the year and be closed upon the establishment
of the new docket in January, 2023.
MRT
By ORDER of the Florida Public Service Commission this 27th day of December, 2022.
ell -
AD J. T TZMAN
Com tssion Jerk
Florida Public Service Commission
2540 Shumard Oak Boulevard
Tallahassee, Florida 32399
(850)413-6770
www.floridapsc.com
Copies furnished: A copy of this document is
provided to the parties of record at the time of
issuance and, if applicable, interested persons.
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17.D.3
ORDER NO. PSC-2022-0438-PAA-WS
DOCKET NO. 20220005-WS
PAGE 6
NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW
The Florida Public Service Commission is required by Section 120.569(1), Florida
Statutes, to notify parties of any administrative hearing that is available under Section 120.57,
Florida Statutes, as well as the procedures and time limits that apply. This notice should not be
construed to mean all requests for an administrative hearing will be granted or result in the relief
sought.
Mediation may be available on a case -by -case basis. If mediation is conducted, it does
not affect a substantially interested person's right to a hearing.
The action proposed herein is preliminary in nature. Any person whose substantial
interests are affected by the action proposed by this order may file a petition for a formal
proceeding, in the form provided by Rule 28-106.201, Florida Administrative Code. This petition
must be received by the Office of Commission Clerk, 2540 Shumard Oak Boulevard,
Tallahassee, Florida 32399-0850, by the close of business on January 10, 2023.
In the absence of such a petition, this order shall become final and effective upon the
issuance of a Consummating Order.
Any objection or protest filed in this/these docket(s) before the issuance date of this order
is considered abandoned unless it satisfies the foregoing conditions and is renewed within the
specified protest period.
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