CCWWA Minutes 09/18/2023September 18, 2023
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MINUTES OF THE COLLIER COUNTY
WATER AND WASTEWATER AUTHORITY MEETING
Naples, Florida, September 18, 2023
LET IT BE REMEMBERED, the Collier County Water and Wastewater Authority
in and for the County of Collier, having conducted business herein, met on this
date at 2:00 P.M. in REGULAR SESSION at the Collier County Growth
Management Department Building, Conference Room 609/610, 2800 Horseshoe
Drive N., Naples, Florida, with the following members present:
CHAIRMAN: Eloy Ricardo
VICE-CHAIR: Patricia Sherry
Bryant Collins
Eugene Wordehoff (excused)
ALSO PRESENT: Jamie French, Department Head, GMCD
Michael Stark, Director, Ops & Regulatory Management
Derek Perry, Assistant County Attorney
Julie Chardon, Ops Support Specialist II, GMCD
Evelyn Trimino, Manager, Financial Operations, Operations
Support & Regulatory Management Division
Monica Leon, Budget Analyst II, GMCD
September 18, 2023
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Any persons in need of the verbatim record of the meeting may request a copy of the
audio recording from the Collier County Growth Management Department.
I. Call to Order (Determination of Quorum) and Roll Call
Chairman Ricardo called the meeting to order at 2 p.m. Roll call was taken and a
quorum of three was established.
Attorney F. Marshall “Marty” Deterding, of Sundstrum & Mindlin LLP, representing
Ave Maria Utility Co., introduced himself.
II. Approval of Agenda – Meeting of September 18, 2023
No changes
Vice Chair Sherry moved to approve the ag enda. Second by Mr. Collins. The motion
passed unanimously, 3-0.
III. Approval of Minutes – Meeting of May 8, 2023
Vice Chair Sherry moved to approve the May 8, 2023, meeting minutes. Second by Mr.
Collins. The motion passed unanimously, 3-0.
IV. Items Requiring Action by the Authority
A. Ave Maria Utility Company Territory Expansion
Mr. Stark said we’re here to consider approving the Ave Maria Utility Company
territory expansion, which is on page 6 of the agenda packet. Marty, who represents
Ave Maria, will provide a brief overview.
Attorney Deterling told the CCWWA:
x In December 2022, on behalf of Ave Maria Utility, we filed a request for
expansion of service territory on a 1,000-acre parcel due east of the existing
territory.
x It’s an area Ave Maria is looking to develop in the future.
x It’s contiguous with the existing territory and next to the existing facilities, so
we’re in the best position to provide service. We want to move forward to
expand our service territories to include that area.
x We filed the required notice in accordance with their rules. Anyone who is
substantially affected and has any objection must file an objection within 30
days.
x That period passed in January, so we have everything required by the rules.
Mr. Collins said the water and wastewater treatment says it’s 2 million gallons per day.
Is that the current capacity or the potential capacity?
David Jansen, of the Ave Maria Utility Co., said the plant’s current capacity is 1
million gallons per day. We’re permitting and will start construction on the second
phase, which will increase capacity to 2 million GPD. Ultimately, at buildout, including
this additional housing we’re adding to the franchise territory, we expect the capacity
will be around 500,000 GPD to handle the expansion, as needed.
September 18, 2023
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Vice Chair Sherry asked if the expansion will all take place on the roads. You won’t
have easements going for property or rights of way?
Attorney Deterling said it’s all in the 1,000-acre parcel and will cross from where it
ends now and go into the new area. We will build large lines across that end and the
treatment facilities will stay where they currently fit and will be expanded there.
Mr. French told the CCWWA:
x He’s the former executive director of the Collier County Water & Wastewater
Authority.
x This was a strategic move by us. This application came in. He, Marty and Ken
Kovensky discussed it, but we waited until the Board of County Commissioners
agreed to expand this area.
x This area is an exclusive franchise, meaning exclusivity is granted to the utility
service provider.
x The property is owned by the same developer. This was unique because of that
level of exclusivity.
x It prevents the county or other utility service providers from being able to run
lines through their service territory.
x We learned our lesson years ago, when Orange Tree Utility existed. We have
language that will allow for transmission lines, not service lines, in the event the
county wanted to run a line as they do their regional water plants. There may
not ever be a line there, but if they elected to do that through the Board of
County Commissioners, this has been granted.
x It’s a little tardy on our part, but it was done by design because we wanted to
make sure they got through the entitlement process first so they could develop
the site.
x We know they need utilities and we also know that the North Regional Water
Plant would not meet their timeline within a reasonable amount of time, so we
negotiated this with the Public Utilities Department. He and Dr. George Yilmaz
spoke about this, and there was no objection. There is no letter of objection.
Mr. Collins moved to adopt Final Order No. 2023-02 for proposed additions of utility
service into any additional service area and authority to amend franchise certificates
authorizing such actions. Second by Vice Chair Sherry. The motion passed
unanimously, 3-0.
B. Ave Maria Utility Company – Index and Pass-through Increase
i. Water and Wastewater Rate Increases.
Mr. Stark said Ave Maria Utility Co. is applying for a 4.86% increase to its water
service and a 4.67% for wastewater service. In May, when we met, the price index
factor of 7.07% was adopted for final order No. 2023-01. We have representatives here,
if there are any questions.
Mr. Collins said Appendix A lists the report justifying the cost increases. Page 101’s
exhibit is a special report that satisfies the requirement authority rules, but there’s no
Exhibit A here. It goes to Exhibit E.
September 18, 2023
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Mr. Stark said this is a cover letter on summary. Page 115 shows Exhibit A, the cover
letter and summary of conclusions by Jacobs.
Mr. Collins said he’s confused about Exhibit A. Jacobs seems to be referring more to
the report they did on the assessment, the condition and depreciation.
Attorney Deterling said the agenda package contains Exhibit A to the index
adjustment is the group of schedules that calculate the index-rate adjustment. It’s a
group of four schedules that show the calculations of the percentage-increase rates.
A discussion ensued over the rate increase, impacts and the anticipated increase in
annual revenue.
Vice Chair Sherry moved to adopt Final Order No. 2023-03, adjusting the wastewater
rates of Ave Maria Utility Company LLLP by applying the 2023 Price Index Factor to
the allowable 2023 operation and maintenance expenses, and its amortized pass-
through costs for water and wastewater. Second by Chairman Ricardo. The motion
passed unanimously, 3-0.
C. Ave Maria Utility Company- Rate of Depreciation Filing
Mr. Stark said this is on page 109. On August 4, 2023, the Ave Maria Utility Company
applied for a change in revenue rates and petitioned for a change in the average service life of
depreciation rates and the reinstatement of accumulated depreciation on such assets. Exhibit
A, in accordance with Collier County Water & Wastewater Authority Rules and Procedures
Sections 2.14, Sections 5-6 and 9 of Resolution 1996-13, as amended.
A discussion ensued and the following points were made:
x The Jacobs report did a condition assessment report, but the replacement schedule is
empty.
x Is the utility planning to match the O&M, such as the replacement of equipment, in
line with the depreciation schedule? If it had a 15-year life, but wasn’t going to be
used because you’re under capacity, are you valuing it with a 30-year life?
x That’s partly why Ave Maria asked for this. Ave Maria believes it lines up with what
we’re estimating the service lines will be. They will be there much longer due to a
combination of factors, including reduced usage and the type of things that were
installed, quality of material and maintenance that has been undertaken.
x It’s one of many rewards for the quality of their operations. Jacobs determined that
the combination of those resulted in a need to change the lives of everybody from a
regulatory standpoint and from the standpoint of the authority, we’re trying to match
cost to customers receiving the value of those costs.
x The definition of depreciation, as stated in your rule, aligns with what we’re
proposing to do here to make sure that the life of the asset and its diminished life over
that period of time matches up with what you put in as depreciation expense and what
you show as accumulated depreciation.
x Ave Maria found that what we did in the past was not correct and based upon these
factors, we’re asking to make it make it better fit the circumstance.
September 18, 2023
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x The length of the product is longer than the anticipated length, so it tends to keep
rates lower.
Attorney Perry said he represents the authority in a legal capacity. His duty is to ensure you
understand. The CCWWA established a general set of depreciation rates in 1996, and since
then there haven’t been changes, Ave Maria is asking for a deviation from its own general
standard from 1996.
Mr. French said this is recognized by the National Association of Regulatory Utility
Commissioners. This is a cost-effective way to better balance the tariff against good sound,
economic and engineering principles based on the life of service. It’s not uncommon
throughout the country. This is like the Florida Public Service Commission. It’s a common
standard.
Attorney Perry said it’s unique and seemed very reasonable. In 30 years’ time, machines
have gotten better.
Mr. French said our code could use a little updating, but this is our only remaining regulated
utility company [he later said there are two remaining]. We once had six.
Attorney Deterling said there was a roughly 8% error in some of the calculations of the
impact of the proposed change. We can provide staff with revised figures and schedules. The
impact was 8-9% higher than what we had shown in our schedules.
Brian Stockman, tax compliance manager for Ave Maria Utilities, told the CCWWA:
x It shows the complexities of group depreciation. He was using only our depreciation
system, which stops calculating depreciation and cost, whereas group depreciation
continues to depreciate assets in excess of the cost incurred to install that asset.
x As a result, the difference is about $618,000, so we have an additional $618,000
worth of accumulated depreciation taken on our financial statements and we would be
restating it.
x Our restatement is based on the corrected useful lines of those assets and based on our
data report. It means our restatement is about $618,000 higher than the number we
requested in our statement.
x That came to him today as he was preparing for this meeting
Vice Chair Sherry asked if they had a revised schedule. We need something to vote on.
How can we vote if it’s going to change?
Attorney Deterling said he didn’t have the entire filing. If you need those schedules
immediately, we could get them. We’d rather do that than delay action.
Mr. Stockman said he can indicate the bottom numbers but doesn’t have numbers for each
group. That would exclude a lot of items. We have thousands of assets on our schedule.
Jabobs only looked at a couple hundred.
A discussion ensued over whether to reschedule the meeting for a vote and Mr. Stockman
said he could return to his office and bring back the information in about 15 minutes.
September 18, 2023
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[A recess was taken from 2:30-3:02 p.m.]
Vice Chair Sherry made a motion to adopt Final Order No. 2023-04 for a proposed change
in service life depreciation rates, restatement of accumulated depreciation rates and
restatement of accumulated depreciation on such assets for Ave Maria Utility Company
LLLP. Second by Chairman Ricardo. The motion passed unanimously, 3-0.
V. Staff Discussion
Mr. Stark said we have one CCWWA opening and have reached out to our Water
Wastewater Collier County contacts, the division directors, and to the public to ensure
they’re aware of the opening. Also, Eugene Wardahoff didn’t attend today so we need to
discuss that. The process is that we let you know what the reason was for not attending and
you can mark it as excused or not. He did not feel that he had enough time to properly
prepare for today’s meeting and wanted to be excused.
Chairman Ricardo said we’ll mark it as an excused absence.
VI. Open to Public
(No public comment)
VII. Authority Members Discussion
Mr. Collins said that on the county’s website it says the CCWWA meets on the third
Monday of each month. You probably should change that because people will show up and
see that no one is here.
Mr. French said we’ll address that and told the CCWWA:
x He was wrong. There are two regulated utilities in Collier County.
x The reason we regulate this at a local level is because in 1996, the Board of County
Commissioners had just regained that utility.
x It was turned over to the state in 1986 and there were complaints coming in from the
utility or private utility customers. They had to drive all the way to Tallahassee to be
heard by the Florida Public Service Commission.
x Under Chapter 367, this authority cannot be granted to anyone at the municipal level.
It can only be given to the county, and if the county were to get this back, it has to be
for no less than 10 years. It has to be awarded by the Florida Public Service
Commission.
x Those meetings are typically held in Tallahassee. Although we only have two
utilities, it’s very important that in the event of a billing perplexity, service
commitments not being met, or questions from consumers or private utilities, whether
it’s north Marco or Ave Maria, we need to have something locally.
x We have another board, the Construction Board of Appeals, which is recognized by
the Florida Building Commission. If you want to appeal the decision of the building
official or fire official, there’s a right of appeal before it goes to the Florida Building
Commission for a final determination.
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