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HomeMy WebLinkAbout11/9/1983Wednesday, November 9, 1983 The Board of County Commissioners of Indian River County, Florida, met in Special Session at the Vero Beach Highlands Recreation Center, Vero Beach, Florida, on Wednesday, November 9, 1983, at 7:30 o'clock P.M. Present' I were Richard N. Bird, Chairman; Don C. Scurlock, Jr., Vice Chairman; Margaret C. Bowman; Patrick B. Lyons; and William C. Wodtke, Jr. Also present were Michael J. Wright, County Administrator; Gary Brandenburg, Attorney to the Board of County Commissioners; Terrance G. Pinto, Utilities Director; Corp. William Reichert, Bailiff; and Virginia Hargreaves, Deputy Clerk. The Chairman called the meeting to order, and Attorney Brandenburg led the Pledge of Allegiance to the Flag. Chairman Bird explained the procedures to be followed during the rate hearing and asked that everyone who had filled out a slip and wished to be heard, come forward to the microphone to speak and be sworn in by Court Reporter Dennis Zambataro. The Chairman noted that the Board was happy to be the guest of Vero Beach Highlands tonight to afford everyone an opportunity to attend and be heard. The Chairman then asked the County Attorney to give some history of the County's involvement with franchises. Attorney Brandenburg explained in detail the responsibilities delegated to the County by the Special Act of 1959 and what occurs under that Special Act when the County grants a franchise. He noted that this particular franchise, which is a very old one, takes in not only the General Development community but certain areas outside of it. Some of the burdens that it places on the utility are that it has to maintain and operate its plant in an NOV 91999 NOV 919834 im 55 ?aU 2117 efficient manner, and it also has to render efficient service throughout the entire franchise area, which means that the utility must plan for continued growth and continued expansion. One of the major burdens the franchise places on the customer of any utility is that they must pay a fair and reasonable rate sufficient to generate enough revenue to meet all costs of the service being provided, plus a fair rate of return, and the Board must judge tonight, based on the testimony given and facts presented, whether this utility is efficiently managing its resources to provide quality service for the least amount of money possible. The hour of 7:30 o'clock P.M. having passed, the Deputy Clerk read the following Notice with Proof of Publication attached, to -wit: VERO BEACH PRESS -JOURNAL Published Daily Vero Beach, Indian River County, Florida COUNTY OF INDIAN RIVER: STATE OF FLORIDA Before the undersigned authority personally,appeared J. J. Schumann, Jr. who on oath says that he is Business Manager of the Vero Beach Press -Journal, a daily newspaper published at Vero Beach in Indian River County, Florida; that the attached copy of advertisement, being a r� in the matter of in the Court, was pub- lished in said newspaper in the issues of�:/ Affiant further says that the said Vero Beach Press -Journal is a newspaper published at Vero Beach, in said Indian River County, Florida, and that the said newspaper has heretofore been continuously published in said Indian River County, Florida, each daily and has been entered as second class mail matter at the post office in Vero Beach, in said Indian River Coun- ty, Florida, for a period of one year next preceding the first publication of the attached copy of advertisement; and affiant further says that he has neither paid nor promised any person, firm or corporation any discount, rebate, commission or refund for the purpose of securing this advertisement for publication in the said newspaper. Sworn to and su (SEAL) D. 19 Zj (ciem or the circun court, inaian miver , Florida) ANNOUNCEMENT SPECIAL CALL MEETING OF ' BOARD OF COUNTY COMMISSIONERS HELD AT VERO HIGHLANDS CLUBHOUSE 7:30 P.M. WEDNESDAY, NOVEMBER 9,1983 i PUBLIC HEARING -- General Development Utilities, Inc., request for RATE INCREASE. PUBLIC HEARING — General Development Utilities, Inc.; FRANCHISE AMENDMENTS.- " PUBLIC MEETING' — GeneralDevelop- ment Utilities, Inc., and Indian" River County WATER AGREEMENT. IF ANY PERSON DECIDES TO APPEAL ANY DECISION MADE ON THE ABOVE MAT- TERS, ATTERS, HE/SHE WILL NEED A RECORD OF THE PROCEEDINGS, AND FOR SUCH PUR- POSES, HE/SHE MAY "NEED TO. ENSURE THAT A VERBATIM RECORD OF THE PRO- CEEDINGS IS MADE, WHICH RECORD IN- CLUDES THE TESTIMONY IN EVIDENCE ON WHICH THE APPEAL IS BASED. Nov. 2, 8,1883. I VERO BEACH PRESS -JOURNAL Published Daily Vero Beach. Indian River County, Florida COUNTY OF INDIAN RIVER: STATE OF FLORIDA Before the under9lnned authority personally appeared J. J. Schumann. Jr. who on oath says that ne is Business Manager of the Vero Beach Press -Journal. a dally newspaper Dubi-shed at Vero Beach In Inolan Rive, County. Florida. that the attached copy of advertisement. being a In the matter of .J } L /t t In the _ _ _ , _ _ Court. was pub. hsned 'n said newspaper in the issues 01 Z 3 Affiant further saga that the said Vero Beach Press Journal is a newspaper oubi-shed at Vero Beacn. In said Indian River County. FFdnoa. and that the said newspacer has heretofore I,,—, continuously puo;lsned in sa,d Indian River County Flonda each dairy anct has been enterec as second class mail matter at the oast otfice m Vero Beach. in said Inolan Fiver coun Jt Flo"ca. for a DerldC at one near next preceding the 11131 nt:7:,catian of the attached cony of aovertlsement: anc a•trant furiner says final !'ie has neither oa�c nor cromtseo any person. firm 0, Corrc-aiion any d.scount. rebate �0mh, ss,cr or refund for the purpose of secuh^.d this advertlse^ent for ouo:.Cal,on In the said newspaper. aag33gyyy}}} �j S,+orn tC any subscnoeo Deforo a to ��I JJ ������'' am I of J_ A D 19 V t, uti/ln.r . -usn1.r'4tf Cuurt, I^c+an River County. Flandai SEAL: Public Notices NOTICE OF PUBLIC HEARING The Indian River County Board of County Commissioners will hold a public hearing November 9. 1983. 7:30 p.a:, in the Vero Highlands Clubhouse, Vero Beach, Florida to consider arequest for a rate increase for General Development Utilities, Inc.; the following rate schedule is proposed: . PROPOSED RATES WATER Base Customer Usage Customer Class Meter Size Facility Charge Charge Charge Residential 5/8 x 3/4" S 5.43 $2.43 $1.90/1000 gal Residential 1" 12.49 2.43 1.90/1000 gal Commercial 5/8 x 3/4" $ 5.43 $2.43 $1.90/1000 gaI Commercial 1" 12.49 2.43 1.90/1000 gal Multiple Unit All Sizes $ 2.72/Unit $2.43 $1.90/1000 gal. SEWER Residential All Sizes $ 6.85 $1.61 'SI.88/1000 gat up to 10,900881 Commercial 5/8 x3/4" S 6.85 $1.61 $1.9E%1000 gal Commercial 1" 15.76 1.61 1.8811000 gal Multiple Unit- All Sizes $ 3.43/Unit $1.61 $1.88/1000 gal NOTE Base Facility Charge for larger meter sizes have been included in the proposed Tariffs. Those changes are based upon FPSC Equivalent Resi– dential Connection Factors, due to lack of historical consumption data. '.•..�.ps+. i All interested persons are invited to this ®seting_• If any Per eOn ..e-. tides to appeal any decision made by the Board of County Commissioners' with respect to any matter considered at this meeting, he/she will - need a record of the proceedings, and that for such purpose he may '7x— need to ensure that a verbatim record of the proceedings is made, which record includes the testimony.and evidence upon which be based. . the appeal is to OItt.23.1983. Richard H. Bird, Chairman 1 ti Board of County. Commissioners The Chairman recognized members of the General Development Utilities staff to make a presentation. Nancy Roen, Corporate Counsel for GDU, requested that all comments from the public be strictly restricted to the request for a rate increase. Attorney Roen discussed the Commisgion's responsibility to make sure that the rates are reasonable and do provide a fair return, and stated that GDU will show tonight that the rates proposed will not cover all the costs but only will cover the costs under the test year, 1982 and will not provide a fair rate of return. She felt the rates they are requesting are reasonable and fair and will enable the utility to provide adequate service. N O V 9 1983 L M 8'Q( 55 shay f Nov g 1983 `I 5 PAc.€ x,19. Attorney Roen called Charles E. Fancher, Jr., who was sworn in by Court Reporter Zambataro. Mr. Fancher stated that his business address is 1111 S. Bayshore Drive, Miami, 33131; that he is the Vice President of Finance for General Development Utilities; and as such, he is responsible for all the financial operations as they relate to the utility. Mr. Fancher acknowledged that he prepared the rate increase application. Attorney Roen requested that Mr. Fancher "walk" the Commission through the financial analysis. Mr. Fancher stated that he would review the essential elements that the Exhibits support. He explained that the test year is 1982 and the results of operations were for the 12 months then ended. Exhibit "A" of their rate case booklet, which is on file in the Office of the Clerk, contains all the financial information for the rate case request and the key page in it is page 4 which provides a summary of the investment base, as follows; 4 1 1 1 6 7 Operating Ezpenses: 8 9 Operations GENERAL DEVELOPEZE1dT UTILITIES, INC. 19250 10 25.785 25,785 VERO WATER AND SEWER OPERATIONS Maintenance 13.277 38,233 12 10.215 INDIAN RIVER COUNTY RATE CASE 9,318 13 Depreciation, Net 31,314 (4.546) YEAR ENDED DECEMBER 31, 1982 $ 112b.487) $ 12 $ ( 1.803) 15 AVERAGE RATE BASE, INC%(E STATEMENT, AND RATE OF RETURN 8.572 (513) 16 (1) (2) (3) (4) (5) (6) W A T E R S E W E R 19 Balance At Balance 20 At LING Per Boots Requested Per Books $ 0 6 Requested NO, 12/31/82 Adjustments Rates 12/31/82 Adjustments Rates 1 AVERAGE RATE BASE $ $(143.330) S$52.391 $ja372.309 $(243.742) $1.128.567 2 26 3 INCOME STATEMENT i 27 NOTE: See attached Schedules A-2 and A-3 for explanation of adjustments Schedule A-1 4 Page 1 of 1 5 Operating Revenue $ 86,288 $ 116,624 $202,912 $ 50,131 $ 117,206 $ 167,337 6 7 Operating Ezpenses: 8 9 Operations 140,831 19250 10 25.785 25,785 11 Maintenance 13.277 38,233 12 10.215 (897) 9,318 13 Depreciation, Net 31,314 (4.546) 14 $ 112b.487) $ 12 $ ( 1.803) 15 Taxes Other Then Income Taxes 8.572 (513) 16 17 Provision for Income Taxes 18 19 Total Expenses 193.994 (3,809) 20 21 Net Operating Income (Loss) $ 0 6 20 4 22 23 RATE OF RETURN 24 25 26 27 NOTE: See attached Schedules A-2 and A-3 for explanation of adjustments Schedule A-1 Page 1 of 1 142,081 94,554 1,250 95,804 13,277 25.785 25,785 26,768 46.064 (7.831) 38,233 8,059 10.215 (897) 9,318 190,185 176,618 (7,478) 169.140 $- $ 112b.487) $ 12 $ ( 1.803) u1 -I •e. -A NOV 9 1993 Mr. Fancher reported that during 1982 the utility had total revenues of approximately $80,000 generated from water operations and approximately $50,000 from sewer operations. The total operating expense during that period was $194,000 for water and $177,000 for sewer. Columns 2 and 5 identify adjustments to exclude portions of the investment set aside to service future customers as they connected to the system. These are some of the lines in the western sections where they have applied a density concept to exclude the cost of lines in front of vacant lots. They are requesting additional water revenues of $117,000 to provide overall revenues of $203,000 and for wastewater additional revenues of $117,000 to provide overall revenues of $167,000 Mr. Fancher stated that with those adjustments, they would have net operating income in their water operation of approximately $13,000 and there would be approximately a $2,000 operating loss from the wastewater operations. Mr. Fancher then discussed Page 5, as follows: N GENERAL DSP UTILITIES, INC. VERO WATER AND SEWER OPERATIONS INDIAN RIVER COUNTY RATE CASE YEARS ENDED DECEMBER 31, 1982 THIRTEEN-MONTR AVERAGE RATE BASE (1) (2) (3) W A T E R Balance At LINK Per Books Requested 'D. 1.2/31/82 Adjustments Rates 1 Utility Pleat in Service $1,418,123 i(164,497) (A) $1,253,126 2 3 Acemdated Depreciation (185,436) 21,511 (B) (163,925) 4 S Contributions -in -Aid -of -Construction (266,972) (266,972) 6 7 Accumulated Depreciation - CIAC 10,742 10,742 0 , 9 Working Capital 19,264 156 (C) 19,420 10 11 Income Tax Leg 12 13 Total Average Rate Base 14 1S 16 17 NOTE; See page,2 for explanation of adjustments ' r Schedule A-2 Page l of 2 r J (4) (5) S E W E R (6) Balance At Per Books Requested 12/31/82 Adjustments Rates $2,131,711 $(291.553)(A) $1,840,158 (347,844) 47.655 (B) (300,189) (441,720) (441,720) 15,119 15,119 15.043 156 (C) 15.199 $1.372.309 $(243.742) $1.128.567 Ln r NOV 91983 'a '55 racy' Mr. Fancher noted that the key item on page 5 is contributions in aid of construction. This is a one time only payment made when customers connect to the system, and those amounts are being used to reduce the overall plant investment. Taking all this into consideration, they come up with a total average rate base of $852,000 for water and $1,128,000 for sewer. Mr. Fancher next reviewed Page 9: WW O kqO 0 H (D (D Pr o � N Pt W G tt W N ft I< � L N �1 6P. (t Co � � N (D N o 10 (D (D W F-+ Co ro ro .• ro r V LO to -1 O mm a N FA Ww Ott O O !1 M M dP WW O kqO 0 H (D (D Pr o � N Pt W G tt W N ft I< � L N �1 6P. L Co N N w OD -1 Ob o 10 W W F-+ Co Co oo r V N Co -1 O Co W J U1 N O 0 O W 0 N �1 En z En W O N • H I� . 00 H � 'H CP V dP N O 00 Ott y !1 �C dP dP 0 z zC1 L21 LId M in 2H H 9 WH M 0 R 0 OH r, Cro ro H HH H 01 O N O Z w 0EEn Z% ao 00s N • to H �1 N �1 z W . N • H N . 00 H � CP V dP N O 00 Q y dP dP dP 8 0 H W O N H 1-3 W 0 0 00 H � CP dP dP O � y OA H tp 01 O N H M— �o •i ao 00s H a dP dP dP dP g n 8 0 H E Mr. Fancher explained that Page 9 contains a summary of the overall capital cost of providing service. It amounts to 14%, and this is what they believe would result in a fair rate of return. If the full amount of the revenues they are requesting tonight were to be granted, however, they would • not be earning close to that percentage, but rather would be earning a little over 1% for water and would be in a net loss position for sewer operations, , Mr. Fancher continued that the other pages contained throughout Exhibit A are backup documentation and computations to arrive at the information just reviewed. Attorney Roen requested that Mr. Fancher review Exhibit B. Mr. Fancher noted that Exhibit B which covers from page • 12 through page -97 contains the bulk of the rate information. Pages 74-97 contain a detailed billing analysis calculation, and a summary is on page 73, as follows: NOV 9 1993 9 etc 55 V Y d L GENERAL DEVELOPMENT UTILITIES, INC. , VERO WATER AND SEWER OPERATIONS INDIAN RIVER COUNTY RATE CASE YEAR ENDED DECEMBER 31, 1982 BILLING ANALYSIS SUMMARY (1) (2) (3) (4) (5) (6) (7) (8) W A T E R S E W E R NUMBER NUMBER LINE RATE OF REVENUES OF REVENUES 80. CLASS BILLS PRESENT PROPOSED BILLS PRESENT PROPOSED RESIDENTIAL 5/8" x 3/4" Meter CA 7,856 $ 70,872.00 $ 161,323.36 6,872 $ 41,232.00 $ 134,156.80 Sl 1" Meter CB 419 7,560.00 18,935.88 419 2,514.00 9,940.50 6 7 Total Residential 8,275 78,432.00 180,259.24 7,291 43,746.00 144,097.30 0` 9 COMMERCIAL ►a . it 5/8 x 3/4" Meter CE 42 $ 358.00 $ 824.12 6 $ 39.00 $ 86.48 12- 13 2" Meter C6 12 7,924.00 21,567.16 12 $ 5,943.00 $ 23,103.32 14 is Total Commercial 54 8,282.00 22,391.28 18 5,982-�O 23,189.80 17; TOTAL PER BILLING ANALYSIS $ 86,714.00 $ 202,650.52 + L 309 $ 49,72$'.00 $ 167.287.10 8 4 Miscellaneous Service Revenues k 259.00 259.00 49.00 49.00 Immaterial Difference (. 685.00) 2.48 354.00 .40 .3 TOTAL REVENUES $ 86.288.00 $ 202.912.00 $ 50.131.00 $ 167.336.50 v W 00 Schedule B-5 Page 1 of 1 'j 2 Mr. Fancher.explained that Page 73 provides a breakdown by customer classification of the total revenues that would be produced under the present rates in effect during the test year and the revenues that would be produced under the proposed rates. The rate structure they have proposed tends to track the county rate structure, i.e., they have proposed a change from the current minimum type charge to one where they have a base facility charge plus a customer charge and a usage charge per thousand gallons. This type of structure helps spread the fixed cost of providing service over a larger customer base by including those customers who will be gone for portions of the year as they would be charged the base figure every month. Mr. Fancher believed this is a more equitable situation because of the fact that you do have to have customer service representatives, meter readers, plant operators, etc., to keep the plant in operation to render service whenever the customer is there. They have also proposed a change in the sewer rate structure - again on a base cost per month plus a usage rate up to a maximum of 10,000 gallon usage. Anything in excess of 10,000 gallons is assumed to be used for irrigation purposes or various activities that would not be impacting flows in the wastewater plant. Mr. Fancher next reviewed Exhibit D, reporting that their analysis showed that the flows at the water and wastewater plant were over the rate of capacity of the plant, including the required component for growth. The water plant has a rate of capacity of about 375,000 gpd and they have had a maximum production day of 400,000 gpd. Likewise the wastewater plant has had peak flow days over the rate of capacity of 250,000 gpd, and they, therefore, consider both plants 100% used and useful. Mr. Fancher noted that they have made an adjustment for lines installed in the western portion on a density analysis. 11 NOV 9 1983 85 �k Nov g 1993 55 rx[ 24 t Attorney Roen asked that Mr. Fancher describe the reason for the amount of rate increase requested. Mr. Fancher stated that there are two elements involved. The rates requested in the 1978 rate case were not designed to recover the total cost of providing service at that point in time so they are involved with catch-up with what was left from 1978, and the other element relates to increases in operating costs due to inflation, additional customers, higher electrical power costs, etc. He emphasized that the total revenues requested would not produce anywhere near what they feel is a fair rate of return. Chairman Bird asked if any of the Commissioners wished to ask questions at this time. Commissioner Scurlock discussed figures on page 73 and also the document which shows 1978 vs. 1982, and was puzzled by the fact that while the projected revenues for water have doubled and the projected revenues for wastewater have tripled, it seems the figures projecting operating costs for - water and sewer reflect a reversal with the operating costs for water being about triple. He asked if possibly there was a transferral of costs from one to the other. Mr. Fancher stated that the sheets referred to include operation and maintenance expenses, and in addition, other operating expenses would be depreciation and property taxes which could account for part of the flip-flop situation Mr. Scurlock is discussing. Commissioner Lyons wished -to have a -comparison between Page 4 and Page 9, noting that they talk, about a rate base of around $1 million but a long term debt of 18 million is shown. Mr. Fancher explained that Page 9 is General Develop- ment Utilities in toto. They do not allocate debt specifi- cally to the Vero Shores and Vero Highlands operations; 12 I they determine ratios and allocate a portion of that total debt and that pool of funds to fund the utility facilities in Vero Shores and Highlands. Commissioner Wodtke had questions about the total number of water and sewer customers in 1978 as opposed to 1982, and -Mr. Fancher answered that they have the total bills generated.during those years which would be reflective of the average number of customers during the year. ,He stated that as of December, 1978, there were 328 water customers and 278 sewer customers while in 1982 there were 951 water customers and 893 sewer customers. Commissioner Wodtke continued to question the figures shown for billings in 1982 and stated that he just wished to determine the amount of new customers since the base year which might generate some additional revenue. Mr. Fancher did not know exactly the present number`of customers, but pointed out that while there obviously would be additional revenues, there would be additional expenses and additional investments required because they would be coming into some of the vacant lots. All of the components would change and move as new customers came in to the system. Commissioner Scurlock wished to know whether in 1978 and 1980 the existing plant was operating under and meeting existing standards. Mr. Fancher felt their engineer could more properly answer that, but he could say that in 1978 they did have some modifications going on at the water treatment plant to put in a ground storage tank, some high service pumps and things of the nature. During that year as a result of the work going on at the plant itself, the water was taken from the raw water sources, chlorinated, and sent out to distribution, which reduced the chemical cost in that year over what had been incurred previously and what has been 13 NOV 9 1983 B -*55 PAu.248. Nov 9 1983 WA 55 FAC1249 F incurred since that time; so, there is almost a $40,000 increase in chemical costs because of the operating mode of that treatment plant being out of service in 1978. Commissioner Scurlock asked if any of the costs of the operation for water or sewer were being carried by the development company in 1978 or 1980 as opposed to the utility company, i.e., were they carrying it on one set of books and charging it off against the other? Mr. Fancher stated no, not to his knowledge. The only possible subsidization that might have occurred was a result of the operating loss, and to that extent the shareholders of the utility were subsidizing in the sense that the full cost of the service was not being recovered. Commissioner Scurlock noted he wasn't on the Commission in '78 or '80, but apparently there was about a 25� differential between the rate requested and what was granted, and he is trying to relate this shortfall to the magnitude of the increase being requested today. Mr. Fancher emphasized that even if GDU had received everything they requested back then, there still would have been a shortfall, and that shortfall makes up 500 or more of the currently requested increase— Commissioner ncrease— Commissioner Lyons wished to be sure that the rate increase being requested is not designed to get money from the current customers to finance a water system to expand to meet General Development's needs for new houses. Mr. Fancher assured him there is nothing in their request that represents collecting from customers for future expansion at all. There are, however, numerous areas where they have had increasing expenses from reaching different stages in the system; they have had to add employees, etc., and it is difficult to isolate these things. 14 Commissioner Scurlock next discussed whether the impact fee or "contribution" actually pays for the plant, the plant capacity, and the distribution system, or whether some of this is in the rate structure and noted that at a premeeting with General Development, a percentage was given in the 50/50 or 60/40 range, indicating that the impact fee did not pay for all of these things. The Minutes of the 1977 meeting, which basically dealt with impact fees, reflect, however, that the proposal presented to the Commission by General Development Utilities at that time was intended to recover all costs from the impact fee as evidenced by Mr. Mosian's statement that "under the proposed policy they were asking each customer to pay for the sewer plant they built, for the line extension, and for physically connecting his property to the line." Mr. Fancher commented that we are both trying to work with those Minutes and interpret them, but it is a fact that the contribution amounts that have been approved through the years have in no instance paid for 100%. They have been designed to cover only a portion of that investment and that portion has changed throughout the years. The actual investment per customer has remained pretty stable as a result of that policy. Commissioner Scurlock asked if the percentage carried for plant expansion under the present proposal has increased or decreased? Is a higher percentage of dollars being collected from existing residents now than was in 1978, or in other words, is the present rate payer carrying more of the load or less? Mr. Fancher explained that it does not work exactly that way - in 1978 it cost $1,500 for a proportion of plant line and meter installation. During 1978 they charged $500.00 in contributions, leaving an amount to be collected through monthly rates of $1,000. In 1982 it now costs 15 N O V 9 1983r� 5Q NOV 9 1933 so 55 rAu 2,51, $2,500 to connect a customer to the system. They are now collecting $1,500 in contributions, leaving the same $1,000 to be collected through the monthly rates. What they are doing is adjusting the contributions amount to offset increasing capital costs of providing service to keep things equal so everybody is paying the same amount through their monthly rates. Attorney Roen called Mr. Morris. Court Reporter Zambataro swore in Curtis Morris, Division Director for General Development Utilities in the Port St. Lucie, Vero and Silver Spring Shores projects, whose business address is 901 Pruynville Rd., Port St. Lucie, Fla. Mr. Morris stated that he is responsible for the general supervision of the water and sewer operations in Vero Shores and Highlands. He then reviewed Exhibit C, as follows, noting that the system is in compliance with all applicable treatment standards and the system in 1982 was basically the same as it is today. 16 GENERAL DEVELOPMENT UTILITIES, INC. VERO WATER AND SEWER DIVISION INDIAN RIVER COUNTY RATE CASE YEAR ENDED DECEMBER 31,1982 EXHIBIT C -OPERATIONS In 1982, the Utility System in Vero consisted of: WATER SYSTEM - One .375 MGD Ion Exchange Water Softening Treatment Plant with three production wells, two zeolilte softening units, one 250,000 -gallon storage reservoir, three peerless high service pumpts, one 10,000 -gallon pressure pneumatic tank, one 6" -distribution meter, approximately 20 miles of distribution pipe ranging in size from 4" to 12", 68 fire hydrants, and 950 water meters serving 950 customers. .SEWER SYSTEM - One .250 MGD activated sludge complete mix package sewage treatment plant, eight lift stations, approximately 13 miles of gravity collection mains serving 893 customers, and approximately four miles of force mains. The treatment plant consists of one contact basin, one aeration basin, one clarifier, one anaerobic digestor, two blowers and miscellaneous piping. PERSONNEL - The facilities are operated and maintained by three on-site personnel and receives additional labor support as required from Port St. Lucie. The three on -:site personnel are: Dana Gallagher - Utility Community Superintendent David Gee - Shift Operator Alan Wheatley - Mechanic No major improvements have been made to the system since the test year. Schedule C-1 shows both water and sewer treated during the test year, along with a calculation of unaccounted for water. Schedule C-2 is a water analysis performed by Orlando Laboratories, Inc. in November 1982. Page 1 of 1 17 NOV 91993 98 �5 r�25.1 NOV 9 1983 Mr. Morris reported that in 1978 the water treatment facility underwent renovation to replace the existing softening units as well as addition of ground storage tank and some replacement of pumps and control equipment. In 1978 the sewage treatment facility consisted of an Imhoff plant and in 1978 they went in and built the plant which is in service today. Mr. Morris believed the 1978 plant did comply with the requirements of the regulatory agencies at that time, and the facilities today do certainly comply. Mr. Morris then discussed the increase in customer load from 1978 to 1982, noting that in 1978 there were approxi- mately 300 water customers and today there are approximately 955 or 960; in 1978 there were 225 on sewer and 893 today. Commissioner Wodtke inquired about the number of additional customers on the system since the 1982 base year. Mr. Morris believed that in 1982 there were approxi- mately 500 additional customers on the sewer system and approximately 600 additional on the water system, and stated that since 1982, there are approximately 5 to 10 additional . customers on the water system. In 1982 they had 950 customers, and he believed that total now is somewhere around 955 or 960. (The audience evidenced much disbelief in this statement.) Mr. Morris concluded that he did believe the system is being run efficiently and economically. Commissioner Scurlock asked about meeting environmental standards in 1978 and 1980 and asked if the system was under citation at any time. Mr. Morris believed in 1978 they were meeting standards and were not under citation and knew that today and in 1982, the plants do meet standards. Chairman Bird commented that there seemed to be some disbelief about the growth of the system since 1982 and it does seem Mr. Morris quoted a rather small increase. He assumed that the area has grown more than that. m Mr. Morris stated that he would provide actual figures. In further discussion, it was noted that page 109 shows projected connections in 1983 based on 32 additional connections during the first quarter of 1983. Mr. Fancher confirmed that the number contained on page 109 is really a multiplication of actual connections as they were during the first quarter of this year. It projects things out to the end of 1983. There were 32 connections during the first quarter and that would mean approximately 75 additional customers connected up to this point in the year if that rate had been maintained. Commissioner Lyons commented that replacement of plants in order to bring them up to date had been mentioned, and he asked if that would come out of monies that had been accumu- lated or whether -it was a charge that shows up as expansion and would be carried by existing customers, i.e., were the rate payers asked to carry an additional load because the plants were replaced? Mr. Fancher replied that the plants were financed through a combination of debt and equity and there have been F. several expansions during the years and replacement of facilities as they wear out. The cost of that financing would show up in the cost of capital which does relate to the average cost of providing service. Commissioner Lyons discussed the segment of the rate that is for repair and replacement and wished to be sure that the replacement is not of larger capacity than needed for the existing customers. Mr. Fancher stated that the customers do not pay for additional capacity they do not use. GDU does have a repair and replacement program on-going with the facility to maintain its useful life. There are dollars in there that relate to the recovery of the capital cost of the facility 19 N 0V 9 1983 ai c 55 iiu,2554 r N OV 9 1983 - that is providing service, but there is nothing included that relates to a replacement fund per se. Chairman Bird announced that Mr. Alexander from the Department of Environmental Regulation in Orlando has made himself available this evening if the Commissioners have any questions. Mr. Alexander introduced Mr. Bostwick, District - Engineer for DER. Court Reporter Zambataro swore in Mr. Bostwick, who stated that his name is William M. Bostwick, Jr., business address 3319 Maguire Blvd., Orlando, Fla., and he is a professional engineer with the DER. Commissioner Scurlock asked if this plant has been under citation since 1978, and Mr. Bostwick stated that he has not researched back to 1978, but presently the system is operating within their regulations. Commissioner Scurlock noted that, therefore, it would appear there would be no need to make any changes to the existing plant other than for expansion. Mr. Bostwick believed there is some bacteriological problem with one of the water supply production wells and there probably will be a need for some additional chlorina- tion at the well site. Utilities Director Pinto informed the Board that a report from our inspector shows that two of the wells may be within 100' of a septic system. He wished to know what the company will have to do if that proves to be true. Mr. Bostwick confirmed that one well.is within the 100' radius, and it was approved a number of years ago. He was not aware of any bacteriological problem there. The second well has shown some problems, and Mr. Bostwick believed there will be some further investigation and possibly some remedial measure may be needed or even replacement with another source of supply, if necessary. 20 s v Director Pinto asked if it would be the DER's attitude to allow use of the well to continue, and Mr. Bostwick stated that it would, with close monitoring, if there is no other problem. Chairman Bird asked Director Pinto to give the staff analysis of the proposed rate increase. Mr. Zambataro swore in Utilities Director Pinto. Mr. Pinto reviewed the following staff memo: TO: Honorable Members of the DATE: November 8, 1983 FILE: Board of County Commissioners THRU: Terrance G. Pinto � Utilities Director�r'SUBJECT: General Development Utilities Rate Increase Michael Wright County AdministA� FROM: Jose -A. Baird REFERENCES: Administrative Manager General Development Utilities has filed application to request a rate increase of approximately 170%. This will change there present revenues from $136,420.00 to $370,249.00 and increase of about $233,830.00 in over all revenues. Even though they are asking for a substantial rate increase, the rate of return they are requesting is only 1 1/2% for water and zero for sewer. Both these rate of returns are far below industry standards which are between 12 1/2 and 14 1/20 at the present time. In evaluating the request, we researched other aspects that would inflate their revenue unjustly. One aspect we evaluated was the 1982 test year and found it to be satisfactory since there were no drought conditions that existed or any other tmusual circumstances that would increase water consump- tion to inflate revenue. In using the 1982 test year, they have also eliminated any costs affiliated with the planned construction of 3.2 million dollar plant or the proposed cost of tying into the County's water system. Both these capital expenses should be excluded, however, not forgotten since they have a large impact on future rates. They are causes for increased rates in the near future. After an indepth review of General. Development rate request, our staff has found the rate request to be financially justified, however, we would like the opportunity to analyze all testimony which will be given at the public hearing prior to makinal final recommendation on the rate increase request. NOV 9 1983 L_ 21 �a 5 ray 2' s NOV 9 1993 I AZACIT ENT A Box 5.5 fAa7 The following is an analysis of General Development Utilities submitted rate increase: Operating revenue and expenses for the 1982 test year seemed reasonable and prudent overall. The adjustments made by General Development Utilities to operating revenues and expenses were as follows: 1. Operating Revenue: The operating revenue adjustment was to reflect the additional operating revenues that would be generated based upon the proposed rates which is an amount of $233,830 and seems reasonable. 2. Operating Expense: Rate case expense estimated to be in the neighborhood of 5,000 was amortized overa two-year period. The $5,000 estimate is extremely reasonable and the amortization over a two-year period is an acceptable practice. 3. Depreciation, Net: The adjustments to reduce depreciation expense is for that portion of Utility Plant in Service considered to be held for future use. The portion of Utility Plant held for future use coincides with the percentage in the used and useful analysis done on the General Development which is acceptable. 4. Taxes Other Than Income Taxes: Property Taxes were reduced by the portion of Utility Plant in Service considered held for future use which was $1,410. This is also based on the=used and usefulness analysis which we find acceptable. Rate Base: Cost of Utility Plant in Service For 1982 has been verified and is correctly stated in the rate base. The adjustments made by General Development Utilities were as follows. 1. UtilitX Plant in Service: This adjustment to reduce Utility Plant in Service y $456,550 is for that portion considered held for future use. This is based on their used and usefulness study that we found acceptable. 2. Accumulated Depreciation: This $69,166 adjustment is to reduce accumulated epreciation for the portion of the Utility Plant in Service held for .future use that has been already depreciated on the books. 3. Working Capital- Working Capital was increased by $312 to compensate for the estimated additional rate case expense of $5,000 that will be incurred. This $312 was based on the cost of money being 12 1/2a. The present cost of money is slightly lower, however, not a significant amount. Rate of Return: The rate of return is definitely within the perimeters of a fair rate of return since they are asking for only 1 1/21 water and zero for sewer. Mr. Pinto stated that they were very concerned about contributions in aid of construction; they have looked into that and did find that the contributions have reduced the cost of the plant in service and, therefore, it is not a return on investment Staff has gone into the number of employees - the salaries they are paid - the expenses of operation based on the size of this facility as compared to 22 other like facilities - the electrical costs, chemical costs, etc., and staff has not found anything that is grossly out of line with any of those costs. The return on investment was really not a concern because GDU is not asking for any return on investment. Their depreciation schedule was reviewed in detail and found to be in order, and staff has not found any problem with the revenues GDU is requesting. Chairman Bird opened the `floor to public comment and called forward those who had submitted written slips requesting to be heard. Mr. Zambataro swore in Nate Davies of 2079 5th Ct., SE, Vero Shores. Mr. Davies stated that he has been a resident of Vero Shores for approximately 3 years and owns two homes there. He had no complaints about the water quality or the service, which he found excellent, but he wished it made clear that we are talking about two separate subdivisions - Vero Shores, which is 18 years old and 90% developed, and Vero Highlands. Mr. Davies felt Vero Shores has paid for a good deal of the existing system over this period of years and believed that this system could take care of them for the next ten to fifteen years. He urged the Commission to take all the undeveloped property in the Highlands and put it on the new county system and let Vero Shores remain a separate unit. Mr. Zambataro swore in Stanley Opalka, 2139 Sunrise Dr., SW, Vero -Highlands. Mr. Opalka, a seven year resident, stated'that the water is terrible. He wished to know why he should pay for General Development to build new homes and expand their utilities system. He did agree that GDU may need a little raise in rates, but not the increase they are asking for. John B. Baker of 523 20th Pl., SW, was called and passed on his opportunity to speak. 23 t+QK N O V 9 1983 �aeF r N o V 91983 Mr. Zambataro swore in Fred Ranker of 2044 5th Court, S.E. Mr. Ranker, a six year resident, stated that the water quality is terrible, but complaints are responded to and service is good. Mr. Ranker noted that in 1978, GDU was asked about the total capacity of these plants for sewer and water, and they guaranteed the people that the capacity was there for all the expansion planned, but now suddenly, it seems there isn't enough capacity. Mr. Ranker continued that in 1980, GDU got an 100% increase in water rates and now they are asking for another 170%, which is well over the consumer price increase index in that period of time. He believed they are asking for entirely too much. Mr. Ranker also wished to find out why he has to pay more for a 1" meter when he doesn't use any more water. Mr. Fancher explained that Mr. Ranker would not pay any more per 1,000 gallons - the rate is the same. The difference is in the base facility cost because that cost is related to the treatment plant capacity available to provide service, and a 1" meter can place more demand on the system. Mr. Ranker wished to know if they had reducing nipples to connect to his meter, and Mr. Fancher stated that the meter size could be changed. The Chairman called Richard C. Barton of 604 23rd St., S.E., and Mr. Barton stated that his questions have been answered. Court Reporter Zammbataro swore in Shirley_Peil of 7701 23rd P1., S.W. Mrs. Peil stated that she has lived in the Highlands for about 26 months and she is.concerned about the quality of the water. She hesitates to use it for drinking or cooking and felt that before the rates are increased, the quality of the water should be improved. The Chairman called Mr. and Mrs. Frederick C. Conklin, 644 24th St., S.W., and they did not respond. 24 The Chairman called Dorothea Okonowski of the same address, and she also did not respond. Court Reporter Zambataro swore in Helen J. Wright of 634 24th St., S.W. Mrs. Wright stated that she has been here 22 years and finds the water quality good, but the taste terrible. She stated that she has not had any complaints so far on the service and she does not have a water softener. Mrs. Wright had a hard time understanding why GDU's rate has to be increased, especially when nothing has been said tonight about connecting this water up with the county's water supply. She also noted that at a previous meeting she attended, GDU had requested 4 million in bonds to be picked up by the county and four other counties. Mrs. Wright noted that GDU is counting on 3,000 more homes in the.western section of the Highlands and felt they should bill the people who are coming in at the higher rate and let the people who have been here for years remain on their original contracts. She requested that the Board consider a very much lower rate increase than that which GDU is requesting. Commissioner Bowman wished to correct a misapprehen- sion. She realized that the people present were not supplied all the financial figures that the Board has access to, and she wished to point out that there was a net loss in 1982 of $107,000 on water and a net loss on the sewer of $126,000. Nobody has made a profit, and in fact, the residents' water and sewer has been subsidized for years. Commissioner Lyons noted that the statement also was made that the County was going to issue bonds and he wished to make it understood that while the County can approve the issuance of these bonds, we have no financial responsibility for them other than to say that they are for a legal purpose. 25 NOV 9 1983 t NOV 91983 boo Attorney Brandenburg explained to those present the purpose of industrial development revenue bonds, noting that they allow the utility company to obtain financing at a tax exempt rate, which in the long run should result in lower rates. The rate increase requested tonight is based on a 1982 test year and any bonds or capital improvements resulting from the bonds would not be reflected at all -in the rate increase addressed tonight nor would the water purchase agreement with the county, which also is on this evening's agenda. Attorney Roen wished to address those present in regard to the possible contamination of a well, which was brought up previously. She emphasized that, as indicated by Mr. Bostwick of the DER, any problem in the raw water source is being monitored and treated and they are currently meeting all applicable treatment standards as the water goes into the system. The Chairman called Barbara Hibbert, 1036 23rd P1., S.W., who did not wish to speak. _ The Chairman called Anna Brogan, 1092 23rd P1., S.W., who did not wish to speak. Court Reporter Zambataro swore in Lola Evans of 2226 14th Ave., S.W., who stated that she has been a customer of GDU for 17 months. She found the quality of the water okay and the service good,but would appreciate them adding fluoride. Ms. Evans boncern was that there are people living in this development who are on a fixed budget - single parents with only one source of income, and she felt such people must be considered. Mr. Zambataro swore in Frank Cositore, 635 24th St. S.W. Mr. Cositore stated that he has been a resident of the Highlands over two years, and he paid a lot of money for his property so that there would be utilities and he .could use them. He commented that he heard that Midway Mobile 26 Home Park was hooked up with General Development Utilities, and if that is so, he felt GDU should disconnect them and give the residents the service that was promised. Mr. Fancher pointed out that Midway Mobile Home Park is located within the utility franchise area; they came to GDU and requested service; and GDU provided it. He continued that Midway Mobile -Home Park is treated the same as all others and charged the same rates. He further noted that GDU is a public utility and pravides service to the general public, not just General Development homes. Mr. Cositore wished to know how long his deposit will be kept and whether he gets interest on it. Mr. Fancher stated that while GDU maintains the deposit, interest will be paid, and upon certain criteria being met, the deposit would be refunded. Mr. Zambataro swore in Ted Byram of 940 25th St., S.W. Mr. Byram stated that he has been a resident two years, and he was "sweet-talked" to come down here by claims of low taxes, etc., and now they want to "sock it to us." He asked if it is possible the County could take over and supply the people with water and GDU could just supply the sewerage. It was pointed out to Mr. Byram that the current county rate is substantially the same as the rate GDU is requesting. The County operates basically the same as private companies. We do not subsidize these systems; they must be self-sustaining; and we are impacted by the same costs as private companies. In addition, it was noted that this franchise still has about 17 years to run, and we cannot just come in and take it over. We have acquired some systems, but they have not been given to us and it has been very expensive. GDU is not willing to give the system to us at no cost. Chairman Bird felt if we can work out an agreement to provide GDU with water from our plant at Oslo, this would be 27 NOV 9 1983 g 5,5 2 L N 0 V 9 1983 5 race 253'. a step somewhat in the direction Mr. Byram is suggesting, and they then would not have to have a new major treatment facility on this site. Mr. Zambataro swore in Bill Davenport of 464 21st P1., S. E. Mr. Davenport, a 72 year resident of Vero Shores, thanked the Commission for coming to the Highlands to hold this meeting. He stated that the water quality is poor, though improved over what it was before. He does have a water softener and also a well for irrigation purposes. In regard to GDU's losses, Mr. Davenport believed that, since they are part of a parent company which is in development, even though they lose money, it is still profitable to their stockholders since these systems add value to their adjacent property. lir. Davenport felt the number one issue is the difference between development cost and supplying water and treatment cost, and their main concern is that they pay forever for a utility system that is already in the ground. As to the "impact" or -"contribution" fee, Mr. Davenport stated if GDU had charged a full impact fee to the 600 customers added to the system, this would have meant an additional $600,000 for them. He felt GDU is very confused in the area of what is development and what is cost of the system, and he further did not feel that county costs can be compared to this utility at all. Mr. Davenport also had a 1" meter and did not feel people should be faced with that type of charge for something there already. He felt the fee should be structured to impact the new people moving in. Commissioner Lyons commented that he.simply referred to the County rate that exists today, and this had nothing to do with how GDU reaches their rate. Mr. Fancher stated that since 1978, GDU has in fact, increased contributions by $620,000 and that is contained on Page 5. Chairman Bird inquired about the effect of the $600,000 on consumer rates. Mr. Faucher again gave the example used before, rioting that in 1978 it cost $1500 to connect someone to the system, and they changed this to $500 in contribution charges leaving $1,OA0. Essentially that $1,000 is collected over the 35 year average life of the facility and the $500 is collected up -front. Later on, as the cost of providing -that service increased and the connection charge went to $2,500, they increased the contribution charge from $500 up to $1,500, thereby keeping the same $1,000 to collect over the 35 year average life of the property. Chairman Bird called Ruth Page of 2954 Sunrise Dr., who did not wish to speak. Mr. Zambataro_swore in Norma Kragon of 1760 14th Ave., S. W. Mrs. Kragon stated that when they bought their property in 1961, their contract stated that within 10 years streets and utilities would be in, and they could build. They waited 13 years before they built; they now have lived there ten years; and to this day, they still do not have sewer and water. There are a few other houses in their vicinity, and they all have their own wells and septic systems. Mrs. Kragon asked if they are going to have to pay a high price for having sewer and water run to their homes, or if they can refuse the water and just take the sewer? She also wished to know if they can pay the connection fee in advance at today's prices rather than waiting until they run the line out and then paying a much higher price. Mr. Fancher stated that the price you pay when you connect to the system is based on what the regulated charge is at that point in time. Mrs. Kragon noted that they are retired people living on a fixed income and emphasized she would like to start paying this fee now. W NOV 91993 NOV 9 1983a '5 Pay 265 Mr. Fancher felt it would be much better to put those dollars in a bank account where they could earn interest. Commissioner Scurlock believed that GDU has, in fact, accepted an advance deposit when an individual insisted, and felt that this action might have established a policy. Mr. Fancher stated that Mr. Morris had just enlightened him that apparently some funds were taken not in accordance with existing established policy and they have tried to refund them, but the individual refused to take them back. This was not part of their existing policy. Commissioner Scurlock noted that under the Florida Land Sales Act, GDU's offer included the fact that they have a public water and sewer supply; they promised to provide these services and when are these people going to get them? Mr. Fancher noted that it is spelled out in the land offering statements that service will be expanded based on number of customers, feasibility, etc. He emphasized that they do their best to phase their development in an orderly manner and expand their utility service accordingly. Chairman Bird asked if Mrs. Kragon is obligated to hook up to the system when they reach her area, and Mr. Fancher confirmed that she is. Mr. Zambataro swore in Allen Reynolds of 473 22nd P1.,S.E. Mr. Reynolds, a resident of Vero Shores for four years, felt the water quality is good for everything except drinking and the service is good. Mr. Reynolds made the point that we are assuming that 1982 was a typical year, and it wasn't because it was a year of great expansion for General Development. He did not doubt GDU had a loss, but believed there is some controversy about the contributions made. He felt that Vero Shores should continue receiving water from their present system and not switch over to county water because it would increase costs. Me Mr. Fancher explained that 1982 was used as the test year because it represented the most recent 12 full months of operations. He stated that it was typical; although they did have a large increase, everything is based on averages. He emphasized that they have charged up to the full amount • of the lawful rates as approved by the County for connection charges throughout the life of the system. Mr. Zambataro swore in Jim Coffey of 1973 6th Ave., S.E. Mr. Coffey, a three year resident of Vero Shores, did not feel the water quality is good. Mr. Coffey found a 1700 increase in anything astounding, and the question that came to his mind was why a successful company such as GDU would wait five years to come in and ask for such a large increase. He noted that if they waited five years to do a • cost run on their houses and raised the price 170%, there wouldn't be any expansion. Mr. Coffey just requested that the Commission please do their homework since, even though these people know how to build houses, he felt they might not know how to run.a water company. Mr. Zambataro swore in Terri Hinzman of 2276 17th Ave., S.W. Ms. Hinzman's main concern was the terrible quality of the water. She noted that it fluctuates from one day to the next and wished to know if GDU does get this increase, which she opposes, whether they would do anything about the water quality. Ms. Hinzman further noted that she has been reading her own meter, and if they are going to raise the rates, she felt the County should look at the way they are billing. Mr. Zambataro swore in Mary Williamson of 24 Highland Dr., S.W. Ms. William stated that she has been a resident 8h years and the water is poor. When her husband takes a shower, she can't do dishes or wash clothes, and she also has problems with bleach affecting her clothes unevenly. 31 NOV 9 1983 r N OV 91983 ear 55 iw`267 The Chairman asked if anyone who had not signed up to speak wished to be heard before the public hearing was closed. Mr. Zambataro swore in Anthony Sammartano of 925 24th St., S.W. Mr. Sammartano stated that he moved in in 1982, and the water is no good. He noted that the majority of the people in this area live on a fixed income and cannot afford a 170% increase. He asked if someone has a well, does he have to use the water from GDU. Attorney Brandenburg stated that he could use his own well for irrigation purposes, but the county has an ordinance requiring people to hook into a public supply if it is available. Mr. Sammartano stated that the water is no good - not even for cooking his spaghetti. Commissioner Lyons commented that the purpose of tonight's meeting is to find out things such as that, and he believed GDU will have to give the people good water before he is interested in raising the rates. . The Chairman announced that all the public having been heard, there would be a short break at this point. ON MOTION by Commissioner Scurlock, -SECONDED by Commissioner Bowman, the Board unanimously closed the public hearing. Chairman Bird called the meeting back to order and reported that he had one question directed to him during the break and that is does the proposed rate structure promote water conservation or discourage it. Mr. Fancher believed it promotes conservation. There are two changes from the previous structure and both relate to going to a base charge vs. a gallonage charge. Under the previous structure none of the rate charge was tied in with 32 the gallonage usage, but now people will be paying for exactly the amount of water they use. Mr. Pinto concurred and further noted that GDU has initiated a water conservation program and has sent informa- tion to their customers suggesting ways of conserving water. The Chairman asked for discussion from the Board members. Commissioner Scurlock believed there are several items which need to be addressed, first and foremost, the water quality problem. He felt strongly that the GDU formula needs to be changed to reflect a heavier impact on the new customers. As to the question of water conservation, he believed a basic lifeline rate structure type of situation may be appropriate in this case and then an inverted type of rate structure, which has a penalty for high usage. Commis- sioner Scurlock noted that as a general practice General Development companies encourage development and subsidize systems and then later come in with large increases because they never adopted an appropriate structure in the first place, and he believed this is exactly the case here. There is no question that a rate increase is necessary, and Com- missioner Scurlock felt it would be appropriate to approve an interim rate hike and then have GDU come back after improvement of quality takes place and we then can address phasing in an increase. In regard to the suggestion by the Vero Shores resident that the system be divided up if, in fact, the county does sell water to GDU, he pointed out that this is all one distribution system and it is not possible to split it up. Commissioner Scurlock continued that there is no question in his mind that an industrial revenue bond issue is appropriate because there will be some necessary improvements no matter what, and they can be done at less cost this way. In regard to the county supplying wholesale 33 2 rz y NOV q 1983 NOV 9 1983 55 r "299 water to GDU, Commissioner Scurlock stated if the customers were willing to say they would be willing to accept the county rate today, he, in turn, would be fully willing to enter a relationship where the county would supply water to GDU. Commissioner Scurlock stated that his feeling was to raise the impact fee to reflect 75-80% of the increase and only 20% in rate base as he felt new development should -pay its way. Commissioner Lyons generally concurred with Commissioner Scurlock, but emphasized the water quality problem. He noted that we have the names on record of at least ten people who have complained, and he would like to see these people satisfied. He believed there may be some system troubles. Commissioner -Bowman also agreed. There was no doubt in her mind that it would be cheaper for GDU to buy the water from the county than to expand, but she wished to know if we did put county water through their system whether it would come out tasting good. _ Commissioner Wodtke believed there are two very basic things that have been made plain tonight, and they are that the water quality problem needs to be addressed and the confusion as to costs and their relationship to new development needs to be cleared up. He also felt that the 1977 Minutes had stated quite plainly that the tap -in fees would refund to the company the cost of the capital expansion, but now we are informed that 50% of the plant is in the basic rate structure. - Commissioner Wodtke agreed that there obviously is a need for a rate increase, but felt we must also take into consideration the fact that there is a proposal for the county to wholesale water to GDU in the future. He believed this would be good for the county overall, but did not know what effect it would have on the rate payers in Vero Shores and Highlands. Commissioner ` 34 Wodtke, therefore, did not believe we have the answer tonight and stated that he would propose that we grant 50% of the rate requested tonight and then within six months to one year continue the process based on improvement of water quality and additional research. • Chairman Bird expressed concern about the water quality complaints made tonight, but noted that an extensive amount of research has been done by staff; they have verified GDU's figures; and he does believe some increase is justified, but that 170% is out of the question at this time. Motion was made by Commissioner Lyons, seconded by Commissioner Bowman, to grant GDU 50% of the requested rate increase, with the condition that 1/3 of that 50% will be in effect the next billing period; the next third to be in effect the sixth_ billing period thereafter; and the last third the 12th billing period thereafter, with the understanding that during that -period of time GDU will demonstrate that the water quality problems have been cured and come back to the Board with what we would consider to be a more satisfactory impact fee. Commissioner Scurlock pointed out that 50% of the requested 170% increase amounts to an immediate 85% increase, which he felt was too.high. His thought was more along the lines of a 40% increase immediately of the gallonage and base charges and then elevate the impact fee for new development to 75% to bring in additional revenue and transfer some of the burden so that the immediate impact on the existing resident would be only 40%. Commissioner Lyons stated that he had no problem with compromising. He mainly did not want the customer to be hit with the increase in one big chunk. He and Commissioner Bowman agreed to withdraw their Motion. 35 NOV 9 1983 v.5 rad -7U N OV 9 1983 accU5 ?A X27 ON MOTION by Commissioner Scurlock, SECONDED by Commissioner Lyons, the Board unanimously agreed that the impact fee be elevated to 75% - that an increase of 40% to the existing rate payer be effective immediately - that any additional rate increase would be contingent upon GDU solving any potential water quality problems as well as any distribution problems, such as pressure, etc. - and that, as set out in the franchise agreement, GDU has the option to petition the Commission at any time for an additional rate increase. Attorney Roen asked for clarification as to when the authorized rate increase will go into effect? In the ensuing discussion, it was stated that it would be effective in the next billing cycle, but Commissioner Wodtke raised the question as to whether the entire system is billed at one time or done alphabetically at staggered intervals. time. Mr. Fancher felt all customers were billed at the same Utilities Director Pinto then wished to know if we are saying the next bill that is issued is going to show the increase. He pointed out that this could involve retroactive charges. After further discussion, it was agreed that there will be a bill issued at the existing rates, and the next successive bill would show the -increase, Mr. Pinto then wished to know how we are going to construct the 40% increase in relation to the facility charge and the user charge, and Administrator Wright commented that GDU has asked for a change in rate structure and did we give them one or did we say keep the same structure, but you have 40% more? 36 Commissioner Scurlock stated that we changed the rate structure. It is not going up the percentages they were requesting; it will go up 40%. Mr. Pinto believed that if we are going to allow GDU to increase their connection charges, then the facility charge should be reduced because that's where the other portion of capital is picked up. The user charge, which basically represents the cost of producing water should not see -as much of a decrease. Mr. Pinto asked if Mr. Fancher followed what he was saying. Mr. Fancher suggested, if it is acceptable to the Commission, that he and Mr. Pinto meet and discuss how the 40% should be applied. He believed that what the Board is saying is that they would like to see the gallonage charge stay where GDU requested it to be and that any difference be made up over in the base charges. General agreement was expressed, and Mr. Fancher noted that the existing gallonage charge is $1.00 per thousand. Administrator Wright pointed out that this will require some calculations, and he did not believe we can come up with the definitive rate tonight. Mr. Pinto stated that if the Board is saying that the amount of money that GDU is requesting in total be limited to 40%, then we can work out the rate structure, and Commissioner Scurlock confirmed that is the intent. Mr. Fancher informed the Board that he would be glad to get together with Mr. Wright and Mr. Pinto and work out a rate structure that will produce a 40% increase in revenues. Administrator Wright emphasized that it would be a 40% increase inrg oss revenues. Mr. Fancher agreed that they would work out a 40% increase in "gross" revenues and then come back before the Commission for approval of the specific rates to implement the new structure. He asked if the Board felt that was I� 37 NOV -9 1983 Etc - ��� racE 272 NOV 9 1983 5 �a X73 reasonable, and Chairman Bird felt it was as long as the structure is at least as water conservative oriented as the one originally proposed. PROPOSED WATER AGREEMENT DISCUSSION Chairman Bird opened discussion on the proposed water agreement as explained in the following staff memo: TO: The Honorable Members of DATE: October 25, 1983 FILE: the Board of County Commissioners THROUGH: Michael Wright � County Administrator SUBJECT:GENERAL DEVELOPMENT UTILITIES WATER AGREEMENT Water Agreement between FROM: Terrance G. Pint REFERENCES: General Development Utilities Utility Services Director & Indian River County DESCRIPTION AND CONDITIONS: General Development Utilities, Inc., in.making an application for a rate increase, has expressed a desire to build a new water treatment plant. Staff recognizes that if GDU was permitted to build this new water plant, it would drastically increase the rates of their existing - customers. Staff believes that if GDU purchases water from the County, it would be a much more cost effective method for supplying the Vero Highlands and Vero Shores area with water. The proposed agreement addresses all of the concerns that the County would have in protecting the interests of all other utility customers. ALTERNATIVES AND ANALYSES: To not service this area with County water and to allow GDU to provide their customers with water by meeting whatever requirements are imposed upon them by other regulatory agencies or -to allow the County to provide water charging appropriate rates and impact fees. RECOMMENDATION: Staff recommends the County supply water to GDU under terms of'the attached agreement which we feel would be in the best interests of the residents within the GDU area and other County utility customers. Administrator Wright noted that GDU has one of two options to improve the quality of the water — either to buy processed reverse osmosis water on a wholesale basis from the county or to construct a new type of treatment facility NK He did not believe they can modify the existing facility to remove the color and some of the other water problems they are having, and they feel it would be cheaper in the long run to construct a water line up Old Dixie to Oslo Road and buy water from us. The alternative would be to construct a new water facility, and cost is the key point. Mr. Fancher reported that they put a hold on design of such a plant because of the negotiations that have been going on with the county for approximately a year. Their analysis shows that it would result in a smaller total revenue requirement if they were to enter into a purchase water agreement. The primary difference is in the cost of money. The county has been able to build their facilities with cheaper cost money - essentially a 5% government grant, which private corporations do not have available. Admin. Wright felt it needs to be pointed out that no matter which route we go, the price of water will be significantly higher. The county process produces extremely good water at a high price. The price will go up because the cost will go up. s_ Commissioner Scurlock had a question about the compatibility of our water with the existing distribution system and the possibility of sediment in the lines because of different pressure in the lines. He wished to know how long it would take to flush out the lines. Mr. Pinto did not think we would see the problems we had in some of the older systems we took over, and he did not feel the water would degrade but that it would slowly improve as their water moved out of the system. Chairman Bird informed those present that he believed the county has an opportunity to provide them with better quality water, but wanted them to be aware that the cost of water will go up. Nov 9 1983 39 sic �a�E 274'. 4 NOV 9 1993 �c 5 fAs. Commissioner Wodtke believed there are many questions people would like to ask and many answers that he does not have. He stressed that he is not ready to make a decision on this agreement until he can tell the people what it will actually cost and what effect it will have. He liked the possibility of being able to serve the people here with county water but felt we should ask General Development to come back to us with the actual cost of purchasing the water as compared to building their own plant. He further won- dered if we use over 1,400,000 gallons if we might have to enlarge our plant to have capacity for other county areas. Discussion followed on the fact that the four million dollar bond issue would cover both water and sewer improvements. Mr. Fancher explained that it would cover the wastewater treatment plant expansion, building the expansion of the interconnecting line to tie into the county system, and also the impact fees that would have to be paid to the county. He further noted that the facilities that would be taken out of service relate only to -the ion exchange units and possibly the pumps and storage tanks, depending on the pressure delivered; so, there would not be that much of a reduction in the capital costs. Both alternatives would result in an increase from the current cost of providing services. Mr. Pinto stated that there is no question that if GDU could continue to maintain and use the present -facility that they could have water more reasonably than by building a new plant or buying from the county. If they..do not connect to the county plant, however, and they have to improve water quality, they are going to have to build a new treatment plant. Commissioner Scurlock felt the remaining question is whether we want to use that capacity in our Oslo plant for this purpose. 40 Mr. Pinto stated that, from the County's point of view, there is not that great a need to sell water to Vero Highlands or Vero Shores to increase revenues because we are now in the black in our operation. The only reason we suggest selling the water to them is to reduce their cost over what it could be and improve quality. We could sell the water somewhere else. Commissioner Scurlock stated that he does support. the wholesale of water to GDU, but would concede that if it was felt additional research was needed, we don't need to make a decision tonight. He did believe, however, that it would be a plus for everybody. Commissioner Lyons also felt that the Commission should be all together on their support of this agreement, but unless something shows up after further study that would change our position, he believed it would be in everyone's best interests that we should go with the agreement. Chairman Bird asked Commissioner Wodtke how much additional time he felt would be needed to resolve his questions, and Commissioner Wodtke stated that he has no information regarding the numbers involved. Mr. Pinto stated that we have the production cost of water, and we have instructed our consultant to work out the wholesale numbers. As to projections re a new plant, that would have to come from GDU, and he believed GDU has been working on that. Mr. Fancher reported that they have all that information and discussed it verbally with Mr. Wright and Mr. Pinto. He was not sure just what additional information was desired. Chairman Bird suggested that the Commissioners individually get together with Mr. Pinto to pass on any questions they might have, and then we could readdress this in 30 days. 41 b K' Put IL - NOV 9 1983 I r NOV 91983 ,mac 5 2� Mr. Pinto felt all that we really need is a rate with county water and a rate without it. Mr. Fancher informed the Board that he has worked out the total revenue required in both instances. The revenue required for purchase of water from the county would be $775,000 while for plant expansion, it would be $870,000. This is a projection several years out and does not take into account new contributions because it depends on the total number of customers; it is based on approximately 1600 total connections. Discussion ensued as bringing this back before the Board at the first meeting in December, and Mr. Fancher expressed concern about the need for an earlier meeting. because of deadlines on the revenue bond issue Administrator Wright believed staff can move on this fairly fast and noted that even if the bonds are validated next week, there is a 30 day appeal period. ON MOTION by Commissioner Scurlock, SECONDED by Commissioner Lyons, the Board unanimously authorized staff to work out an appropriate time schedule for GDU to bring the desired information back to the Board and set the appropriate hearing dates. GENERAL DEVELOPMENT UTILITIES - FRANCHISE AMENDMENTS The hour of 7:30 o'clock P.M. having passed, the Deputy Clerk read the following Notice with Proof of Publication attached, to -wit: 42 VERO BEACH PRESS -JOURNAL Published Daily Vero Beach, Indian River County, Florida COUNTY OF INDIAN RIVER: STATE OF FLORIDA Before the undersigned authority personally appeared J. J. Schumann, Jr. who on oath says that he is Business Manager of the Vero Beach Press -Journal, a daily newspaper published aI Verb Beach in Indian River County, Florida; that the attached copy of advertisement, being in the matter Of in the . Court• was pub. lished in said newspaper in the issues of f,4 Afhant further says that the said Vero Beach PressJournal is a newspaper published at Vero Beach, in said Indian River County, Florida. and that the said newspaper has heretofore been continuously pubashed ,n said Indian River County. Florida. each dally and has been entered a4 second class mail matter at the post office in Vern Beach, in said Indian River Coun� ty. Flonda, for a period of one year nett preceding the first Publication of the attache tl copy of advertisement and affiant further says that he has neither paid not promised any person, Ilam or corporation any discount. rebate. commission or refund for the purpose of perso . this advertisement for publication in the said newspaper Sworn to and subscr•bed beliefs me 1 is _r�? day of t0Gt A.D. 14 —� V lcru _s anagen EAU (Clerk of the Circuit Court, Indian R"r County, Florida) 1 Public Notices - NOTICE OF PUBLIC HEARING The Indian River Board of County Commis- sioners will hold a public hearing November 9, 1983, at 7:30 p.m., in the Vero Highlands Clubhouse in Vero Beach, Florida, to consider adoption of the following resolution: RESOLUTION NO. — A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY AMENDING THE GENERAL DEVELOPMENT UTILITIES, INC., WATER AND SEWER FRANCHISE AGREEMENT TO 'PROVIDE FOR THE "PASS-THROUGH" OF INCREASES IN THE COUNTY WHOLESALE WATER RATE AND PROVIDING FOR THE IM- POSITION OF A FRANCHISE FEE AND PROVIDING FOR A MODIFICATION OF THE FRANCHISE AREA. WHEREAS, General Development Utilities, inc., (Utility) has, proposed certain amend- ments to their water and sewer franchise; and WHEREAS, -the Utility's franchise dated May 5, 1960, allows it to provide water and sewer service in a portion of Indian River County; and WHEREAS, the Utility desire to clarity he . procedures for the processing of general rate jIncrease applications and to simplify the procedures -for the "pass-through" to Its cus- tomers of rate changes imposed on it by the County under an agreement, to purchase i wholesale water utility service from the Coun- ty; and . I... . . WHEREAS, the Utility desires to revise its franchised territory; and - WHEREAS, the County consistent with cur- rent policy desires to impose a franchise fee on the provision of water and sewer services by the Utility; and WHEREAS, the County desires ,to reserve the right to adopt, in addition. to the provisions herein .contained 'and existing applicable resolutions or laws, such fees and charges as it shall find necessary in the exercise of the police power and lawful authority vested in said County- and WHEREAS, after public hearing the Board finds It is in the public interest to amend the franchise to accomplish each of the foregoing purposes; and NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Indian River County, Florida, that the Resolution dated April 5, 1960, between Indian River County, Florida, and General Development Utilities,, Inc., as subsequently amended by Resolution 77-95, Resolution 80-15, and Resolution 81-101, is hereby amended as fol- lows: 1. Section 4 of the original resolution is hereby amended to read as follows: SECTION 4 The territory In which this franchise shall be applicable is all that part of Indian River . County. Florida,located within the following I. described boundary lines, to -wit: All of the East 'h of Section 35, and all of Section 36 of Township 33 South, Range 39 /. East; and the Southeast' of the Southeast Y4 of Section 30, the portion of the Southwest '/4 of'Sectlon 29 bounded on the East by the In- dian River West Shoreline, all of Section 31 and that portion of the West 'h of Section 31 bounded on the East by the Indian River West Shoreline in Township 33 South, Range, 40 East. 2. Section 17 of the original resolution is hereby amended to read as follows. SECTION 17 a. Except as provided in paragraph b of this section, should the Utility desire to adjust any charges heretofore established and aproved by the Board, then the Utility shall notify and make application to the Board in writing, setting forth a schedule of rates and charges which it proposes. Within nine(90) ays atter notice as aforesaid, a oar s a hold a public hearing on such request, notice of whch shall be given by publication in a newspaper regularly published in said Coun- ty, at least one time not more than one month nor less than one week preceding such hear - Ing. Certified proof of publication of such no- w tice shal be filed with the Board. The Board i will approve or disapprove said increase• in rates with sixty (60) days after said public hearing. If the Board has not acted within one hundred twenty (120) days after the initial no- tice by the Utility, then the Utility may forthwith put such amended schedule of rates and charges into effect. It the Utility should raise. rates or charges as hereinabove stated prior to action by the Board, the difference between the Implemented rates and the previous au- thorized rates shall be collected under bond and subject to refund for a period of one hun- dred twenty (120) days. Upon the expiration of said one hundred twenty (120) day" period, if no action has been taken by the Board, there shall be no further obligation on the part of the Utility to refund any monies, and the bond will no longer be in force, and the increase in rates or charges shall continue as it the re- quest of the Utility had been granted. It the Board enters an order approving or disap- proving the rate Increase prior to the time the request is deemed to have been granted, and the Utility or any person feels aggrieved by such order, then the Utility or such person may seek review of the Board's action by pro- ceedings in the Circuit Court of the County. b. If at any time the Utility is purchasing all or any portion of its utility services from Indian River County and redistributing such services to its customers, the Utility's rates to its cus- tomers shall be automatically increased or de- creased without hearing, upon verified notice to the Board thirty (30) days prior to the Util- ity's implementation of the increase or Ida - crease that the rate charged to the Utility'by Indian River County or its successor hsrq f changed. Before implementing a change in rates under this section, the Utility shall file an affirmation under oath as. to the accuracy of OiAh 1g tne-nn. I.c►e" prior {a'tAe mime m: -O" request is deemed to have been granted, and the Utility or any person feels aggrieved by such order, then the Utility or such person may seek review of the Board's action by pro- ceedings in the Circuit Court of the County. b. If at any time the Utility is purchasing all or any portion of Its utility services from Indian River County and redistributing such services. to its customers, the Utility's rates to its cus- tomers shall be automatically Increased or de- creased without hearing, upon verified notice to the Board thirty (30) days prior to the Util- ity's Implementation of the increase or de- crease that the rate charged to the Utility by Indian River County or its successor hu•q changed. Before implementing a change in rates under this section, the Utility shall file an affirmation under oath as to the accuracy of the figures and calculations upon which the Vbal • -Is based, stating that the IIAWdesthe till ty's revenu�estotiy noamore se or tlhanethe amount of the additional change imposed on the Utility by the County. 3. A new Section 23 Is added to the. origi- nal resolution,, as, amended, to read as fol - tows ... :..t -SECTION 23 ,. Within thirty (30) days atter the first anniver- sary.of the effOCtfve date of this section and within thirty (30) days after each succeeding anniversary of the effective date of this sec- tion, the Utility, its succesors or assigns, shall pay to the County or its succesors an amount which, when added to the amount of all county taxes. license and other impositions levied or imposed upon he Utility's property business or operations for the preceding Year, will equal six percent (6%) of gross com- pany revenues (excluding contributions -in - aid -of -construction and -. ,-nnection charges) from the sale of water and sewerservice to residential and commercial customers served Vero Beacthe h Highlands within stems In esro the Sunincorpo- rated area of this County for the twelve fiscal months preceding the applicable anniversary date. The franchise fee shall be collected from, and shall be shown as a separate item on the Utility's bills to its customers. The County reserves the right to adopt, in addition to the provisions herein contained and existing applicable resolutions or laws; such fses and charges as it shall find neces- laIn the exercise of the for ul authority vested In said Clounh�y.wer and 4. •A new Section 24 is added to the origi- nal resolution, as amended, lows: to read as (ol_ SECTION 24 Ifany word, sections, clause or part of this resolution is held invalid, such portion shall be deemed a separate and independent part and.the same shall not invalidate the remain- der. IN WiTNESS WHEREOF, The Board of CountyCommissioners of Indian River Coun- ty, Florida, has caused this franchise to be ex- ectited In the name of the County of Indian River by the Chairman of the Board of County Commissioners and its seal to be affixed and attested by its Clerk, all pursuant to the reso- lution of the Board of County Commissioners adopted on the --- day of1983. County of Indian River, Florida By: Richard N. Bird, Chairman "..BoArd est "Zounty COmmiselonere Clerk Signed, sealed and delivered in the presence of: ACCEPTANCE OF FRANCHISE GENERAL DEVELOPMENT UTILITIES, INC., does hereby accept the foregoing fran- chise, and for their successors and assigns does hereby covenant and agree to comply with and abide by all of the terms, conditions and provisions therein set forth and con- tained. DATED at Vero Beach, Indian River County, Florida, this — day of —, 1983. General Development Utilities, inc. By: Senior Vice President WITNESS: STATE OF FLORIDA COUNTY OF INDIAN RIVER 1 HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State and County aforesaid to take acknowledgements personally appeared -- — as -_ of General Develoment Utilities, Inc., and he ac- knoWledged before me that he executed the foregoing instrument for the uses and pur- poses therein expressed. WITNESS my hand and official seal in the State and County aforesaid this — day of - ----, 1983. Notary Public State of Florida at Large My Commission Expires: All interested persons are invited to this meeting. If any person decides. to appeal any decision made by the Board of County Com- missioners with respect to any matter consid- ered at this meeting, he/she will need a record of the proceedings, and that for such purpose he may need to ensure that a verba- tim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. _ :�,;,4.Richard N. Bird, Chairman I r NOV 9 1983 55 nu 279 Attorney Brandenburg reviewed staff memo, as follows: TO:The Honorable Members of theDATE: October 25, 1983 FILE: Board of County Commissioners r Through: Terrance G. Pinto Utility Services Director SUBJECT: GENERAL DEVELOPMENT UTILITIES AMENDMENTS TO FRANCHISE FROM: Joyce S. Hamilton I. �+ 1) Water Agreement Administrative AssistantREFERENCES: 2) Location Map Utility Services DESCRIPTION AND CONDITIONS: General Development Utilities, Inc., has proposed certain amend- ments to _their water and sewer franchise. The Utility desires to clarify the procedures for the processing of the "pass-through" to its customers of rate -charges imposed on it by the County under an agreement to purchase wholesale water utility service from the County. The Utility also desires to revise its franchised If territory. Consistent with current policy, the County desires to impose a(6%) franchise fee on the provision of water and sewer services by the Utility. The County also desires to reserve the right to adopt, in addition to the provisions herein contained and existing appli- cable resolutions or laws, such fees and charges as it shall find necessary in the exercise of the police power and lawful authority vested in said County. ALTERNATIVES AND ANALYSES: Amending this franchise agreement would allow for the collection of franchise fees to the County which was not part of the original agreement and we have limited their franchise area to what we think is more suitable for them to serve. RECOMMENDATION: Staff recommends the Board amend the original Resolution dated April 5, 1960 subsequently amended by Resolution No. 77-95, Resolution No. 80-15, and Resolution No. 81-101. The Attorney noted that Section 17B of the proposed Resolution should be deleted from the Board's consideration as they have not approved the purchase agreement tonight. He continued that, if desired, that section could be left in, and if the Board didn't approve the water purchase agreement, it just would never be an applicable section. That way it would not have to be addressed at another public hearing. Mr. Fancher was agreeable to this suggestion. 44 Attorney Brandenburg stated that Section 4 has been changed to restrict the size of the territory. Section 17 a. changes some of the time frames and procedures in regard to requesting rate increases, and this changes are agreeable to GDU. If GDU-should enter into a water purchase agreement with the County, Section 17 b. provides that any subsequent increases in the county rates could be passed on to their customers without an additional hearing. In other words, what would be passed through would be the total increase of cost to the utility. Mr. Fancher confirmed that the intent would be to leave the utility in the same profit position as they were before. Attorney Brandenburg noted that Sec. 23 imposes a 60 franchise fee, which is commonplace in modern franchises, and this comprises all the changes. Chairman Bird inquired about the extent the territory is being changed by the boundaries being adjusted, and it was noted that this basically shrinks the area and brings it in line with GDU's own development. It has no effect on 4 - existing residents. Chairman Bird asked if anyone present wished to be heard. There were none. ON MOTION by Commissioner Scurlock, SECONDED by Commissioner Bowman, the Board unanimously closed the public hearing. ON MOTION by Commissioner Scurlock, SECONDED by Commissioner Bowman, the Board unanimously adopted Resolution 83-109 amending the General Development Utilities franchise as discussed and making the exhibit defining the boundaries as adjusted a part of it. 45 AC�1c 5 5 �A�E® NOV 9 1983 A R 9 1983 RESOLUTION N0. 83-109 A RESOLUTION OF THE BOARD OF COUNTY '5 2.'. OF INDIAN RIVER COUNTY AMENDING THE GENERAL DEVELOPMENT UTILITIES, INC., WATER AMID SEWER FRANCHISE AGREENIEN'I' TO PROVIDE FOR THE "PASS-THROUGH" OF INCREASES IN THE COUNTY WHOLESALE WATER RATE AND PROVIDING FOR THE IMPOSITION OF A FRANCHISE FEE AND PROVIDING FOR A MODIFICATION OF THE FRANCHISE AREA. �, General Development Utilities, Inc., (Utility) has proposed certain amendments to their water and sewer franchise; and WHEREAS, the Utility's franchise dated May 5, 1960, allows it to provide water and sewer -service in a portion of Indian River County; and WHEREAS, the Utility desires to clarify the procedures for the processing of general rate increase applications and to -simplify the procedures for the "pass-through" to its customers of rate changes imposed on it by the County under an agreement to purchase wholesale water utility service from the County; and WHEREAS, the Utility desires to revise its franchised territory; and WHEREAS, the County consistent with current policy desires to impose a franchise fee on the provision of water and sewer services by the Utility; and WHEREAS, the County desires to reserve the right to adopt, in addition to the provisions herein contained and existing applicable resolutions or laws, such fees and charges as it shall find necessary in the exercise of the police power and lawful authority vested in said County; and �, after public hearing the Board finds it is in the public interest to amend the franchise to accomplish each of the foregoing purposes; and NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Indian River County, Florida, that the Resolution dated April 5, 1960, between Indian River County, Florida and General Development Utilities, Inc., as subsequently amended by Resolution 77-95, Resolution 80-15, and Resolution 81-101, is hereby amended as follows: 1. Section 4 of the original resolution is hereby amended to read as follows: SECTION 4 The territory in which this franchise shall be applicable is all that part of Indian River County, Florida, located within the following described boundary lines, to -wit: 1 All of the East � of Section 35, and all of Section 36 of Township 33 South, Range 39 East; and the Southeast of the Southeast a of Section 30, that portion of the Southwest - of Section 29 bounded on the East by the Indian River West Shoreline, all of Section 31, and that portion of the West h of Section 32 bounded on the East by the Indian River West Shoreline in Township 33 South, Range 40 East. C < 2. Section 17 of the original resolution is hereby amended to read as follows: -- SECTION 17 a. Except as provided in paragraph b of this section, should the Utility desire to adjust any charges heretofore established and approved by the Board, then the Utility shall notify and make application to the Board in writing, setting forth a schedule of rates and charges which it proposes. Within ninety (90) days after notice as aforesaid, the Board shall hold a public hearing on such request, notice of which shall be given by publication in a newspaper regularly published in said County, at least one time not more than one month nor less than one week preceding such hearing. Certified proof of publication of such notice shall be filed with the Board. The Board will approve or disapprove said increase in rates within sixty (60) days after said public hearing. If the Board has not acted within one hundred twenty (120) days after the initial notice by the Utility, then the Utility may forthwith put such amended schedule of rates and charges into effect. If the Utility should raise rates or charges as hereinabove stated prior to action by the Board, the difference between the implemented rates and the previously authorized rates shall be collected under bond and subject to refund for a period of one hundred twenty (120) days. Upon the expiration of said one hundred twenty (120) day period, if no action has been taken by the Board, there shall be no further obligation on the part of the Utility to refund any monies, and the bond will no longer be in force, and the increase in rates or charges shall continue as if the request of -the Utility had been granted. If the Board enters an order approving or disapproving the rate increase prior to the time the request is deemed to have been granted, and the Utility or any person feels aggrieved by such order, then the Utility or such person may seek review of the Board's action by proceedings in the Circuit Court of the County. b. If at any time the Utility is purchasing all or any portion of its utility services from Indian River County and redistributing such services to its customers, the Utility's rates to its customers shall be 6 9 NOV 1983 ® I Nov 9 1983 I automatically increased or decreased without hearing, upon verified notice to the Board thirty (30) days prior to the Utility's implementation of the increase or decrease that the rates charged to the Utility by Indian River County or its successor have changed. Before implementing a change in rates under this section, the Utility shall file an affirmation under oath as to the accuracy of the figures and calculations upon which the change in rates is based, stating that the change is designed to increase or decrease the Utility's revenues by no more than the amount of the additional change imposed on the Utility by the County. 3. A new Section 23 is added to the original resolution, as. amended, to read as.fol-lows: _ SECTION 23 Within thirty (30) days after the first anniversary of the effective date of this section and within thirty (30) days after each succeeding anniversary of the effective date of this section, the Utility, its successors or assigns, shall pay to the County or its successors an amount which, when added to the amount of all county taxes, licenses and other impositions levied or imposed upon the Utility's property, business or operations for the preceding tax year, will equal six percent (6%) of gross company revenues (excluding contribute.ons-in-aid-of-construction and connection charges) from the sale of water and sewer service to residential and commercial customers served by the Utility's systems in Vero Shores and Vero Beach Highlands within the unincorporated area of the County for the twelve fiscal months preceding the applicable anniversary date. The franchise fee shall be collected from, and shall be shown as a separate item on the Utility's bills to its customers. The Utility shall supply the County with a copy of the Utility's annual report and financial statements. All records and all accounting of Utility shall be in accordance with the Uniform System of Accounts of the National Association of Regulatory Utilities Commissioners and general accepted accounting principles. Within ninety _(90) days after close of fiscal year, the Utility shall submit financial statements prepared by a CPA and in accordance with general accepted accounting standards and MUM. Upon demand by the Board the Utility will submit audited financial statements certified by a CPA. Also, a letter from a CPA certifying that the six (6) percent franchise fee has been collected and disbursed in accordance with the terms of this Agreement. The County reserves the right to adopt, in addition to the provisions herein contained and existing applicable resolutions or laws, 3 such fees and charges as it shall find necessary in the exercise of the a police power and lawful authority vested in said County. 4: A new Section 24 is added to the original resolution, as amended, to read as follows: Q,VrTPTrW 9A If any word, sections, clause or part of this resolution is held invalid, such portion shall be deemed a Separate and independent part and the same shall not invalidate the remainder. IN WITNESS W MF, The Board of County Commissioners of Indian River County, Florida has caused this franchise to be executed in the name of the County of Indian River by the Chairman of the Board of County Commissioners and its seal to be affixed and attested by its Clerk, all pursuant to the resolution of the Board of County Commissioners adopted on the 9th day of November 1983. Signed, sealed and delivered in the presence of: Approved aPf form and legal Me - ry trf E;r~:der:��z Co ty Ariornaye"' COUNTY OF INDIAN RIVER, FLORIDA By Richard N. Bird, Chairman Board of County Commissioners I Attest:�I-L,j Clerk j Ll GENERAL DEVELOPMENT UTILITIES, INC., does hereby accept the foregoing franchise, and for their successors and assigns does hereby covenant and agree to ccxmply with and abide by all of the terms, conditions and provisions therein set forth and contained. DATED at Vero Beach, Indian River County, Florida, this day of , 19 8.4. .19 80014 55 PAOC 2U 4 N GU 9 M3 Sr.911-E OF - 0 1u , C0UWY OF RMIAN Yid BOOK 55 MGCZ$ 5 !l�IAi�IC? �'�i��i�•�aU1��Mi , INC. I HEREBY CEKl'M that on this day, before me, an officer duly authorized in the State and County aforesaid to take acknowledgements personally appeared GORDON J. PFERSICH , as Senior Vice President of General Development Utilities, Inc., and he acknowledged before me that he executed the foregoing instrument for the uses and purposes therein expressed. WITNESS my hand and official seal in the State -and County aforesaid this 30th day of January , 1984. Notary Alic, State o lorida at �7' g' e My Comnission Expires: 1407ARY PUBLIC STATE OF FLORIDA AT LARGE- nrr wiry USSION EXPIIZ DEC 2 1985 WNU.v r MMU GrNdwL_ 11,6 , UNDERWki I ERS. 5 1 1 Twp 335 TwP 34 S VERO BEACH HIGHLANDS VERO SHORES INDIAN RIVER COUNTY 0 XRRRR BOUNDARIES OF EXISTING FRANCHISE AREA AREA TO BE DELETED n z PROPOSED FRANCHISE AREA 0 F,�a N.OV 9 1983 55 pw,287 There being no further business, on Motion made, seconded and carried, the Board adjourned at 11:46 o'clock P.M. Attest: Clerk 52. Chairman