Case Background
Coastal Income
Properties - The Harbor, LLC (Coastal Income or Utility) is located in Polk
County. Based on its application, the Utility provides water service to 175
individual mobile home/recreational vehicle (RV) customers, and 1 general
service customer. The general service customer (Hidden Harbor Resort) has 14
lots. Coastal Income also provides wastewater service to 156 of the residential
water service customers.
The water and
wastewater systems were built in 1967 to service the original RV resort (Harbor
Waterfront Resort or Resort), owned and developed by Harry and Lucille Monroe,
consisting of 119 lots for RVs and mobile homes. In subsequent years, the
Monroes developed the surrounding area into what is now known as Mark Lane,
Opal Drive, and Harbor Pointe Drive. These areas are outside of the Resort and
the mobile homes are individually owned. The Monroes extended water service to
these areas, and wastewater service to all but the residents of Opal Drive and
two of the residents on Mark Lane. The Monroes also extended water service to a
mobile home park adjacent to Opal Drive, the Hidden Harbor Resort (Hidden
Harbor). In 1994, the Monroes sold the resort and all of its facilities to Mr.
Rob Smith.
Until
1996, regulation of water and wastewater utilities in Polk County (County) fell
under the jurisdiction of the County. On May 14, 1996, the Board of County
Commissioners of Polk County adopted a resolution which made the privately-owned, for-profit
water and wastewater utilities in the County subject to the jurisdiction of the
Florida Public Service Commission (Commission). The owner of the subject water
and wastewater systems, Mr. Smith, was informed at that time that his water and
wastewater systems would be exempt from Commission regulation and he would not
have to file a grandfather application.
On
June 28, 2016, the Office of Public Counsel (OPC) contacted staff regarding the
regulatory status of the Resort because it received a complaint from a water
and wastewater customer of the Resort. The complaint was handled by the Polk
County Health Department, and Commission staff began investigating whether the
Resort was exempt from Commission regulation or needed a certificate. On July
27, 2016, staff sent the Resort a letter instructing it to file an application
for water and wastewater certificates by August 31, 2016.
On
August 23, 2016, the Resort requested an extension to November 30, 2016, which
was granted. Staff worked with an engineering firm retained by the Resort to
prepare maps and territory descriptions that met the requirements of the
Commission’s rules. On June 12, 2017, staff was informed that the Resort had
been sold, including the water and wastewater systems, to Coastal Income,
managed by Mr. Brian Keller. The closing took place on June 15, 2017.
Following
the sale, staff worked with Coastal Income to complete its application for
water and wastewater certificates. The Utility filed its application on August
21, 2017. Staff found its application to be deficient, and issued a deficiency
letter on September 20, 2017. The Utility cured the deficiencies on February
20, 2018.
Pursuant to
Section 367.031, Florida Statutes (F.S.), the Commission shall grant or deny an
application for a certificate of authorization within 90 days after the
official filing date of the completed application. The application was deemed
complete on February 20, 2018, which is considered the official filing date. Coastal
Income has waived the 90-day statutory deadline through June 5, 2018.
This
recommendation addresses the application for original water and wastewater
certificates and the appropriate rates and charges for the Utility. The
Commission has jurisdiction pursuant to Sections 367.031 and 367.045, F.S.
Discussion
of Issues
Issue 1:
Should the application for water and wastewater
certificates by Coastal Income be approved?
Recommendation:
Yes. Coastal Income should be granted Certificate
Nos. 671-W and 573-S to serve the territory described in Attachment A,
effective the date of the Commission’s vote. The resultant order should serve
as Coastal Income’s water and wastewater certificates and it should be retained
by the Utility. (M. Watts, Johnson)
Staff Analysis:
On August 21, 2017, Coastal Income filed its
application for original water and wastewater certificates in Polk County. Upon
review, staff determined the original filing was deficient and sent several
data requests to the Utility seeking additional information. Coastal Income
corrected the deficiencies on February 20, 2018, which is considered the
official filing date for the application. The Utility’s application is in
compliance with the governing statutes, Sections 367.031 and 367.045, F.S.
Notice
On February 20, 2018, Coastal Income filed proof of
compliance with the noticing provisions set forth in Rule 25-30.030, Florida
Administrative Code (F.A.C.). No entity filed a protest during the protest
period and the time for filing objections has expired.
Land
Ownership and Service Territory
Coastal Income provided adequate service territory and
system maps and a territory description as required by Rule 25-30.034, F.A.C.
The legal description of the service territory is appended to this
recommendation as Attachment A. The
application contains a copy of a special warranty deed that was executed on June
15, 2017, as evidence that the Utility owns the land upon which the wastewater
treatment facilities are located pursuant to Rule 25-30.037(2)(s), F.A.C.
Financial
and Technical Ability
Pursuant to Rule 25-30.034(1)(i), F.A.C., the Utility
provided statements describing its financial and technical ability to provide
service. Staff has reviewed the financial statements of Coastal Income and
believes the current owner has documented adequate resources to support the
Utility’s water and wastewater operations.
Regarding technical ability, the Utility stated in its
application that, during the mid-1980's and early 1990's, Mr. Keller owned and
operated 36 mobile home and RV communities throughout the State of Florida. Approximately
half of the communities had their own wells and wastewater treatment
facilities. He has sufficient experience administratively and operationally to
operate Coastal Income facilities. In addition, the technical expertise and
daily operating procedures will be handled by a contractor licensed by the
Florida Department of Environmental Protection (DEP). As of May 9, 2018, Coastal
Income has no compliance issues on file with DEP and is current with its
monitoring requirements.
Conclusion
Coastal Income should be granted Certificate Nos. 671-W
and 573-S to serve the territory described in Attachment A, effective the date
of the Commission’s vote. The resultant order should serve as Coastal Income’s
water and wastewater certificates and it should be retained by the Utility.
Issue 2:
What are the appropriate rates and charges for
Coastal Income?
Recommendation:
Staff recommends that the Utility be authorized to
charge residential and general service flat rates of $42 per month for water
and $42 per month for wastewater for all customers, with the exception of Hidden
Harbor, which should be charged $315 per month as shown on Schedule No. 1. The Utility’s
proposed late payment charge of $5 should also be approved. The Utility should
be authorized to bill all customers on a quarterly basis. The Utility should be
required to notice all customers of the approved rates and charges and the
change to quarterly billing. The notice should be approved by staff prior to
publication and the Utility should provide proof of the date notice was given
within 10 days of the date of the notice. The approved rates and charges should
be effective for service rendered on or after the effective date of the tariffs
pursuant to Rule 25-30.475, F.A.C. (Bruce)
Staff Analysis:
The Utility provides water service
to approximately 175 residential customers and Hidden Harbor;
wastewater service is provided to approximately 156 of the residential customers.
Because the Utility’s customers are not metered, they are billed flat rates for
water and wastewater service. For customers in a portion of the service area,
the cost of water and wastewater service is included in the lot rent. In
addition, the flat rate for some customers has included non-jurisdictional
services, such as garbage and street lights and some customers were billed an
additional amount if the customers had a washing machine.
The Utility proposes billing all
residential and general service customers, with the exception of Hidden
Harbor,
flat rates of $42 per month for water and $42 per month for wastewater based on
the amounts currently billed to water and wastewater customers who are not
billed for the non-jurisdictional services. Hidden Harbor
will continue to be charged $315 per month for water service.
The Utility has also previously
billed a late payment charge of $10 per month; however, the Utility proposed a
$5 late payment charge and provided cost justification which reflects the Utility’s
administrative cost for processing late payment notices. The proposed late
payment charge is consistent with prior Commission decisions.
The Utility’s cost justification for its requested late payment charge is shown
below on Table 2-1. The Utility does not have any other miscellaneous service
charges or service availability charges.
Prior to Commission regulation, the
Utility increased monthly water and wastewater rates annually, effective January
1. However, due to the Utility’s pending application, the Utility was not
allowed to increase its rates for January 1, 2018, without Commission approval.
The Utility has previously allowed
customers to choose whether they wanted to pay monthly, quarterly, semi-annually,
or annually. However, the Utility proposes billing all customers on a quarterly
basis. The Utility is responsible for contacting the Department of Business and
Professional Regulation to amend their prospectus to remove the cost of water
and wastewater service from lot rent.
Table 2-1
Late Payment Charge
|
Labor
|
$4.28
|
|
Supplies
|
$0.23
|
|
Postage
|
$0.49
|
|
Total
|
$5.00
|
Source: Utility’s Cost Justification
Staff recommends that the Utility
be authorized to charge residential and general service flat rates of $42 per
month for water and $42 per month for wastewater for all customers, with the
exception of Hidden Harbor, which should be charged $315 per month as
shown on Schedule No. 1. The Utility’s proposed late payment charge of $5
should also be approved. The Utility should be authorized to bill all customers
on a quarterly basis. The Utility should be required to notice all customers of
the approved rates and charges and the change to quarterly billing. The notice
should be approved by staff prior to publication and the Utility should provide
proof of the date notice was given within 10 days of the date of the notice.
The approved rates and charges should be effective for service rendered on or
after the effective date of the tariffs pursuant to Rule 25-30.475, F.A.C.
Issue 3:
Should this docket be closed?
Recommendation:
No. If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, a consummating order should be issued. The docket should
remain open for staff’s verification that the revised tariff sheets and
customer notice have been filed by the utility and approved by staff. Once
these actions are complete, this docket should be closed administratively.
(Trierweiler)
Staff Analysis:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, a consummating order should be issued. The docket should
remain open for staff’s verification that the revised tariff sheets and
customer notice have been filed by the utility and approved by staff. Once
these actions are complete, this docket should be closed administratively.
Coastal Income Properties
- The Harbor, LLC
Description of Water and Wastewater Service
Territory
Polk County
Commence at the Southwest corner of Section 21, also being
the Northwest corner of Section 28, Township 29 South, Range 29 East, Polk
County, Florida. Thence run N90°00'00"E along the Common line between said
Sections 21 and 28 a distance of 2,543.93 ' to the SE Corner of Lot 1 Block G
of Tiotie Beach Estates, Unit Number Two as recorded in Plat Book 41, Page 17,
Public Records of Polk County, Florida, and the Point of Beginning. Thence run
along the Easterly Boundary of said Block G the following three courses
N00°08'15"E 24.46'; N55°11'25"E 245.00'; S89°51'45"E 42.00';
thence continue along the Easterly Boundary of Block G, N00°08'15"E
131.99' to the NE corner Lot 6 of said Block G and the South Right of Way of
North Marina Parkway and Kissimmee Boulevard, thence S89°51'45"E, along
said South Right of Way, 547.25'; thence N00°08'15"E, 200.00' to the NE
corner of Lot 18, Block C, of said Tiotie Beach Estates, Unit Number Two;
thence S89°51'45"E, along the South Right of Way of a 50.00' Canal,
485.00' to Lake Rosalie; thence S05°12'45"W, along Lake Rosalie,
1,050.20'; thence N89°5l'45"W, 1,385.90' to the East line of Tiotie Beach
Estates, Unit Number Three, as Recorded in Plat Book 41, Page 20, Public
Records of Polk County, Florida; thence along said East line N00°00'00"E,
124.00'; thence N04°52'17"W, 118.25'; thence N35°00'00"E, 375.00' to
the NE corner of said Tiotie Beach Estates, Unit Number Three, returning to the
Point of Beginning.
FLORIDA PUBLIC SERVICE COMMISSION
authorizes
Coastal Income
Properties - The Harbor, LLC
pursuant to
Certificate Number 671-W
to provide water service in Polk County in
accordance with the provisions of Chapter 367, Florida Statutes, and the Rule,
regulations, and Orders of this Commission in the territory described by the
Orders of this Commission. This authorization shall remain in force and effect
until superseded, suspended, cancelled or revoked by Order of this Commission.
Order Number Date
Issued Docket Number Filing Type
* * 20170178-WS Original Certificate
* Order Number and date to be provided at time of
issuance.
FLORIDA PUBLIC SERVICE COMMISSION
authorizes
Coastal Income
Properties - The Harbor, LLC
pursuant to
Certificate Number 573-S
to provide wastewater service in Polk County in
accordance with the provisions of Chapter 367, Florida Statutes, and the Rule,
regulations, and Orders of this Commission in the territory described by the
Orders of this Commission. This authorization shall remain in force and effect
until superseded, suspended, cancelled or revoked by Order of this Commission.
Order Number Date
Issued Docket Number Filing Type
* * 20170178-WS Original Certificate
* Order Number and date to be provided at time of
issuance.
The Harbor Waterfront
Resort
Monthly
Water Rates
|
Residential
and General Service
|
|
|
|
Flat
Rate
|
|
$42.00
|
|
|
|
|
|
General
Service
|
|
|
|
Flat
Rate - Hidden Harbor Resort
|
|
$315.00
|
|
(7.5
ERCs)
|
|
|
Monthly Wastewater Rates
|
Residential
and General Service
|
|
|
|
Flat
Rate
|
|
$42.00
|
|
|
|
|
|
Miscellaneous
Service Charges
|
|
Late
Payment Charge
|
|
$5.00
|
