Case Background
Pine Island Cove
Homeowners Association, Inc. (Pine Island or Utility), is a Class C wastewater
utility located in Lee County. The Utility provides service to 324 mobile home
lots. Water service is provided by Greater Pine Island Water Association, Inc.,
a co-op serving the entire island.
On January 11,
1994, the Florida Public Service Commission (Commission) approved the transfer
of Certificate No. 453-S from Century Group, Inc., to Pine Island. In the transfer, it was Pine Island’s intent
to be exempted from the Commission’s jurisdiction as a non-profit association
pursuant to Section 367.022(7), Florida Statutes (F.S.). However, Pine Island at
the time did not qualify for exemption since it was providing service to
customers that were not members of Pine Island and instead were members of
Pinewood Cove Association, Inc. (Pinewood Cove).
On January 1, 1999, Pinewood Cove merged into Pine Island and the two
customer groups became one entity.[2] However, it was
not until new management reviewed Pine Island’s books and records that they
noticed the Utility now may qualify for exemption due to the 1999 merger. For
this reason, on December 26, 2018, the Utility filed an application for
transfer of facilities from a regulated utility to an exempt entity other than
a governmental authority. After discussions with staff, it was determined that
the Utility was not seeking a transfer, but instead seeking exemption from the
Commission’s jurisdiction pursuant to Section 367.022(7), F.S., and cancellation
of its wastewater certificate.
The Commission
has jurisdiction pursuant to Section 367.022, F.S.
Discussion
of Issues
Issue 1:
Should the Commission acknowledge Pine Island Cove
Homeowners Association, Inc.’s exemption from the Commission’s jurisdiction
pursuant to Section 367.022(7), F.S.?
Recommendation:
Yes. The Commission should acknowledge Pine Island’s
exemption from the Commission’s jurisdiction pursuant to Section 367.022(7), F.S.
Therefore, the Commission should cancel Certificate No. 453-S effective the
date the consummating order is issued, and return the transfer application fee.
Regulatory assessment fees (RAFs) for 2019 are due to the Commission within 30
days of the Commission vote. (Doehling, Salvador)
Staff Analysis:
On
December 26, 2018, Pine Island filed an application for
transfer of facilities from a regulated utility to an exempt utility, along
with a $750 filing fee. Upon staff’s review and communication with the Utility,
it was determined that no transfer was actually taking place, and therefore no
filing fee was required. Instead, the Utility was seeking exemption pursuant to
Section 367.022(7), F.S. This exemption applies to nonprofit
corporations, associations, or cooperatives providing service solely to members
who own and control such nonprofit corporations, associations, or cooperatives.
In determining Pine Island’s eligibility for
exemption, staff reviewed the Amended and Restated By-Laws of Pine Island Cove
Homeowners Association, Inc. (By-Laws).[3] Section 2.11 of the By-Laws states that every person or entity which
is an owner of a lot shall be entitled to one vote for each lot owned by that
person or entity. In Section 15.2, the By-Laws also state that there is a
mobile home park on leased lots within Pine Island’s subdivision. The customers
renting these leased lots are not members of Pine Island, and may not cast
votes. However, eleven of the leased lots are owned by Pine Island, and
pursuant to 2.11 of the By-Laws, Pine Island’s Board of Directors maintains
voting rights for these lots. The rest of the leased lots are owned by Pine
Island homeowners, and therefore maintain their voting rights. Because every
member or entity which is an owner of a lot has voting rights, staff believes
Pine Island meets the exemption pursuant to Section 367.022(7), F.S.
Pine Island has submitted its 2018 Annual
Report and has paid its 2018 RAFs. Pine Island has agreed to pay its 2019 RAFs.[4] In addition, Pine Island has notified its customers that it is seeking
exemption from the Commission’s jurisdiction.[5]
Based on the above, staff recommends that the
Commission acknowledge Pine Island’s exemption from the Commission’s
jurisdiction pursuant to Section 367.022(7), F.S. Therefore, the
Commission should cancel Certificate No. 453-S effective the date the
consummating order is issued, and return the transfer application fee. RAFs for
2019 are due to the Commission within 30 days of the Commission vote.
Issue 2:
Should this docket be closed?
Recommendation:
If no protest to the proposed agency action is filed
by a substantially affected person within 21 days of the date of the issuance
of the order, a consummating order should be issued and the docket should be
closed. (Simmons)
Staff Analysis:
If no protest to the proposed agency action is filed
by a substantially affected person within 21 days of the date of the issuance
of the order, a consummating order should be issued and the docket should be
closed.
