Discussion
of Issues
Issue 1:
Should
the Commission approve Florida Telecommunications Relay, Inc.'s (FTRI) proposed
budget as presented in Attachment A for Fiscal Year 2020/2021, effective August
1, 2020, and should the Commission maintain the current Telecommunications
Relay Service (TRS) surcharge at $0.10 per month?
Recommendation:
Staff recommends the Commission reduce FTRI’s
proposed budget expenses for Fiscal Year 2020/2021 by $96,000 for TTY/TDD
Equipment, $58,597 for VCP Hearing Impaired Equipment, $24,000 for VCP Speech
Impaired Equipment, $128,481 for Regional Distribution Centers, $6,000 for
Leasehold Improvements, and $2,000 for Employee Training. Staff recommends the
Commission allow FTRI to transfer $165,211 from the Reserve Account to offset a
projected revenue shortfall. Staff recommends the Commission order all local
exchange companies to continue billing the $0.10 TRS surcharge for Fiscal Year
2020/2021. Staff further recommends the Commission require FTRI to conduct a
financial break-even analysis of the RDC fee structure and present the results
to the Commission with its Fiscal Year 2021/2022 budget filing. (Williams,
Fogleman, Murphy)
Staff Analysis:
Traditional
Telecommunications Relay Service
The
traditional TRS cost to FTRI as approved in Sprint Communications Company,
L.P.’s (Sprint) contract is currently $1.35 per session minute. Sprint’s
projections indicate that traditional minutes will decrease by 3.6 percent
during Fiscal Year 2020/2021 from the current fiscal year. Traditional relay
users are transitioning to the following services:
·
Internet Protocol (IP) Relay
·
Video Relay Service (VRS)
·
Captioned Telephone (CapTel) Service
·
IP Captioned Telephone Service
·
Internet Protocol Speech-to-Speech (STS) Service
·
Wireless Service
CapTel
Service
The CapTel
cost to FTRI as approved in the Sprint contract is currently $1.69 per session
minute. CapTel service uses a specialized telephone that provides captioning of
the incoming call for a deaf or hard of hearing person. Sprint’s projections
show that CapTel minutes of use will decline by 24 percent during Fiscal Year
2020/2021 from the current fiscal year. CapTel users are transitioning to
Internet Protocol Captioned Telephone Service and wireless services.
Florida
Telecommunications Relay, Inc. Budget
Attachment
A reflects FTRI’s Fiscal Year 2020/2021 proposed budget, which was reviewed and
adopted by FTRI’s Board of Directors prior to filing with the Commission. The
FTRI proposed budget projects total operating revenue of $4,906,838 and total
expenses of $5,387,127. Based on the projected revenue and expenses, FTRI
requests that the Commission grant FTRI authority to transfer $480,289 from the
Reserve Account to offset the shortfall. FTRI also requests that the TRS
surcharge be maintained at $0.10 per access line for Fiscal Year 2020/2021.
FTRI’s
proposed budget represents a projected decrease in revenue of $502,871 (9
percent) from that included in the Fiscal Year 2019/2020 Commission-approved
budget. This projected revenue decrease is attributed to an expected six
percent decrease in access lines from the current fiscal year that are assessed
the TRS surcharge.
FTRI’s
proposed budget also includes a decrease in expenses of $308,296 (5.4 percent)
from the Fiscal Year 2019/2020 Commission-approved budget. The most significant
decline in FTRI’s proposed budget expense ($301,210) relates to an expected
decline in minutes of use.
Sprint’s
estimated Fiscal Year 2020/2021 traditional TRS minutes of use are 1,105,917,
at a rate of $1.35 per minute, for the TRS related expense of $1,492,988.
Sprint’s estimated CapTel minutes of use are 450,871, at a rate of $1.69 per
minute for the CapTel related expense of $761,972. The Fiscal Year 2019/2020
Commission-approved budget reflected traditional TRS minutes of 1,147,727 and
CapTel minutes of 595,703. The total expense for TRS and CapTel for Fiscal Year
2019/2020 was $2,556,170.
A
comparison of FTRI’s Fiscal Year 2019/2020 Commission-approved budget, FTRI’s
Fiscal Year 2019/2020 estimated revenues and expenses, and FTRI’s Fiscal Year
2020/2021 proposed budget as filed is shown in Table 1 below.
Table 1
FTRI Budget Comparison
|
|
Commission Approved 2019/2020
|
FTRI Estimated 2019/2020
|
FTRI Proposed 2020/2021
|
|
Operating Revenue:
|
|
|
|
|
Surcharges
|
$5,315,788
|
$5,098,137
|
$4,792,249
|
|
Interest Income
|
93,921
|
111,674
|
114,589
|
|
Total Operating
Revenue
|
$5,409,709
|
$5,209,811
|
$4,906,838
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Relay Provider
Services
|
$2,556,170
|
$2,556,170
|
$2,254,960
|
|
Equipment &
Repairs
|
938,394
|
806,530
|
951,832
|
|
Equipment
Distribution & Training
|
707,389
|
564,344
|
695,458
|
|
Outreach
|
535,650
|
535,650
|
535,650
|
|
General &
Administrative
|
957,820
|
877,841
|
949,227
|
|
Total Expenses
|
$5,695,423
|
$5,340,535
|
$5,387,127
|
|
|
|
|
|
|
Annual Surplus
|
($285,714)
|
($130,724)
|
($480,289)
|
|
Reserve Account
|
16,957,128
|
17,353,184
|
17,222,460
|
|
Total Reserve
|
$16,671,414
|
$17,222,460
|
$16,742,171
|
Source: FTRI’s Fiscal Year
2020/2021 proposed budget.
Analysis
Based upon
current industry trends, FTRI estimates that access lines will decrease at the
rate of approximately six percent from the current fiscal year as more
consumers transition from landline phones. Holding the TRS surcharge constant,
a decrease in access lines results in a decrease in revenues to support FTRI’s
activities. Continued effort by FTRI to reduce expenses is important.
Staff
developed an estimate of FTRI’s expenses for Fiscal Year 2019/2020. This data
is presented in Attachment B. Staff used actual data from the first three
quarters of the fiscal year, and took an average of those three quarters to
estimate the fourth. Staff’s estimates were then used as one element in
evaluating FTRI’s proposed budget. Attachment B also includes FTRI’s budgeted
information for comparison purposes. Staff also analyzed past
Commission-approved FTRI budgets to identify and evaluate ongoing cost
reduction measures. Below is staff’s review of selected items from FTRI’s
proposed budget expense by category.
Category
I – Relay Services
Category I
captures expenses for traditional TRS and CapTel service currently provided by
Sprint. The proposed budget recognizes a $301,210 expense reduction from the
Fiscal Year 2019/2020 Commission-approved budget, primarily due to declining
minutes and service cost associated with CapTel service.
The relay
service expenses are based on the minutes of use as projected by Sprint and
relay service contract rates. Sprint’s historical projections have proven to be
reasonable and it has multi-state experience with such projections. Staff
believes that the estimates for Fiscal Year 2020/2021 are reasonable and should
be used for budgetary purposes.
Category
II – Equipment & Repairs
Category
II expenses reflect the purchase of equipment to be distributed to clients and
the repairs that FTRI must make to keep the equipment in working order. FTRI
used contract pricing for equipment multiplied by the number of units it plans
to order over the course of the year. These contracts for equipment between
FTRI and equipment vendors are separate from the contract for relay service
approved by the Commission. FTRI’s proposed budget represents a $13,438
increase in expense when compared to the Fiscal Year 2019/2020
Commission-approved budget.
CapTel Phone Equipment
FTRI’s
Fiscal Year 2019/2020 CapTel Phone Equipment expense increased from the previous
year by $16,875 as a result of projected demand and expiration of a 2015
agreement FTRI had with Sprint to provide the CapTel 840 PLUS at no cost
through Fiscal Year 2018/2019. FTRI’s Fiscal Year 2020/2021 proposed budget
reduces CapTel Equipment expense by $16,875. FTRI has determined that it has
enough inventory on hand and is refurbishing returned units.
Text Telephone / Texting Device for
the Deaf Equipment
Text
Telephone (TTY) and Texting Device for the Deaf (TDD) are interchangeable terms
used to refer to text-based telecommunications equipment used by deaf or hard
of hearing consumers. FTRI’s proposed Fiscal Year 2020/2021 budget includes
$96,000 for advanced technologies under the TTY/ TDD equipment budget line
item. In support of its budget filing, FTRI states:
Telecommunications Devices for the
Deaf have traditionally been TTY (text telephones for the Deaf). Over the past
decade or more, these units have become less preferred by Deaf consumers and
replaced by newer technology. Smart Phones, Tablets, Captioning services are
some of the new technology that may be piloted.
TASA
currently provides funding for the distribution of specialized
telecommunications devices for the deaf, hard of hearing or speech impaired and
the provision of intrastate relay service. In response to staff’s Fiscal Year
2020/2021 data request, FTRI explained that it had budgeted $96,000 based on
plans to “distribute 80 iPads priced at $1,200 per unit configured with
applications that enable Florida residents who are deaf or severely hard of hearing
to access the telecommunications system.”
Staff
agrees that traditional TTY/TDD equipment has become less preferred by
consumers. This is evident by declines in equipment distributed by FTRI, and
TRS and CapTel minutes of use. However, the Florida Legislature narrowly
defined TDD as “a mechanism which is connected to a standard telephone line,
operated by means of a keyboard, and used to transmit or receive signals
through telephone lines.” Section 427.703(14), F.S. Because iPads are not
connected to a standard telephone line (i.e., landline) and do not transmit or
receive signals through telephone lines, staff believes that they are not TDDs.
Moreover,
by Section 427.703(11), F.S., the Florida Legislature defined “specialized
telecommunications devices” as “TDD, a volume control handset, a ring signaling
device, or any other customer premises telecommunications equipment
specifically designed or used to provide basic access to telecommunications
service for a hearing impaired, speech impaired, or dual sensory impaired
person.” In contrast, iPads are, in basic terms, tablet computers. Consumers
can use an iPad for browsing the web, reading and sending email, enjoying
photos, watching videos, listening to music, playing games, and reading
e-books. Software can be purchased for other productivity functions, such as
drafting documents, creating spreadsheets, developing presentations, and
editing photographs. While additional applications may be available that
provide assistance to the deaf and hard of hearing community, staff believes
that the iPad is not a specialized telecommunications device specifically
designed or used to provide basic access to telecommunications service for a
hearing impaired, speech impaired, or dual sensory impaired person.
Because an
iPad is neither a TDD nor a specialized telecommunications device, staff
recommends that distribution of iPads by FTRI is not authorized by applicable
law and that FTRI’s budget should be reduced by $96,000 for TTY/TDD equipment.
VCP Hearing Impaired Equipment
FTRI’s
Fiscal Year 2019/2020 estimated expense for VCP Hearing Impaired Equipment is
$646,535. FTRI’s proposed budget is $635,800 for Fiscal Year 2020/2021.
However, staff’s estimate for Fiscal Year 2019/2020 is $577,203. As stated
earlier, staff’s estimated expense for 2019/2020 includes three quarters of
actual data, while FTRI’s includes only two quarters of historical data. Over
the past several years, there has been a steady decline in expense related to
this category of equipment. FTRI has not presented any information that would
suggest a change in this trend. For these reasons and staff’s estimate for the
current year, staff recommends that the Commission reduce FTRI’s budget by
$58,597.
VCP Speech Impaired Equipment
FTRI has
also proposed $24,000 for VCP Speech Impaired equipment for Fiscal Year
2020/2021. FTRI states that the request is to pilot newer technology equipment
using documented pilot program parameters for the program. FTRI explains that
over the past decade or more, new technology such as smartphones and tablets
have become available to assist speech impaired persons connect with the
communications systems. FTRI indicated in its response to staff’s data request
that its budget for this category of equipment was based on plans to distribute
20 iPads. It intends for these iPads to be configured with applications that
enable speech impaired Florida residents to access the telecommunications
system.
As
discussed earlier, staff understands that a growing number of consumers prefer
to use newer devices that offer varied services and applications. Staff
appreciates FTRI’s challenge to provide attractive technology under Chapter
427. However, as noted earlier, staff does not believe that iPads meet the statutory
definition of a “specialized telecommunications device.” Furthermore,
considering FTRI’s budgetary constraints based on declining access line
revenue, staff does not support FTRI’s proposed funding. Staff recommends that
FTRI’s request of $24,000 be denied.
VRS
Signaling Equipment
FTRI’s
proposed Fiscal Year 2020/2021 budget is $16,400 for VRS Signaling Equipment.
FTRI’s Fiscal Year 2019/2020 Commission-approved budget is $7,733. This year’s
budget request includes increasing the number of Bellman-Symdon devices
distributed, which were piloted last year. These more advanced devices allow
users to control the unit plugged directly into the phone or by transmitter
alerting the user of a ring if the unit is in another room. The Commission
denied FTRI’s Fiscal Year 2019/2020 proposed funding level for the
Bellman-Symdon device, voting to maintain the budget of $7,733. FTRI was
directed to provide information regarding consumer demand and product quality
of the Bellman-Symdon device for the following year. In response to staff’s
Fiscal Year 2020/2021 data request, FTRI explained that based on results from
its pilot, ninety-five percent of its clients benefited from the device. FTRI
further explained that all twenty units piloted during Fiscal Year 2019/2020
remain in use by the original recipients. Based on FTRI’s reported pilot
results, staff recommends that FTRI’s Fiscal Year 2020/2021 proposed $16,400
expense be approved.
Category
III – Equipment Distribution & Training
Category
III reflects the cost of distributing equipment throughout the state and the
training of consumers in the use of that equipment. FTRI’s proposed budget
reflects a slight decrease in expense of $11,931 from the Fiscal Year 2019/2020
Commission-approved budget. This decrease is the result of decreased freight cost.
Regional Distribution Centers
Expenses
related to Regional Distribution Centers (RDCs) are the largest component of
Category III expenses. FTRI’s proposed budget for RDCs is unchanged from the
Fiscal Year 2019/2020 Commission-approved budget of $664,128. Staff notes that
FTRI’s proposed budget exceeds its Fiscal Year 2019/2020 estimated expenditures
by $128,481. In response to staff’s data request, FTRI indicated that it
intends to “expand the quantity of Regional Distribution Centers (RDCs) while working
with the existing RDCs to evaluate and implement a business model that enables
them to provide FTRI services at break-even.”
By
comparison, staff estimates that RDC expense for Fiscal Year 2019/2020 is
$483,984. This amount is 27 percent less than this year’s Commission-approved
budget. While staff does not recommend approval of FTRI’s proposed Fiscal Year
2020/2021 expense of $664,128, we are hesitant to recommend staff’s current
estimate as it is based primarily on historical data. Given that FTRI has
indicated its intent to increase the number of RDCs, and recognizing the
importance of adequately funding equipment distribution channels, staff
recommends continued funding at FTRI’s estimated 2019/2020 expense level of
$535,647.
In support
of its budget request, FTRI indicated in its response to staff’s inquiry that
the current fee per service structure is not financially performing at a
break-even point for the RDCs. FTRI contracts with the non-profit RDCs to
perform equipment distribution and training throughout Florida. Currently there
are 27 RDCs. The amount of funds for FTRI’s contracts with RDCs varies based on
the number of clients they assist. More funds are provided for connecting a new
client, while fewer funds are provided to assist existing clients in the
system. FTRI did not present sufficient cost detail regarding the compensation
to RDCs and their associated costs. Staff recommends that FTRI conduct a
financial break-even analysis of the RDC fee structure and present the results
to the Commission with its Fiscal Year 2021/2022 budget filing. Additional
information is needed to confirm the appropriate reimbursement rate FTRI pays
RDCs.
Category
IV – Outreach
Outreach
efforts are designed to promote FTRI’s equipment distribution services and to
raise awareness about Florida relay service. FTRI’s proposed Fiscal Year
2020/2021 outreach budget remains unchanged from the Commission-approved
outreach budget for Fiscal Year 2019/2020. Recent budgets have seen a slight
decline in the outreach expense from year to year.
FTRI
employs various forms of communication in its outreach strategy. FTRI plans to
continue advertising in newspapers using free-standing insert ads (flyers) in
markets where such ads continue to be effective. However, FTRI acknowledges
that it has witnessed rapid changes in the newspaper industry. In response,
FTRI will utilize other print tools such as direct mail post cards and coupon
book advertisements. FTRI also plans to continue expanding its digital
marketing campaign, including increased use of banner ads on websites, targeted
email campaigns, and social media campaigns.
The
Commission has previously encouraged FTRI to research and consider more
technologically advanced and cost-effective forms of outreach in addition to
traditional newspapers. Staff takes note of FTRI’s efforts to make its outreach
strategy more cost-effective and to put more focus on digital marketing
strategies. Staff believes FTRI’s proposed budget for Category IV expense is
reasonable.
Category
V – General & Administrative
Category V
reflects the expenses associated with FTRI’s operations, such as office and
furnishings, employee compensation, contracted services (auditors, attorney,
and computer consultants), computers and other operating expenses. FTRI is
proposing an overall $8,593 decrease in Category V expense for Fiscal Year
2020/2021.
Legal Services
When it
evaluated FTRI’s budget for the 2017/2018 fiscal year, the Commission reduced
legal expense from $72,000 to $36,000 based on an analysis that paying an
attorney an hourly rate may be more cost-effective than paying a retainer.
Subsequent to the Commission’s 2017 order, FTRI signed a legal services
agreement with an attorney guaranteeing a monthly flat fee of $3,000 per month
(12 hours at $250 per hour), with additional hours billed for specified
services as needed at $225 per hour. This agreement was for a minimum of
$36,000, and resulted in a subsequent proposed Fiscal Year 2018/2019 budget of
$55,823. The Commission rejected that amount and once again approved a budget
of $36,000. For the current 2019/2020 fiscal year the Commission approved a
budget of $33,500, as requested by FTRI.
For Fiscal
Year 2020/2021, FTRI has proposed a budget of $28,776 for legal expenses. Based
on Commission’s prior decisions staff believes that FTRI’s proposed budget of
$28,776 for Fiscal Year 2020/2021 is reasonable.
Leasehold Improvements
FTRI
included a new line item in its proposed Fiscal Year 2020/2021 budget for
Leasehold Improvements. FTRI is requesting approval of the first year of
amortized expense of $6,000 for replacing the flooring in their office, which
was originally installed in 2001. FTRI’s total cost for replacement would be
$30,000 amortized over 5 years. Leasehold improvements are negotiable between
landlords and tenants. Landlords may offer payment or a discount on rent for
tenants that make necessary or desired improvements themselves.
FTRI
renewed its lease in 2017 at the same rate as the previous lease. FTRI’s rate
has remained steady for the past five years and FTRI states that it is not
expected to change. The Fiscal Year 2020/2021 proposed rent expense is $91,715.
In
general, building maintenance is the responsibility of the landlord. Staff does
not support this expense at this time. It is not clear to staff why FTRI would
seek to pay for replacing the carpet as opposed to asking the landlord to do
so, or at least negotiating the need for improvements with the landlord. To the
extent that FTRI’s landlord is unwilling to make necessary improvements to the
facility, FTRI should begin reviewing other lease options and related
relocation expenses.
Retirement
In recent
years, the Commission has ordered FTRI to conduct in-house analyses for
retirement and to include quotes from other retirement plans offered by
comparably sized nonprofit and for-profit entities. In response, FTRI filed
reports performed by Regions Institutional Services (Regions) on the plan
design, investment returns, and administrative structure of FTRI’s pension plan.
The analysis pointed out that FTRI’s current plan through NTCA boasts roughly
$2 billion in assets with over 17,000 participants. It further stated that the
cooperative nature of the plan allows the assets to be pooled for investment
purposes and the large asset base attracts outside managers not generally
available to smaller defined benefit plans.
Regions
concluded that there are no glaring issues with FTRI’s plan design or
operation. However, Regions did recommend that FTRI continue to review investment
returns, fees, and plan design to ensure that NTCA’s plan remains
cost-effective. The Commission ordered FTRI to continue to conduct in-house
analyses for retirement expenses and submit its findings every three years,
with the next due on January 31, 2022. Retirement expense is based on salary
and related pension costs. For Fiscal Year 2020/2021, FTRI has proposed
retirement expense of $77,030. This represents a 4.7 percent decrease from the
Fiscal Year 2019/2020 Commission-approved budget. FTRI’s proposed budget is
based on staffing eight full-time positions. Staff believes FTRI’s proposed
retirement budget is reasonable.
Insurance
In FTRI’s
proposed Fiscal Year 2018/2019 budget, it initially requested $192,496 for
insurance expense, which represented an increase of 5.12 percent from 2017/2018
estimated expenditures. However, FTRI’s insurance budget was based on an
estimate from its previous insurance provider. In response to staff’s inquiry,
FTRI provided a revised insurance estimate of $153,027 from another insurance
provider. FTRI’s Fiscal Year 2018/2019 budget line item for insurance was
reduced to reflect the updated estimate provided by FTRI. FTRI was also
required to continue to conduct in-house analyses for insurance expense and
submit its findings to the Commission every three years. Last year’s
Commission-approved budget for insurance increased to $165,266. FTRI’s proposed
Fiscal Year 2020/2021 budget for insurance expense is $181,893. FTRI indicated
that this amount includes a ten percent premium increase based on quotes from
its insurance provider reflecting increasing healthcare costs. Staff recommends
approval of FTRI’s proposed budget for insurance. Staff notes that FTRI is
required to present the Commission an in-house analysis for insurance expense
on January 31, 2021.
Employee
Compensation
FTRI’s
proposed Fiscal Year 2020/2021 employee compensation budget represents a
$25,451 decrease compared to the Fiscal Year 2019/2020 Commission-approved
budget. A data entry position experienced turnover in February 2019, reducing
the number of employees from nine to eight. Eight positions are budgeted for
Fiscal Year 2020/2021 with a three percent merit increase pool based on current
employee salaries. Staff believes that it is important for an organization like
FTRI to attract and retain skilled employees in order to maintain
organizational effectiveness from year to year. As such, staff believes FTRI’s
proposed budget for employee compensation, including the three percent
merit-based salary increase pool, is reasonable.
Travel and Business Expense
FTRI
proposes a budget of $8,111 for Fiscal Year 2020/2021. This represents an
increase of $4,056 from last year’s Commission-approved budget. For the current
year, staff estimated that FTRI travel expense will be closer to $3,431. The
requested travel is based on six trips for FTRI staff to meet with RDCs and/or
vendors and one trip to the Telecommunications Equipment Distribution Program
Association annual conference. By comparison, last year’s budget included a
total of five trips. Staff believes the increased number of trips and related
expense is reasonable given FTRI’s expressed interest in developing additional
RDC locations. Additional RDC locations may improve equipment distribution and
relay service promotion. FTRI should, however, consider having more virtual
meetings and conference calls as cost-cutting measures.
Employee Training
FTRI
requests a budget of $4,145 for Fiscal Year 2020/2021. This represents an
increase of $3,195 from last year’s Commission-approved budget. FTRI budgeted
for two staff retreats that may be held off-site. FTRI also included other
training and professional development through the LinkedIn program. In light of
budget constraints, staff recommends reducing the proposed increase by $2,000.
FTRI should consider having more in-house training as a cost-cutting measure.
Surcharge
FTRI
recommends that the Commission order all local exchange companies to continue
billing the $0.10 monthly surcharge for Fiscal Year 2020/2021. Staff’s
recommended total budget includes a shortfall of $165,211. FTRI proposed
drawing from the Reserve Account to cover the shortfall in its proposed budget.
Staff notes that a $0.01 increase in the surcharge would produce approximately
$479,225 in additional revenue. Staff recommends that rather than increasing
the surcharge, it is appropriate to transfer the funds from the Reserve Account
to cover the budgeted shortfall for Fiscal Year 2020/2021. Staff notes that in
a future year it may be necessary to evaluate whether a temporary increase in
the surcharge may be a reasonable approach to cover budgetary needs and to
replenish the Reserve Account.
Staff
Adjustments to FTRI’s Proposed Budget
Based on
the analysis above, staff recommends adjustments to the following expenses in
Table 2.
Table 2
Proposed Expense Category Reductions
|
Expense Category
|
FTRI Proposed 2020/2021
|
FPSC Staff’s Proposed 2020/2021
|
Staff’s Proposed Reduction
|
|
TTY/TDD Equipment
|
$96,000
|
$0
|
$96,000
|
|
VCP Hearing Impaired Equipment
|
635,800
|
577,203
|
58,597
|
|
VCP Speech Impaired Equipment
|
24,000
|
0
|
24,000
|
|
Regional Distribution Centers
|
664,128
|
535,647
|
128,481
|
|
Leasehold Improvements
|
6,000
|
0
|
6,000
|
|
Employee Training/Development
|
4,145
|
2,145
|
2,000
|
Conclusion
Staff
believes FTRI’s expense reductions continue to better position FTRI to meet its
obligations under Chapter 427, F.S., in a changing industry with declining
revenues. However, a sustained effort is necessary for FTRI to strategically
position itself in a rapidly changing environment. Staff has identified six
expense line items in FTRI’s proposed Fiscal Year 2020/2021 budget that should
be reduced. Staff also recommends that additional cost analysis related to RDC
expense be conducted.
Staff
recommends that the Commission reduce FTRI' s proposed budget expenses for
Fiscal Year 2020/2021 by $96,000 for TTY/TDD Equipment, $58,597 for VCP Hearing
Impaired Equipment, $24,000 for VCP Speech Impaired Equipment, $128,481 for
Regional Distribution Centers, $6,000 for Leasehold Improvements, and $2,000
for Employee Training. Staff also recommends that the Commission allow FTRI to
transfer $165,211 from the Reserve Account to offset a projected revenue
shortfall. Staff recommends that the Commission order all local exchange
companies to continue billing the $0.10 TRS surcharge for Fiscal Year
2020/2021. Staff further recommends that the Commission require FTRI to conduct
a financial break-even analysis of the RDC fee structure and present the
results to the Commission with its Fiscal Year 2021/2022 budget filing.
Issue 2:
Should this docket be closed?
Recommendation:
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, this docket should be closed upon the issuance of a
consummating order. (Murphy)
Staff Analysis:
At the conclusion of the protest period, if no
protest is filed this docket should be closed upon the issuance of a
consummating order.
