Case Background
Crooked Lake
Park Sewerage Company (Crooked Lake or Utility) is a Class C wastewater utility
providing service in Polk County. The Utility was issued grandfather Certificate
No. 517-S on September 21, 1998, and
currently serves approximately 324 wastewater customers. Crooked Lake’s 2019
Annual Report indicates that the Utility had gross operating revenues of
$227,281 and a net operating loss of $149,659.
On July 2, 2020,
Crooked Lake filed an application for an amendment to delete territory. In its application for amendment, the
Utility stated that the reason it wished to delete territory was to delete the
College Park Mobile Home Park (CPMHP), a bulk customer, from its territory to
reduce flow to its wastewater treatment plant (WWTP). Crooked Lake’s WWTP had
been having compliance issues with the Department of Environmental Protection
(DEP), and it believed eliminating the CPMHP as a customer would allow it to
correct its compliance issues with the DEP.
On July 10,
2020, the Office of Public Counsel (OPC) filed a notice of intervention in the
docket. On July 14, 2020, OPC issued its first set of interrogatories and first
request for production of documents to Crooked Lake.
On September 3,
2020, staff notified the Utility that its application was deficient, with
corrections to be submitted to the Commission no later than October 5, 2020. On
September 4, 2020, Crooked Lake’s attorney notified the Commission that Crooked
Lake wished to withdraw its application for amendment and advised that the
Utility intended to file for an abandonment of the Utility.
On September 4,
2020, Crooked Lake filed its notice of abandonment with the Commission and with
the Polk County manager, with an effective date of November 8, 2020. On October
27, 2020, the Utility filed a notice of its intent to delay the abandonment
proceedings for 90 days pending its attempts to sell the Utility. At a January
21, 2021 status hearing before the Circuit Court for the Tenth Judicial
Circuit, the Utility advised that the sale would not proceed, and asked that
the court restart the abandonment proceedings. By order dated March 25, 2021,
the court appointed Polk County as receiver for the abandoned Utility.
The purpose of this
recommendation is to acknowledge the abandonment of the utility system by Crooked Lake and the appointment of Polk County (County)
as the receiver, and to cancel Certificate No. 517-S. The Commission has
jurisdiction pursuant to Sections 367.022 and 367.165, Florida Statutes (F.S.).
Discussion
of Issues
Issue 1:
Should the Commission acknowledge the abandonment of
the utility system by Crooked Lake Park Sewerage Company and the appointment of
Polk County as receiver, and cancel Certificate No. 517-S?
Recommendation:
Yes. The Commission should acknowledge the abandonment
of Crooked Lake pursuant to Section
367.165, F.S., and appointment of Polk County as the receiver for the Utility.
Certificate No. 517-S should be cancelled
effective March 25, 2021. (M. Watts, Kunkler)
Staff Analysis:
When a utility is abandoned, Section 367.165(2), F.S., requires the county to petition the
circuit court for the appointment of a receiver. Such receiver can be the county
or any other person or entity approved by the court, such as a homeowners
association. The responsibility of the receiver is to operate the utility
efficiently and effectively from the date of abandonment until disposition of
the property. As discussed in the case background, Crooked Lake attempted to
sell the Utility rather than abandon it. However, its efforts were
unsuccessful, so it proceeded with the abandonment proceedings. By Order dated
March 25, 2021, the Circuit Court acknowledged Polk County’s petition to
appoint a receiver, and appointed the County as receiver
of the Utility in Case No. 2020CA-003194-0000-00. Pursuant
to Rule 25-30.090(3), Florida
Administrative Code (F.A.C.), within 10 days
of the appointment of the receiver by the Circuit Court, the receiver shall
request from the Commission a copy of the Utility’s tariff and most recent
annual report. A copy of the Utility’s tariff and most recent annual report has
been sent to the County.
Rule 25-30.110(3), F.A.C., requires that a water or
wastewater utility which is subject to this Commission’s jurisdiction as of
December 31 of that year file an annual report. Crooked Lake is current on its
annual reports through 2019; however, the Utility has not filed its annual
report for 2020. Staff calculates the assessed penalty to be $282 as of July 2,
2021. The penalty will continue to accrue at $3 per day until the annual report
is filed.
Crooked Lake has paid its
Regulatory Assessment Fees (RAFs) through 2018. However, the Utility has not
paid its RAFs owed for 2019, 2020, and 2021 (through March 25, 2021, the date
when a receiver was appointed). It should be noted that the proposed cancellation
of the Utility’s certificate, if approved, would not relieve the Utility’s obligation
regarding outstanding RAFs. Based on the Utility’s 2019 operating revenues in
the amount of $227,281, as reported in Crooked Lake’s 2019 Annual Report, the
Utility owes 2019 RAFs in the amount of $10,227.65, plus a late penalty in the
amount $2,556.91 (5 percent x 5 months x $10,227.65), and accrued interest in
the amount of $1,636.42 as of July 22, 2021, resulting in a total amount due of
$14,420.98.
Since the Utility’s 2020 Annual Report has not been filed
with the Commission to date, staff has calculated an estimated 2020 RAF amount
based on the Utility’s most recent annual report. Staff estimates that Crooked
Lake owes $10,227.65 in RAFs for 2020, based on the revenues of $227,281
reported in the Utility’s 2019 Annual Report. Further, Crooked Lake is also
responsible for the RAFs for the January 1, 2021 through March 25, 2021 period,
which will be due next year, by March 31, 2022. Staff will continue to work
with the Utility to obtain the outstanding annual report and RAFs, and will
bring the matter to the Commission in a separate docket in the future if
necessary.
Based on all the above, staff recommends that the
Commission acknowledges the abandonment of Crooked Lake pursuant to Section 367.165, F.S., and appointment of
Polk County as the receiver for the Utility. Certificate No. 517-S should be cancelled effective March
25, 2021.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If the Commission approves staff’s
recommendation in Issue 1, this docket should be closed because no further
action is necessary. (Trierweiler)
Staff Analysis:
If the Commission approves staff’s recommendation in
Issue 1, this docket should be closed because no further action is necessary.
