§ 126-123. Rates, fees and charges—franchisees with gross annual revenues of $200,000.00 or more.

(a)

Rate case minimum filing requirements. All applications for rate adjustment by a Franchisee with current gross annual revenue of $200,000.00 or more shall file with the County an original application, ten photocopies and a digital copy. All data required by this section shall be presented on such forms as may be required by County Staff and shall be identified as relating to either water utility service or wastewater utility service:

(1)

A brief summary statement or petition stating the grounds for the proposed rate change and rate setting principles used, whether based on cost, uniform percentage increase or any other consideration. This statement shall also include, at a minimum, the following comparisons between the Test Year and the Pro Forma Year:

a.

Operating expenses, giving reasons for major changes;

b.

Rate Base, giving reasons for changes;

c.

Cost of capital; and

d.

Present and proposed residential monthly service charge for an average residential customer;

(2)

A statement of financial operations in historical form for the previous three fiscal years and a statement of financial operations for the Test Year and for the Pro Forma Year at existing and proposed rates;

(3)

A balance sheet for the Test Year and for the previous three fiscal years;

(4)

A statement of the proposed increases or changes in the rate or rate structure. Such statement shall compare the current rate structure with the proposed rate structure, setting forth the proposed rate structure with reasonable clarity and with appropriate rate classifications where applicable, including bill comparisons between existing and proposed rates. Any proposed rate structure change must be accompanied by a detailed explanation for the change;

(5)

An annual billing analysis by class, including the actual and proposed number of customers and gallons sold by existing and proposed rates, fees and charges, extended and compared to actual revenues for the Test Year and proposed revenues for the Pro Forma Year;

(6)

A detailed schedule of the monthly billing determinates by class of customers, by meter size and by gallons sold in increments of no more than 1,000 gallons for the Test Year;

(7)

A detailed schedule of all fixed assets (may include additional assets needed to serve customers during the Pro Forma Year supported by competent, substantial evidence such as an executed non-revocable contract), depreciated using the straight-line method, based upon original cost to the owner first dedicating them to public service;

a.

The detailed schedule of fixed assets shall include each utility asset and include the date placed in service, its original cost to the owner first dedicating them to public service, its beginning and ending accumulated depreciation for the Test Year and the Pro Forma Year. The schedule is to include the annual depreciation expense for the Test Year and the Pro Forma Year. Utility asset additions and retirements for the Test Year and the Pro Forma Year are to be reflected in the schedule. This schedule is to reflect totals by class which reconciles to the summary schedule in (7) b. below;

b.

A summary schedule of fixed assets by class beginning with the balances reflected in the most recent rate case brought forward to the Test Year for original cost and accumulated depreciation, updated annually for additions, retirements and depreciation expense;

(8)

Actual and Pro Forma Year expense adjustments with supporting detail set forth by the accounts affected. Such adjustments shall be supported by competent, substantial evidence and shall not include estimates based on speculative or conjectural data;

(9)

A comparative schedule of operation and maintenance expenses in historical form, classified according to the Franchisee's chart of accounts, for the Test Year, the prior three fiscal years and the Pro Forma Year;

(10)

Detailed schedules of unrecovered and proposed rate case expenses;

(11)

Calculation of the Rate Base and the rate of return for the Test Year, the prior three fiscal years, and the Pro Forma Year at existing and proposed rates;

(12)

A schedule of the cost of capital and rate of return for the Test Year and for the Pro Forma Year, with the Rate Base reconciled to the components of the cost of capital;

(13)

If the Franchisee is responsible for the payment of income taxes, a calculation of federal and state income taxes for the Test Year and for the Pro Forma Year computed at the present and the proposed rates. The most recently filed Federal and State income tax returns are to be made available for review. If the Federal and State income tax returns are not available for review, it shall be assumed that no tax has been paid;

(14)

In the event the Franchisee is a subsidiary or division of a parent corporation, company, or other legal entity, such parent shall also make available for review its federal and state income tax returns filed with the Internal Revenue Service for its most recent tax year. If the Federal and State income tax returns are not available for review, it shall be assumed that no tax has been paid;

(15)

Detailed schedules showing the computation of the used and useful water and/or wastewater treatment plants for the Test Year and the Pro Forma Year;

(16)

Detailed schedules showing the computation of the used and useful transmission and distribution lines, collection lines, lift stations and pumping stations for the Test Year and the Pro Forma Year. This will be applicable only if the Franchisee has an investment in the distribution and collection systems;

(17)

Detailed maps depicting the Franchisee's service area. The maps shall show lines in the ground and lots served. Lots presently being served and proposed extensions shall be distinguishable from lots not presently connected;

(18)

A listing of the Franchisee's current and proposed connection and extension fees together with a statement of the Franchisee's service extension policy and any proposed changes thereto;

(19)

A schedule of connection fees, extension fees, meter fees and other CIAC received;

a.

The detailed schedule of CIAC shall include each amount or contributed utility asset and include the date placed in service, its original amount, its beginning and ending accumulated amortization for the Test Year and the Pro Forma Year. The schedule is to include the annual amortization for the Test Year and the Pro Forma Year. CIAC additions and retirements for the Test Year and the Pro Forma Year are to be reflected in the schedule. This schedule is to reflect totals by class which reconciles to the summary schedule in subsection (19)b. below;

b.

A summary schedule of CIAC by class beginning with the balances reflected in the most recent rate case brought forward to the Test Year for original amount and accumulated amortization, updated annually for additions, retirements and amortization;

(20)

Detailed schedules to determine the percentage for reduction of ad valorem taxes and depreciation expense due to excess capacity, where applicable;

(21)

When services or commodities are provided to a parent, affiliate, or another party, the applicant must provide a schedule which describes in detail the services or commodities provided, gives a complete description of the basis for the charges, billings or procedures used to allocate the cost and must furnish a copy of any contracts concerning such services or commodities;

(22)

History of dividends paid out for the last three fiscal years and the proposed payouts in the Pro Forma Year;

(23)

Any Franchisee that has costs allocated or charged to it from a parent, affiliate, related party or management entity, shall provide additional schedules supported by competent, substantial evidence demonstrating that the charges allocated to the Franchisee are fair and reasonable and that the work performed provides a direct benefit to the Franchisee customers. All data provided pursuant to this subsection shall be submitted in affidavit form.

a.

The total costs being charged, billed or allocated, the name of the entity, its relationship to the Franchisee, a detailed description of services being provided and the itemized cost for each service,

b.

The allocation method or direct charging method used and the bases for using that method;

c.

The workpapers used to develop the allocation method, including but not limited to the numerator and the denominator of each allocation factor;

d.

The workpapers used to develop the basis for the direct charging method (such as invoices, daily time sheets or time logs);

e.

An organizational chart of the relationship between the Franchisee and its parent and affiliated companies and the relationship to any other related parties; and

f.

A copy of any contracts or agreements between the Franchisee and its parent and affiliated companies or any other related party for services rendered between or among them;

(24)

For any land utilized by the Franchisee, the applicant shall file copies of the documents that demonstrate that the Franchisee owns the land upon which the treatment facilities are located or that provide for the continued long-term use of the land;

(25)

If the capital structure contains equity, a return on equity shall be requested based upon the return on the current equity leverage formula established by the Florida Public Service Commission (FPSC);

(26)

A copy of the rules, regulations and service availability policy of the Franchisee if different from the Board approved "Water and Sewer Franchise Utilities Rules and Regulations";

(27)

Water conservation rate structure;

a.

The Southwest Florida Water Management District has designated the area of Sarasota County as being within the Southern Water Use Cautionary Area, and has targeted the area for aggressive water conservation measures. Conservation rate structures are widely recognized as a means to encourage a reduction in per capita consumption. All water rate increase applications filed by Franchisees must include a multiple-tier water conservation rate structure, including a rate adjustment policy for unexpected corrected water leaks or other unanticipated circumstances;

b.

Upon a showing that a multiple-tier water conservation rate structure is inappropriate due to the Franchisee's historical water usage or to its current rate structure, the requirement for a multiple-tier water conservation rate structure may be waived by the Hearing Examiner;

(28)

Such additional information related to items (1) through (27) above as may be required by the County Staff or the Board.

(b)

Whenever the applicant proposes any corrections, updates or other changes to the originally filed minimum filing requirements, ten copies and an electronic copy shall be filed with County Staff, with copies also served on all parties of record at the same time.

(c)

Following Board approval of a rate adjustment, not less than ten days prior to the time a customer begins consumption at the adjusted rates, the Franchisee shall notify each customer of the authorized increases or decreases and explain the reasons for the increases or decreases. The notice to the customers shall be approved by County Staff prior to sending to the customers.

(Ord. No. 2016-041, § 2, 9-21-2016)