WARNING:

Changes in appearance and in display of formulas, tables, and text may have occurred during translation of this document into an electronic medium. This HTML document may not be an accurate version of the official document and should not be relied on.

For an official paper copy, contact the Florida Public Service Commission at contact@psc.state.fl.us or call (850) 413-6770. There may be a charge for the copy.

 

 

DATE:

May 5, 2014

TO:

Office of Commission Clerk (Stauffer)

FROM:

Office of the General Counsel (Corbari, Teitzman)

Office of Telecommunications – RAF Technical Analyst  (Earnhart)

 

RE:

Docket No. 140031-WS – Initiation of show cause proceedings against Country Club Utilities, Inc. in Highlands County for violations of Rule 25-30.120, FAC, Regulatory Assessment Fees; Water and Wastewater Utilities.

AGENDA:

05/09/14Regular Agenda – Interested Persons May Participate

COMMISSIONERS ASSIGNED:

All Commissioners

PREHEARING OFFICER:

Edgar

CRITICAL DATES:

None

SPECIAL INSTRUCTIONS:

None

 

 

 Case Background

 

Staff opened Docket No. 140031-WS to initiate show cause proceedings against Country Club Utilities, Inc. (Country Club or Utility) for apparent violations of Florida Statutes and Commission rules and regulations in failing to remit payment of its annual Regulatory Assessment Fees (RAFs) for the years 2010, 2011 and 2012. 

 

 

 

 

 

 

 

 

On March 17, 2014, the Commission issued Order No. PSC-14-0131-SC-WS[1] (Show Cause Order), ordering Country Club to remit payment of its delinquent RAFs, in the amount of $30,810.28, plus penalties and interest in the amount of $16,026.63, by April 17, 2014 or show cause, in writing, why it was not obligated to remit payment for its delinquent RAFs, plus statutory penalties and interest, for the years 2010, 2011 and 2012. On April 10, 2014, Country Club filed its Response to Order to Show Cause and Petition for a Hearing.

 

 

2013 Regulatory Assessment Fees

 

On February 26, 2014, the Commission received Country Club’s 2013 RAF returns for water and wastewater, wherein Country Club reported a total gross revenue of $147,666.39 for water and $98,166.94 for wastewater.   On April 3, 2014, Country Club filed its annual report for 2013, reporting a total gross revenue of $144,079 for water and $98,167 for wastewater.  Based on its annual report filing, Country Club was required to remit a RAF payment in the amount of $6,483.60 for water and $4,417.51 for wastewater, by March 31, 2013.  As of the date of filin this recommendation Country Club has not remitted payment of its 2013 RAFs. 

 

Accordingly as of May 14, 2014, the amounts owed by Country Club for delinquent RAFs plus statutory penalty and interest, for the years 2010, 2011, 2012, and 2013, are as follows:

 

 

Year

Revenues

RAFs

(4.5%)

Payments

Penalty

5 - 25%

(Thru 05/14/14)

Interest

1%

(Thru 05/14/14)

 

Total

Due

2010

$238,846.00

$10,748.08

$2,500.00

$2,687.02

$3,886.75

$14,821.85

2011

$250,425.00

$11,269.13

$0.00

$2,817.28

$2,929.97

$17,016.38

2012

$250,957.00

$11,293.07

$0.00

$2,823.27

$1,581.03

$15,697.37

2013[2]

$242,247.00

$10,901.11

$0.00

$1,090.11

$218.02

$12,209.24

Totals

$982,475.00

$44,211.39

$2,500.00

$9,417.68

$8,615.77

$59,744.84

 

 


 

 

Settlement Discussions

 

On March 24, 2014, staff participated in a telephone conference with Country Club’s owner, Greg Harris, and Mr. Harris’ accountant Rob Reed, to discuss a possible settlement.  Although a settlement was not reached on that date, the parties agreed to a second telephone conference for the purpose of continuing settlement discussions.  On April 2, 2014, staff and Mr. Harris participated in a second telephone conference, where the staff and Mr. Harris tentatively  agreed on the terms for a proposed settlement in this docket.  After the second telephone conference, staff and Mr. Harris exchanged several drafts of the proposed Settlement Agreement.  On May 2, 2014, Country Club filed a letter requesting the Commission approve its proposed Settlement Agreement, which is attached hereto as Attachment 1.

 

 

The Commission has jurisdiction pursuant to Sections 120.57, 350.113, 367.121, 367.145, 367.161, F.S., and Rule 25-30.120, F.A.C.


 

Discussion of Issues

 

Issue 1

 Should the Commission accept the Settlement Agreement proposed by Country Club Utilities, Inc., to resolve the apparent violations of Rule 25-30.120, F.A.C., Regulatory Assessment Fees; Water and Wastewater Utilities?

 

Recommendation

 Yes. The Commission should accept the Settlement Agreement proposed by Country Club Utilities, Inc., to resolve the apparent violations of Rule 25-30.120, F.A.C., Regulatory Assessment Fees; Water and Wastewater Utilities, and to pay its delinquent Regulatory Assessment Fees, plus statutory penalties and interest, for the years 2010, 2011, 2012, and 2013.    (Corbari, Teitzman, Earnhart)

 

Staff Analysis

 

 

On May 2, 2014, Country Club filed a letter with the attached proposed Settlement Agreement, in an effort to fully resolve its apparent violations of Rule 25-30.120, FAC, Regulatory Assessment Fees; Water and Wastewater Utilities and delinquent RAFs, penalties and interest.  The goal of any show cause proceeding, is to ensure compliance with Florida law and the Commission’s rules and orders.  Staff is recommending approval of the proposed Settlement Agreement, in full, as attached hereto. Staff believes the Settlement Offer accomplishes this goal, as well as providing a remedy for apparent past violations.  Highlights of specific provisions of the settlement offer are as follows:

 

·        Country Club acknowledges its obligation, pursuant to Sections 367.145 and 350.113, F.S., and Rule 25-30.120, F.A.C., to remit payment of its Regulatory Assessment Fees, plus statutory penalties and interest, for the years 2010, 2011, 2012, and 2013.

 

·        Country Club will make a one-time payment of $19,517.27, by May 14, 2014, to satisfy the principal balance of the RAF amounts Country Club owes for 2010 and 2011.

 

·        Beginning on September 15, 2014, Country Club will begin making monthly payments, by the fifteenth of each month, in the amount of $1,000.00, in an effort to pay off the balance of  its 2012 and 2013 RAFs, as well as penalties and interest for 2010, 2011, 2012, and 2013. 

 

·        Country Club will submit payment of its 2014 and future RAFs to the Commission, timely and in full.

 

·        Country Club agrees to waive its right to an administrative formal hearing pursuant to Sections 120.569 and 120.57, F.S., and will withdraw its petition for formal hearing filed on April 10, 2014, in this docket, within ten (10) days of approval of the Settlement Agreement.

 

 

 

 

·        The Commission conditionally waives its right to seek civil remedies against Country Club for failing to remit payment of RAFs, penalties and interest, provided that Country Club complies with all of the terms of this Settlement Agreement and any final Commission order approving the agreement.

 

·        Country Club will notify the Commission prior to any sale, conveyance, or abandonment of the utility or the property it is located upon, and/or the initiation of any bankruptcy proceedings involving the utility or its property.  In addition, Country Club will provide a copy of the Settlement Agreement and Commission order approving the agreement to any purchaser, operator, or person assuming control of Country Club and/or any court presiding over any abandonment or bankruptcy proceeding involving Country Club.

 

·        The agreement does not prevent a Party from filing suit to specifically enforce any of the terms of the agreement; and the Commission reserves the right to initiate appropriate legal action to address any violations of Commission rules or statutes that are not specifically related to the agreement.

 

·        Should Country Club fail to comply with any of the terms of the proposed Settlement Agreement, such failure would be considered a breach of the agreement and automatically accelerate the balance of any unpaid RAFs, penalties and interest, which would then become immediately due.  In addition, the Commission would seek to enforce the terms of the Settlement Agreement and pursue all reasonable means necessary to collect the amounts owed, including, but not limited to, placing a lien on the real and personal property of Country Club.

 

 

            Staff believes that, taken in its entirety, the Settlement Agreement provides a reasonable resolution of the outstanding issues in Docket No. 140031-WS.  Staff further believes that the Commission’s approval of the Settlement Agreement is in the public interest, as it provides for future compliance with Florida Statutes and Commission Rules.  Staff believes that Commission approval of the Settlement Agreement will promote administrative efficiency and will avoid the time and expense of a hearing.  Therefore, Staff recommends that the Commission approve the proposed Settlement Agreement submitted by Country Club.

 


Issue 2

 Should this docket be closed?

 

Recommendation

 No.  If Issue 1 is approved, the Settlement Agreement would resolve all matters in Docket No. 140031-WS in accordance with Section 120.57(4), F.S., and Order No. PSC-14-0131-SC-WS should become final. Staff recommends the docket remain open to process the settlement payments and to monitor ongoing compliance with the terms of this Settlement Agreement.  Once all the terms of the Settlement Agreement and outstanding amounts owed have been satisfied, the docket may be administratively closed. Should Country Club fail to comply with any of the terms of the proposed Settlement Agreement, the Commission will seek to enforce the terms of the Settlement Agreement and pursue all reasonable means necessary to collect the amounts owed by Country Club, pursuant to Sections 120.69 and 367.121(1)(g) and (j), F.S., including, but not limited to, the placement of a lien on the real and personal property of Country Club.  (Corbari, Teitzman) 

 

Staff Analysis

   If Issue 1 is approved, the Settlement Agreement would resolve all matters in Docket No. 140031-WS in accordance with Section 120.57(4), F.S., and Order No. PSC-14-0131-SC-WS should become final. Staff recommends the docket remain open to process the settlement payments and to monitor ongoing compliance with the terms of this Settlement Agreement.  Once all the terms of the Settlement Agreement and outstanding amounts owed have been satisfied, the docket may be administratively closed. Should Country Club fail to comply with any of the terms of the proposed Settlement Agreement, the Commission will seek to enforce the terms of the Settlement Agreement and pursue all reasonable means necessary to collect the amounts owed by Country Club, pursuant to Sections 120.69 and 367.121(1)(g) and (j), F.S., including, but not limited to, the placement of a lien on the real and personal property of Country Club. 

 

 

 









[1]       See Order No. PSC-14-0131-SC-WS, issued March 17, 2014, in Docket No. 140031-WS, In re:  Initiation of show cause proceedings against Country Club Utilities, Inc. in Highlands County for violations of Rule 25-30.120, FAC, Regulatory Assessment Fees; Water and Wastewater Utilities.

[2]       Although the Show Cause Order did not include the failure to remit 2013 RAFs, Country Club’s proposed Settlement Agreement acknowledges the obligation to remit payment of its 2013 RAFs, plus penalty and interest, and includes a payment plan for satisfying the obligation.