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Home My WebLink AboutO-92-16 AMEND CITY UTILITY CODE '. . . ORDINANCE NO. 0-92-16 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, AMENDING VARIOUS SECTIONS OF CHAPTER 27 OF THE CODE OF ORDINANCES, RELATING TO "UTILITIES" BY AMENDING DEFINITIONS; AMENDING SECTION 27-5 RELATING TO OPERATING AND TESTING; CREATING REQUIREMENT FOR SERVICE AVAILABILITY POLICY; CREATING GUIDELINES FOR DESIGNING SERVICE AVAILABILITY POLICY; CREATING PROCEDURE FOR IMPUTING CONTRIBUTIONS-IN-AID- OF-CONSTRUCTION; CREATING SECTION 27-10 RELATED TO APPLICATIONS; PROVIDING SEVERABILITY CLAUSE; PROVIDING FOR CONFLICTS; PROVIDING FOR ATTORNEYS' FEES; PROVIDING FOR CODIFICATION AND PROVIDING AN EFFECTIVE DATE. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, as follows: Section 1. The City Council of the City of Sebastian hereby makes the following findings of fact and makes the following declarations of intent: (1) The Florida Constitution in Article VIII, Section 2(b), grants unto cities all governmental, corporate and proprietary powers to enable them to conduct municipal government, perform municipal functions and render municipal services, and authorizes cities to exercise any power for municipal purposes except as otherwise provided by law. (2) Pursuant to Chapter 166, Florida Statutes (the "Municipal Home Rule Powers Act"), the Florida LegiSlature in turn extended to cities the exercise of powers for municipal governmental, corporate, or proprietary purposes not expressly prohibited by the constitution, general or special law, or county charter and removed any limitations, judicially imposed or otherwise, on the exercise of home rule powers other than those expressly prohibited. '//:/1/ ([ . . '.~ T ~ . /' . . . (3) The city has previously invoked the Municipal Home Rule Powers Act through the adoption of its Home Rule Charter and numerous ordinances. (4) The city's Home Rule Charter grants it all governmental, corporate, and proprietary powers to enable it to conduct municipal government, perform municipal functions and render municipal services, and may exercise any power for municipal purposes except as otherwise provided by law. (5) Pursuant to its Home Rule Powers, the city has previously adopted Chapter 27 of the Code of Ordinances of the City of Sebastian for the regulation of franchised water and sewer utilities within the city. (6) As currently enacted and amended, Chapter 27 of the Code has become outdated and does not address issues which have been discovered and analyzed since its adoption. (7) The City finds that the current Chapter 27 of the Code lacks any sufficient mechanism or guidelines for the approval of adequate service availability pOlicies. (8) Adopting guidelines for the approval of service availability policies can accomplish many beneficial objectives, including preserving reasonable rates for utility services, preventing cash-flow crisis resulting from insufficient income to cover expenses, creating incentive for the owners to efficiently and effectively - 2 - . . manage the utility company, and properly allocating the risk of potential nondevelopment of new service areas. (9) utilities with excessive amounts of contributions-in-aid-of-construction ("CIAC") can experience a cash-flow crisis with no income to cover increased expenses, leading to inadequate and unsafe operation and maintenance. (10) utilities controlled by development companies can also manipulate lot sales contracts and developer agreements to unreasonably and unfairly inflate the rate base, thereby causing rates to be unjust, unfair, and inequitable. (11) Since CIAC is by its nature compelled to be contributed by the customers, there is a substantial public interest in providing guidelines for the approval of just, fair, and equitable service availability policies justifying substantial public scrutiny. (12) Since service availability policies are intertwined with all rates of a given utility, the city finds it to be in the best interests of the public health, safety, and welfare to address and regulate appropriate levels of CIAC during all future rate cases or proceedings of any utility regulated by the City. (13) The City also finds it to be in the best interests of the pUblic health, safety, and welfare to encourage a fair and proper balance between the utility - 3 - . . owner's invested capital and compelled CIAC so that all rates are just, fair, and equitable. (14) Prior determinations or reported levels of the rate base or CIAC are hereby found to be non-binding on future rate case decisions of the city. (15) The city also declares its intent to implement this ordinance in a manner such that a utility's rate of return is not impaired. (16) Because of the additional work effort which will be involved for the city in order to review and process rate applications for utilities, the city has determined to adopt an application fee to defray the estimated costs of said review and processing. (17) The city has scheduled and conducted the necessary public hearings and received testimony and other competent and substantial evidence to support its actions and the findings set forth herein. (18) The city hereby declares its intent that this ordinance be liberally construed to effect its purposes and to provide for just, fair, and equitable rates to consumers. (19) In the franchises it has previously granted, the city has reserved the right to fix utility rates which are just, reasonable, compensatory, and not unfairly discriminatory. - 4 - .....' . . . (20) section 27-20 (b) of the Code also provides that the issuance of any franchise shall be further subject to all applicable city regulations. Section 2. That Section 27-1 of the Code of Ordinances, city of Sebastian, Florida, is hereby amended to read as follows: "Sec. 27-1. Definitions. [As used herein, the following words and phrases shall have the meanings respectively ascribed to them:] city refers to the city of Sebastian, Florida. Franchise means a contract with the City by which the utility is licensed to conduct a particular business within a particular area for a given period of time. Service Availability Policy refers to a pOlicy which sets forth a uniform method of determining the system capacity charge or other charges to be paid and conditions to be met by applicants for service in order to obtain water and sewer service. utility means water or sewer utilities serving subdi vision, apartment and housing complexes, condominium, mobile home or trailer parks, industrial complexes, shopping center and similar systems. "utility" includes wells, pumps, tanks, treatment facilities, distribution systems, water meters, disposal facilities, force mains, pump stations, collection systems, service lines and pipes, real estate and easements necessary to such systems and includes every - 5 - person, corporation, lessee, trustee, or receiver owning, operating, managing or controlling a utility systems or proposing construction of a system or who is providing or proposes to provide water or sewer service to the public. II section 3. That Section 27-5 of the Code of Ordinances, City of Sebastian, Florida, is amended to read as follows: "Section 27-5. Operating and testing in accordance with agency rules and regulations. Upon completion of the initial portion of the utility plant, the applicant shall be responsible for the operation and regular testing of the utility in accordance with the rules and regulations of all agencies having jurisdiction, including without limitation the city of Sebastian." Section 4. That the Code of Ordinances, City of Sebastian, Florida, is hereby amended by adding a section to be numbered section 27-7, which said section shall read as follows: "Sec. 27-7. Applicability. (a) All utilities within the jurisdiction of the City of Sebastian must develop a service availability policy. (b) The provisions of Section 27-7 through 27-9 shall apply to any utility that on or after September 2, 1992, (i) files or applies for a change to any of its rates or charges or (ii) when the Council of the City of - 6 - Sebastian, Florida, initiates a show cause proceeding to require the utility to adopt or change a service availability policy or charges." Section 5. That the Code of Ordinances, city of Sebastian, Florida, is hereby amended by adding a section to be numbered Section 27-8, which said section shall read as follows: "Sec. 27-8. Guidelines for designing service availability policy. (a) A utility's service availability policy shall be designed in accordance with the following guidelines: (1) The maximum amount of contribution- in-aid-of-construction, net of amortization, should not exceed seventy-five percent (75%) of the total original cost, net of accumulate depreciation, of the utility's facilities and plan when the facilities and plant are at their designed capacity; and (2) The minimum amount of contributions- in-aid-of-construction should not be less than the percentage of such facilities and plant that is represented by the water transmission and distribution and sewage collection systems. (b) In any case where compliance with the guidelines of subsection (a) introduces unusual hardship or unreasonable difficulty, and the Council of the city - 7 - of Sebastian, Florida, utility, or interested party shows that it is not in the best interest of the customers of the utility to require compliance, the Council may exempt the utility from the guidelines." section 6. That the Code of ordinance, City of Sebastian, Florida, is hereby amended by adding a section to be numbered section 27-9, which said section shall read as follows: "Sec. 27-9. Imputation of contributions-in-aid- of-construction. (a) If the amount of contributions-in-aid- of-construction ("CIAC") has not been recorded on the utility's books and the utility does not submit competent substantial evidence as to the amount of CIAC, the amount of CIAC shall be imputed to be the amount of plant cost charged to the cost of land sales for tax purposes if available, or the proportion of the cost of the facilities and plant attributable to water transmission and distribution system and the sewage collection system. (b) In any case where the provisions of subsection (a) introduce unusual hardship or unreasonable difficulty, and the Council, utility or interested party shows it is not in the best interest of the customers of the utility, the Council may waive the applicability of this section to the utility." - 8 - ":'''1 '. .. Section 7. That the Code of Ordinances, City of Sebastian, Florida, is hereby amended by adding a section to be numbered section 27-10, which said section shall read as follows: "Sec. 27-10. Application for Rate Increase. (a) Each applicant for a rate increase shall file with the city Clerk a written application containing information substantially the same as that information required by Florida Administrative Code Rules 25-30.436, 25-30.437, 25-30.438, and 25-30.440 in effect on the effective date of this ordinance. (b) Notwithstanding any previous ordinance to the contrary, the appl icant ' s application for rate relief will not be deemed filed and the applicant shall not have the right to collect any increased rates until the appropriate filing fee has been paid and all minimum filing requirements have been met, including prepared testimony where appropriate. (c) Each applicant shall pay an application fee as determined by the city based upon the City's estimate of the city's fees and costs to review and render a decision on the requested rates; provided, however, - 9 - P"'II'f ., .. ." . . . that the application fee shall not exceed $50,000.00. Said fee may be recovered in the rates as an expense of the utility over a ten (10) year period. The city shall notify the applicant of the application fee due to the city within seven (7) business days after the city receives the applicant's initial application. (d) The city may grant a waiver with respect to specific data required by this rule upon a showing that the production of the data would be impractical or impose an excessive economic burden upon the applicant. All requests for waiver shall be made with the submittal of the initial application. (e) This section shall apply to all applications filed on or after September 2, 1992." section 8. SEVERABILITY. In the event a court of competent jurisdiction shall hold or determine that any part of this Ordinance is invalid or unconstitutional, the remainder of this Ordinance shall not be affected and it shall be presumed that the City Council of the city of Sebastian did not intend to enact such invalid or unconstitutional provision. It shall further be assumed that the city council would have enacted the remainder of - 10 - ..~.. of .. . 1'''' . . . this Ordinance without said invalid and unconstitutional provision, thereby causing said remainder to remain in full force and effect. section 9. CONFLICT. All Ordinances or parts of Ordinances in conflict herewith are hereby repealed. Section 10. ATTORNEYS' FEES. Should it become necessary for the city to initiate legal or other proceedings to enforce the terms of this Ordinance, the prevailing party shall be entitled to recovery of reasonable costs and attorneys' fees. section 11. CODIFICATION. It is the intention of the city council of the city of Sebastian, Indian River County, Florida, and it is hereby provided that the provisions of this Ordinance shall become and be made a part of the Code of Ordinances of the city of Sebastian, Florida; that the sections of this Ordinance may be renumbered or relettered to accomplish such intention; and the word "Ordinance" may be changed to "Section," "Article" or other appropriate designations. section 12. EFFECTIVE DATE. This Ordinance shall take effect immediately upon passage and adoption, but the requirements set forth in Sections 4 through 7 hereof shall be applied to all rate applications received on or after September 2, 1992. The foregoing Ordinance was moved for adoption by Council member ()~ The motion was seconded by Council member .~~ and, upon being put to a vote, the vote was as follows: - 11 - '. .. ".,'ft.... . " .t . ' f . Mayor Lonnie R. Powell Vice-Mayor Frank Oberbeck Council member Peter R. Holyk Council member George G. Reid Council member Carolyn Corum 9:!t~ fJ4~ The Mayor thereupon adopted this ~ day of declared this ~ Ordinance duly passed and , 1992. CITY OF SEBASTIAN, FLORIDA ATTEST: Kathr M. O'Halloran, Ci ty Clerk_ I HEnEiW CERTIFY that notice of pUblic hearing on this Ordinance was published in the Vero Beach Press Journal as required by state Statute, that one publ~c hearin~ was held on this Ordinance at 7:00 p.m. on the ~day of J~~ , 1992, and that following said pUblic hearing this rdinance was passed by the city Council. ~':IK"}r;. {};hN.M~~ Kathfyn M. O'Halloran, CMC/AAE city Clerk Approved a~nd Charles Ian Nash, City Attorney Content: - 12 -