HomeMy WebLinkAbout1989 02 03 - Rate IncreaseCHARLES IAN NAB
JAHEB H. FALLAcE
KAREN J. SEHBEAU
PAUL J. KREUZKAMP. JR.
• Ba D CERTITIDD IN
ESTATD PW NIND "D PADDAT6
VIA FAX
NASH & FALLACE, P.A.
ATTORNEYS AT LAW
RECEIVED'
February 3, 1989
Robert S. McClary, City Manager
City of Sebastian
1225 Main St.
Sebastian, FL 32978
Re: Sebastian
Increase
Our File
Dear Mr. McClary:
T
9.30 S. HARBOR CITY BLVD.
SUITE 505
WELBOURNE, FLORIDA 32901
(407) 984.3300
PAX(407)951-3741
Lakes Utility Company/Rate
Request
No.: 89-2985
You requested that I provide you with a legal opinion concerning
the rate increase requested by Sebastian Lakes Utility Company
pursuant to Ordinance No. 0-85-16 (the "Franchise"). It is my
understanding that the rate increase requested by Sebastian Lakes
Utility Company exceeds 80% of the rate currently in effect for
the utility services provided by Sebastian Lakes Utility Company.
In providing a legal opinion to the City of Sebastian, I reviewed
the existing Franchise.
Section 109 of the Franchise provides, among other things, that
in no event shall a rate adjustment for any three year term
exceed 20% of existing rates. Therefore, it is my opinion that
the city council could not approve a rate increase for Sebastian
Lakes Utility Company that would exceed 20% of the existing rates
being charged by Sebastian Lakes Utility Company pursuant to the
Franchise.
Note that Section 120 of the Franchise requires that the rates be
reasonable and subject to such regulations as may be provided by
law. However, it is my position that Sebastian Lakes Utility
Company would need to provide legal justification for the
avoidance of the 20% cap set forth in Section 109 of the
Franchise. In absence of any statutory law to the contrary, the
20% cap imposed by Section 109 of the Franchise would govern the
pending rate increase application by Sebastian Lakes Utility
Company.
go,/5-0
City of Sebastian
ROBERT S- MCL3AW POST OFFICE BOX 780127 O SEBASTIAN, FLORIDA 32978.0127 Carol Carswell
City Manager TELEPHONE (305) 589.5330 Finance Director
January 31, 1989
Charles I Nash, Esq.
Nash & Fallace
930 S. Harbor City Blvd.
Suite 505
Melbourne, F1. 32901
Re: Sebastian Takes Utility Franchise
Dear Charlie:
Sebastian Takes Utility Franchise has requested a rate increase
of 83.9%. This is the first increase they have requested since
the inception of the Franchise agreement dated Sept. 11, 1985.
One of the reasons for their request is the increases by General
Development Utilities from whom they purchase water.
Section 109 of the Franchise Agreement states that they may request
a rate increase at the end of any three (3) year team but °... in
no event shall a rate adjustment for any three (3) year term exceed
twenty percent (20%) of existing rates,"
We would like your legal opinion as to whether they are limited
to this 20% increase.
S erely,
Robert S. McClary
7
City Manager