Loading...
08/01/1994 IDA Bond ApplicationLAW OFFICES ROSE, SUNDSTROM & BENTLEY A PARTNERSHIP INCLUDING PROFESSIONAL ASSOCIATIONS 2548 BLAIRSTONE PINES DRIVE TALLAHASSEE, FLORIDA 32301 (904) 877-6555 ROBERT A. ANTISTA CHRIS H. BENTLEY, P.A. F. MARSHALL DETERDING MARTIN S. FRIEDMAN, P.A. JOHN R. JENKINS ROBERT M. C. ROSE, P.A. WILLIAM E. SUNDSTROM, P.A. DIANE D. TREMOR, PA. JOHN L. WHARTON August 2, 1994 Mr. Danny L. Kolhage Clerk of Courts Monroe County, Florida 530 Whitehead Street Key West, Florida 33040 Re: North Key Largo Utility Corp. $3,100,000 IDB Application Our File No. 30026.01 Dear Kolhage: MAILING ADDRESS POST OFFICE BOX 1567 TALLAHASSEE. FLORIDA 32302-1567 TELECOPIER (904) 656-4029 Yesterday this firm filed an Application for Industrial Development Revenue Bond in the amount of $3,100,000 filed on behalf of North Key Largo Utility Corp. That filing was made with the County Attorney's Office for distribution to appropriate County officials. However, since this issue is one that may be of particular concern to you as Clerk, I am enclosing several copies for you and your staff. I have also taken the liberty of providing copies to Judson Freeman and Lavon Wisher in the event the County will be using their services to review this Application. The Bond proceeds will be utilized to acquire and make improvements to a wastewater utility system currently owned by the Ocean Reef Club, Inc. which is a qualifying "project"'=as`defined in section 159.27 Florida Statutes. Please let me know if I can provide any further information on this matter. i cerely r John R. kins For the ' m JRJ:jmt Enclosures p I NORTH KEY LARGO UTILITY CORP. $3,100,000 INDUSTRIAL DEVELOPMENT REVENUE BOND APPLICATION AUGUST 1, 1994 . I I� TABLE OF CONTENTS Page 1. REQUEST FOR SPONSORSHIP AND APPLICATION SUMMARY A. Request . . . . . . . . . . . . . . . . . . . . . . . 1 B. Application Summary . . . . . . . . . . . . . . . . . 1 2. APPLICANT'S BACKGROUND A. Basic Information on Applicant . . . . . . . . . . . . 2 B. History of Utility System . . . . . . . . . . . . . . .3 C. Purpose for North Key Largo Utility Corp. . . . . . . 3 3. PHYSICAL PLANT AND CURRENT OPERATIONS A. Collection System . . . . . . . . . . . . . . . . . . 5 B. Treatment Plant . . . . . . . . . . . . . . . . . . . 5 C. Effluent Disposal . . . . . . . . . . . . . . . . . . 5 D. Permitting . . . . . . . . . . . . . . . . . . . . . . 6 E. Management . . . . . . . . . . . . . . . . . . . . . . 6 4. PROJECT DESCRIPTION A. System Acquisition . . . . . . . . . . . . . . . . . . .7 B. Treatment Plant Expansion . . . . . . . . . . . . 7 C. Reserve Funds and Costs of Issuance . . . . . . . . . 8 5. PROPOSED BOND ISSUE STRUCTURE A. Preliminary "Term Sheet" . . . . . . . . . . . . . . . 9 B. Schedule of Uses of Funds . . . . . . . . . . . . . 10 C. Method of Bond Placement . . . . . . . . . . . . . . . 11 6. HISTORICAL AND PROJECTED FINANCIAL INFORMATION A. Preliminary Financial Projections . . . . . . . . . 12 B. Historical Financial Statements . . . . . . . . . . 12 C. Previous Financing Experience . . . . . . . . . . . 12 7. PUBLIC PURPOSE AND APPLICANT'S PERFORMANCE A. Environmental and Health Benefits . . . . . . . . . 13 B. Compliance With Comprehensive Plan Goals . . . . . 13 C. Economic and Employment Benefits . . . . . . . . . . 13 D. Applicant's Performance . . . . . . . . . . . . . . . 14 S. MISCELLANEOUS A. Project Legal Qualifications . . . . . . . . . . . . 15 B. Inducement Resolution and Allocation Request. . . . 15 -i- J LIST OF EXHIBITS EXHIBIT "A" SERVICE TERRITORY EXHIBIT "B" ARTICLES OF INCORPORATION EXHIBIT "C" FURTHER DESCRIPTION OF DESIGN/BUILD SERVICES (PLANT EXPANSION) EXHIBIT "D" PRELIMINARY FINANCIAL PROJECTIONS EXHIBIT "E" 1993 PSC ANNUAL REPORT EXHIBIT "F" EXPLANATION OF UNAUDITED ANNUAL REPORTS I i L APPLICATION FOR INDUSTRIAL DEVELOPMENT REVENUE BOND 1. REQUEST FOR SPONSORSHIP AND APPLICATION SUMMARY A. Request NORTH KEY LARGO UTILITY CORP., 31 Ocean Reef Drive, Key Largo, Florida, 33037 ("Applicant"), files this Application and respect- fully requests that Monroe County issue Industrial Development Revenue Bonds (North Key Largo Utility Corp. Project), Series 1994, in an amount not to exceed $3,100,000 ("Bonds") for the purpose of financing the acquisition and improvement of a wastewater collec- tion, transmission, treatment and disposal system serving North Key Largo, Monroe County, Florida. B. Application Summary Issuer: Monroe County, Florida (Industrial Development Authority) Obligor: North Key Largo Utility Corp. Issue Size: $3,100,000 Interest Rate: To be determined Maturity: November 1, 2024 Method of Sale: Private Placement Denomination: Minimum $100,000 Placement Agent: To be determined Bond Counsel: Squire, Sanders & Dempsey Project: The Project consists of: (i) Acquisition of the 450,000 gallons per day ("gpd") central wastewater collection, transmis- sion, treatment and disposal system owned by Ocean Reef Club, Inc. located on Key Largo, Florida ("System"); (ii) construction of 300,000 gpd of new plant capacity to replace certain existing facilities and accommodate reasonably anticipated future growth; and, (iii) payment for qualifying costs of issuance ("Project"). Legal Eligibility: The Project qualifies as a "Pollution Control Facility" under Chapter 159 Florida and is further defined as a "priority project" for purposes of allocation of state bond volume -- limitation. Allocation: The Applicant will apply to the State of Florida for allocation of State bond volume limitation immediately following the mandatory "TEFRA" public hearing. Closing will occur following allocation by the Florida Division of Bond Finance from any funds still remaining in the 1994 pool or from the 1995 pool. Security: (i) first mortgage on all existing real estate, buildings and personal property of the Applicant, (ii) security pledge and assignment of revenue, (iii) pledge and assignment of all money and securities in Trustee accounts, and (iv) "rate covenant" to maintain rates at a level sufficient to repay the Bonds. Ul �j 2. APPLICANT'S BACKGROUND A. Basic Information on Applicant M The name, address and contact persons for the Applicant are: North Key Largo Utility Corp. 31 Ocean Reef Drive, Suite 301-A Key Largo, Florida 33037 Attention: Paul B. Winklejohn, Utility Director Telephone: (305) 367-3067 Fax: (305) 367-4246 The Applicant is a Florida, not -for -profit corporation estab- lished on August 1, 1994. The Applicant is a member -owned coopera- tive in the business of providing wastewater collection, treatment and disposal services to its customers who are the members of the Corporation. The contact persons for purposes of this Application are the Applicant's Counsel: Rose, Sundstrom & Bentley 2548 Blairstone Pines Drive Tallahassee, Florida 32301 Attention: John R. Jenkins, Esq. William E. Sundstrom, Esq. Telephone: (904) 877-6555 Fax: (904) 656-4029 The name and address of the Applicant's Accountant is: Cronin, Jackson, Nixon & Wilson 2560 Gulf -To -Bay Boulevard, Suite 200 Clearwater, Florida 34625-4419 Attention: Robert C. Nixon, C.P.A. Telephone: (813) 791-4020 Fax: (813) 797-3602 The name and address of the Applicant's Engineer is: Hartman & Associates, Inc. 201 East Pine Street, Suite 1000 Orlando, Florida 32801 Attention: Gerald C. Hartman, P.E. Telephone: (407) 839-3955 Fax: (407) 839-3790 11 B. History of Utility System Central wastewater service was first provided to North Key Largo in 1971. The Utility was originally developer owned and operated to serve the Ocean Reef Club, a large, upscale development on North Key Largo. The original sewer plant was a 100,000 gpd package plant utilizing contact stabilization as a treatment method with effluent disposal through a system of shallow injection wells. In 1980, a second Davco treatment plant with a capacity of 100,000 gpd was installed in series with the first. In 1974, Monroe County transferred jurisdiction over private- ly -owned water and sewer utilities to the Florida Public Service Commission ("PSC"). The Utility was issued Certificate of Authority No. 363-S by the PSC authorizing it to provide service to a specific territory, approving rates and charges, and establishing policies governing the provision of wastewater service to its customers. In 1985, the plant was expanded for a second time with the construction of a Marolf 250,000 gpd concrete treatment plant addition. On December 30, 1993, the PSC approved a transfer the Utility's sewer certificate from the Ocean Reef Utility Company to Ocean Reef Club, Inc. f\k\a Ocean Reef Acquisition Corp. The territory served by the Utility at the time of transfer is set forth in Exhibit " All attached. The transfer was part of a larger March 1, 1993 buy-out of the developer of the Ocean Reef Club by its residents, which acquisition included a marina, hotel, two golf courses, airstrip, and other property including the Utility. The entire property, including the wastewater System, was purchased for $58,000,000. C. Purpose for North Key Largo Utility Corp. The Applicant is a Florida, not -for -profit corporation in which the Utility customers comprise the membership. A copy of the Articles of Incorporation are attached as Exhibit "B" to this Application. Ocean Reef Club, Inc. ("Club"), the previous owner of the System is also a not -for -profit corporation. A majority of the Club members are also utility customers. However, some Club members are not utility customers. Conversely, some utility customers are not members of the Club. This diversity in member- ship ,and interest prevented the Utility customers from enjoying two substantial benefits which can be realized in a sale of the System to North Key Largo Utility Corp.: Securing Exemption from Federal Income Taxes Internal Revenue Code Section 501(c)(12) generally provides that a mutual ditch or irrigation company, mutual or cooperative 3 d D 11 d 11 telephone company, or like organization can qualify for tax-exempt status if 85% or more of the income of the company consists of amounts collected from members for the sole purpose of meeting losses and expenses of the operations of the company. Applicant, a cooperative in which all customers, and only customers, are members, is a "like organization" under Section 501(c)(12). Each Utility customer, as a member of the Applicant, is entitled to vote on matters affecting the System, and to partici- pate in the election of Directors. Service is provided to members in a nondiscriminatory manner. The Applicant intends to file a request for a letter ruling from the Internal Revenue Service confirming its tax-exempt status. By qualifying, the Applicant can avoid payment of federal income taxes which will help to reduce rates and charges paid by customers of the Utility. Securing Exemption from PSC Jurisdiction A not -for -profit corporation, association, or cooperative providing service solely to members who own or control it is exempt from PSC jurisdiction pursuant to Section 367.022(7), Florida Statutes. This exemption is based on the premise that a utility controlled by its customers will set rates and charges which are fair and equitable, and which are sufficient to compensate for operation, maintenance and capital requirements, without a profit incentive. The Applicant qualifies for such an exemption. Self -regulation in the ratemaking process affords Applicant and its customers the following advantages: * Eliminates 4.5% regulatory assessment fee (gross receipts tax); * Avoids extensive PSC reporting requirements and onerous rate case expense; * Allows Utility to provide "rate covenant" t rates are set at level sufficient to repay * Direct accountability of Board of Directors o bondholders so that the Bonds. to customers. U11 3. PHYSICAL PLANT AND CURRENT OPERATIONS The wastewater System is comprised of a 450,000 gpd wastewater treatment plant, collection and transmission system, shallow injection well effluent disposal system and appurtenant facilities. The Applicant currently provides service to approximately 800 units in the North Key Largo area, processing over 100, 000, 000 gallons of wastewater in 1993. A. Collection System The Applicant collects wastewater for treatment through its collection/transmission system consisting of gravity sewers, manholes, force mains and wastewater lift stations. There are currently 30 satellite lift stations and 310 concrete manholes. The existing collection/transmission system is made up of over 64,000 feet of gravity wastewater mains and 32,000 feet of force mains. The System transports raw wastewater through a series of 4" to loll gravity and force mains throughout the service area to the Plant. B. Treatment Plant The treatment plant has a design capacity of 450,000 gpd. Initial screening removes large debris and trash. Waste is then biologically treated through one of two treatment processes: - Two 100,000 gpd steel plants manufactured by Davco provide treatment through a process of extended aeration (one plant is currently out of service); or One 250,000 gpd concrete facility manufactured by Marolf provides treatment through a process of contact stabilization. Following secondary treatment, wastewater undergoes chlorina- tion followed by high level disinfection. Reject water storage facilities are in place, with aerobic mixing tanks for the stabilization of sludge included as part of the process. Waste _ sludge is hauled away by private contractors. This treatment process results in effluent that meets or exceeds all DEP permit and rule requirements for this System. The treatment plant site and lift stations to be acquired with the System. No additional property is expected to be acquired in the System acquisition or construction of the Project. C. Effluent Disposal Effluent, the liquid by-product of the treatment process is disposed of by injection into a series of 50, class V shallow wells ranging in depth of approximately 30 feet, located adjacent to the treatment plant. Each well has been inspected and individually 5 0 permitted by the Florida Department of Environmental Protection ("DEP"). This is the preferred method of effluent disposal on the Island due to limited space, permeable soil conditions, proximity to environmentally sensitive waters and other factors. D. Permitting DEP is the primary environmental regulatory agency for the System. The Plant is permitted to operate by the DEP under their permit No. DO44-207655. This operating permit was issued on April 23, 1992 and expires April 23, 1997. All plant and line construc- tion is undertaken pursuant to DEP permits, following review of plans and specifications, and completed with professional engineer- ing certification. The shallow well effluent disposal system is operated pursuant to its own permits and approvals. The System maintains all necessary regulatory permits to operate and is operating in compliance with those permits. E. Management The Applicant is administered by a nine member Board of Directors elected by the customers or members of the Applicant. The Officers of the not -for -profit Corporation are as follows: Member Office Robert Kilby President Robert Morgan Vice -President Howard K Howard Secretary Tom Davidson Treasurer In 1993, Paul Winklejohn was hired as the System's Utility Director, and is responsible for the day-to-day management of the Applicant including operations, contract negotiations with new users, customer service and bookkeeping. The Applicant also employs Mark Malka as its Operations Manager and Chief Operator. Mr. Malka has 22 years in the water and wastewater business, holding DEP certifications as a class "C" wastewater system operator and a class "A" water system operator. The operations Manager is responsible for the day-to-day operation and maintenance of all systems. At this time, the System is managed by the Ocean Reef Community Association. In the future, the Applicant will hire all operations and customer service personnel directly and will also enter into a Management Agreement with the Ocean Reef Community Association to assist in the continued oversight and management of the System at least in the initial phases of System ownership and Project construction. 9 -1 4. PROJECT DESCRIPTION A. system Acquisition Ocean Reef Club Inc., owns the 450,000 gallons per day ("gpd") central wastewater collection, transmission, treatment and disposal System described herein which provides service to the Ocean Reef Club. Approximately $1,100,000 of Bond proceeds will be paid by Applicant to acquire the assets of the System from Ocean Reef Club Inc. The firm of Hartman & Associates, Inc. ("HAI") has been retained to provide a complete, independent evaluation and appraisal of the System. The appraisal utilizes methodologies including replacement cost new (less depreciation), the net income or cash flow approach, and a comparable sales approach. Based on these accepted practices of utility valuation, as well as a detailed inspection of the facilities themselves, a preliminary purchase price was established at $1,000,000. This amount is subject to finalizing the appraisal, certain aniticipated changes based on final negotiations between buyer and seller, and closing costs and adjustments as agreed to by the parties. On that basis, $1,100,000 in Bond proceeds have been allocated to the purchase price. B. Treatment Plant Expansion Approximately $1,600,000 of the Bond proceeds will be used to fund a treatment plant expansion of 300,000 gpd. This additional plant capacity will be used in part to replace 200,000 gpd of capacity currently provided by the two Davco plants. These steel plants, operating for years in a harsh, salt water environment, will soon reach the end of their useful lives. They will be replaced with new, more efficient facilities requiring less maintenance, less operator time and improved residuals stabiliza- tion capabilities. Wastewater plant construction is very capital intensive and usually requires 12 to 24 months lead time in order to design, permit and construct plant facilities. Plant expansion projects typically provide capacity necessary for at least a 5 year period. Expansion at this time in a 300,000 gpd increment will be suffi- cient to treat existing and projected flows from continued home building in the Ocean Reef Club beyond the year 2000. A Report entitled Further Description of Design/Build Services prepared by HAI and Allens Environmental Equipment detailing the plant expansion, construction timetable and other relevant information is attached hereto as Exhibit "C." Other than the existing plant site acquired with the System, no additional property acquisitions are necessary for the Project. Plant construction will take place within the existing site. Any necessary main extensions will utilize dedicated rights -of -way or 7 [I existing utility easements. No additional effluent disposal will be necessary in order to treat up to 600,000 gpd resulting from this plant expansion. C. Reserve Funds and Costs of Issuance Subject to final structuring of the issue, the balance of the proceeds are expected to be used to fund a debt service reserve fund, and costs of issuance including Bond Counsel fees, placement agent fees, accounting and legal fees, and miscellaneous project expenses totalling $400,000 from Bond proceeds. 8 1 S. PROPOSED BOND ISSUE STRUCTURE A. Preliminary "Term Sheet" The following Term Sheet outlines preliminary terms and condi- tions the Applicant and its consultants anticipate in marketing this issue: Issuer: Monroe County, Florida (Industrial Development Authority) Obligor: North Key Largo Utility Corp. Issue Size: $3,100,000 Dated: November 1, 1994 Maturity: November 1, 2024 Interest Rate: To be determined Form of Bonds: Fully Registered Denomination: Minimum $100,000. Placement Agent: To be determined Bond Counsel: Squire, Sanders & Dempsey Use of Proceeds: To finance the Project which consists of: (i) Acquisition of the 450,000 gallons per day ("gpd") central wastewater collection, transmission, treatment and disposal system owned by Ocean Reef Club, Inc. located on Key Largo, Florida ("System"); (ii) construction of 300,000 gpd of additional plant capacity to replace certain existing facilities and accommodate reasonably anticipated future growth; and, (iii) payment for qualifying costs of issuance ("Project"). Sinking Fund and Interest Payment Schedule: Sinking fund payments -- will be structured to yield level debt service during the term of the Bonds. The Bonds will be fixed rate current interest paying terms bonds. Interest payments will be made semi-annually on i November 1 and April 1 based on a 360-day year of 30-day months. Tax Exemption: Interest on the Bonds will be excluded from gross income for federal tax purposes and from Florida personal income taxes. Interest on the Bonds will be an item of tax preference for purposes of the Federal alternative minimum tax imposed on individu- als. Allocation: The Applicant will close the issue as soon as alloca- tion is obtained from the Florida Division of Bonds Finance. It is anticipated that the Club will advance monies necessary to continue engineering design and begin Project construction which will be reimbursed from Bond proceeds. Security: Sources of security for the Bonds may include: (i) a first mortgage on all real estate, buildings and personal property of the Applicant (including the proposed capital improvements), (ii) a security pledge and assignment of rights to accounts receivable 0J .- i and all contracts relating to Applicant revenue, (iii) a pledge and assignment to the trustee of the Issuer's and Applicant's rights to all money and securities in all trustee accounts, excluding the rebate refund, and (iv) a negative pledge against additional liens on the mortgaged project as appropriate. Debt Service Reserve Fund: If necessary, a Debt Service Reserve Fund will be funded at closing in an amount equal to the lesser of (i) 10% of the par amount of the Bonds, or (ii) the maximum annual debt service due on the Bonds. Capitalized Interest: Not expected to be necessary as existing revenues are sufficient to handle projected debt service require- ments during, as well as following, construction. Costs of Issuance: Payment of Project costs including legal and accounting fees, Bond counsel fees, placement agent fees and other qualifying costs will be paid from proceeds up to the 2% limit thereon. Mandatory and Optional Redemption: To be determined. Additional Debt: Additional long-term indebtedness is expected to be authorized on a parity basis, provided reasonable tests of debt service coverage are met. Short-term indebtedness secured by ac- counts receivable and purchase money financing may also be incurred. Financial Reporting Covenants: The Applicant will covenant to furnish: (i) quarterly financial statements within 45 days of the end of each quarter, (ii) annual financial statements within 120 days of the end of each fiscal year and (iii) such additional information as the bondholders may reasonably request. Miscellaneous: No guarantees or credit enhancement are anticipated at this time. This matter will be determined through negotiation with the Bond purchasers, and the County will be promptly advised of any such requirements. The proposed method of sale of the Bonds is through a private placement to sophisticated investors. B. Schedule of Uses of Funds The following is a Preliminary Schedule of Uses of Funds for the Project: System Acquisition Cost $ 1,100,000 Treatment Plant Expansion Costs $ 1,600,000 Debt Service Reserve Fund $ 300,000 Bond Issuance Cost (2%) $ 60,000 Miscellaneous $ 40,000 Total 10 $ 3,100,000 r si n J111 All identified Project components are either depreciable assets which may be capitalized under generally accepted accounting principles, or costs of issuance, and therefore qualify as a proper expenditure of bond funds. Funds needed in addition to Bond proceeds will be paid by the Applicant from cash on hand. C. Method•of Bond Placement At this time it is anticipated that the Bonds will be privately placed with sophisticated investors who are also customers of the Utility System. In lieu of an investment grade rating, the Bonds will be sold in denominations of not less than $100,000 (and integral amounts thereafter) to sophisticated investors (whether members or nonmembers), who will be required to attest to that fact by execution of a "big boy" letter prior to purchasing the Bonds. Due to the unusual circumstance of selling the Bonds to its members, the Applicant has not selected a placement agent at this time. To the extent one is necessary, the placement agent will independently analyze the sources and uses of Bond funds, debt service calculations, revenue and expense projections, and will draft an Official Statement, Blue Sky Memoranda and other offering materials, and structure an issue which will be both acceptable to the marketplace and to the County as Issuer. 11 1 6. HISTORICAL AND PROJECTED FINANCIAL INFORMATION A. Preliminary Financial Projections Preliminary Financial Projections and related information prepared by the Accounting Firm of Cronin, Jackson, Nixon & Wilson, is attached as Exhibit " D." These Preliminary Financial Projec- tions were developed in conjunction with the Applicant and Hartman & Associates, Inc., and estimate performance as a result of new investment made possible by the Bonds. The Projections are based on adjustments to historical financial statements and demonstrate that revenue generated by service to the System's existing customer base will be sufficient to pay operating expenses and debt service (including coverage requirements) on a $3,100,000 par amount of Bonds required to pay System acquisition, plant expansion, debt service, reserve and issuance costs. The Preliminary Financial Projections will be updated prior to closing to reflect refinements in revenue and expense information and final Bond structuring. B. Historical Financial Statements ® Attached hereto as Exhibit "E" and incorporated herein by reference, is the Applicant's 1993 Annual Report required by, and submitted to, the PSC. This Annual Report is provided in lieu of conventional financial statements based upon the unique accounting methods used to accurately depict the financial status of a regulated utility in Florida, as discussed in greater detail in Exhibit "F" attached. Annual Reports detail the Utility's financial status and provide additional information pertaining to the operation of a regulated utility. Prior years Annual Reports are available upon request. However, future System revenues will depend more on the customer base during the years relating to debt service payments than on the prior history of the Utility. C. Previous Financing Experience The members of the Applicant are in large part also members of the Club. As members of the Club, they have shown themselves capable of handling sophisticated financial transactions, particu- larly the March 1993 purchase of the Club facilities from the developer of the Ocean Reef Club. The Club is an integral part of the Ocean Reef Community providing club amenities, hotel, marina, airfield, utility and other facilities. Club members contracted to acquire�.the Club at a purchase price of $58,000,000, utilizing both debt and equity capital, and have successfully operated the facilities in conjunction with the Ocean Reef Community Association since closing. 12 7. PUBLIC PURPOSE AND APPLICANT'S PERFORMANCE A. Environmental and Health Benefits f The Federal Clean Water Act, the Florida Air and Water Pollu- tion Control Act, and State and local environmental rules and ordinances limit pollution to surface water and groundwater in the State of Florida. Public Law 92-500, provides that it is the policy of the United States to eliminate as many source points of pollution as possible. On -site septic tanks and small, inefficient, package- type sewage treatment plants are such source points of pollution. The Florida DEP has certified that the construction of central sanitary sewage collection, treatment, and disposal facilities are in furtherance of the purpose of abating or controlling water pollu- tion. The Project qualifies as a sewage treatment facility, or pollution control facility under Florida law and the Internal Revenue Code for purposes of the issuance of tax-exempt bonds. ® Section 159.27 and 159.803 Florida Statutes. B. Compliance With County Regulations and Comprehensive Plan Goals The problem of providing sufficient infrastructure is one of the most fundamental issues of growth management in the State of Florida. The Monroe County Comprehensive Plan sets goals, objec- tives, and policies to guide anticipated growth, based upon a study of County needs and resources. To accommodate growth, and overcome deficiencies in urban services, new growth will be required to pay its fair share for necessary capital improvements. A priority for capital investment is wastewater facilities and the provision of sewage collection and treatment services in environmentally sensitive areas. North Key Largo Utility Corp. provides such services, and the Bonds will allow it to continue and extend these services. _ C. Economic and Employment Benefits !I Water and wastewater utility projects are capable of producing tangible economic benefits in the form of new employment, the preservation of existing employment, and new capital investment in Monroe County. With utility infrastructure in place, employment opportunities occur as growth results in construction of residential and commercial development, facilities for the retirement popula- tion, and hotel/motel facilities encouraging tourism. A number of jobs in the areas of construction, engineering, and operation of the utility system will become available as a direct result of a major utility expansion project. Increased construction activity in turn causes a ripple effect which increases employment opportunities in related support services. The County significantly reduces Applicant's cost of capital through issuance of the Bonds. Repayment of the Bonds through service availability charges and monthly rates demonstrates that 13 11 growth pays its fair share, rather than relying on the limited resources of government programs funded by tax dollars. D. Applicant's Performance Utility performance will be enhanced through renovation and expansion of the wastewater System. A larger, more efficient system increases gross revenues, creates jobs both inside and outside the I s costs and spreads i Applicant, lower risk i k over a larger customer base. The benefits of this plant expansion and financing will inure directly to the customers. Tax-exempt financing typically reduces the interest rate to approximately 75% of the prime interest rate, which is seldom available except to a Bank's largest corporate U11 UI_ 11 F] clients. As interest expense is a major factor in determining rates paid by utility customers, the reduction in the cost of capital obtained through tax-exempt financing will flow through to the benefit of the rate payers. 14 S. MISCELLANEOUS A. Project Legal Qualifications The Applicant represents that the Project qualifies for financing through the use of industrial development revenue bonds as a "project" as defined in section 159.27 Florida Statutes because it constitutes a pollution control facility as defined in therein. As a sewage treatment facility the project is further defined as a "priority project" under section 159.803 Florida Statutes for purposes of allocation of state bond volume limitation. The Applicant represents that the Project will serve the public purposes of promoting pollution control, and increasing employment and preserving jobs. THE APPLICANT ACKNOWLEDGES AND AGREES THAT THE BONDS SHALL NOT CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE COUNTY AND THE INTEREST THEREON WILL BE PAYABLE SOLELY FROM THE PLEDGED REVENUES DERIVED FROM OPERATION OF THE WASTEWATER SYSTEM. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF MONROE COUNTY IS PLEDGED TO THE PAYMENT OF PRINCIPAL OR INTEREST ON THE BONDS. THE BONDS WILL NEVER CONSTITUTE A DEBT OR INDEBTEDNESS OF THE COUNTY NOR WILL THEY CONSTITUTE OA GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OF MONROE COUNTY. B. Inducement Resolution and Allocation Request The Applicant has incurred substantial legal, accounting and engineering costs on tasks such as plant expansion design, financial projections, and document drafting which costs are properly capitalized as a part of this transaction. The Applicant is permitted to recover such costs from bond proceeds provided they are incurred after the date of Inducement, or official action by the County giving preliminary approval to the issue (Treasury Regula- tions Section 1.150-2). Applicant requests that the County promptly make a finding of a public purpose and pass an Inducement Resolution to allow maximum reimbursement of Project related expenditures from Bond proceeds as provided by law. The Applicant is also concerned with its ability to obtain bond volume allocation from the State of Florida Division of Bond Finance from the 1994 State bond volume cap. As of July 1, the State pool had essentially been fully allocated to projects around the state. Although this project qualifies as a "priority project" under Chapter 159.803, Florida Statutes, competition exists even among priority projects. The Applicant requests that, in addition to Inducement, the County hold a public ("TEFRA") hearing as soon as possible to hear public comment on the issue and satisfy the requirements of Section 147(f) of the Internal Revenue Code. This TEFRA Hearing is a prerequisite to filing a Request For Allocation with the Florida 15 I Division of Bond Finance. Prompt filing of this Request will allow the Applicant to obtain the best priority now available for any allocation which may be returned to the State from other projects which do not close in 1994. WHEREFORE, North Key Largo Utility Corp. respectfully requests the County approve the issuance of Industrial Development Revenue Bonds for the Project, this 1st day of August, 1994, by: 0 U 0 u U11 0 16 ROSE, SUNDSTROM & BENTLEY Attorneys for Applic t �D— - r-�- J N R. JENKIN FIQ the Firm EXHIBIT "A" TERRITORY SERVED Township 59 South, Range 40 East SECTION 12 Al; of said Section 12 lying East of Card Sound. SECTION 19 All of said Section 13 lying East of S.A. 905. SECTION 24 That part of the North h of said Section 24 lying East of S.R. 905. Township 59 South, Rance 41 East SECT ION 05 The South 2,950 feet of the West 4,000 feet of said Section 05. SECTION 06 The South 2,700 feet of the East 5,100 •feet of said Section 06 EXCEPT that island known as Government Lot 5. SECTION 07 All of said Section 07 lying West of the Atlantic Ocean. SiCI'ION 08 :+11 of said Section 08 lying North and West of the Atlantic Ocean. SZ=20N 18 The West 3,000 feet cf the North 500 feet, AND the South 1,900 feet of the North 2,400 feet of the West 600 feet of said Section is. SECTION 19 That portion of said Section 19 lying West of the Atlantic Ocean 1 ARTICLES OF INCORPORATION NORTH KEY LARGO UTILITY CORP. r ?. 3 o The undersigned acknowledges and files these Articles of Incorporation in the Office of the Secretary of State of Florida for the purpose of forming a not -for -profit corporation under and in accordance with the laws of the State of Florida. ARTICLE I NAME The name of the corporation shall be NORTH KEY LARGO UTILITY CORP. (the "Corporation"). ARTICLE II PURPOSES This Corporation is organized exclusively for charitable purposes as described in Section 501(c)(12) of the Internal Revenue Code of 1986, as amended, including but not limited to, the provision of wastewater utility services through a mutual or cooperative organization. ARTICLE III MEMBERSHIP 1. Active members of the Corporation shall be limited to persons who obtain wastewater collection, treatment and disposal services from the Corporation. 2. Each active member shall be entitled to a number of votes upon each matter submitted to a vote, based on the amount of wastewater capacity utilized by such member, provided the member is in good standing as to the wastewater capacity represented by his votes. ARTICLE IV DURATION The Corporation shall commence its existence on August 1, 1994 and shall exist perpetually until dissolution. ARTICLE V REGISTERED AGENT The registered agent of the Corporation shall be John R. Jenkins, whose office shall be located at 2548 Blairstone Pines Drive, Tallahassee, Florida 32301. ARTICLE VI PRINCIPAL OFFICE The principal off ice of the Corporation shall be located at 31 ocean Reef Drive, Key Largo, Florida 33037, but the Corporation may maintain offices and transact business in other places within or without of the State of Florida as may from time to time be designated by the Board; furthermore, the Board may from time to time relocate the principal office of the Corporation. ARTICLE VII DIRECTORS 1. The Board shall consist of the number of directors determined in accordance with the Bylaws, but not less than three directors. 2. The directors of the Corporation shall be elected at the annual meeting of the members in the manner determined by the Bylaws. Directors may be removed and vacancies on the Board shall be filled in the manner provided in the Bylaws. 3. The names and addresses of the members of the first Board, who shall hold office until their successors are elected and have qualified in accordance herewith, or until removed, are as follows: Name Address Alan Goldstein 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 Howard K Howard -John- J- Hrad Tom Davidson Lois McClure 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 N�4 a Robert Kilby, Chairman Robert Morgan Frank Shumway, Jr. 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 31 Ocean Reef Drive, Suite A-3 01 Key Largo, Florida 33037 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 William Nesbitt 31 Ocean Reef Drive, Suite A-301 Key Largo, Florida 33037 VIII AMENDMENTS The Articles may be amended or repealed, in whole or in part, by a majority vote at any duly organized meeting of the directors. IX DISSOLUTION In the event of the dissolution or liquidation of the Corporation, either voluntarily or pursuant to order of a Court of competent jurisdiction, and after payment of all outstanding liabilities, each member shall be repaid capital credits without priority on a pro rata basis to the extent assets are available to make such payments. To the extent that assets remain following payment of all outstanding liabilities and capital credits, distributions shall be made without priority to the members and former members in the proportion which the patronage of each member or former member bears to the total patronage of all members on the date of dissolution. A plan of distribution of excess capital prior to dissolution shall be set forth in the Corporation's Bylaws. X CHARITABLE RESTRICTIONS AND LIMITATIONS The Corporation intends to be an organization described in Section 501-(c)(12) of the Internal Revenue Code of 1986, Title 16 to the United States Code, as amended. 3 XIII INCORPORATOR The name and address of the incorporator and subscriber to these Articles is: John R. Jenkins 2548 Blairstone Pines Drive Tallahassee, Florida 32301 IN WITNESS WHEREOF, the incorpor9tor and subscriber has hereunto set his hand and seal, this day of August, 1994. ;___- John R. JenQns STATE of FLORIDA ) COUNTY.OF LEON ) Sworn tpp and subscribed before me this day of 1994, by tiRl/�1t? . e,L k n S who is personally known to a -vr— ( (SEAL) Print Name Notary Publ' State of Florida at Large My Commission Expires: .,��Q•�,M�ss�on F� • Ic" 360802 :7' 2 17 CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE OF PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM r� PROCESS MAY BE SERVED In pursuance of Chapters 48.091 and 617.0501, Florida Statutes, the following is submitted, designating the Corporation's registered office and registered agent, in compliance with those Acts: NORTH KEY LARGO UTILITY CORP., a not -for -profit corporation, desiring to organize under the laws of the State of Florida with its principal office, as indicated in the Articles of Incorporation, at Key Largo, County of Monroe, State of Florida, has named John R. Jenkins located at 2548 Blairstone Pines Drive, Tallahassee, County of Leon, State of Florida, as its agent to accept service of process within this State. ACKNOWLEDGMENT: Having been named to accept service of process for the above - stated Corporation, at the place designated in this Certificate, I hereby accept to act in this capacity, and agree to comply with the provisions of said Act relative to keeping open said office, and I an familiar with and accept the obligations of my position as registered agent. By: n R. Jenkin e 'stered Age t Cncr wJ "C'• COD --i 5 Further Description Of Design/Build Services For Ocean Reef Community Association Wastewater Treatment Plant Expansion Prepared For. Ocean Reef Community Association Prepared By: Allens Environmental Equipment And Hartman & Associates, Inc. June, 1994 HAI #i94-162.03 FURTHER DESCRIPTION �.t OF DESIGN/BUILD SERVICES FOR OCEAN REEF COMMUNITY ASSOCIATION WASTEWATER TREATMENT PLANT EXPANSION TABLE OF CONTENTS Section Page No. Title No. Table of Contents -I- List of Tables -iii- List of Figures -iv- 1.0 INTRODUCTION 1.1 Purpose 1-1 1.2 Background 1-1 1.3 General Description and Proposed Project Schedule 1-1 2.0 BASIS OF DESIGN OF TREATMENT FACILITIES 2.1 Quantity of Wastewater 2-1 2.2 Treatment Level 2-1 2.3 Wastewater Characteristics 2-1 2.4 Preliminary Treatment 2.5 Flow Equalization 2-1 2-6 2.6 Aeration Zone 2-6 2.7 Secondary Clarifier 2-7 2.8 Chlorine Contact 2-7 2.9 Effluent Disposal 2-7 2.10 Residuals Management 2-7 2.11 Plant Monitoring and Control 2-10 2.12 Chlorination System 2-10 2.13 Site Features 2-10 2.13.1 Access 2-10 2.13.2 Lighting 2-10 MAR/ch/R 10/toc. rpt HAI #94-162.03 -i- FURTHER DESCRIPTION OF DESIGN/BUILD SERVICES FOR OCEAN REEF COMMUNITY ASSOCIATION WASTEWATER TREATMENT PLANT EXPANSION TABLE OF CONTENTS (Continued) Section Page No. Title No. 2.13.3 Landscaping 2-10 2.13.4 Drainage 2-11 3.0 MATERIAL AND EQUIPMENT 3.1 General 3-1 3.2 General Materials of Construction 3-1 3.3 Electrical System 3-1 3.4 Paint System 3-2 3.5 Pretreatment 3-2 3.6 Flow Equalization and Aeration Tankage 3-2 3.6.1 Blowers 3-2 3.6.2 Air Header and Air Diffusers 3-3 3.6.3 Walkway and Handrail 3-3 3.7 Clarifiers 3-4 3.8 Waste Sludge Holding 3-4 3.9 Lime Stabilization Tank 3-4 APPENDICES A PROPOSED SITE PLAN MAR/ch/R10/toc.rpt HAI #94-162.03 -ii- FURTHER DESCRIPTION OF DESIGN/BUILD SERVICES FOR OCEAN REEF COMMUNITY ASSOCIATION WASTEWATER TREATMENT PLANT EXPANSION LIST OF TABLES Table Page No. Title _No. 2-1 Wastewater Design Flows and Peak Factors 2-2 2-2 Design Influent Wastewater Characteristics 2-4 2-3 Design Effluent Wastewater Characteristics 2-5 2-4 Aeration Basin Design Summary Extended Aeration Mode 2-8 2-5 Clarifier Design Summary 2-9 MAR/ch/R10/LOT.Rpt HAI #94-162.03 -iii- FURTHER DESCRIPTION OF DESIGN/BUILD SERVICES FOR OCEAN REEF COMMUNITY ASSOCIATION WASTEWATER TREATMENT PLANT EXPANSION LIST OF FIGURES Figure Page No • Title No. 2-1 Process Flow Schematic 2-3 MAR/ch/R10/lof.rpt HAI #94-162.03 -iv- J 1.1 PURPOSE SECTION 1 INTRODUCTION The purpose of this document is to set forth information and basis of design criteria for the i Ocean Reef Community Association (ORCA) Wastewater Treatment Plant expansion. 1.2 BACKGROUND Based on information provided by ORCA, the proposed wastewater treatment plant (WWTP) expansion will serve the needs of the community at build -out. Wastewater flows from this community have been projected to reach approximately 600,000 gallons per day (gpd). The flow historically has been seasonal in nature. The wastewater will be pumped from the collection system to the proposed WWTP flow equalization tank and treated as described in the following sections. We understand that the treated effluent will be disposed of in ORCA's existing injection wells on -site. 1.3 GENERAL DESCRIPTION AND PROPOSED PROTECT SCHEDULE The project will primarily consist of construction of poured -in -place concrete tankage that will - include the equalization, aeration, clarification, sludge holding and chlorine contact. The structure will be built in the area that is currently occupied by the existing steel wastewater treatment units. These units will be removed by the design/builder. A proposed site plan is provided in Appendix A. The treatment capacity of the proposed expansion will be 0.300 million gallons per day (MGD) and it will operate as an independent treatment train except for shared sludge holding and stabilization facilities with the existing 0.250 MGD unit. Also, the existing blowers are sufficient for use with the proposed plant and will be utilized. Due to the wide seasonal variations in flow, it was initially proposed that construction be initiated in May, 1995, and completed by October, 1995. However, it is not necessary to MAR/ch/R 10/Sec l . rpt HAI /l94-162.03 1-1 delay construction, as the existing steel WWTP can be relocated and kept in operation during construction. Therefore, it is possible, assuming normal permitting process time, to begin construction in January, 1995, on the new unit. This design/build proposal is based on this described plan and schedule as presented below: Activity/Task Engineering Design Removal of Steel (Rectangular) VJWTP Relocation of Tub Steel WWTP FDEP Permitting Begin Plant Construction Concrete Work Completion Mechanical Installation Electrical and Yard Piping Start-up FDEP Certification Record Drawings & O&M MAR/ch/R10/Secl .rpt HAI #/94-162.03 1-2 Date July - September, 1994 September, 1994 October, 1994 October - December, 1994 January, 1995 March, 1995 March - April, 1995 May - June, 1995 July 2, 1995 July 15, 1995 July 15, 1995 SECTION 2 BASIS OF DESIGN OF TREATMENT FACILITIES 2.1 QUANTITY OF WASTEWATER The amount of average daily flow of additional wastewater to be treated by the proposed WWTP has been estimated at 300,000 gpd. This flow is based on the inclusion of the septic tank area. A flow equalization basin is proposed and thus, this enables a 1.5 peak factor to be applied to the process units. This factor will be applied to the various process units as shown in Table 2-1. 2.2 TREATMENT LEVEL The design of the proposed WWTP has been based upon the Florida Department of Environmental Protection's requirements of secondary treatment level. Biochemical oxygen demand (BOD) and total suspended solids (TSS) effluent limits for this type of application is defined as the more stringent of either 20 mg/l for either or 90 percent removal of either BOD of TSS. A process flow diagram is presented as Figure 2-1. 2.3 WASTEWATER CHARACTERISTICS The now to the proposed WWTP is assumed to consist of primarily residential contributions. As this is an older facility with historical wastewater quality information, design values were selected based upon monthly operating reports (MOR's). These influent wastewater characteristics are depicted in Table 2-2. Table 2-3 depicts the effluent characteristics for the type of treatment facility proposed for this project. 2.4 PRELIMINARY TREATMENT Preliminary treatment will be provided by a mechanical cleaned bar rack located on top of the flow equalization tank. This bar rack will be contained in the headworks influent box. The bar rack assembly will be designed to accommodate the peak hour wastewater flows from the transmission system. The bar rack will also be designed such that if the bar rack becomes completely clogged, the raw wastewater will be able to overflow the screen without MAR/ch/R10/Sec2.rpt HAI #94-162. 03 2-1 TABLE 2-1 WASTEWATER DESIGN FLOWS AND PEAK FACTORS Unit Process Aeration Basin Clarifier Chlorine Contact Tank Aerobic Sludge Holding and Lime Stabilization Unit Note: 1. Design Flow = Peak Factor x 0.30 MGD Peak Factor 1.0 1.5 1.5 1.0 Design Flow (MGD)(1) 0.300 0.450 0.450 MAR/ch/R10//2-1 .tab HAI #94-162.03 2-2 I - I I I �I O I I I I O I i a s Co J LL V r---rl`--- W41 i I WW Ir z nX I � Z� ffHE Wa v I U I V V I I i I I I U I U J I I z I I i I 1: 1 c 7 V L _ J I s xl it 7 7 I �I y _ L----------------- - IW an----I-I I= I < a� n Ix I U I la jw I O I � LJ gR � o $ [� I n n � f.' FIGURE 2-1 ZOMfOZ91/f0'ZYI-f6 TABLE 2-3 DESIGN EFFLUENT WASTEWATER CHARACTERISTICS Parameter Value Biochemical Oxygen Demand (BOD) 20 mg/1 Total Suspended Solids (TSS) 20 mg/1 Ammonia Nitrogen 20 mg/1 MAR/ch/R10/2-3. tab HAI ##94-162.03 2-5 TABLE 2-2 DESIGN INFLUENT WASTEWATER CHARACTERISTICS Parameter Biochemical Oxygen Demand (BOD) Total Suspended Solids (TSS) Ammonia Nitrogen Value 200 mg/1 200 mg/l 30 mg/1 MAR/ch/R10/2-2.tab HAI #94-162.03 2-4 overflowing the bar rack enclosure. The approach channel depth will be selected to limit the o g P minimum approach velocity to greater than 1.25 feet per second (fps) and the maximum approach velocity to less than 3.0 fps. 2.5 FLOW EQUALIZATION Peak flow rate is expressed as the ratio of peak hourly flow to average daily flow. Due to the relatively small service area and seasonal nature, the ORCA wastewater treatment plant experiences very high peak hourly ratios. The effect of a peak flow on the system usually has deleterious effects to treatment level. Flow equalization provides for the dampening of flow rate variations such that stable unit process operations can be achieved. The extended aeration process which is proposed is relatively accommodating to peak flow, although it does have limits.. Therefore, a flow equalization tank with a nominal volume of 150,000 gallons is proposed. All flow will enter the aerated equalization tank after screening. A series of non -clog pumps will then pump the wastewater to the two process trains, thus splitting the flow. An emergency overflow port will be provided to allow wastewater into the aeration tank in the event of a power failure. 2.6 AERATION ZONE The extended aeration activated sludge process was selected for biological treatment of the wastewater. Aeration will be provided by a diffused air system which will create a spiral roll pattern in the tanks. The air diffusers will be the coarse bubble type. The system will be designed to provide 1.5 pounds (lb) of oxygen per pound BOD5 removed and 4.6 lb. of oxygen per pound Total Kjeldahl Nitrogen (TKN) removed. Although the plant is not designed to fully nitrify, some partial nitrification will occur and this oxygen demand has been accounted for. The aeration system will also be designed to provide a minimum mixing level of 20 SCFM per 1000 cubic feet (cf) of reactor. The tank will be equipped with a return activated sludge (RAS) system which will utilize an air lift for sludge return from the clarifier into the reactor basin. MAR/ch/R10/Sec2.rpt HAI #94-162.03 2-6 I Waste activated sludge (WAS) will be air lifted to the aerobic sludge holding tank. Presented ■, in Table 2-4 is a design summary for the aeration basin. 2.7 SECONDARY CLARIFIER Both RAS and WAS will be withdrawn from the bottom of the clarifier. The RAS will be withdrawn using an airlift and discharged into an aluminum return box with a V-notch weir for measurement which will assist the operators with control of the RAS flow rate. The air lifts will be sized to be capable of pumping up to 150 percent of ADF. Table 2-5 presents a design summary for the clarifiers. 2.8 CHLORINE CONTACT After clarification effluent will enter the chlorine contact tank. The chlorine contact tank will be sized to provide a minimum of 15 minutes contact time at peak flow conditions. The chlorine contact tank will be equipped with at least two baffle walls. 2.9 EFFLUENT DISPOSAL The existing Class V injection wells will be utilized. We understand that additional wells are proposed by the Owner and will be completed by January, 1995. We understand that it is not necessary to pump effluent to the wells, as there is sufficient head available from the chlorine contact tank. 2.10 RESIDUALS MANAGEMENT An aerobic sludge holding tank will be provided within the proposed WWTP. It will have a nominal capacity of 20,000 gallons and thus, provide approximately 7 - 10 days waste sludge holding capacity. The sludge holding tank will be equipped with a decanter and thus, solid contact of 1.8 to 1.5 % should be achieved. The existing digester will be converted for use as a lime stabilization tank and equipped with a mechanical mixer. Waste sludge will be transferred to the lime stabilization tank by a recessed impeller pump. Utilizing the existing tankage would require that a batch process of sludge stabilizer be run approximately 7 - 10 days. Based on 0.75 % solids, this would require approximately four trucks per week. MAR/ch/R10/Sec2.rpt HAI k94-162.03 2-7 TABLE 2-4 AERATION BASIN DESIGN SUMMARY EXTENDED AERATION MODE Process Parameter Value Volumetric Loading @ ADF, (lb. BOD/1000 CF/Day) 13.7 Hydraulic Detention Time, (HR) 24.0 Side Water Depth, (FT) 12.5 Nominal Tank Volume, * (GAL) 300,000 F/M Organic Loading, (lb. BOD/lb MLVSS/Day) 0.105 MLVSS, (mg/1) 2100 Carbonaceous Oxygen Demand, (lb. 02/lb. BOD) 1.5 Nitrogenous Oxygen Demand, (lb. 02/lb. TKN) 4.6 Minimum Mixing Requirements, (SCFM/1000 CF) 20 Required Air Flow, SCFM (Process Limited) 990 No. of Operating Tanks 1 MAR/ch/R10/2-4. tab HAI #94-162.03 2-8 TABLE 2-S CLARIIJER DESIGN SUMMARY Process Parameter Quantity Area, (SF) SWD, (FT) Hydraulic Loading @ ADF, (GPD/SF) Hydraulic Loading @ Qp, (GPD/SF) Design Recycle Rate (Qr), Percent ADF Value 1 550 8-12 545 818 150 MAR/ch/R 10/2-5. tab HAT #94-162.03 2-9 r-. It is understood that ORCA will provide a lime storage area. We recommend it be at ground 17 level and have sufficient space for two pallets of lime. Anticipated hydrated lime usage is expected to be approximately one pallet per month. A motorized lift will be furnished by the design/builder which will transport the bag lime from the storage building up to the lime slurry mix equipment. The lime slurry will then be added to the sludge stabilization tank. 2.11 PLANT MONITORING AND CONTROL A flow recording device will be provided in the chlorine contact tank. It shall be the ultrasonic type and be equipped with a circular chart recorder. 2.12 CHLORINATION SYSTEM We understand the chlorine solution feed system will be in place and not require any modification other than connecting to the solution feed line. 2.13 SITE FEATURES 2.13.1 Access The Florida Administrative Code does require access control around wastewater facilities. We have not included fencing in this proposal. 2.13.2 Li htin Site and tank top lighting is not proposed for the WWTP. 2.13.3 Landscaping Landscaping is not proposed. MAR/ch/R10/Sec2.rpt HAI #94-162.03 2-10 C 2.13.4 Drainage ® Since the tankage is open and there are no other impervious areas, there will be no significant stormwater run-off from the WWTP. Thus, no provisions for stormwater run-off are incorporated in the overall detention facility plan. U1 U11 MAR/ch/R10/Sec2.rpt HAI #94-162.03 2-11 f _o SECTION 3 MATERIAL AND EQUIPMENT 3.1 GENERAL The design -builder shall furnish and install the equipment necessary for the effective operation of the wastewater treatment plant, including piping, valves, fittings, blower/motor units with enclosure, hopper type clarifier with skimmer assembly and return sludge piping for the flow equalization, walkway with handrails, access ladder, electric control panels, and chlorine contact basin. 3.2 GENERAL MATERIALS OF CONSTRUCTION The treatment tankage shall be constructed of poured -in -place reinforced concrete. An engineer registered in the State of Florida shall design the structural elements of the tankage. Our proposal is based on the site having a minimal bearing capability of 2,000 psf. Non -corrosive polyvinyl chloride (PVC) piping and fittings shall be used where possible. Standard flexible type transition fittings shall be used where possible for inter -tank transfer lines. Nuts and bolts used in bolting equipment in place shall be hot dipped galvanized steel. Chlorine solution piping shall be schedule 80 PVC. 3.3 ELECTRICAL SYSTEM We have verified that 3-phase power is readily available. NEMA type 3R enclosures, fabricated of 12 gauge steel shall house the control equipment. The panels shall be gasketed and dust tight. Panels shall have a front door capable of opening approximately 180 degrees. The exterior of the panel shall be coated with an enamel finish. The outside door shall be held closed by lock -down clips. Equipment mounted in the panel shall be securely fastened to the removable back panel. The back panel shall be tapped to accept the mounting screws. Thermal magnetic air circuit breakers shall be provided to branch disconnect service and over current protection of motors, control and auxiliary circuits. Magnetic across -the -line starters MAR/ch/R10/Sec3.rpt HAI #94-162.03 3-1 with under -voltage release and heat sensing coils for each phase shall be provided to give r positive motor protection. Low voltage control wiring shall be encased in plastic wireway mounted with screws. The panel shall have warning tags specifying voltage, phase, and danger. A wiring diagram shall be provided in the panel. The control panel shall meet NEMA and/or N.E.C. standards. On -plant electrical wiring shall be encased in rigid Schedule 40 PVC conduit. Flexible liquid tight conduit shall be used where possible to make connections from conduit to motor boxes and other equipment. Wiring and conduit shall be in accordance with NEMA and N.E.C. standards. 3.4 PAINT SYSTEM Painting is not proposed for this project. During our visit of the facilities, it was noticed that neither the interior or exterior of the existing tanks were coated and thus, have not proposed it for this project. Only PVC piping shall receive the appropriate coating for ultraviolet protection. 3.5 PRETREATMENT Existing force mains will be rerouted into the proposed pretreatment unit. The mechanical bar screen will be of a type as manufactured by Vulcan. The influent structure will either be constructed of welded aluminum or concrete. The discharge chute shall also be aluminum. 3.6 FLOW EQUALIZATION AND AERATION TANKAGE 3.6.1 Blowers The existing blowers shall be utilized for the proposed aeration tankage. Dual single - stage regenerative blowers shall be provided for the flow equalization tank. The proposed blowers and motors shall be mounted on a structural steel blower skid, shipped loose to mount on a concrete slab. Each blower/motor unit shall be equipped with a metal belt guard, which shall comply with OSHA specifications. The blower MAR/ch/R10/Sec3.rpt HAI #94-162.03 3-2 1 :t l kid shall be equipped with pressure relief valves, discharge check valves and blower s eQ PP intake filters. The blower skid shall be isolated from the treatment plant by the use of vibration dampeners in the piping system. The pressure relief valve shall be of the spring -loaded type. The valve shall be equipped with an adjustable spring. The spring shall be protected from corrosion by heavy-duty axle grease. The valve shall be mounted on the air header system. The pressure relief valve shall be factory tested and adjusted prior to shipment. Each blower shall be provided with an intake filter and, if required, a discharge silencer. The intake filter shall remove dust and particulate matter from the air to a minimum size of 10 microns. The intake filter shall be mounted on the blower intake connection. 3.6.2 Air Header and Air Diffusers The plant air header system shall be aluminum.The headersystem will be located so as to provide maximum space along walkways. The diffusers shall be non -corrosive, lightweight, and removable without dewatering the compartment. Each diffuser shall be constructed of stainless steel suitable for waste water service. Diffusers shall be Sanitaire D-24 model coarse bubble. The diffuser arrays shall be spaced to provide efficient oxygen transfer. A Schedule 80 PVC drop pipe shall be provided with a bronze isolation valve. A union shall be provided to permit easy removal from the tank without the need for mechanical lifting devices. 3.6.3 Walkway and Handrail The plant shall be equipped with a service walkway extending over the tank allowing for ease of maintenance of the equipment. The walkway shall be constructed of structurally supported aluminum grating panels or concrete. If grating is utilized, sections shall be provided with cut-outs for access to air control valves. MAR/ch/R10/Sec3.rpt HAI #94-162.03 3-3 The access stairs shall be of all aluminum construction. An aluminum handrail system shall extend along the entire length of the walkway on both sides. The vertical handrail posts and horizontal handrails shall be constructed of aluminum and may be attached to the air header system. Walkway, handrail and ladder shall be in accordance with OSHA specifications. 3.7 CLARIFIERS The clarifiers will be of the hopper type design. The clarifiers shall be equipped with an inlet energy dissipation structure, surface skimmer, sludge airlift, scum baffle and adjustable effluent weir. The hopper side slope shall not be less than 601 from the horizontal plane and shall have a sludge collector sump of approximately one foot square. The clarifier shall be equipped with a 3-inch sludge airlift for sludge transfer and a 3-inch skimmer for floating solids. The sludge return system shall be adjustable and designed for a recirculation capacity of up to 150 % of average daily flow and shall transfer settled sludge to the aeration tank or the digester. Flow adjustment of the air lift shall be accomplished using air control valves. 3.8 WASTE SLUDGE HOLDING An area of the treatment unit will be partitioned to function as the aerobic sludge holding tank. Air diffusers will be provided in this section similar to those described for the aeration basin. This section will be equipped with a floating decanter pipe to remove excess water from the digested sludge, which will decrease the volume of sludge to be transferred to the lime stabilization tank. 3.9 LIME STABILIZATION TANK ry equipment will be provided. All material and equipment A lime slurry mix tank and accesso furnished will be non -corrosive and suitable for the application intended. The existing plant water service will be extended from the nearby hose bib for use in mixing lime. MAR/ch/R10/Sec3.rpt HAI /194-162.03 3-4 0 The line stabilization tank will be equipped with a mechanical mixer. The materials of it will also be suitably selected to provide corrosion resistance. In order to facilitate ease of operations, a lime bag lift will be provided that will permit the bag lime to be loaded below and raised to the lime slurry mix equipment. The lift will be constructed from non -corrosive material suitable for the application. V V MAR/ch/R10/Sec3.rpt HAI #94-162. 03 3-5 11 Cronin, Jackson, Nixon & Wikon CERTIFIED PUBLIC ACCOUNTANTS. P.A. JAMUL CAALSMT. CP.A. jWN jr. CAS JAL Ct.A_ Aowrjr.rAc=W- CPA APAMbA W. AhA4AM9 CPA ROM"r c NOW. CPUL JAMML- WJltUW, GM. To the officers and Directors North Rey Largo Utility Corp. 25W GULF-TV44 Y MOULEVARD SUITQM CLlEARWAUX FLORIDA SOM-019 (813) "I-AW nuUMV/•>XX August 1, 1994 We have compiled the accompanying Special Report of North Key Largo Utility Corp., consisting of actual, annualized, and projected statements of cash flow before debt service for the eight years ending December 31, 1998. This Report was prepared to provide information to management concerning the financial feasibility of a transfer of utility assets from Ocean Reef Club, Inc. to North Rey Largo Utility Corp. and the amount of debt service the utility system could support under new operation and ownership, and should not be used for any otbar purpose. A compilation is limited to presenting, in the form of actual and projected data, information that is the representation of management and does not include an evaluation of the support for the assumptions underlying the presentation. We have not examined this special Report and, accordingly, do not express an opinion or any other form of assurance on it or the assumptions disclosed therein. rurthermore, there will usually be differences between the actual and projected results because events and circumstances frequently do not occur as expected and those differences may be material. We have no responsibility to update this Report for events and circumstances occurring after the date of this Report. , f �-� W M-; �w /" & W, C, IL'� 4 �-Ww' . CRONIN, JACKSON, NIXON & WILSON Z 4;:06008L8b06 q�-99777 : WdTS:£ b6-T -8 : G :AS 1N3S a North Key Largo Utility Corp. Actual, Annualit@d, and Projected Statements of Cash Flow For the Eight Years Ending December 31, 1998 Summary of Significant Projection assumptions The financial projection premants to the best of management's knowledge and belief, North Key Largo Utility Corp.'s (company) expected cash flow before debt service and the amount of bonds which could be issued and serviced, based on the assumptions and estimates set forth below. The projections contained herein reflect managenentle bast estimate of the expected cash flow from operations as of August 1, 1994, the date of this projection. The presentation is designed to provide information about the feasibility of financing approximately $3.1 million in tax exempt Industrial Development Revenue Bonds. The assumptions and estimates disclosed herein are those that management believes are sicnificant to the projection. There will usually be differences between the projected and actual results because events and circumstances frequently do not occur as expected and those differences may be material. 1. General desgrrip i on North Key Largo Utility Corp. is a private wastewater utility located on North Key Largo, Florida. The Company intends to serve the community of ocean Reef Club and is organized as a not -for -profit corporation owned and controlled by the residents who receive sewer utility service. The Utility desires to obtain approximately $3.1 million in bond proceeds which will be used to acquire the existing utility assets from ocean Reef Club, Inc. and construct a new wastewater treatment and disposal facility, At December 31, 1993, the system provided service to approximately 1,143 Equivalent Residential Connections (ERC's). These connections consist of single family homes, multi -family residences, and a variety of ® commercial services. Currently, the system is regulated by the Florida Public service commission. The Commission determines the rates and charges which are billed the residents of Ocean Reef Club. Under operation and ownership of North Key Largo Utility Corp., it is expected that the system will be exempt from Commission regulation. II. Projected absorption Historically, the system has connected approximately five new ERC's as customers each year. The projection assumes this trend will continue throughout the projection period. Additionally, service was extended to 200 dock slips at the marina in 1994. Revenue from these slips amounts to approximately $22,000 annually, and represents approximately 56 ERC's. £ #:06009LGb06 t-99TTZ WC2S:£ b6-7 -S . U ; AS 1N3S III. Proiected revenue Projected revenue was based on the average annual revenue per ERC. During 1993, annual revenue per ERC amounted to $388. The projection assumes a 7% increase in 1994, with no projected increases thereafter. No projected increases for inflation were made, since the Company intender to increase revenue to offset any increases in expenses, if necessary. IV. Proiect Operating expenses for the year ended December 31, 1993, were analyzed and divided into fixed and variable expenses. - Variable expenses consist of sludge removal, purchased power, and chemicals. All other operating expenses were assumed to be fixed. The following assumptions and estimates were used for the annualized year ended December 31, 1994, and throughout the projection period. 1. 1993 variable expense per ERC amounted to $55. Annual increases in variable expenses were based on the projected effective ERC's. 2. 1993 discretionary management fe*s and other contract services paid to a related party were reduced to an annual amount of $30, 000. Management teas are paid for billing, accounting, and management services. 3. Under Florida Public service Commission (PSC) jurisdiction, the system pays regulatory assessment fees based on 4.5% of operating revenue. Also, the system pays local property taxes and payroll taxes. The projection assumes that North Key Largo Utility Corp. will become exempt from PSC regulation. Therefore, regulatory assessment fees totalling approximately $20,000 in 1993 have been excluded from the projection. Also, since the Company is a not -for - profit corporation, local property taxes have been excluded from the projection. V. Bonding CADA2 *1 Based on projected 1994 cash flow of approximately 0276,000, the Company will have sufficient net revenue to service a $3.1 million bond issue, based on 30-year amortization, an interest rate of 7%, and a coverage requirement of 1.10 times. b :05008GSb0o f-99T72! : WJZS:i b6-7 -8 : G:AS 1N3S North Key Largo Utiiiiy Corp. Wastewater Operating Division Utility Bonding Capaddty Based on Projected 1904 CaM Flow Cash flow available for debt service DM& by ooverago fador Cash flow not of coverage Annual debt asnrlos on 30 year 69,100.000 bond issue, Ili, Interest rate. I&M annual payments of principal and Imeram s 270,000 1,10 8 259_OOQ Schedule No,1 Page 1 of Q S # s 0b008LBt*6 f-99T TZ : Wd£S : £ bG—T —a : d : AS 1NM North Key Largo UtIlky Corp. Amortization Schedule s9,100,000 on January 1, 1 s08 at TV. Interest with 30 annual payments Payment Interest Principal Total Remaining Number Pawnent Date PaYment Payment Pamwrn Balance 1 January 1. 1am = 217,000 S 32,818 $ 249.818 t 0.0157,182 2 January 1, 1997 214,703 35,116 240.818 3,032,007 3 January 1, 1900 212,245 37,573 249.016 2,994,494 4 January 1, 1999, 209.515 40,203 249,810 2.954,291 3 January 1. 2000 206,800 43,0/a 249,813 2,911.273 0 January 1, 2001 203,789 45,029 249,018 2,a05,244 7 January 1. p002 200,567 49,291 242,516 2,21d,990 a January 1. 2000 197.120 62,698 249,818 2,76%295 9 January 1, 2004 103,431 58,987 240,818 2,704908 10 January 1, 9005 109,484 80,334 249,815 2,646,574 11 January 1, 2006 185.260 54,55a 249,ai8 2,502,01a 12 January 1, 2007 100.741 0910T7 249,ala L012.939 13 January 1. 2008 173,900 73,912 249,016 2,439,027 14 January 1. 2009 170,732 79,086 249,018 2,859,941 15 January 1. 2010 165,198 84,622 249,818 2,276,319 16 January 1, 2011 1159,272 90,a46 240,a18 2,184,773 17 January 1. 2019 162,034 98,884 240,818 2,087,889 18 January 1. 2013 148,162 103,666 249,818 1,084,229 19 January 1, 2014 138.596 110,922 249,818 1,879,301 20 January 1, 2015 131,131 118,687 249,818 1,754,014 21 January 1, 2010 122.023 125,995 242,818 1.027.419 22 January 1, 2017 113,933 135,885 249,816 1.401.734 23 January 1, 2010 104,421 145,897 242.813 1.94a,aa7 24 January 1, 2019 94,244 155.574 249,618 1,190,763 25 January 1, 2020 63,353 168,463 240,818 1,0244,208 26 January 1, 2021 71,701 178.117 249.818 846,161 27 January 1, 2022 59,233 190,855 242,510 085.59a 2a January 1, 2023 45.892 203.920 249.at0 451.670 29 January 1, 2W4 31,017 210.201 249,ata 208,469 30 January 1, 2026 10,343 233,469 249,818 0 Total ,� 4.304.534 "A QQ,000 4 7.494.640 8ctwdub No.1 Pape 2 of 2 9 #'06008L8b06 t-99 T T Z : Wd£S:£ b6-T -8 : t1:A8 1N3S Its 10 L #:0600SL8b06 �99TTZ : WdbS:£ b6-T -8 : tl : AG 1N3S im §� 2 �- b - - � k� _ ■ § K■ § ■ - ■ s ■ � ■ ■ f ■ - g $ # � § e _ ■ � � § ® & � E a a � � § B � r 1 e #=06@GeLs06 (-99TTE : w s : - - : tJ:AG IN3G Worth Kay largo Utility Corp. Wastawater Operating Division Annualized Fixed and Variable 0 & M Expense For the Year Ended December 31, 1 ON Unaudited Adiuslod Total Adlustments Total H Wades and wages — etnpi0y*m $ 55,670 $ $ 05,870 EMk yee pe. wkx^s and benefits 8,306 9,906 Ccr*wwW service — engineering 3,480 3,480 Co * ac%W Mrvioe — a000untlrrg 8,786 8,785 Cono7 aww "r4l" - N40 2001 2,001 oorferaotusl setvioe - managsrnaMfee 121,800 (101.800) (A) 20.000 Carttrra ww "Moe - other 30,888 (20,888) A 10,000 PAnW of equonumt 5017 0,017 Transpormbon wponas 4,485 4,465 ingumrm — gwmW liability 1.60o 1,000 kwurwwe - workman Comp. 1,440 1,410 bAYcMlerts+:x�sGVPWM 3,067 3,067 Maudais and supplies 2,438 2,438 Totalfbaad wgwnses VadabM *= r" Sludge removal a*erne Pwalwnd power ChemicoM Divide by 1 W3 average ERC's Vw*bis sxpwm per ERC S 281 A38 $ f� $ $ 20,440 s S 20,440 35,000 35,000 7,270 7,270 S 82.710 S_ 0 S (A) Ellminft disoretionery portion of management fee (9) Remove non —reavying contractual services —other Li --- :.. Schedule No. 3 Page 2 of 2 6 #:06008LM6 r9917Z : w8ss:E b6_1 -8 : U:AE 1N3S North Key Largo Utility Corp. Wastewater Operating Division Adjusted Operations and Maintenance (O & " Dc)onse Year Ended December 31,1993 AOMI 0 & M expense per annual reports LMr Discmum aM managerrant fee Non —recurring contractual services — other Ad$noed 0 a M expense 1869 $ 323,748 (101,800) (20,M) (1ZZ,[fIBZ s 2Q1.ot� Ocheduls No. A 0T#:06008G8706 r99TTZ : W89S:F b6-7 -8 : d:A8 INM e41 t CLASS "B" WATER and/or SEWER UTILITIES (Gross Revenue of $150,000 or More but Less Than $750,000 Each) ANNUAL REPORT OF Ocean Reef Club, Inc- — EXACT LEGAL NAME OF RESPONDENT 363—S Certificate Number(s) •Z �-i IF. FOR THE MAY 1994 .rjo--fc'j pub!j,; terv;ce (:omrmision if YV.:tar. any Wastew—ter YEAR ENDED DECEMBER 31,1993 Form PSC/WAS 5 (Rev. 12/22/86) :t Cronin, Jackson, Nixon & Wilson CERTIFIED PUBLIC ACCOUNTANTS, P.A. JAMES L CARLSTEDT. C.P.A. JOHN H. CRONIN, JR-, C.P.A. ROBERT H. JACKSON, C.P.A. BRENDA W. MCBARRON. C.P.A. ROBERTC. NIXON, C.P.A. HOLLYM. TOWNER C.P.A. JAMES L WILSON, C.P.A. officers and Directors Ocean Reef Club, Inc. 2560 GULF -TO -BAY BOULEVARD SUITE 200 CLEARWA TER. FLORIDA 34625-4419 (813) 791-4010 TELECOPIER (813) 797-3601 May 27, 1994 We have compiled the 1993'Annual Report of Ocean Reef Club, Inc. in the accompanying prescribed form, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Our compilation was limited to presenting, in the form prescribed by the Florida Public Service Commission, information that is the representation of the management of Ocean Reef Club, Inc. We have not audited or reviewed the report referred to above and, accordingly, do not express an opinion or any form of assurance on it. This report is presented in accordance with the requirements of the Florida Public Service Commission, which differ from generally accepted accounting principles. Accordingly, this report is not designed for those who are not informed about such differences. O CRONIN, JACKSON, NIXON & WILSON General Instructions 1. Prepare this report inconformity with the 1984 National Association of Regulatory Utility Commissioners Uniform System of Accounts for Water and/or Sewer Utilities. 12. Interpret all accounting words and phrases in accordance with the USDA. 3. Complete each question fully and accurately, even if it has been answered in a previous annual report. Enter the word "None" where it truly and completely states the fact. 4. For any question, section, or page which is not applicable to the respondent enter the words "Not Applicable". Do not omit any pages. 5. Where dates are called for, the month and day should be stated as well as the year. 6. All schedules should be rounded to the nearest dollar unless otherwise specifically indicated. 7. Complete this report by means which will create a permanent record, such as by typewriter. 8. If there is not enough room on any schedule, an additional page or pages may be added provided the format of the added schedule matches the format of the schedule of the page with not enough room. Such a schedule should reference the appropriate schedules, state the name of the utility, and state the year of the report. 9. If it is necessary or desireable to insert additional statements for the purpose of further explanation of schedules, such statement should be made at the bottom of the page or an additional page inserted. Any additional pages should state the name of the utility, the year of the report, and reference the appropriate schedule. 10. The report should be filled out in quadruplicate and the original and two copies returned by March 31 of the year following the date of the report. The report should be returned to: Florida Public Service Commission Division of Water and Sewer 101 East Gaines Street Tallahassee, Florida 32399-0873 TABLE OF CONTENTS Schedule Page Schedule Paqe _ Executive Summary Certification E-1 Directors and Affiliates E-7 General Information E-2 Affiliation of Officers and Directors E-8 _ Directory of Personnel Who Contact the Fla. Businesses Which Are A Byproduct, Coproduct Public Service Commission E-3 or Joint Product of Providing Service E-9 Company Profile E-4 Business Transactions With Related Parties Parent/Affiliate Organization Chart E-5 — Part I and II E-10 Compensation of Officers & Directors E-6 Composite of Statistics E-11 Business Contracts With Officers. _ Financial Section Comparative Balance Sheet — Assets Companies F-13 F-14 And Other Debits F-1 Capital Stock — Comparative Balance Sheet — Equity Long Term Debt F-14 Capital and Liabilities F-2 Statement of Retained Earnings F-15 Comparative Operating Statement F-3 Bonds F-16 Schedule of Year End Rate Base F-4 Advances From Associated Companies F-16 Utility Plant F-5 Accrued Taxes F-17 Utility Plant Acquisition Adjustments F-5 Accrued Interest F-18 Accumulated Depreciation F-6 Regulatory Commission Expense — Rate Case Expense F-18 _ Accumulated Amortization F-6 Amortization of Nonutility Property F-7 Misc. Current and Accrued Liabilities F-19 Special Deposits F-7 Advances for Construction F-19 Investments and Special Funds F-8 Contributions In Aid Of Construction F-20 Accounts and Notes Receivable — Net F-9 Additions to CIAC Received from Accounts Receivable From Associated Capacity, Main Extension and Companies F-10 Customer Connection Charges F-21 F-21 Notes Receivable From Associated Co. F-10 Accum. Amortization of C.I.A.C. Prepayments F-11 Additions to CIAC Received from Miscellaneous Deferred Debits F-11 All Developers or Contractors Unamortiz,,d Debt Discount and Agreements F-22 Expense and Premium on Debt F-12 Reconciliation of Reported Net Extraordinary Property Losses F-13 Income With Taxable Income For Notes Payable F-13 Federal Income Taxes F-23 Accounts Payable to Associated F-13 AFUDC Calculation F-24 AFUDC Capital Structure Adjustments F-25 Water Operation Section Water Utility Plant Accounts W-1 Statistics W-6 . Water Utility Expense Accounts W-2 Water Treatment Plant, Mains, _ Water Operating Revenue W-3 Services and Meters W-7 Basis for Water Depreciation Charges W-4 Wells and Well Pumps, Reservoirs, Analysis of Entries in Water and High Service Pumping W-8 Depreciation Reserve W—S Other Water System Information ERC's W-9 W-10 Pumping and Purchased Water Calculation of Sewer Operation Section Sewer Utility Plant Accounts S-1 Pumping Equipment and Service S-6 Sewer Utility Expense Accounts S-2 Connections S-7 Sewer Operating Revenue S-3 Collecting and Force Mains Information S-8 Basis for Sewer Depreciation Charges S-4 Other Sewer System Analysis of Entries in Sewer Calculation of ERC's S-9 Depreciation Reserve S-5 5 EXECUTIVE SUMMARY r r L,':n i _ -S-% 1',; :'(T GI: it 7 r"-n T F! I i (.•, ii1;'ft l !.::`. 1, i l� to i •. -li UTILI i Y :'f, Mff.: ,_ �__•._._ :��!vn ; :ice i C!L�Ii, in :r.•V.�a�.��....,(/�''7''•'c'_.,FOj; J:/'.�. 'i�1�Y, .��,�Y`�:•.I v.CT y T1 (i. ,!{� ' n♦ ; i.: j•: ifS s:i il:](•t� C. to ut!, is i?1 Q-Jt7��:r; !;! Cvi„ C9'r! kh �i`r"� � StiCC9U"1ii �(ilit�i'd r':r� buyI;'i i Flrj;ii a F'l.ii_;au'ic'n. %q: N0 ., 1 t) () 2, fdIt y!3 !tl l tiF�i3 f. iG 4 1 , !fif.'=i:•,! !• ,,�i . rj.•+! ,_r r, ,,, ,. ate• f.l;f�i if'+;'it r"1` V''rl.'�:St':�:n 531�i;i',.:i:('31�i.•�ill",3 tifly. a rn :i: i' , ...U.-a ril r.f i•: ' YX j CNO, 4.lii:i Hit;i'!r>! ?:�`J(t isl(!y i.r,rR;Git'j?$ i': 1 ' t,i=l i r .s a.. S n 1' (< h r h!f:1ij �,'•. R•v� iI!, Ci ii-nd otliar CA ::y;!3i�_.l•�1?it i.1 t, � 8�()G,,,.::rt�i ,•-� t � ,3�. ! ..1 a a 4! � r.• a� r it1U w'i}.�sPf,,:lltti pfii,—,zn�.jd :n irLai ?:•^.i'{ wad t'U c�i� i:It Y!;cSv: f;G?i avt 31 i ,".' 'P �E t`T or O;a a lirD� �fw!i t;,4 il;a ,•, r•;SClt�t`•'di,. era ii1?, , i for it w r al,r:,a, a �...i--y': •.•:• w:p.n'1. •,•r;y:.yl:: r!"nr�:.`ctY '.:str:;Mkt:-+u.r..uul�.��.1r7.'rr::Ti ....�.+t•:r.=::1)r'•e:�S �"..•:::�,:vl :lU'�.r:�:�.y., i :�.. -Y I it lt% VI (��: •y .��i+i 5�s:/13 :1 Y'L .�.tl ;, .'31 refit t:t!'tj} r�;;tva•• f l% "li0 �.iit:-i':4'il a'•.•�`�" r ' r r• � •, .. a .� y--' lip:.+ :.3 (;' :�, ri .i 1, t. .•{ �'. ..r:1 � pr:: >.,. P•1;:. !; :l C. 1 JI �. •,:o IGUr :: a.it?i5 t�:?1.;. t C f,. ��i '. a� :, .i ,i:( , �ttl !i�•r: v! z•(Z.::.,f{ 3 .V:� .n• •,! ,•_r•• ,r r,. in ,` •� r' I,j•r�!• 'ail•' 'i'j-�, '„i5} ii::r=` i !: •(b,�� t. `.�•isl.tii V !3y !! .') i.11 :i.• i �Ii'7ll1'. :'•r _i2G �. 11 jj'. `. �. r' .r.. ;-j.^., •N .f<! � sl, r,'4 `..� r I,i 0• � J. J'`!_ ,1�, i n�. r':i i:c.•n "ll: t{i :i: �', :rti i� ' 1'I:i" f i_':i 'et'iTdat i't,'lllia V Il 111'y ,.'�U11�� •.4 ii";i,•{='':, i,. � ;+ iP;.c, t'r: ani I!1 1�'; �:' , �•,�h' !,{,.:!i i..':n � .'1• lo�i :n I:�•.. ..7•i �..rslir( ��1 ti :�J :•'i''i^!li? 1;"���;',%�• •!!1 Ocean Reef Club. Inc. ANNUAL REPORT OF County: Monroe (Exact Name of Utility) List below the exact mailing address of the utility for which normal correspondence should be sent: 31 Ocean Reef Drive C-300 Ke Largo, Florida 33037 Telephone: 30S 367-2611 Name and address of person to whom correspondence concerning this report should be addressed: Robert C. Nixon, CPA Cronin Jackson, Nixon and Wilson, CPA's 2560 Gulf —to —Bay Blvd, Suite 200 Clearwater Florida 33625 Telephone: 813 791-4020 List below the address of where the utility's books and records are located: 31 Ocean Reef Drive C-300 Key Largo, Florida 33037 Telephone: ( 305 367-2611 List below any groups auditing or reviewing the records and operations: Cronin, Jackson, Nixon and Wilson, CPA's McGladrev & Pullen Date of original organization of the utility: 1 / 1 / 86 Check the appropriate business entity of the utility as filed with the Internal Revenue Service: Individual = Partnership = Sub S Corporation 1, Av 1, 1120 Corporation List below every corporation or person owning or holding directly or indirectly 5 percent or more of the voting securties of the utility: 1. Ocean Reef Ulub, Inc. 2. 3. 4. 5. 6. 7. 8. 9. 10. t Name Percent Ownership 100 % o/ 0 o/ 0 % ° o/ ° °/ ° E-2 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31,1993 OF PERSONNEL WHO CONTACT THE FLORIDA PUBLIC SERVICE COMMISSION DIRECTORY NAME OF TITLE ORGANIZATIONAL USUAL PURPOSE COMPANY OR UNIT FOR CONTACT REPRESENTATIVE 1 2 POSITION TITLE 3 WITH FPSC Robert C. Nixon CPA Cronin, Jackson, Accounting and rate Nixon & Wilson matters Marty Deterding Attorney Rose Sundstrom & Bentley Legal matters (1) Also list appropriate legal counsel, accountants and others who may not be on general payroll. (2) Provide individual telephone numbers if the person is not normally reached at the company. (3) Name of company employed by if not on general payroll. E-3 YEAR OF REPORT UTILITY NAME: Ocean Reef Club Inc. December 31,1993 COMPANY PROFILE Provide a brief narrative company profile which covers the following areas: A. Brief company history. B. Public services rendered. C. Major goals and objectives. D. Major operating divisions and functions. E. Current and projected growth patterns. F. Major transactions having a material effect on operations. (A) The Company was organized in 1969 to provide sewer treatment service to the residents of Ocean Reef Club on Key Largo, Florida. (B) Sewer service only (C) To provide adequate sewage treatment service and provide a fair rate of return to the stockholders. (D) Sewage treatment (E) The service area is nearing build —out. Growth is expected at about 1% annually. (F) The Ocean Reef Utility Company was purchased March 1, 1993 by Ocean Reef Club, Inc. as a operating division. Certificate transfer was approved under Docket No. 930436—SU. E-4 YEAR OF REPORT December 31.1993 UTILITY NAME: Ocean Reef Club, Inc. PARENT / AFFILIATE ORGANIZATION CHART Current as of 12 / 31 193 Complete below an organizational chart that shows all parents and subsidiaries a) and f the utility. The chart must also show Ocean Reef Club, Inc. 100% Utility Operating Division E-5 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31 1993 COMPENSATION OF OFFICERS For each officer, list the time spent on respondent as an officer compared to time spent on total business activities and the compensation received as an officer from the respondent. NAME a TITLE (b) % OF TIME SPENT AS OFFICER OF UTILITY c OFFICERS COMPENSATION d Thomas N. Davidson Chairman — % % $ $ None None Alan J. Goldstein Vice Chairman 5 % $ None John J. Hrad President % $ Robert R. Ambridge Senior Vice President — Property Development 5 % $ None Allen F. Anderson Vice President — Marketing — % $ None Kenneth A. Luban Vice President & Secretary 5 % $ None James M. Truckenbrod Vice President — Finance 5 % S None 4o S COMPENSATION OF DIRECTORS For each director, list the number of director meetings attended by each director and the compensation received as a director from the respondent. NAME a TITLE (b NUMBER OF DIRECTORS MEETINGS ATTENDED c) DIRECTORS COMPENSATION (d Thomas N. Davidson Chairman 1 $ None Alan J. Goldstein Vice Chairman 1 $ None John R. Hrad President 1 $ None Robert R. Ambridge Senior Vice President — $ Property Development 1 $ None Allen F. Anderson Vice President — Marketing 1 $ None Kenneth A. Luban Vice President & Secretary 1 $ None None James M. Truckenbrod Vice President — Finance 1 $ E-6 !I 1:1 - I ei - I i -1 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31,1993 BUSINESS CONTRACTS WITH OFFICERS, DIRECTORS AND AFFILIATES List all contracts, agreements, or other business arrangements* entered into during the calendar year (other than compensation related to position with Respondents) between the Respondent and officer and director listed on page E-6. In addition, provide the same information with respect to professional services for each firm, partnership, or organization with which the officer or director is affiliated. NAME OF OFFICER, DIRECTOR OR AFFILIATE a) IDENTIFICATION OF SERVICE OR PRODUCT bl AMOUNT c NAME AND ADDRESS OF AFFILIATED ENTITY d) None $ * Business Agreement, for this schedule, shall mean any oral or written business deal which binds the concerned parties for products or services during the reporting year or future years. Although the Respondent and/or other companies will benefit from the arrangement, the officer or director is, however, acting on his behalf or for the benefit of other companies or persons. E-7 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 AFFILIATION OF OFFICERS AND DIRECTORS For each of the officials listed on page E-6, list the principal occupation or business affiliation and all affiliations or connections with any other business or financial organizations, firms, or partnerships. For purposes of this part, an official will be considered to'have an affiliation with any business or financial organization, firm or partnership in which he is an officer, director, trustee, partner, or a person exercising similar functions. NAME a PRINCIPAL OCCUPATION OR BUSINESS AFFILIATION b AFFILIATION OR CONNECTION c NAME AND ADDRESS OF AFFILIATION OR CONNECTION d Thomas N. Davidson Chairman Ocean Reef Club, Inc. North Key Largo, Florida Alan J. Goldstein Vice Chairman Ocean Reef Club, Inc. North Key Largo, Florida John R. Hrad President Ocean Reef Club, Inc. North Key Largo, Florida Robert R. Ambridge Senior Vice President — Property Development Ocean Reef Club, Inc. North Key Largo, Florida Allen F. Anderson Vice President — Marketing Ocean Reef Club, Inc. North Key Largo, Florida Kenneth A. Luban Vice President & .Secretary Ocean Reef Club, Inc. North Key Largo, Florida James M. Truckenbrod Vice President — Finance Ocean Reef Club, Inc. North Key Largo, Florida E-8 t 1 t UTILITY NAME: Ocean Reef Club, Inc. YEAR OF REPORT December 31.1993 BUSINESSES WHICH ARE A BYPRODUCT, COPRODUCT OR JOINT PRODUCT RESULT OF PROVIDING WATER OR SEWER SERVICE Complete the following for any business which is conducted as a byproduct, coproduct or joint product as a result of providing water and/or sewer service. This would include any business which requires the use of utility land and facilities. Examples of these types of businesses would be orange groves, nurseries, tree farms, fertilizer manufacturing, etc. This would not include any business for which the assets are properly included in Account 121 — Nonutility Property along with the associated revenues and expenses segregated out as nonutility also. E-9 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. I December 31 1993 BUSINESS TRANSACTIONS WITH RELATED PARTIES List each contract, agreement, or other business transaction exceeding a cumulative amount of $500 in any one year, entered into between the Respondent and a business or financial organization, firm, or partnership named on pages E-2 and E-6 identifying the parties, amounts, dates and product, asset, or service involved. Part I. Specific Instructions: Services and Products Received or Provided 1. Enter in this part all transactions involving services and products received or provided. 2. Below are some types of transactions to include: — management, legal and accounting — material and supplies furnished services — leasing of structures, land and _ — computer services equipment — engineering & construction services — rental transactions — repairing and servicing of equipment — sale, purchase or transfer of various products NAME OF COMPANY OR RELATED PARTY a DESCRIPTION SERVICE AND/OR NAME OF PRODUCT b CONTRACTOR AGREEMENT EFFECTIVE DATES c ANNUAL CHARGES (P)urchased / or / (S)old / AMOUNT d) e Ocean Reef Club, Inc. Management & accounting Open P $ 121,800 E-10(a) BUSINESS TRANSACTIONS WITH RELATED PARTIES (Cont'd) Part II. Specific Instructions: Sale, Purchase and Transfer of Assets Enter in this part all transactions relating 3. The columnar instructions follow: 1. to the purchase, sale or transfer of assets. (a) Enter name of related party or company. 2. Below are examples of some types of (b) Describe briefly the type of assets purchased, sold or transferred. transactions to include: (c) Enter the total received or paid. Indi- "S". - purchase, sale or transfer of equipment. cate purchase with "P" and sale with d Enter the net book value for each item () — purchase, sale or transfer of land reported. and structures. — purchase, sale or transfer of securities. e Enter the net profit or loss for each item () (column (c) — column (d)). — noncash transfers of assets. dividends other than stock (� Enter the fair market value for each item below or in a sup — — noncash dividends. reported. In space schedule, describe the basis —. writeoff of bad debts or loans. plemental used to calculate fair market value. SALE OR NET GAIN NAME OF COMPANY PURCHASE BOOK OR PRICE VALUE LOSS OR RELATED PARTY DESCRIPTION OF ITEMS d) e b a None FAIR MARKET VALUE E-10(b) YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 COMPOSITE STATISTICS FOR ALL PRIVATELY OWNED WATER AND SEWER UTILITIES UNDER AGENCY JURISDICTION DESCRIPTION WATER SEWER (b) (c) PLANT (Intrastate Only)(000's Omitted): $ N/A $ 2,021 Plant in Service -------------------- Construction Work In Progress_______________________________ Plant Acquisition Adjustment ------ --------------------------- Plant Held For Future Use__________________________________ Materials and Supplies____________________________________ Less: Accumulated Depreciation and Accumulated Amortization_ _ _ _ _ _ _ _ _ _ _ _ _ - _ 592 Contributions In Aid Of Construction (Net) ——— ———— —————— —— —— — —— —— —— 644 Net Book Cost ________________________ $ $ 785 REVENUES AND EXPENSES (Intrastate Only)(000's Omitted): Operating Revenues $ $ 444 Depreciation and Amortization Expense---------------- —_—_—_ $ $ 51 Income Tax Expense — — — — — — —— —— ————————— ——— ——— —————— — — — — —— 42 Taxes Other Than Income — — — —— —— ———— —— ——— ——— ——— —————— — ————— 325 Other Operating Expenses———————————————————————————— —————— Total Operating Expenses_______________________ $ $ 418 Net Operating Income -__ $ $ 26 Other Income $ $ 0 16 Other Income Deductions__________________________________ $ $ 10 Net Income CUSTOMERS (Intrastate Only): 437 Residential — Yearly Average — — —— ——— —— —————— —— —— ——— —— — — — ————— Commercial — Yearly Average -------------------------- --- _—_— Industrial — Yearly Average_________________________________ 147 Others — Yearly Average_.(Multi—family) —————————— —— ————— —— — —————— 635 Total—-------——————————————————————————————— ——————— OTHER STATISTICS (Intrastate Only): Average Annual Residential Use Per 1,000 Gallons _(1)_ $ $ 158 4.16 Average Annual Residential Cost Per 1,000 Gallons -(1)------------------ $ 25.91 Average Residential Monthly Bill — _ — _ _ _ _ _ _ _ _ __ $ $ $ 3,183 Gross Plant Investment Per Customer__________________________ (1) Averages for all customers E-11 51 FINANCIAL SECTION I YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 COMPARATIVE BALANCE SHEET — ASSETS AND OTHER DEBITS ACCT. REF. CURRENT PREVIOUS NO. ACCOUNT NAME PAGE YEAR YEAR a b c d e UTILITY PLANT 101-105 Utility Plant--------------------- F-5 $ 2,021,276 $ 1,769,036 108-110 Less: Accumulated Depreciation and Amortization F-6 (591,961) (857,033) Net Plant 1,429,315 912,003 114-115 Utility Plant Acquisition Adjustments (Net)________________ F-5 Other Plant Adjustments (specify)_ _ _ _ _ _ _ _ Total Net Utility Plant _ _ _ — _ _ _ _ 1,429,315 912,003 OTHER PROPERTY AND INVESTMENTS 121 NonutilityProperty ________________ F-7 122 Less: Accumulated Depreciation and Amortization Net Nonutility Property_ _ _ _ _ _ _ _ _ _ _ _ _ _ 123 Investmenty in Associated Companies_ _ _ _ _ F-8 124 Utility Investments_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F-8 125 Other Investments__________ F-8 127 Special Funds___________________ F-8 Total Other Property and Investments _ _ _ _ _ CURRENT AND ACCRUED ASSETS 131 Cash (402) 132 ------------------------ Special Deposits F-7 134 Working Funds__________________ 135 Temporary Cash Investments _ _ _ _ _ _ _ _ _ 141-144 _ Accounts and Notes Receivable Less Accumulated Provision for Uncollectable Accounts _ _ _ _ _ _ _ _ _ _ _ F-9 145 Accounts Receivable from Associated Companies___________________ F-10 146 Notes Receivable from Associated Companies___________________ F-10 151 Materials and Supplies _ _ _ _ _ _ _ _ _ _ _ _ _ 162 _ Prepayments____________________ F-11 171 Accrued Interest and Dividends Receivable__ 174 Misc. Current and Accrued Assets_ _ _ — _ Total Current and Accrued Assets (402) _ F-1 (a) YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 COMPARATIVE BALANCE SHEET — ASSETS AND OTHER DEBITS ACCT. NO. a ACCOUNT NAME b REF. PAGE c CURRENT YEAR d PREVIOUS YEAR e 181 182 186 190 DEFERRED DEBITS Unamortized Debt Discount & Expense_ _ _ _ _ Extraordinary Property Losses_ _ _ _ _ _ _ _ _ _ Misc. Deferred Debits _ _ _ _ _ _ _ Accumulated Deferred Income Taxes_ Total Deferred Debits TOTAL ASSETS AND OTHER DEBITS F-12 F-12 F-11 27,000 27,000 $ 938,601 1,429,315 NOTES TO THE BALANCE SHEET The space below is provided for important notes regarding the balance sheet. I 11 E F F F E UTILITY NAME: Ocean Reef Club, Inc. YEAR OF REPORT December 31.1993 COMPARATIVE BALANCE SHEET — EQUITY CAPITAL AND LIABILITIES ACCT. REF. CURRENT PREVIOUS NO. ACCOUNT NAME PAGE YEAR YEAR a b c d e EQUITY CAPITAL 201 Common Stock Issued _ _ _ _ _ _ _ _ _ _ _ _ _ _ F-14 $ $ 1 204 Preferred Stock Issued _ _ _ _ _ _ _ _ _ _ _ _ F-14 211 Other Paid —in Capital--------------- 212 Discount on Capital Stock_ _ — _ — — _ _ _ _ _ _ 213 Capital Stock Expense______________ 214-215 Retained Earnings (Deficit)_ _ _ _ _ _ — -- — _ _ F-15 (582,863) 216 Reacquired Capital Stock_ _ _ _ _ _ _ _ _ _ _ _ 218 Proprietary Capital (Proprietorship and Partnership Only)_ _ _ _ _ _ _ _ _ _ _ _ _ Total Equity Capital (Deficit)_ _ _ _ _ _ _ _ _ _ _ (582,862) LONG TERM DEBT 221 Bonds _ F-16 223 Advances from Associated Companies— _ _ _ F-16 885,306 224 Other Long Term Debt______________ F-14 Total Long Term Debt — — — — ————— — — — ——— 885,306 CURRENT AND ACCRUED LIABILITIES 231 Accounts Payable_________________ 3.456 232 Notes Payable — — — — — — — — ————— — — ———— F-13 233 Accounts Payable to Associated Co. _ — _ _ _ _ F-13 765,711 434,004 234 Notes Payable to Associated Co. _ _ _ _ — _ _ _ F-13 235 Customer Deposits — — — — — — — — ————— ——— 19,770 236 Accrued Taxes ------------------- F-17 19,017 237 Accrued Interest ------------------ F-18 238 Accrued Dividends _ 239 Matured Long Term Debt_ _ _ _ _ _ _ _ _ _ _ _ _ 240 Matured Interest ------------------ 241 Miscellaneous Current and Accrued Liabilities F-19 Total Current and Accrued Liabilities 785,481 456,477 F— 2(a) YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 COMPARATIVE BALANCE SHEET — EQUITY CAPITAL AND LIABILITIES ACCT. REF. CURRENT PREVIOUS NO. ACCOUNT NAME PAGE YEAR YEAR a b c d e DEFERRED CREDITS 251 Unamortized Premium on Debt _ _ _ _ _ _ _ _ _ F-12 $ 252 Advances for Construction ------------ F-19 253 Other Deferred Credits-------------- 255 Accumulated Deferred Investment Tax Credits Total Deferred Credits OPERATING RESERVES 261 Property Insurance Reserve _ _ _ _ _ _ _ _ 262 Injuries and Damages Reserve_ _ _ _ _ _ _ _ _ _ 263 Pensions and Benefits Reserve 265 Miscellaneous Operating Reserves _ _ _ _ _ _ Total Operating Reserves CONTRIBUTIONS IN AID OF CONSTRUCTION 271 Contributions in Aid of Construction _ F-20 768,099 222,968 272 Accumulated Amortization of Contributions in Aid of Construction _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F-21 (124,265) (43,288) Total Net C.I.A.C. 643,834 179,680 ACCUMULATED DEFERRED INCOME TAXES 281 Accumulated Deferred Income Taxes — Accelerated Depreciation_ _ _ _ _ _ _ _ _ _ _ _ 282 Accumulated Deferred Income Taxes — Liberalized Depreciation _ _ _ _ _ _ _ _ 283 Accumulated Deferred Income Taxes — Other Total Accum. Deferred Income Taxes TOTAL EQUITY CAPITAL AND LIABILITIES $ 1,429,315 $ 938.601 F-2(b) YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. [-December 31.1993 COMPARATIVE OPERATING INCOME PLa ACCOUNT NAME b PREVIOUS YEAR c REF. PAGE d CURRENT YEAR e UTILITY OPERATING INCOME 400 Operating Revenues ---------------- $ 422,606 F-3(b) $ 443,772 401 403 Operating Expenses_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Depreciation Expense_ _ _ _ _ — _ — _ _ 241,158 F-3(b) F-6 323,748 51,198 66,324 406 Amortization of Utility Plant Acquisition Adjustment — — — — — — — — — — — — — — — — — — — — 407 408.1 409.1 Amortization Expense_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Taxes Other Than Income_ _ _ _ — _ — _ — _ — _ Income Taxes___________________ F-17 F-17 41,528 33,256 410.10 Deferred Federal Income Taxes _ _ _ _ _ _ _ _ _ 411.10 Provision for Deferred Income Taxes — Credit ----------------- 412.10 Investment Tax Credits Deferred to Future Periods______________ 412.11 Investment Tax Credits Restored to Operating Income_ _ _ _ _ _ _ _ _ _ _ _ _ _ Utility Operating Expenses _ _ _ _ _ — _ — _ _ _ — 340,738 416,474 Utility Operating Income— — — -- — — — — — — — — 81,868 27,298 413 Income From Utility Plant Leased To Others_______________ 414 Gains (Losses) From Disposition of Utility Property________________ Total Utility Operating Income [Enter here and on Page F-3(c)]_ 81,868 27,298 F-3(a) COMPARATIVE OPERATING INCOME REF. —"' REF. PAGE OTHER SEWER PAGE WATER h e S-3 $ 443,772 $ N/A W-3 $ N/A S-2 323,748 W-2 F-6 51,198 F-6 F-6 F-6 F-17 41,528 F-17 F-17 F-17 416,474 27,298 $ 27,298 s NIA $ N/A F-3(b) UTILITY NAME: Ocean Reef Club, Inc. COMPARATIVE OPERATING INCOME (Cont'd) YEAR OF REPORT December 31,1993 ACCT. PREVIOUS REF. CURRENT NO. ACCOUNT NAME YEAR PAGE YEAR a b c d e Total Utility Operating Income (From Page F-3(a)j................... 81,868 27,298 OTHER INCOME AND DEDUCTIONS 415 Revenues From Merchandising, Jobbing and Contract Deductions 416 Costs and Expenses of Merchandising, Jobbing and Contract Work_ _ _ _ _ _ _ _ _ _ 419 Interest and Dividend Income---------- 420 Allowance for Funds Used During Construction_____________ 421 Nonutility Income _ _ _ _ _ _ _ _ _ _ _ 426 Miscellaneous Nonutility Expenses_ _ _ _ _ _ _ Total Other Income and Deductions TAXES APPLICABLE TO OTHER INCOME 408.20 Taxes Other Than Income_ _ _ _ _ _ _ _ _ _ _ _ F-17 409.20 Income Taxes ------------------- F-17 410.20 Provision for Deferred Income Taxes_ 411.20 Provision for Deferred Income Taxes - Credit' ----------------- 412.20 Investment Tax Credits - Net---------- 412.30 Investment Tax Credits Restored to Operating Income Total Taxes Applicable to Other Income__ INTEREST EXPENSE 427 Interest Expense__________________ 106,170 F-18 17,399 428 Amortization of Debt Discount & Expense_ _ _ _ F-12 429 Amortization of Premium on Debt F-12 Total Interest Expense_ _ _ _ _ _ _ _ _ _ _ _ _ _ 106,170 17,399 EXTRAORDINARY ITEMS 433 Extraordinary Income_ _ _ _ _ _ _ _ _ _ _ _ _ _ 434 Extraordinary Deductions- _ _ _ _ _ _ _. _ _ _ _ 409.30 Income Taxes, Extraordinary Items- _ _ _ _ _ _ Total Extraordinary Items- _ _ _ _ NET INCOME $ (24,3021 $ 9,899.00 F-3(c) -1 - . I UTILITY NAME: Ocean Reef Club, Inc. SCHEDULE OF YEAR END RATE BASE YEAR OF REPORT December 31.1993 ACCT. NO. a ACCOUNT NAME b REF. PAGE c WATER UTILITY d SEWER UTILITY e 101 108.1 110.1 271 252 272 114 115 Utility Plant In Service________________ Less: Nonused and Useful Plant (1) Accumulated Depreciation_ — — _ _ _ _ _ _ Accumulated Amortization _ _ _ _ Contributions in Aid of Construction_ _ _ _ Advances for Construction Subtotal Additions: Accumulated Amortization of Contributions in Aid of Construction Subtotal Plus or Minus: Acquisition Adjustments (2) _ _ _ — _ _ _ — _ Accumulated Amortization of Acquisition Adjustments (2)_______________ Working Capital Allowance (3)_ _ _ _ _ _ _ Other (Specify)_ F-5 F—E F-6 F-20 F-19 F-21 F-5 F-5 $ N/A $ 2,021,276 591,961 768,099 661,216 124,265 785,481 40,469 $ 825,950 RATE BASE UTILITY OPERATING INCOME ACHIEVED RATE OF RETURN_ _ _ _ _ _ _ _ _ _ _ $ $ $ 27,298 -- % 3.31 % NOTES: (1) Estimated if not known. (2) Include only those Acquisition Adjustments that have been approved by the Commission. (3) Calculated using the 1/8th of 0 & M method. F-4 UTILITY NAME: Ocean Reef Club, Inc. UTILITY PLANT (ACCTS. 101 — 106) YEAR OF REPORT December 31.1993 OTHER THAN ACCT. REPORTING NO. DESCRIPTION WATER SEWER SYSTEMS TOTAL a b c d e Plant Accounts 101 Utility Plant In Service_ _ _ _ $ N/A $ 2,021,276 $ N/A $ 2,021,276 102. Utility Plant Leased to Others 103 Property Held for Future Use 104 Utility Plant Purchased or Sold_ 105 Construction Work in Progress Total Utility Plant_ _ _ _ _ _ _ $ $ 2.0 11.276 $ N/A $ 2,021,276 0 UTILITY PLANT ACQUISITION ADJUSTMENTS (ACCTS. 114 — 115) Report each acquisition adjustment and related accumulated amortization separately. For any acquisition ac;ustment approved by the Commission, include the Order Number. DESCRIPTION a WATER b SEWER c OTHER THAN REPORTING SYSTEMS d TOTAL e ACQUISITION ADJUSTMENTS (114): N/A $ $ $ $ Total Plant Aquisition Adjs. _ _ _ _ _ _ _ ACCUMULATED AMORTIZATION (115) N/A Total Accumulated Amortization Net Acquisition Adjustments_ _ _ _ _ _ $ $ $ $ F-5 YEAR OF REPORT December 31.1993 UTILITY NAME: Ocean Reef Club, lnc. ACCT. 108) ACCUMULATED DEPRECIATION OTHER7HAN REPORTING WATER SEWER SYSTEMS DESCRIPTION c d a N/A $ 8--�57,033 $ N/A TOTAL (el 857,033 Balance first of year----------- ---- Credits during year: 78,108 Accruals charged: 78,108 -------- - - to Account 108-___----- Accruals charged other accounts ------- -- (specify) _---- Salvage---------------- Other Credits (specify) ___----- �— _____--- ------- _-_ -------- ___----- �- 78,108 Total credits --- - - - - -- --"-- 78,108 ______-- 35,528 - - - -- Debits during year: _ 35,523 — Book cost of plant retired- _ _ - - - - -- ___ __— Cost of removal -___-------- ----'-- �_ ---- 307,652 Other debits (specify) - - - - - - - --------' 3_ 07,652 ___--- -. 930436—SU PSC Ad' Per Docket No. —_______-- 343,180 debits - - - - _ - -- -�- 3 43_180_ _---- 591 961 Total - - ----- $ 51 96 IA $ N--__ -- N A -- Balance end of year __--------- ---- ACCUMULATED AMORTIZATION (ACCT. 110) OTHER THAN REPORTING TOTAL WATER SEWER SYSTEMS d e DESCRIPTION b c) $ N_ A 5 a A $ N/ A 5 N/A Balance first of year_ - _-- - - - - -- --- Credits during year: Accruals charged: --- to Account 110-_------- charged other -------- __---- Accruals accounts (specify)-__---- ----- � Total credits - - - - - - - - - - - - - - --- Debits during year - cost of plant retired - - - - - -- ----- -------- ___--- Book Book Other debits (specify)-_------- ---- ----- Total debits-------------- ---- � NN/A � - �_ N/_ $ 5 Balance end of year --__------- F-6 UTILITY NAME: Ocean Reef Club, Inc. NONUTILITY PROPERTY (ACCT 121) YEAR OF REPORT December 31.1993 Report separately each item of property with a book cost of $25,000 or more included in Account 121. Other items may be grouped by classes of pro ertv. DESCRIPTION a BEGINNING YEAR BALANCE b ADDITIONS c REDUCTIONS d ENDING YEAR BALANCE e N/A $ $ $ $ $ $ Total Nonutility Property_ _ _ _ $ $ SPECIAL DEPOSITS (ACCTS. 132 — 133) Report hereunder all special deposits carried in Accounts 132 and 133. DESCRIPTION OF SPECIAL DEPOSITS a SPECIAL DEPOSITS (ACCT. 132): N/A Total Special Deposits_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ a $ YEAR END BOOK COST F-7 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 INVESTMENTS AND SPECIAL FUNDS (ACCTS. 123 — 127) Report hereunder all investments and special funds carried in Accounts 123 thru 127. FACE OR YEAR END DESCRIPTION OF SECURITY OR SPECIAL FUND PAR VALUE BOOK COST a b c) INVESTMENT IN ASSOCIATED COMPANIES (ACCT. 123): N/A $ $ Total Investment In Associated Companies_ _ _ _ _ _ _ _ __ _ _ _ _ $ UTILITY INVESTMENTS (ACCT. 124): N/A $ � Total Utility Investments _ _ _ $ OTHER INVESTMENTS (ACCT. 125): N/A $ $ Total Other Investments — — — — _ _ _ — _ $ SPECIAL FUNDS (ACCTS. 126 & 127) N/A $ Total Special Funds-------------------------------------- $ F-8 -1 -1 G YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 ACCOUNTS AND NOTES RECEIVABLE — NET (ACCTS. 141 — 144) Report hereunder all accounts and notes receivable included in Accounts 141, 142 and 144. Amounts included in Accounts 142 and 144 should be listed individualiv. DESCRIPTION (a) ACCOUNTS RECEIVABLE: Customer Accounts Receivable (Acct. 141): Water-------------------------- N/A------- $ Sewer Other ----------------------------------- Total Customer Accounts Receivable ---------------------------- OTHER ACCOUNTS RECEIVABLE (Acct. 142): 1 Total Other Accounts Receivable ------------------------------ NOTES RECEIVABLE (Acct. 144): Total Notes Receivable ----------------------------------- Total Accounts and Notes Receivable -------------------------------- ACCUMULATED PROVISION FOR UNCOLLECTABLE ACCOUNTS (Acct. 143): Balance First of Year _ _ N/A _ _ _ $ Add: Provision for uncollectables for current year _ _ _ _ _ _ _ _ _ _ _ Collections of accounts previously written off -------- - - - - -- Utility accounts Others-- — — — — — — — — — — — — — — — — — — — — — - — — — —— Total Additions --------------------------------- Deduct accounts written off during year: Utility accounts ----------------------------- Others Total accounts written off I Balance end of year —_______—_ Total Accounts and Notes Receivable — Net _______________ $ TOTAL F-9 YEAR OF REPORT UTILITY NAME: Ocean Reef Club Inc. December 31,1993 ACCOUNTS RECEIVABLE FROM ASSOCIATED COMPANIES (ACCT. 145) Report each account receivable from associated companies separately. DESCRIPTION (a) N/A Total------------------------------------------ - - - - I$ NOTES RECEIVABLE FROM ASSOCIATED COMPANIES (ACCT. 146) TOTAL Report each note receivable from associated companies separately. DESCRIPTION a INTEREST RATE b TOTAL c N/A $ Total $ UTILITY NAME: Ocean Reef Club, Inc. PREPAYMENTS (ACCT. 162) DESCRIPTION (a) YEAR OF REPORT December 31 1993 TOTAL Prepaid Insurance______________________________ N/A______ $ Prepaid Rents -------------------------------------- Prepaid Interest ---------------------------------------- Prepaid Taxes --—————————————————————————————————————— Other Prepayments (Specify): Total Prepayments___________________________ I $ MISCELLANEOUS DEFERRED DEBITS (ACCT. 186): DESCRIPTION (a) TOTAL (b) MISCELLANEOUS DEFERRED DEBITS (Acct. 186): Deferred Rate Case Expense (Acct. 186.1) _ _ _ _ N/A_ _ _ _ _ _ $ ------------ Other Deferred Debits (Acct 186.2) Total Miscellaneous Deferred Debits $ F-11 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 UNAMORTIZED DEBT DISCOUNT AND EXPENSE AND PREMIUM ON DEBT (ACCTS. 181 AND 251) Report the net disount and expense or premium separately for each security issue. DESCRIPTION a AMOUNT WRITTEN OFF DURING YEAR b YEAR END BALANCE c UNAMORTIZED DEBT DISCOUNT AND EXPENSE (Acct. 181): N/A $ $ $ Total Unamortized Debt Discount and Expense _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ $ UNAMORTIZED PREMIUM ON DEBT (Acct. 251): N/A $ $ $ Total Unamortized Premium on Debt _______________________ $ EXTRAORDINARY PROPERTY LOSSES (ACCT. 182) Repot each item separately. DESCRIPTION a) EXTRAORDINARY PROPERTY LOSSES (Acct. 182): N/A TOTAL (b) ITotal Extraordinary Property Losses __________________________________I $ F-12 ei UTILITY NAME: Ocean Reef Club, Inc. NOTES PAYABLE (ACCTS. 232 AND 234) YEAR OF REPORT . December 31,1993 NOMINAL DATE INTEREST PRINCIPAL FREQUENCY DATE OF OF AMOUNT PER DESCRIPTION ISSUE MATURITY RATE OF PAYMENT BALANCE SHEET a b c d e ACCOUNT 232 — NOTES PAYABLE: N/A % $ Total Account 232 $ ACCOUNT 234 — NOTES PAYABLE TO ASSOCIATED COMPANIES: N/A % ° $ Total Account 234 $ ACCOUNTS PAYABLE TO ASSOCIATED COMPANIES (ACCT. 233) Report each account payable separately. DESCRIPTION TOTAL (a) (b) Inter —company account payable to Ocean Reef Club, Inc. for plant acquisition and utility $ operating expenses 765,711 Total ___________$ 765,7 111 -------------------------------------- - F-13 UTILITY NAME: Ocean Reef Club Inc. CAPITAL STOCK (ACCTS. 201 and 204) YEAR OF REPORT December 31.1993 DESCRIPTION a COMMON STOCK (b) PREFERRED STOCK (c Par or stated value per share__________________________ Shares authorized _ _ _ _ _ _ _ _ _ _ Shares issued and outstanding Total par value of stock issued (stated value) _ _ _ _ _ _ _ _ _ _ _ _ _ Dividends declared per share for year_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ $ N/A $ N/A $ $ $ $ LONG TERM DEBT (ACCT. 224) DESCRIPTION OF OBLIGATION (INCLUDING NOMINAL DATE OF ISSUE AND DATE OF MATURITY) a INTEREST PRINCIPAL AMOUNT PER BALANCE SHEET RATE d FREQUENCY OF PAYMENT e N/A % o/ ° o/ 0 O O/ O °IO O/ O O/ O O/O O/O O/ O % O/ O % $ _ $ Total--------------------------------------------------- F-14 UTILITY NAME: Ocean Reef Club, Inc. STATEMENT OF RETAINED EARNINGS YEAR OF REPORT December 31,1993 1. Dividends should be shown for each class and series of capital stock. Show amounts of dividends per share. 2. Show separately the state and federal income tax effect of items shown in Account No. 439. ACCT. NO. DESCRIPTION AMOUNTS a b c) 215 Unappropriated Retained Earnings: Balance beginning of year (Deficit) — — — — —————————— ————— —— ————— $ (582,863) Changes to account: 439 Adjustments to Retained Earnings (requires Commission approval prior to use): Credits: Retained Earnings closed pursuant to sale of Utility. Utility is an operating division of the new entity 582,863 Total Credits ------------------------------------- 582,863 Debits: Total Debits ------------------------------------ -- 435 Balance transferred from Income --------------------------- 436 Appropriations of Retained Earnings: Total appropriations of Retained Earnings — — — — — — — — —_------ - - - - - - Dividends declared: 437 Preferred stock dividends declared 438 Common stock dividends declared Total Dividends Declared Balance end of year ---_ --------------------------------- 214 Appropriated Retained Earnings (state balance and purpose of each appropriated amount at year end): Total Appropriated Retained Earnings -----------------------_— Total Retained Earnings---------------------------------- $ Notes to Statement of Retained Earnings: KIM t- — l 5 UTILITY NAME: Ocean Reef Club, Inc. BONDS (ACCT. 221) DESCRIPTION OF OBLIGATION (INCLUDING NOMINAL DATE OF ISSUE AND DATE OF MATURITY) a N/A YEAR OF REPORT December 31,1993 INTEREST PRINCIPAL FREQUENCY AMOUNT PER RATE OF PAYMENT BALANCE SHEET (bl I (c) (d) ° % Total--------------------------------------------------- $ ADVANCES FROM ASSOCIATED COMPANIES (ACCT. 223) Report each account payable separately. DESCRIPTION TOTAL (a) b Total $ NONE F-16 UTILITY NAME: Ocean Reef Club, Inc. ACCRUED TAXES (ACCT. 236) YEAR OF REPORT December 31.1993 ACCT. NO. a DESCRIPTION b Balance First of Year _ _ _ _ _ _ WATER c $ N/A SEWER d $ 19,017 OTHER e $ N/A TOTAL $ 19,017 Accruals Charged: 408.10 408.11 408.12 Utility Regulatory Assessment Fees Property Taxes_ _ _ _ _ _ _ _ Payroll Taxes _ _ _ 19,970 14,236 7,322 19,970 14,236 71322 408.13 Other Taxes & Licenses_ _ _ 409.10 Federal Income Taxes_ _ _ _ 409.11 State Income Taxes _ _ _ Taxes Applicable to Other Income (Accts. 408.2, 409.2, 409.3, 410.2) _ _ _ _ _ Total Taxes Accrued 41.528 41,528 Taxes Paid During Year: 408.10 408.11 408.12 Utility Regulatory Assessment Fees Property Taxes_ _ _ _ _ _ _ Payroll Taxes 19,217 19,217 14,236 7,322 14,236 7,322 408.13 Other Taxes & Licenses_ _ _ 409.10 Federal Income Taxes_ _ _ _ 409.11 State Income Taxes _ _ _ _ Taxes Applicable to Other Income (Accts. 408.2, 409.2, 409.3, 410.2) _ _ _ _ _ Total Taxes Paid 40,775 40,775 Balance End of Year _ _ _ _ _ _ _ $ N/A $ 19.770 $ N/A $ 19,770 F-17 UJ Fi UTILITY NAME: Ocean Reef Club, Inc. ACCRUED INTEREST (ACCT. 237) YEAR OF REPORT December 31,1993 DESCRIPTION OF DEBT a BALANCE BEGINNING OF YEAR b INTEREST ACCRUED DURING YEAR INTEREST PAID DURING YEAR e BALANCE END OF YEAR ACCT. DEBIT c AMOUNT d ACCOUNT NO. 237.1 — ACCRUED INTEREST ON LONG TERM DEBT: N/A $ $ $ $ 17,399 Total Account No. 237.1 ACCOUNT NO. 237.2 — ACCRUED INTEREST ON OTHER LIABILITIES: N/P Ocean Reef Club, Inc. 17,399 17,399 Total Account 237.2 Total Account 237 17,399 $ $ 17,399 $ 17.399 $ 0 REGULATORY COMMISSION EXPENSE — AMORTIZATION OF RATE CASE EXPENSE (ACCTS. 666 and 766) DESCRIPTION OF CASE (DOCKET NO.) a EXPENSE INCURRED DURING YEAR b AMOUNT TRANSFERRED TO ACCT. NO. 186.1 c CHARGED OFF DURING YEAR ACCT. d) AMOUNT e N/A $ $ $ $ Total ----------------------- $ $ -t F-18 YEAR OF REPORT UTILITY NAME: Ocean Reef Club Inc. December31,1993 MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES (ACCT. 241) BALANCE DESCRIPTION END OF YEAR a b N/A $ Total Miscellaneous Current and Accrued Liabilities ADVANCES FOR CONSTRUCTION (ACCT. 252) NAME OF PAYOR a BALANCE BEGINNING OF YEAR b DEBITS ACCT. CREDITS e BALANCE END OF YEAR DEBIT c AMOUNT d N/A $ $ $ $ Total-------------- $ $ $ $ F-19 _E YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 CONTRIBUTIONS IN AID OF CONSTRUCTION (ACCT. 271) W & S OTHER THAN SYSTEM DESCRIPTION a WATER b SEWER c REPORTING d TOTAL e Balance first of year_ _ _ _ _ _ _ $ N/A $ 222,968 $ N/A $ 222,968 Add credits during year: Contributions received from Capacity, Main Extension and Customer Connection Charges (Schedule "A") _ _ _ 545,131 545,131 Contributions received from Developer or Contractor Agreements in cash or property (Schedule "B") _ _ _ _ _ _ _ Total Credits 545,131 545,131 Less debits charged during the year (All debits charged during year must be explained below)_ _ _ _ _ _ _ _ Total Contributions In Aid of Construction _ _ _ _ _ _ _ _ _ _ $ NIA $ 768,099 $ N/A $ 768,099 Explain all debits charged to Account 271 below: I F-20 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. I December 31.1993 SCHEDULE 'A' ADDITIONS TO CONTRIBUTIONS IN AID OF CONSTRUCTION RECEIVED FROM CAPACITY, MAIN EXTENSION AND CUSTOMER CONNECTION CHARGES RECEIVED DURING THE YEAR DESCRIPTION OF CHARGE a NUMBER OF CONNECTIONS b CHARGE PER CONNECTION c WATER (d) SEWER (e Adi Per PSC Docket No. 930436—SU $ Total Credits____________________________________ $ $ 545,131 $ $ 545,131 ACCUMULATED AMORTIZATION OF CONTRIBUTIONS IN AID OF CONSTRUCTION (ACCT. 272) DESCRIPTION a WATER b SEWER c W & S OTHER THAN SYSTEM REPORTING d) TOTAL e Balance first of year_ _ — — _ _ _ Debits during year: Accruals charged to Account 272_____________ Other debits (specify): Adi Per PSC Docket No. 930436—SU $ N/A $ 43,288 $ N/A $ 43,288 26,910 26,910 54,067 54,067 Total debits Credits during year (specify): 80,977 80,977 Total Credits Balance end of year........ $ N/A $ N/A $ 124.265 $ 124,265 F-21 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31,1993 SCHEDULE 'B" ADDITIONS TO CONTRIBUTIONS IN AID OF CONSTRUCTION RECEIVED FROM ALL DEVELOPERS OR CONTRACTORS AGREEMENTS FROM WHICH CASH OR PROPERTY WAS RECEIVED DURING THE YEAR INDICATE `CASH" OR DESCRIPTION "PROPERTY' WATER SEWER a b c d N/A $ $ Total Credits------------------------------------ $ $ F-22 :g YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 REC ONCILIATION OF REPORTED NET INCOME WITH TAXABLE INCOME FOR FEDERAL INCOME TAXES (UTILITY OPERATIONS) 1. The reconciliation should include the same detail as furnished on schedule M — 1 of the federal income tax return for the year. The reconciliation shall be submitted even though there is no taxable income for the year. Descriptions should clearly indicate the nature of each reconciling amount and show the computation of all tax accruals. 2. If the utility is a member of a group which files a consolidated federal tax return, reconcile reported net income with taxable net income as if a separate return were to 0 filed, indicating intercompany amounts to be eliminated in such consolidated return. State names of group members, tax assigned to each group member, and basis of allocation, assignment. or sharing of the consolidated tax among rour) members. DESCRIPTION REFERENCE AMOUNT _ a b c --- Net income for the year___________________________ __ � 9,899 Reconciling items for the year: Taxable income not reported on the books: Deductions recorded on books not deducted for return: Income recorded on books not deducted for return: Deduction on return not charged against book income: Federal tax net income ______________________ _______ Computation of tax: The Utility is a division of a non—profit corporation. Therefore, no tax expense is applicable or will be paid. $ 9,899 F-23 ** COMPLETION OF SCHEDULE ONLY REQUIRED IF AFUDC WAS CHARGED DURING YEAR ** UTILITY NAME: Ocean Reef Club, Inc. YEAR OF REPORT December 31,1993 SCHEDULE 'A' SCHEDULE OF COST OF CAPITAL USED FOR AFUDC CALCULATION (2) PERCENTAGE ACTUAL WEIGHTED DOLLAR OF COST COST CLASS OF CAPITAL AMOUNT (1) CAPITAL RATES [c x d] a b c d e Common Equity $ N/A % % % Preferred Stock % % % Long Term Debt % % % Customer Deposits % % Tax Credits — Zero Cost % % % Tax Credits — Weighted Cost % % % Deferred Income Taxes % % % Other (Explain) % % % Total $ N/A % % (1) Should equal amounts on Schedule 6, Column (f), page F-25. (2) Must be calculated using the same methodology used to calculate AFUDC rate approved by the Commission. APPROVED AFUDC RATE Current Commission approved AFUDC rate: % Commission order approving AFUDC rate: F-24 ** COMPLETION OF SCHEDULE ONLY REQUIRED IF AFUDC WAS CHARGED DURING YEAR ** UTILITY NAME: Ocean Reef Club, Inc. SCHEDULE 'B' SCHEDULE OF CAPITAL STRUCTURE ADJUSTMENTS YEAR OF REPORT December 31,1993 CAPITAL STRUCTURE PER USED FOR BOOK NON —UTILITY NON—JURIS. OTHER (1) AFUDC CLASS OF CAPITAL BALANCE ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS CALCULATION a b c d e Common Equity $ N/A $ $ $ $ Preferred Stock Long Term Debt Customer Deposits Tax Credits — Zero Cost Tax Credits — Weighted Cost Deferred Income Taxes Other (Explain) Total $ N/A $ $ $ $ (1) Explain below all adjustments made in Column (e): F-25 WATER OPERATION SECTION Note: Ocean Reef Club, Inc. provides sewer service only; therefore, pages W-1 through W-10 have been omitted from this report. SEWER OPERATION SECTION YEAR OF REPOR December 31.1993 UTILITY NAME: Ocean Reef Club, Inc. SEWER UTILITY PLANT ACCOUNTS ACCT. PREVIOUS YEAR ADDITIONS RETIREMENTS NO. ACCOUNT NAME d e a b c 351 Organization_______________ $ - $ $ 352 Franchises _ — _ _ _ _ - 353 Land and Land Rights — — — _ _ _ _ _ _ 86 687 24,000 — 354 Structure and Improvements _ _ _ _ _ _ 423 57 9,423 427,800 289,183 (1) 360 Collection Sewers — Force _ _ _ _ _ _ — 361 Collection Sewers — Gravity— _ — _ _ _ 13,699 - 362 Special Collecting Structures _ — _ — — 363 Services to Customers_ _ _ — _ _ _ _ _ 50,735 — 364 Flow Measuring Devices _ _ _ _ _ _ _ 675 365 Flow Measuring Installations_ _ _ — — _ — 370 Receiving Wells_ _ _ _ _ _ _ _ _ _ _ _ _ 3,048 1 ( ) 371 Pumping Equipment_ _ _ — _ _ _ _ _ _ _ Treatment and Disposal Equipment 537,63 531,634 27.502 27,502 380 381 __ Plant Sewers _ _ _ _ _ 11,943 382 Outfall Sewer Lines — _ _ _ _ _ _ _ 389 Other Plant and Miscellaneous 390 Equipment—__ -- Office Furniture and Equipment— _ _ _ 4,019 10, 773 3,541 391 Transportation Equipment_ _ _ _ _ _ _ 148 392 Stores Equipment — _ _ _ _ _ _ _ _ _ _ 4,529 (2) 393 Tools, Shop and Garage Equipment__ 394 Laboratory Equipment_ _ _ _ — _ _ — — _ 395 Power Operated Equipment_ _ _ _ _ _ 396 Communication Equipment_ — _ _ _ — _ 33,467 (4,5291(2) 28,938 397 Miscellaneous Equipment— _ — _ _ _ _ _ 398 Other Tangible Plant ---________ Total Sewer Plant____________ $ 1,769.036 $ 576,950_ $ 324,710 NOTE: Any adjustments made to reclassify property from one account to another must be footnoted. Notes: (1) Retirements and adjustments per certificate transfer —Docket No. 930436—SU (2) Reclassify to proper account S-1 (a) SEWER UTILITY PLANT MATRIX .2 .3 TREATMENT SYSTEM AND CURRENT INTANGIBLE COLLECTION PUMPING �j�G DISPOSAL DISPOSAL PLANT GENERAL PLANT YEAR PLANT PLANT PLANT h $ 110,687 10-6 87 718,040. 718,040 13,699. 13,699 50,735 50,735 675 6 75 53433 534,433 565,136 565,136 11,943 11,943 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —1, 11,251 2 5-1 148 148 4,529 4,599 ...... .... .......... 2,021,276 $ $ 783,149. $ 534,433 687,766- $ 15,928 I I u YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31,1993 SEWER UTILITY EXPENSE ACCOUNTS i .2 COLLECTION COLLECTION ACCT. NO. a ACCOUNT NAME b CURRENT YEAR c EXPENSES — OPERATIONS d EXPENSES — MAINTENANCE (e) 701 Salaries and Wages — Employees _ $ 65,670 $ $ 703 Salaries and Wages — Officers, Directors and Majority Stockholders _ 9,306 704 Employee Pensions and Benefits_ _ 710 Purchased SewageTreatment ,440 20440 711 715 Sludge Removal Expense Purchased Power_ _ _ _ _ _ _ _ _ _ << 35,000 716 Fuel for Power Purchased_ _ _ _ _ _ _ �. ..........••.....:....•.... 7,270 718 720 Chemicals________ Materials and Supplies_ _ _ _ _ _ _ _ 2,438 3,480 731 Contractual Services — Engineering _ 732 733 Contractual Services — Accounting_ Contractual Services — Legal _ _ _ _ 8,786 2,001 734 Contractual Services — Management Fees _ _ _ _ _ _ _ _ _ 121,800 30,888 735 Contractual Services — Other_ — — _ _ — 741 Rental of Building/Real Property—------------- 6,017 742 750 Rental of Equipment _ _ _ _ _ _ _ _ _ Transportation Expense _ _ _ _ — _ _ 4,465 — 756 Insurance — Vehicle _ 1,680 757 Insurance — General Liability _ _ _ _ 758 Insurance — Workmens Compensation --——— — — — — —— 1,440 759 Insurance — Other 760 766 Advertising Expense Regulatory Commission Expenses — Amortization of Rate Case ..::::..:.........:.............. 767 Expense Regulatory Commission Expenses m 770 775 Other Bad Debt Expense — — — — — — — — —— Miscellaneous Expenses_ _ _ _ — _ _ s.,..,�.....,..�.,..�._.,.4 ,._..<,...��'«�>.._�......... 3,067 Total Sewer Utility Expenses_ _ _ _ _ $ 323,748 $ $ S-2(a) SEWER EXPENSE ACCOUNT MATRIX .3 .4 .5 .7 .8 TREATMENT TREATMENT PUMPING PUMPING & DISPOSAL & DISPOSAL CUSTOMER ADMINISTRATIVE EXPENSES — EXPENSES EXPENSES — EXPENSES — ACCOUNTS & GENERAL OPERATIONS MAINTENANCE OPERATIONS MAINTENANCE EXPENSE EXPENSES 32,835 1 $ ERMUM limmimil 35,000 32,835 1 $ 300 9,006 44-0 7,270 377 1,050 1,011 3,480 8,786 2,001 48,720 73,080 23,166 7,722 6,017 MENU ME= 2,250 817 67,835 $ $ 64,980= $ 38,350 $ �48 7Z—O $ 103,863 S-2(b) UTILITY NAME: Ocean Reef Club, Inc. SEWER OPERATING REVENUE YEAR OF REPORT December 31,1993 BEGINNING YEAR END ACCT. YEAR NO. NUMBER NO. DESCRIPTION CUSTOMERS CUSTOMERS AMOUNTS a b c d e Operating Revenues: Flat Rate Revenues: 521.1 Residential Revenues— — — _ _ _ _ — _ _ _ 453 453 $ 140,205 521.2 Commercial Revenues---------- 521.3 Industrial Revenues_ 521.4 Revenues From Public Authorities — _ _ 521.5 Multiple Family Dwelling Revenues_ _ _ _ 521.6 Other Revenues Total Flat Rate Revenues 453 453 140,205 Measured Revenues: 522.1 Residential Revenues----------- 522.2 Commercial Revenues_ _ _ _ _ _ _ _ _ — 37 37 123,521 522.3 Industrial Revenues_ 522.4' ' Revenues From Public Authorities 180,046 522.5 Multiple Family Dwelling Revenues_ _ _ 146 146 Total Measured Revenues 183 183 303,567 523 Revenues From Public Authorities 524 Revenues From Other Systems_ — _ _ _ _ _ 525 Interdepartmental Revenues Totals 636 636 443,772 Other Sewer Revenues: 530 Guarenleed Revenues _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 531 Sale of Sludge_______________________________________ 532 Forfeited Discounts __ ___________ 534 Rents From Sewer Property_______________________________ 535 Interdepartmental Rents_________ _______ ______ ____ _ 536 Other Sewer Revenues _____ _____ ____ _ Total Other Sewer Revenues Total Sewer Operating Revenues____________________________ $ 443,772 S-3 UTILITY NAME: Ocean Reef Club, Inc. BASIS FOR SEWER DEPRECIATION CHARGES YEAR OF REPORT December 31,1993 ACCT. NO. a ACCOUNT NAME b AVERAGE SERVICE LIFE IN YEARS c AVERAGE NET SALVAGE IN PERCENT d DEPRECIATION RATE APPLIED IN PERCENT (100% — d) / c 351 352 354 360 361 362 363 364 365 370 371 380 381 382 389 390 391 392 393 394 395 396 397 398 Organization_ _ _ _ _ _ _ _ _ _ _ _ _ _ Franchises _mprov_ — _ _ _ _ Structure and Iements _ _ _ — _ _ — Collection Sewers — Force _ _ _ _ _ Collection Sewers — Gravity _ _ — _ — _ _ Special Collecting Structures Services to Customers Flow Measuring Devices _ _ — — _ — _ _ _ Flow Measuring Installations Receiving Wells_ _ _ _ _ _ _ _ _ _ _ _ Pumping Equipment_ — _ _ _ _ _ _ — _ Treatment and Disposal Equipment .... Plant Sewers _ _ _ _ Outfall Sewer Lines _ _ _ _ _ _ Other Plant and Miscellaneous Equipment_______ ________ Office Furniture and Equipment....... Transportation Equipment_ _ _ _ _ _ _ _ _ Stores Equipment _ _ _ _ _ _ _ _ _ _ _ Tools, Shop and Garage Equipment_ _ _ _ Laboratory Equipment_ — _ _ _ _ _ Power Operated Equipment_ _ _ _ _ _ _ _ Communication Equipment_ _ _ _ _ _ _ _ _ Miscellaneous Equipment_ _ Other Tangible Plant Sewer Plant Composite Depreciation Rate_ _ — _ _ — _ _ _ % % % % ° % 3.13 % 3.33 % 3.33 % % 2.63 % 20.00 % % % 5.56 % 5.56 % 2.86 % % % 6.67 % 16.67 % % 6.25 % % % % 6.25 % % 32 30 30 % 38 % 5 °a % % 18 18 % 35 % % 15 ° % 6 % % 16 % % % 16 % * If depreciation rates prescribed by this Commission are on a total composite basis, entries should be made on this line only. S-4 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 ANALYSIS OF ENTRIES IN SEWER ACCUMULATED DEPRECIATION BALANCE AT TOTAL ACCT. BEGINNING OTHER CREDITS NO, ACCOUNT NAME OF YEAR ACCRUALS CREDITS * (d + e) a b c d e 351 Organization_ _ _ _ _ — _ _ — _ _ _ $ $ $ $ 352 354 Franchises ______________ Structure and Improvements 20,321 2,709 2,709 360 _ _ _ _ _ Collection Sewers — Force _ _ _ _ _ _ 297,990 19,314 19,314 457 361 Collection Sewers —Gravity_ _ _ _ _ 1,608 457 362 Special Collecting Structures _ _ _ _ 1,335 363 Services to Customers __ _ 8,102 1,335 0 364 Flow Measuring Devices _ _ _ _ 675 365 Flow Measuring Installations__ 370 371 Receiving Wells ________--__ Pumping Equipment_ _ _ _ _ _ 151,336 24,228 24,228 V 380 _ _ _ _ Treatment and Disposal Equipment 338,769 29,418 29,418 381 _ Plant Sewers _ _ 2,560 341 341 ' 382 Outfall Sewer Lines _ _ 389 _ _ _ _ _ _ Other Plant and Miscellaneous 390 Equipment_____ _ _____ Office Furniture and Equipment___ 3,863 109 10 • 391 Transportation Equipment_ _ _ _ 149 0 0 392 Stores Equipment _ _ _ _ _ _ _ _ _ 197 197 393 Tools, Shop and Garage Equipment_ 394 395 Laboratory Equipment_ _ _ _ _ _ _ _ _ Power Operated Equipment_ _ _ _ _ _ 396 Communication Equipment_ _ _ _ _ _ 0 397 Miscellaneous Equipment_ _ _ _ _ _ _ 31,660 398 Other Tangible Plant_ _ _ _ _ _ _ _ _ _ Total Depreciable Sewer Plant $ $ 78,108 In Service_________ 857,033 $ $ 78,108 * Specify nature of transaction. Use ( ) to denote reversal entries. Note (1): Adjustments per certificate transfer — Docket No. 930436—SU S-5(a) -E -E t ANALYSIS OF ENTRIES IN SEWER ACCUMULATED DEPRECIATION (Cont'd) PLANT RETIRED ASSOCIATED SALVAGE AND INSURANCE h ASSOCIATED COST OF REMOVAL i OTHER CHARGES TOTAL CHARGES (g—h+i+j) (k)I BALANCE AT END OF YEAR (c+f—k) (1,739)(1) 1,742 (1) (200,832)(1) (1,739) 21,291 (199,090) 118,214 (292) (1) (292) 1,773 (854) (1) (854) 8"583 675 160,707 274,609 (3,048) (11,809)(1) (93,578) (1) (219) (1) (14,857) (93,578) (219) 2,682 (3,496) (3,541) 45 (1) 476 (1)(1) (1) 148 2,803 2,606 (1) 2,606 (28,939) $_(236 3601 (021) (1) (31,660) 0 $ $ $ (106,8201 $_ 343 180 $ 591,961 S-5(b) _t I E UTILITY NAME: Ocean Reef Club, Inc. SYSTEM NAME: Same PUMPING EQUIPMENT YEAR OF REPORT December 31.1993 Lift station number___ Make or type and nameplate data of pump 2 idontical litt A-1 EMU FA80-421.1 E-1 E III Simplex Unit (a) FC—! CC-1 Simplex N/A Flyght CP-3127 EMU FA81 —130 Gorman Rupp T3A3-6 N/A pumps per station 461 Year installed Rated capacity _ _(GPM) ...... Size -------------- Power: Electric_ _ _ _ _ _ _ _ _ _ Mechanical Nameplate data of motor _ _ 1985 1981 1974 1984 1980 1978 210 4" 55 55 250 170 10 4" 4" 4" 230V-30A 230V-30A 230V-30A 230V-30A 230V-30A 230V-1OA N/A FK202-4/9 N/A F13.2-4/9 7.5 HP 10 HP 1.6 HP 5 HP Lift station number _ _ _ _ _ Make or type and nameplate data of pump 2 identical lift station CHP-1 Flyght CP3126— 460, 1971 MV-1 FV-1 FL-1 FL-2 HC-1 Flyght Myers Flyght Flyght CP3085— Flyght CG3065— 4V CP3101 — CP3127- pumps per 206 432 440 483 Year lnstalled --------- Rated capacity _ _(GPM) ....... Size -------------- Power: Electric_ _ _ _ _ _ _ _ _ _ Mechanical Nameplate data of motor__ 1978 1983 1978 1978 1985 200 180 125 100 100 4" 300 4" 3" 4" 4" 4" 230V-30A 230V-10A 230V-30A 230V-10A 230V-10A 230V-30A 9.4 HP 1.9 HP i HP 3.8 HP 1.15 HP 10 HP SERVICE CONNECTIONS Size (inches) _ _ _ _ _ — _ — _ Type (PVC, VCP, etc)_ _ _ _ Average length — _ _ _ _ — _ Number of active service connections Beginning of year_ _ _ _ _ _ Added during year_ _ _ _ _ _ Retired during year_ _ _ _ _ End of year —____—____ Give full particulars concerning inactive connections 4" PVC 25' 449 449 6° 6° PVC CI 25' 25 204 2 204 2 449 204 2 None 19 None New Development i S-6(a) 0 UTILITY NAME: Ocean Reef Club, Inc. SYSTEM NAME: Same PUMPING EQUIPMENT YEAR OF REPORT December 31,1993 Lift station number_—_ Make or type and nameplate data of pump 2 identical lift HC-2 Flyght CA3065— 206 1976 HC-3 HC-4 GV-1 HH-1 Flyght_ PC-1 Flyght Flyght Flyght Flyght CP3101 — CA3065— CP3101 — CP3101 — CP3126- pumps per station 206 432 433 435 460 Year installed _ _ _ _ _ _ _ _ Rated capacity _ (GPM)_ _ Size Power: Electric_ _ _ _ _ _ _ _ _ _ Mechanical Nameplate data of motor _ _ 1976 1976 1978 1978 1974 100 100 200 100 100 250 3" 4" 4" 4" 4" 230V-30A 230V-10A 230V-10A 230V-10A 23OV-10A 230V-30A 9.4 HP 1.9HP 1.9 HP 3.8HP 3.8HP 5HP Lift station number _ Make or type and nameplate data of pump 2 identical lift station SC-1 SMU FA-101 — 155 1981 S-1 SP-1 SP-2 V-1 MI-1 Myers Flyght _ Fly_ hg t _ Flyght Flyght _ WG-50 CP3101 — CG3065— C03126— C03065- pumps per 432 206 460 206 Year installed _ _ _ Rated capacity _ _(GPNI)_ _ Size -------------- Power: Electric_ _ _ _ _ _ _ _ _ _ Mechanical _ Nameplate data of motor _ _ 1983 1975 1975 1974 1978 130 125 100 100 200 180 4" 2.5" 4" 4" 4" 3" 230V-10A 230V-30A 230V-10A 23OV-10A 230V-30A 230V-10A FN17-1-4/8 3.8 HP 32. HP 5 HP 1.9 HP 9.4 HP 1.9 HP Litt station number _ _ Make or type and nameplate data of pump 2 identical lift station VH-1 Flyqht CP3126— 461 1983 BI-1 FL-1 Flyght Flvqht CP3082— CP3082- pumps per 634 634 Year installed_ _ _ _ _ _ _ Rated capacity _ _(GPM)_ _ Size-------------- Power: Electric_ _ _ _ _ _ _ _ — _ Mechanical Nameplate data of motor 1974 1988 200 150 150 4" 4„ 230V-30A 23OV-30A 230V-30A 1 HP 9.4 HP 1 HP S-6(b) 0 11 YEAR OF REPORT UTILITY NAME: Ocean Reef Club, Inc. December 31.1993 SYSTEM NAME: Same COLLECTING MAINS COLLECTING MAINS: Size (inches)_ _ _ _ _ _ _ Type of main _ _ _ _ _ _ _ _ Length of main (nearest foot): Beginning of year ------- Added during year...... Retired during year_____ End of year_ _ _ _ _ _ — — _ _ 8" 10" 8" 8" 6" 6" PVC PVC CI VCP Cl— PVC 50' 25' 25' 25' 30' 54,266 2,575 300 1,659 920 4,320 54,266 2,575 300 1,659 920 4,320 MANHOLES: I I l Size (inches)_ Type_______________ Number: Beginning of year_ _ _ _ _ _ Added during year_ _ _ _ _ _ Retired during year_____ End of year _______—_ Concrete 255 255 FORCE MAINS FORCE MAINS: Size (inches)_ _ _ _ _ _ _ Type of main _ —_ Length of main (nearest foot): Beginning of year_ _ _ _ _ _ Added during year —____— Retired during year_____ End of year ___—___—__ 6" 4" 4" Cl 41190 6" Cl PVC PVC 910 10,890 16,134 910 10,890 4,190 16,134 S-7 UTILITY NAME: Ocean Reef Club, Inc. SYSTEM NAME:Same TREATMENT PLANT YEAR OF REPORT December 31,1993 Manufacturer_ _ _ _ _ _ Type_ _'_ _ _ _ _ _ _ _ "Steel" or "Concrete"_ _ Total Capacity_____ Average Daily Flow_ _ Effluent Disposal Total Gallons of Sewage Treated_ (1) Marolf (2) Davco (3) Davco Contact Stabilization Extended Air Extended Air Concrete Steel Steel .250 MGD .100 MGD .100 MGD Totals for all three plants: 274,457 Bore Holes Bore Holes Bore Holes Totals for all three plants: 100,177,000 MASTER LIFT STATION PUMPS i i,,14 14 - - C-a/�1 � A ¢-l;fh1 Manufacturer__ Capacity......... Motor: Mir. __ Horsepower__ Power (Electric or Mechanical) _ _ _ _ OTHER SEWER SYSTEM INFORMATION OTHER SEWER SYSTEM INFORMATION Furnish information below for each system not physically connected with another facility. A separate page should be sun lied where necessary. 1. Maximum number of ERC's * which can be served. 998 2. Estimated annual increase in ERC's * . 24 3. List permit numbers required by Chapter 14-17, Rules of the Department of Environmental Regulation (DER) for systems in operation. D044-127102 4. State any plans and estimated completion dates for any enlargements of this system. Plant No. 3 expansion and modification _ 5. If the present systems do not meet the requirements of Chapter 17-4, Rules of the DER, submit the following a. Exaluation of the present plant or plants in regard to meeting the DER's rules. b. Plans for funding and construction of the required upgrading. c. Have these plans been coordinated with the DER? N/A d. Do they concur? e. When will construction begin? 6. In what percent of your certificated area have service connections been installed' 90 * ERC = (Total Gallons Treated / 365 Days) / 275 Gallons Per Day Note: Total Gallons Treated includes both sewage treated and purchased sewage treatment. S-8 FDecernberEAR OF REPURT� UTILITY NAME: Ocean Reef Club, Inc. 31.1993 SYSTEM NAME: Same CALCULATON OF THE SEWER SYSTEMS EQUIVALENT RESIDENTIAL UNITS METER SIZE a TYPE OF METER b EQUIVALENT FACTOR (c) NUMBER OF METERS (d) TOTAL NUMBER OF METER EQUIVALENTS (c x d) (e 5/8" 3/4" V. 1 1 1/2" 2" 31. 3" 3" 4^ 4" 6-1 6° 8.. 8.1 101, 10" 12" Displacement Displacement Displacement Displacement or Turbine Displacement, Compound or Turbine Displacement Compound Turbine Displacement or Compound Turbine Displacement or Compound Turbine Compound Turbine Compound Turbine Turbine 1.0 1.5 2.5 5.0 8.0 15.0 16.0 17.5 25.0 30.0 50.0 62.5 80.0 90.0 115.0 145.0 215.0 467 467 94 235 53 265 22 176 1,143 Total SEWER System Meter Equivalents _ _ _ _ _ _ CALCULATION OF THE SEWER SYSTEMS EQUIVALENT RESIDENTIAL CONNECTIONS ( 100,177,000 / 365 days) / 275 gpd = 998 (total gallons treated) IJ, S-9 do EXHIBIT "F" PUBLIC SERVICE COMMISSION ANNUAL REPORT IN LIEU OF FINANCIAL STATEMENT Counties commonly request audited financial statements from the Industrial Development Revenue Bond Applicant. For the reasons out- lined herein, we request that the County accept Florida Public Service Commission (PSC) Annual Reports for the Applicant's predecessor, Ocean Reef Club, Inc. in lieu of audited financial statements, based on its unique position as a regulated utility in the State of Florida. The rules of the PSC require filing of an annual report which details the financial position of the Utility. This information may or may not be obtained in accordance with generally accepted auditing standards. However, due 'to the nature of regulated utilities, this information will not be presented in accordance with generally accepted accounting principles. Treatment of contribu- tions -in -aid -of -construction, amortization of such contributions, methods of depreciation and determinations of used and useful portions of plant are examples of considerations which may be unique to utility financing. This in no way reflects negatively on the financial integrity of the Utility, but is simply a recognition on the part of the PSC that the information necessary to regulate utilities is, in some respects, different from that of other businesses, and accounting procedures must be adapted accordingly. At this time, the Applicant would be required to expend significant sums of money to hire accountants to go back and audit the Utility for the past three years to put together conventional, audited financial statements for that period. Access to records necessary for such reporting may not be available from third parties. The County is concerned that it be provided with every assurance of the integrity of the Utility and the fact that it has been operated in an efficient manner in the past. However, we suggest that the methods used by the PSC in obtaining such assur- ances, which include submission of annual reports and unaudited financial statements for use during rate cases, are of a quality which also assure the County that such utilities are prudently operated. Indeed, financial statements generated in accordance with generally accepted accounting principles, due to the peculiarities of regulated utilities, may be more misleading than reference to this other financial information. In the past, the Systems Annual Reports have been compiled by Cronin, Jackson, Nixon & Wilson, certified public accounts of Clearwater, Florida. We understand the responsibility of the County to protect all parties in the issuance of an Industrial Development Revenue Bond. It is the desire of the Applicant to work closely �1 with the County staff to provide such assurance. 11