Florida Crown Utility Services, Inc. v. Utility Regulatory Bd. of City of Jacksonville, P--450
| Decision Date | 15 March 1973 |
| Docket Number | No. P--450,P--450 |
| Citation | 274 So.2d 597 |
| Parties | FLORIDA CROWN UTILITY SERVICES, INC., a Florida corporation, Appellant, v. UTILITY REGULATORY BOARD OF the CITY OF JACKSONVILLE, Appellee. |
| Court | Florida District Court of Appeals |
Robert J. Kelly, Tallahassee, and John B. Chandler, Jr., of Rogers, Towers, Bailey, Jones & Gay, Jacksonville, for appellant.
T. Edward Austin, Jr., and William D. Moore, Jacksonville, for appellee.
Appellant seeks reversal of an adverse order entered by the circuit court in a certiorari proceeding by which it sought review of an order entered by the appellee in a utility rate case. We have jurisdiction to entertain this appeal from an order of the circuit court denying certiorari review of a utility board's administrative order on rates. Southern Gulf Utility, Inc. v. Metropolitan Dade County Water and Sewer Board, 180 So.2d 481 (Fla.App.); Westwood Lake v. Metropolitan Dade County Water and Sewer Board, 203 So.2d 363 (Fla.App.1967).
The appellant sewer and water company filed an application for a rate hearing before the appellee municipal regulatory board. Shortly thereafter a hearing was had at which evidence was received from appellant's witnesses, appellee's staff and the public. An order was entered by the regulatory board denying appellant's application for an increase in rates. On the contrary, the order entered by the board in the same proceeding reduced the rates permitted to be charged to appellant's customers.
For reversal, appellant raises a number of alleged errors. Appellant contends, inter alia, that the board erroneously disallowed management fees as an expense for rate-making purposes in the amount of $12,500 as claimed and reduced that item to $5,400 without substantial competent evidence in the record to sustain the reduction. We agree that it was error. In Westwood Lake, Inc. v. Metropolitan Dade County Water and Sewer Board, 203 So.2d 363 Fla.App.1967), the court condemned such disallowances where there was no competent evidence to show that the amount paid was excessive for the services rendered. Appellant aptly points out that the board had one of the recipients of the management fees in question under subpoena but failed to call him as a witness regarding the services performed by him. Opinions of regulatory board staffs as to executive compensation and management fees unsupported by evidence cannot be sustained as the basis for disallowance of such expenses. Westwood Lake, Inc. v. Metropolitan Dade County Water and Sewer Board, supra.
Appellant also contends that it was a departure from the essential requirements of law to disallow the expenses incurred by it in connection with the rate hearing. This claim appears to be supported by the Westwood Lake case, supra, and authorities cited therein at page 366. The board in the case at bar refused to allow this item of expense on the ground that the hearing has served no practical purpose for rate payers since no rate increase was granted. While we recognize the well settled rule that a regulatory board is vested with broad discretion concerning the allowance of rate hearing expense, it is equally well settled that whether a rate increase is granted is not the sole criteria on which that discretion rests. Accordingly, we hold that the disallowance of these expenses and the grounds relied upon by the board, without more, constituted a departure from the essential requirements of law.
The most vital issue raised by appellant concerns the rate base upon which the allowed rate is fixed. Chapter 69--1166, Laws of Florida, 1969, authorizes the City of Jacksonville to regulate private water and sewage systems and to fix rates therefor. The statutory criteria for fixing the rate base is found in Section 2 of Chapter 69--1166, which reads as follows:
By its Ordinance 70--406--430, the City of Jacksonville implemented Section 2 of the enabling statute quoted above in nearly identical language. Section 4 of the Ordinance states:
'Section 4--Duties and Powers of Utility Regulatory Board.
(c) To fix rates, connection charges and other charges of utility companies, and in so doing to insure that all rates or other charges shall be fair, just, reasonable and compensatory. In setting rates, the Board shall include contributions in aid to construction in the rate base where such factor is necessary to insure a fair, just, reasonable and compensatory rate of return to the owner of such water or sewer system;'
And finally the appellee board's own rule implementing both the statute and ordinance above cited reads as follows:
The appellant's complaint about the rate base is twofold. First, it is contended that the board failed to follow the command of...
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...were properly includable in the rate base, it was incumbent upon the Board to add these items. See Florida Crown Util. S., Inc. v. Utility Regulatory Bd., Fla.App.1st, 1973, 274 So.2d 597. Contributions in Aid of The Board declined to include the cost of certain water and sewer facilities i......
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...because the reduction in the president's salary is not supported by CSE. See, e.g., Florida Crown Util. Servs., Inc. v. Utility Reg. Bd. of City of Jacksonville, 274 So.2d 597 (Fla. 1st DCA 1973) (error to reduce management fee from $12,500 to $5,400); Westwood Lake, Inc. v. Metropolitan Da......
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