TITLE
and Members, Board of County Commissioners From: Carlos A. Gimenez
Mayor Subject: Approval of Settlement Agreement between The Grand Condominium Association, Inc. and Miami-Dade County Regarding Outstanding Water and Sewer Charges

STAFF RECOMMENDATION
It is recommended that the Board of County Commissioners (Board) approve the attached resolution approving a Settlement Agreement between Miami-Dade County (County), through its Water and Sewer Department (WASD), and The Grand Condominium Association, Inc. (The Grand), resolving a dispute arising from nonpayment of water and sewer fees due for services provided by WASD to The Grand.

Scope
The impact of this Settlement agreement is a benefit to the retail and wholesale customers of WASD. The property subject to this Settlement Agreement is in District 3, which is represented by Commissioner Audrey M. Edmonson.

Fiscal Impact/Funding Source
Under the terms of the Settlement, The Grand will pay the County $1,450,000.00 as full and final settlement of all disputes regarding outstanding water and sewer charges between the County and The Grand.

Track Recorder/Monitor
WASD�s Chief Financial Officer Frances G. Morris will oversee implementation of the settlement agreement.

Background
The Grand is a mixed-use residential and commercial building located at 1717 North Bayshore Drive in Miami. It was constructed in the mid-1980s and contains 810 condominium units, 152 hotel rooms, 8 restaurants, and thousands of feet for commercial businesses. The building is served by a single- metered water connection for the entire complex. In 2008, the WASD rate structure as provided in the Schedule of Rates, Fees and Charges was modified by the Board to include residential, multi-family residential, and non-residential categories, at which time The Grand was billed as a multi-family residential customer. In 2012, the rate structure was clarified to include mixed-use developments with a single meter such as The Grand to be billed in the non-residential category. In October 2014, a routine WASD audit of customer billing classifications revealed that The Grand was erroneously billed as a multi-family development instead of a non-residential development as prescribed in the Schedule of Rates, Fees and Charges.

The Grand disputed the charges and requested time to determine the feasibility of changing the plumbing within the building to provide a separate metered service for the commercial parts of the development, which would enable the residential units to be billed at the multi-family residential rate. During this time, the WASD Director authorized accepting monthly payments of $75,000.00, which was more than the monthly amount using the multi-family residential rate, but less than the monthly amount using the non-residential rate. This temporary solution was in lieu of termination of the water service. An engineering study performed by The Grand concluded that it was not financially feasible to make the substantial changes necessary to isolate the commercial uses.

In the meantime, WASD conducted further rate system reviews, and the Board approved a new mixed-use rate for combined residential and commercial uses with a single water meter that became effective in January of 2018. Although The Grand has been making regular payments under the mixed-use rate schedule, The Grand would not agree to a payment plan proposed by WASD in June 2019 for payment of the outstanding balance of $1,475,446.42, which included late fees, for billing amounts at the non-residential rate that accumulated from October 2014 to January 2018.

In October 2019, the County filed a lawsuit in Circuit Court to recover the past due balance. WASD�s Rules and Regulations authorizes the Director to enter into payment arrangements with customers for the payment of outstanding accounts and provides the Director with the authority to waive late penalty charges.

Representatives of the Grand recently met with the Department�s representatives to negotiate a settlement. The attached Settlement Agreement requires a total payment of $1,450,000.00 for the full amount of the water and sewer charges, and a reduction in the late penalty fees with an initial payment of $250,000.00, followed by monthly payments of $8,333.33 until the outstanding balance is fully paid. If The Grand fails to make a payment and does not timely cure the default the court will enter a judgment for the outstanding balance. The Grand�s Board of Directors approved the settlement agreement on February 12, 2020.

Since the County will receive the full amount of delinquent water and sewer charges and the settlement avoids the cost and uncertainty of further litigation, WASD recommends approval of the Settlement Agreement as being in the best interest of the County.

____________________________ Jack Osterholt Deputy Mayor



Jack Osterholt Deputy Mayor