§ 37-7. Certain rights regarding capital charges paid to OCU prior to April 3, 2012.

(a)

General. The rights to service related to capital charges paid after April 3, 2012 shall be valid only for the property specified in the application for service, and the rights related to such capital charges may not be transferred or sold for use on another property. Applicants who paid capital charges prior to April 3, 2012 have certain rights regarding the sale or transfer of the rights related to service for which capital charges were paid, as described in this section. Refunds of capital charges paid prior to April 3, 2012 shall be processed in accordance with this section. Applicants who paid capital charges prior to April 3, 2012 were issued "water and/or wastewater capacity permits," as defined below.

The provisions in the remainder of this section shall only apply to capital charges paid prior to April 3, 2012.

(b)

Definitions. The following definitions are valid only for section 37-7 of this article.

Assignment shall mean a type of transfer of a water or wastewater capacity permit only applicable to the sale of property to a purchaser of a single lot in the residential subdivision for which the subject water or wastewater capacity permit was issued.

Common parent shall mean the person, persons, or entity which owns, either directly or indirectly, both a majority interest, either legal or equitable, of the corporation, partnership, joint venture, limited partnership, trust, association, or other business entity transferring the capacity and a majority interest, either legal or equitable, of the corporation or other business entity to which the capacity is being transferred.

De minimus sale shall mean any sale which, when aggregated with all other sales of rights to service related to the affected wastewater permit, does not cumulatively exceed ten (10) ERUs to a single entity within a ninety (90) day period.

De minimus transfer shall mean any transfer which, when aggregated with all other transfers of capacity related to the affected water or wastewater permit, does not cumulatively exceed ten (10) ERCs/ERUs to a single entity within a ninety-day period.

Large user shall mean applicants and permittees that require greater than fifteen thousand (15,000) gallons of wastewater service capacity per day (GPD) in the aggregate for their project.

3MGD capacity shall mean wastewater capacity issued pursuant to Orange County Emergency Ordinance No. 83-21, approved on May 24, 1983.

Outstanding capacity maintenance fees (formerly known as revenue and maintenance fees) shall mean those annual capacity maintenance fees which are due and unpaid.

Permit holder or holder of a permit shall mean the person or entity legally entitled to use a water or wastewater permit or to transfer the rights to service governed by the permit, or to sell the wastewater capacity governed by a permit.

Project shall mean the development of raw land, construction of improvements on developed land, or modifications of improved property.

Related party shall mean a person or entity that owns the property that is the subject of the existing water or wastewater permit (the "transferor property") and the property that is the subject of the proposed transfer (the "transferee property"). Related party shall also mean the owner of the transferee property when there is a common parent that holds a majority ownership interest in both the permit holder and the owner of transferee property. For purposes of this definition, ownership shall mean at least a majority fee simple ownership interest in both the transferee and transferor properties.

Sale(s) shall mean a conveyance for consideration of all or any portion of the wastewater capacity associated with an existing wastewater permit to a third party which (1) results in the creation of a new wastewater permit or other document reflecting the ERUs that are the subject of each such conveyance, and (2) which is not a transfer.

Small user shall mean applicants and permittees that require fifteen thousand (15,000) gallons or less of wastewater service capacity per day (GPD) in the aggregate or less for their project.

Third party shall mean a party that is the intended transferee of a wastewater permit, who is (1) not a related party to the permit holder; and (2) not a party acquiring land or an interest in land from a permit holder that a wastewater permit, held by the permit holder, was intended to serve.

Transfer shall mean a shift of flow in GPD from an existing water or wastewater permit to a new water or wastewater permit or other document to be held by: (1) the same person, persons or entity, (2) a related party, or (3) the successor in title to all or any portion of the property that is the subject of the existing water or wastewater permit (also referred to as a "transfer with the conveyance of property").

Wastewater permit or sewer permit or wastewater capacity permit shall mean the permit issued by OCU granting to the permit holder the right, subject to the conditions specified therein, to connect to and transmit a specified amount of wastewater to the OCU wastewater system for treatment and disposal.

Wastewater service area shall mean a specifically defined geographic area in which OCU may provide wastewater utility services from a single designated wastewater treatment facility.

Water capacity permit or water permit shall mean the permit issued by OCU granting to the permit holder the right, subject to conditions specified therein, to connect to and utilize a specified amount of water. The term "capacity allocation certificate" and "water system service allocation certificate" shall be interchangeable with "water capacity permit."

Water system service capacity shall mean the amount of water which can be pumped from the ground, treated, transmitted and distributed, where such amounts are measured in gallons per day and based upon maximum daily domestic demand and fire flows.

(c)

Sales and transfers of service rights related to capital charges paid prior to April 3, 2012. Applicants who paid capital charges prior to April 3, 2012 have certain rights regarding the transfer and sale of the rights to service related to the capital charges paid, as described in this section. An applicant may connect the number of gallons related to the capital charges paid, at any time in the future, subject to all requirements of this article with the exception of section 37-5(b)(2) (Recapture). If the permit holder cannot use some or all of the gallons for which capital charges were paid on the subject property, the permit holder may apply for a refund of all or part of the capital charges paid, in accordance with section 37-5(b)(3) of this article.

Rights related to water or wastewater capacity permits may be revoked by OCU for violation or noncompliance with provisions of such permits, this article, or mistake of fact or law, until such defect is corrected.

(1)

Sales of service rights related to wastewater capital charges paid. Any person or entity currently holding a wastewater permit for which capital charges were paid prior to April 3, 2012, may sell all or any portion of the rights to service associated with such permit to any third party for use on property owned by the third party, but only upon complying with the conditions and subject to the restrictions set forth below:

a.

The permit holder shall supply an affidavit, in a form prescribed by or acceptable to the director, indicating that:

1.

The permit holder has actual knowledge that no FDEP collection system permits have been issued related to the capacity that is the subject of the sale; or

2.

A diligent search of the records of OCU, the FDEP, the permit holder, and any other pertinent records has revealed that there is no valid FDEP collection system permit issued related to the capacity that is the subject of the sale.

b.

All outstanding capacity maintenance fees have been paid in full.

c.

The service rights subject to the sale may only be used on property lying within the wastewater service area within which the original wastewater capacity permit was issued unless authorized otherwise by the director.

d.

The permit holder must have acquired the wastewater permit more than two (2) years prior to the proposed sale date (for purposes hereof, the date of acquisition shall be the date that OCU issued the wastewater permit that is the subject of the sale).

e.

Those permit holders or their successors or assigns who purchased 3MGD capacity at one thousand six hundred dollars ($1,600.00) per ERU shall pay an additional three hundred dollars ($300.00) per ERU to OCU before using or selling such service rights. However, the seller of such service rights may supply an affidavit to OCU from the buyer of the service rights attesting that the three hundred dollars ($300.00) per ERU will be paid prior to use, in lieu of making the actual three hundred dollars ($300.00) per ERU payment prior to a sale.

f.

The permit holder must provide a lawyer's opinion letter in a form prescribed by OCU which states, based upon a search of the public records of both Orange County, Florida, and the Office of the Secretary of State, an affidavit of the permit holder, and any other pertinent data (or a statement that the attorney drafting the letter, after due diligence and inquiry, is unaware of any other pertinent data), that the wastewater service rights are not encumbered by any security interests, mortgages, or other encumbrances of any kind that would affect the sale or transferability of the service rights. The opinion letter shall also state that the permit holder involved in the sale has full legal right and authority both to make the request and to bind all other legal or beneficial owners of the subject wastewater permit. The seller may provide an affidavit attesting to all of the foregoing in lieu of an opinion letter in the event of a de minimus sale.

g.

The permit holder shall record in the public records of Orange County, at the permit holder's expense, a "status of permit" notice (1) describing the lands that are the subject of both the original wastewater permit and any new documents created to effect the sale; (2) setting forth the flow in GPD allocated to each such permit or other document; and (3) identifying the holders of all such permits or other documents. The notice shall be in a form prescribed by or otherwise acceptable to the director.

h.

The permit holder must obtain written consent from OCU for the sale.

i.

Any person or entity that purchases all or any portion of the rights to service associated with a wastewater permit under the requirements of this section shall be subject to all requirements of this article with the exception of section 37-5(b)(2) (Recapture). The capacity purchased in this manner may only be used on the property specified in the "status of permit" notice referenced in "g." above, and cannot be sold or transferred for use on another property.

(2)

Transfers of rights to water and wastewater service related to capital charges paid. Except as otherwise set forth below, any holder of a water or wastewater permit for which capital charges were paid prior to April 3, 2012 may transfer all or any portion of the rights to service allowed by such permit, but only upon complying with the conditions and subject to the restrictions set forth below. However, transfers with the conveyance of property shall not be required to comply with conditions (a) or (d), and assignments shall be governed by section 37-7(c)(4)b., and not by this section.

a.

The permit holder shall supply an affidavit in a form prescribed by or acceptable to the director indicating that:

1.

The permit holder has actual knowledge that no FDEP collection or distribution system permits have been issued related to the capacity that is the subject of the transfer; or

2.

A diligent search of the records of OCU, the FDEP, the permit holder, and any other pertinent records has revealed that there is no valid FDEP collection or distribution system permit issued related to the capacity that is the subject of the sale.

b.

All outstanding capacity maintenance fees must be paid in full.

c.

Those permit holders or their successors or assigns who purchased 3MGD capacity at one thousand six hundred dollars ($1,600.00) per ERU shall pay three hundred dollars ($300.00) per ERU to OCU before using or transferring such service rights. However, the transferor of such service rights may supply an affidavit to OCU from the transferee of the service rights attesting that the three hundred dollars ($300.00) per ERU will be paid prior to use, in lieu of making the actual payment prior to a transfer.

d.

The permit holder must provide a lawyer's opinion letter in a form acceptable to the director which states, based upon a search of both the public records of Orange County, Florida, and the Office of the Secretary of State, an affidavit of the permit holder, and any other pertinent data (or a statement that the attorney drafting the letter, after due diligence and inquiry, is unaware of any other pertinent data) that the service rights are not encumbered by any security interests, mortgages, or other encumbrances of any kind that would affect the sale of the service rights. The opinion letter shall also state that the permit holder signing the transfer request has full legal right and authority both to make the request and to bind all other legal or beneficial owners of the subject water or wastewater permit. The transferor may provide an affidavit attesting to all of the foregoing in lieu of an opinion letter in the event of a de minimus transfer.

e.

The permit holder shall record in the public records of Orange County, at the permit holder's expense, a "status of permit" notice (1) describing the lands that are the subject of both the original water or wastewater permit and any new documents created to effect the transfer, and (2) setting forth the flow in GPD allocated to each such permit or other document, and the notice shall be in a form prescribed by or otherwise acceptable to the director.

f.

The permit holder must obtain written consent from OCU for the transfer.

(3)

Refunds of water capital charges.

a.

Each previously issued water permit or allocation of water system service capacity shall be valid until used, assigned, transferred, or relinquished to OCU, in OCU's discretion pursuant to this section, in exchange for the water connection fees and capital charges originally paid (without interest).

b.

Rights to prepaid water system service capacity may be revoked by OCU for violation of or noncompliance with provisions of such capacity allocation certificate, or this section, mistake of fact, or mistake of law, until such defect is corrected. All water connection fees and capital charges paid related to unconnected capacity shall, upon issuance of a water system service allocation certificate therefore, be refundable if:

1.

The director determines that a hardship to the owner exists and the director and the owner mutually agree that for good reason, the water system service capacity allocation should be canceled and all water connection fees and capital charges related to unconnected capacity be refunded; provided, that no owner shall be entitled to any interest on any fees or charges paid to OCU, whether refunded or not; or

2.

The capacity owner cannot or will not use all or any portion of the water system service capacity allocated pursuant to a previously issued water permit or other water system service allocation method, the owner may request a refund of connection fees and capital charges related to unconnected capacity from OCU in a form prescribed by the director. OCU shall refund such connection fees and capital charges at the rate originally paid by the owner for the surplus water system service capacity. OCU may defer the refund thereof until OCU has unencumbered water capital charges available to affect the refund.

(4)

Refunds of wastewater capital charges.

a.

A permit holder may request a refund, for all or part of the wastewater capacity granted under a wastewater permit, of the capital charges originally paid to OCU for such capacity by completing a wastewater capital charge refund form.

b.

All requests for refund will be processed under this section and shall be subject to the following:

1.

Refunds will be made only from and to the extent of the revenues received by OCU each month from purchase of new wastewater capacity in the same service area in which was issued the wastewater permit that is the subject of the refund request. Refund requests will be considered on a first-come, first-served basis, and shall be based on the guidelines set forth in a) and b), below:

a)

The revenues from sales of new capacity purchased by small users shall be used first to honor refunds requested by the small users, if any, then on the waiting list. The remaining revenues, if any, shall then be used to honor refunds requested by any large users remaining on the waiting list after refunds are made under subparagraph b.

b)

The revenues from sales of new capacity purchased by large users shall be used first to honor refunds requested by the large users, if any, then on the waiting list. The remaining revenues, if any, shall then be used to honor refunds requested by any small users remaining on the waiting list after refunds are made under subparagraph a.

2.

All revenue derived each month from OCU's sale of new capacity within a particular wastewater service area shall be used first to pay those refund requests which have been received by OCU on or before the last day of the month and which pertain to the particular service area, all in accordance with the priorities described in paragraph 1. The revenue, if any, remaining from such sales on the first day of the subsequent month, after taking into account all refunds paid or to be paid under this section, may thereafter be used by OCU for any lawful purpose. If such revenues are not sufficient to pay all refund requests received as of the last day of the month, those refund requests shall be carried over on the waiting list in the subsequent month or months, as necessary, until paid in full in accordance with the guidelines set forth in this subsection.

3.

Wastewater permits secured by letters of credit are not eligible for wastewater capital charge refunds.

4.

Permit holders awaiting refunds shall continue to pay capacity maintenance fees as they come due pursuant to this article. Outstanding capacity maintenance fees may offset against any potential refund rendered by OCU under this section, except in cases of petitions of bankruptcy and eminent domain proceedings. If:

a)

The permit holder files a petition for bankruptcy; or

b)

The permit holder decides not to develop all or any portion of the property for which the wastewater permit was issued for the permit holder's intended use due to condemnation or threat of condemnation for a public purpose; and

c)

The permit holder irrevocably surrenders all or any portion of the capacity allocated pursuant to such wastewater permit in a form prescribed by the director, then OCU will thereafter not charge capacity maintenance fees on such irrevocably surrendered capacity. The permit holder's right, title and interest to such capacity shall terminate upon the director's (or the director's designee) receipt of such notification.

5.

The amount to be paid to a permit holder for any refund requested shall be the amount paid to OCU by the permit holder (or the permit holder's predecessor) as capital charges for the wastewater capacity surrendered, without interest and without regard to any intervening increases in capital charges. If and when there is uncertainty in the records of OCU, the permit holder requesting the refund shall have the burden of establishing the amount of the capital charges paid for the wastewater capacity surrendered.

c.

The conditions, requirements and restrictions in this section for transfer of capacity likewise apply to and must be complied with prior to any refund of wastewater capital charges, with OCU being considered the "transferee" and the permit holder being considered the "transferor." Refunds of previously designated "Type A" capacity may be considered and approved by the director on a case-by-case basis.

d.

Notwithstanding any other requirements for transferring capacity, the permit holder must provide a lawyer's opinion letter evidencing that the permit holder currently owns the capacity that is the subject of the refund, or otherwise has full legal right and authority to request and accept the refund on behalf of all legal and beneficial owners. The opinion letter shall further state that the capacity is not encumbered by any security interests, mortgages, or other encumbrances of any kind that would affect the refund of the capacity. The director shall be authorized to accept from the permit holder an affidavit attesting to all of the foregoing on a case-by-case basis for a refund request for a permit that has a refund value of no more than seven thousand five hundred dollars ($7,500.00) after all capacity maintenance fees have been paid.

e.

OCU will signify its consent through its issuance of the refund check.

(5)

Miscellaneous.

a.

Restriction in extraordinary circumstances. Any sale, transfer (other than a transfer with the conveyance of property), purchase or refund may be denied if the director determines that such sale, transfer or refund will have a material, adverse effect on the utilities system or public interest, or if the director determines that such sale, transfer, purchase or refund is part of an artifice or device to evade the letter or intent of this article.

b.

Assignment. A developer of a single-family residential subdivision may assign flow, in GPD, from the water or wastewater permit or other document that covers a subdivision for the use on a single lot within that subdivision, subject to the following:

1.

Conditions. All outstanding applicable capacity maintenance fees must be paid in full. Also, the requirement to pay an additional three hundred dollars ($300.00) per ERU for use of 3MGD wastewater capacity purchased at one thousand six hundred dollars ($1,600.00) per ERU shall remain in effect.

2.

Procedure. Assignment letters, in a form prescribed by and acceptable to the director, must be presented to OCU to evidence that fees, including any applicable capacity maintenance fees, have been paid in order to obtain the appropriate endorsements on a building permit application from the Orange County Building Department for that lot. At the time of such building permit endorsement, if the assignment letter has not already been recorded, OCU will collect recording fees and record the assignment letter. The assignee of the flow assumes responsibility for fees, including applicable capacity maintenance fees that may come due after assignment of the flow, and shall also be responsible for forwarding a copy of the assignment after the date the assignment letter is signed by the parties.

c.

Validity of sales, transfers, assignments and refunds. Sales, transfers, assignments or refunds which do not comply with the terms and provisions of this article shall not be valid.

d.

Leases. For sales, transfers, purchases, or refunds, a leaseholder with a term of at least fifty (50) years remaining on a lease shall be treated as a fee simple owner.

(Ord. No. 2012-08 , § 1, 4-3-12; Ord. No. 2013-15 , § 2, 6-18-13)