Chapter 02. Accounting, Financial, and General Information
Regulation .01 General.LinkCopy Citation
Each application for authority to construct a system shall be accompanied by the information required by this chapter.
Regulation .02 Corporate Status.LinkCopy Citation
A.
If an applicant is incorporated, it shall file:
(1)
A certified copy of the charter or articles of incorporation, together with any amendments;
(2)
A copy of the bylaws, together with any amendments;
(3)
Any stock issuance statements; and
(4)
The amount and classes of stock for which the applicant will seek the authority of the Commission to issue and the stated or par value of the shares.
B.
The applicant shall describe the relationship, if any, with a land or home developer concerning the formation, construction, and operation of the proposed system.
C.
An applicant shall submit documentary evidence clearly showing that it is an entity separate from any land or business activity not related to the normal and incidental activities of a water, sewage disposal, or water and sewage disposal company and that it shall keep and maintain books, accounts, and records of expenses, and revenues attributable solely to its operations.
Regulation .03 Capital Structure.LinkCopy Citation
An applicant shall have a minimum equity participation of 25 percent and shall fully disclose all financial and capitalization arrangements to be entered into, and shall provide the details and methods of payment by any person or party of obligations, assessments, fees, and charges resulting from these arrangements.
Regulation .04 Debts and Obligations.LinkCopy Citation
A.
An applicant shall separately describe each mortgage, deed of trust, or other lien upon any property of the applicant to be used in the operation of the proposed system.
B.
In each description required by §A of this regulation, the applicant shall, at a minimum, set forth:
(1)
The date of execution of the described obligation;
(2)
The name, or names, of the trustee or trustees;
(3)
The amount of indebtedness authorized to be secured by the described obligation;
(4)
The amount of the indebtedness actually secured by the described obligation; and
(5)
A description of the mortgaged property or collateral.
C.
The applicant shall describe the number and amount of bonds and debentures authorized and issued under each mortgage, describing each class of bond and debenture separately, giving date of issue, par value, rate of interest, date of maturity, and how the obligation is secured.
D.
If the applicant is unincorporated, it shall describe the amount and type of investments to be made by the proprietor or partners and any limitation on the investments.
E.
The applicant shall describe any other indebtedness incurred by him, giving same by classes, and describing security, if any.
Regulation .05 Franchise.LinkCopy Citation
A.
Except as provided in §B of this regulation, the applicant shall submit certified copies of each necessary franchise issued by the State or by a political subdivision of the State.
B.
If franchises are not necessary, the applicant shall submit an affidavit, made under oath and signed by the officers or owners of the proposed system or systems, stating that local franchises are not required.
Regulation .06 Local Approval.LinkCopy Citation
A.
The applicant shall submit documentary evidence indicating that:
(1)
It has received the required consent of the proper local authorities to the proposed system or systems; and
(2)
The proposed project has been accepted and included in the appropriate county's master water and sewerage plan.
B.
The applicant shall also submit:
(1)
A statement from the area public works or sanitary authority as to its jurisdiction, its construction requirements as they pertain to the applicant, and its agreement that the applicant should provide water service, or sewerage service, or both; and
(2)
A map showing the area within which the applicant has requested authority to exercise franchise or rights for the rendering of water service, sewage disposal service, or both.
Regulation .07 Rates and Revenues.LinkCopy Citation
A.
The applicant shall submit a schedule or schedules of the proposed rates and charges under which service is to be furnished.
B.
The schedule or schedules required to be submitted by §A of this regulation shall include any connection fees and any availability or demand charges proposed to be collected from users of the system.
C.
The applicant shall file:
(1)
A detailed pro forma statement of anticipated revenues and expenses based on a full calendar year's operation under the proposed tariff schedule of rates; and
(2)
A pro forma balance sheet showing the applicant's financial condition at the close of the calendar year referred to in §C(1) of this regulation.
Regulation .08 Establishment of Rates.LinkCopy Citation
A.
In establishing rates, depreciation expense will be permitted only against investor-supplied plant, as determined by the Commission.
B.
Rebuttable Presumption of Contributed Plant.
(1)
An applicant under Public Utilities Article, §5-204, Annotated Code of Maryland, shall be rebuttably presumed to consist of entirely contributed plant for which the total cost and investment either has been or will be recovered.
(2)
Proof of actual investment by investors, organizers, and owners of an applicant may be established by the presentation to the Commission of the books, records, accounts, audited financial statements, and other pertinent documents and testimony of all persons, corporations, and business entities (except regulated financial institutions engaged in the financing, construction, and the operation of the applicants for the period of financing and construction).
Regulation .09 Prior Commission Approval of Borrowings.LinkCopy Citation
Any long-term borrowing, payable in whole or in part more than 12 months after date of issuance, by a water or sewage disposal company regulated by the Commission shall be void and of no force and effect unless made with the prior approval of, or until approved by, the Commission.
Regulation .10 Records and Record Keeping.LinkCopy Citation
A.
If authorization is granted by the Commission, the applicant shall keep accurate records of the actual costs of the water system, the sewerage system, or both, and shall keep an accurate account of the revenues received and expenses incurred in connection with the operation of the system.
B.
The records shall be kept in accordance with the “Uniform System of Accounts for Water Utilities” or the “Uniform System of Accounts for Sewerage Utilities”, as amended, which are subject to modification by the Commission.
C.
Copies of the accounting systems referred to in §B of this regulation can be purchased from the National Association of Regulatory Utility Commissioners, 1102 Interstate Commerce Commission Building, Washington, D.C. 20044.
D.
For the purpose of applying the appropriate systems of accounts, water and sewage disposal companies are divided into the following four classes:
(1)
Class A—Annual utility operating revenues of $500,000 or more;
(2)
Class B—Annual utility operating revenues of $250,000 or more but less than $500,000;
(3)
Class C—Annual utility operating revenues of $50,000 or more but less than $250,000; or
(4)
Class D—Annual utility operating revenues of less than $50,000.
Chapter annotations
Authority: Public Utilities Article, §§2-121 and 5-204, Annotated Code of Maryland
History: Effective date: October 11, 1982 (9:20 Md. R. 1982)