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DECISION MEMORANDUM TO: COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER HANSEN JEAN JEWELL RON LAW DAVID HATTAWAY ALDEN HOLM GENE FADNESS WORKING FILE (Barb) FROM: DON HOWELL DATE: JUNE 3, 2002 RE: ST. MARIES RIVER RAILROAD'S OBJECTION TO ITS 2002 REGULATORY FEE, CASE NO. SMR-R-02-1 On May 6, 2002, the St. Maries River Railroad filed a timely objection to its annual regulatory fee for calendar year 2002. In its objection, the Railroad stated that it had over-reported its gross intrastate operating revenues for the calendar year 2001. More specifically, the Railroad asserted that it had over-reported its intrastate revenues by more than $847,767. On May 22, 2002, the Commission issued a Notice of Objection and a Notice of Hearing to examine the Railroad's objection. In its Notice, the Commission directed the Staff to expeditiously conduct an audit to verify the intrastate revenues of St. Maries. If the audit verified the Railroad's adjusted intrastate revenue, the Staff suggested that the Railroad's annual assessment be recalculated. THE STAFF AUDIT AND MOTION On June 3, the Staff filed its Audit Report. After reviewing the Company's revenues, the Staff agreed that St. Maries had incorrectly reported its gross intrastate operating revenue. Based upon its audit, the Staff agreed with the Railroad that the correct gross intrastate operating revenue for calendar year 2001 should be $480,027. Reducing St. Maries River Railroad's operating revenue also affects the calculation of the assessment used to determine each railroad's regulatory fee. Reducing the cumulative amount of gross intrastate revenues for all railroads would increase the railroad assessment from .8171% to .8612% (.008612). Multiplying the adjusted assessment by the corrected St. Maries intrastate revenue would result in a regulatory fee for St. Maries of $4,133.99 instead of $10,848.64. On June 3, the Staff filed a Motion to Close the Case and a Motion to Vacate the Hearing scheduled for June 6. Staff noted that St. Maries agrees that its regulatory fee for calendar year 2002 should be $4,133.99. This would result in a refund of $1,290.33. Consequently, the Staff and the Railroad recommended that the Commission seek the approval of the Board of Examiners to refund this amount. The next Board meeting is in July. Staff also recommended that the Commission not reassess the railroads to make up the budget shortfall caused by St. Maries' lower fee. Staff calculated that adoption of the St. Maries adjustment would result in the Commission under collecting its railroad appropriation by approximately $6,715 or roughly 5% of its FY 2003 railroad budget. Commission Decision 1. Does the Commission find that the adjusted gross intrastate revenue of St. Maries for calendar year 2001 is $480,027? 2. If so, does the Commission further find that the corrected railroad assessment necessary to calculate St. Maries' 2002 regulatory fee is .8612% (.008612)? 3. Does the Commission further find that St. Maries' 2002 regulatory fee should be $4,133.99? If the Commission accepts this amount, does it wish to seek the Board of Examiners' approval to refund $1,290.33 to St. Maries? 4. Does the Commission wish to vacate the hearing and close this case? 5. Does the Commission wish to do anything else? Don Howell vld/M:SMR-R-02-01_dh