9/14/1977 - Laserfiche WebLink

Home Browse Search

SEP 14 177 L_ COMMISSIONER SIEBERT ASKED IF EFFICIENCY OF MANAGEMENT OR METHOD OF RECORD KEEPING COULD RESULT IN A HIGHER RATE OF RETURN ON AN INVESTMENT. MR. MULLE FELT THAT IT COULD NOT ON INVESTMENT, BUT IT COULD ON `ABOVE THE LINE" ITEMS. HE NOTED THAT THE COMPANY THAT IS SPENDING MORE ON OPERATIONS WILL NOT ACHIEVE'THE SAME RATE OF RETURN, MR. MULLE EXPLAINED TO THE BOARD THAT HE TOOK THE RATE OF RETURN FOR THE WHOLE HOLDING SYSTEM AND SUPPLIED IT TO MR. COFFEY, WHO WORKED OUT HIS FIGURES BASED ON THIS. ATTORNEY COLLINS ASKED WHY IT IS MATERIAL TO THIS COMMISSION TO KNOW THE RATE OF RETURN FOR THE GENERAL WATERWORKS COMPANY AS A WHOLE, AS HE FELT IT WOULD BE MORE MATERIAL FOR THEM TO KNOW WHAT WATER COMPANIES OTHER THAN GENERAL WATERWORKS HAVE FOR A RATE OF RETURN. MR, MULLE POINTED OUT THAT GENERAL WATERWORKS IS THE SYSTEM THAT ATTRACTS THE CAPITAL, BUT HE STATED THERE ARE OTHER WATER COMPANIES IN THE STUDY. ATTORNEY COLLINS ASKED IF MR. MULLE RELIED ON THE FIGURES PRESENTED TO HIM BY MR, COFFEY. MR, MULLE STATED HE DID NOT, THAT HE GETS HIS FIGURES FROM GENERAL WATERWORKS IN PHILADELPHIA, WHO HAS A REPORT AUDITED BY PEAT, MARWICK & MITCHELL, ATTORNEY COLLINS NOTED THAT WE HAVE HEARD TESTIMONY THAT SOME OF THE MID -FLORIDA DISTRIBUTION LINES ARE PRETTY WELL WORTHLESS, BUT THEY ARE ON THE BOOKS AT A PRETTY HIGH VALUE. MR. MULLE STATED THAT THEY ARE ON THE BOOKS,AT THE DEPRECIATED COST. HE EXPLAINED THAT HIS DECISION IS BASED ON THE CAPITAL DOLLARS ATTRACTED, NOT THE DOLLARS INVESTED, BUT THE DOLLARS OBTAINED FROM THE MONEY MARKET, HE STATED THAT*A UTILITY SYSTEM MUST BE ABLE TO ATTRACT CAPITAL AND MAINTAIN ITS LEVEL OF CREDIT AND THAT DOESN'T HAVE ANYTHING TO DO WITH THE ASSETS EMPLOYED DOWN HERE. HE STATED THAT ACTUALLY MID -FLORIDA BENEFITS FROM THE ATTRACTED CAPITAL. i 24 plo0x 3.1 PArF 53