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A 10% RATE OF RETURN AND USED THOSE RATES TO CALCULATE, WHICH <br />SHOWED A NET INCOME OF $17,000. THE ACTUAL RATES REQUESTED ARE <br />LESS AND WOULD SHOW A LOSS OF $1,381. <br />i <br />CHAIRMAN WODTKE ASKED IF THE RETURN ON RATE BASE 10% IN <br />EXHIBIT H IS;BASED ON THE CHANGED RATES, AND ATTORNEY BOGOSIAN <br />STATED THAT FIGURE IS NOT ACCURATE EITHER ON THE NEW BASIS, <br />JOSEPH EDELSTEIN, AUDITOR FOR IXORA UTILITIES, INFORMED <br />THE BOARD THAT WHEN HIS FIRM WAS ORIGINALLY CONSULTED TO PREPARE' <br />THE REPORT, THEY WERE ADVISED AS TO WHAT THE"ADDITIONAL COSTS TO <br />OPERATE THE COMPANY WOULD BE, EMBRACING THE FACT THAT $100,000 <br />WOULD HAVE TO BE INVESTED. ON THAT BASIS, AND EXPECTING THAT THE <br />e <br />INVESTMENT WOULD BE MADE IN THE NEXT FISCAL PERIOD, HE PREPARED <br />SCHEDULE E, WHICH PROJECTS A RETURN OF 10% ON THE COMPANY'S INVESTED <br />ASSETS, AS A CONSEQUENCE OF THE DETERMINATION TO REQUEST LOWER <br />RATES, EXHIBIT E WAS REDUCED TO THE FIGURES PRESENTED BY ATTORNEY <br />BOGOSIAN, LIMITING THE CHARGE TO $10.50 FOR THE FIRST 4,500 GALLONS. <br />MR. EDELSTEIN REVIEWED THE RESULTING CHANGE IN FIGURES AND STATED <br />F <br />THAT IT BROUGHT THE TOTAL REVENUE TO $90,000 INSTEAD OF THE $108,000 <br />PROJECTED IN SCHEDULE E. <br />CHAIRMAN WODTKE ASKED IF THE $31,000 FIGURE IN THE PRO - <br />FORMA STATEMENT OF INCOME FOR ADDITIONAL COSTS TO OPERATE THE NEW <br />FACILITY IS OVER -AND ABOVE WHAT IT IS COSTING TO OPERATE THE PLANT <br />NOW AND WOULD BE FOR THE NEW PLANT WHICH IS REPLACING THE OLD ONE. <br />MR. EDELSTEIN FELT IT WOULD BE OVER AND ABOVE THE PRESENT <br />OPERATING COSTS, BUT NOTED THAT HE BELIEVED THE OLD AND NEW PLANTS <br />WILL BE WORKING IN TANDEM, ALTHOUGH HE DID NOT UNDERSTAND.THE ENGI- <br />NEERING TECHNICALITIES. MR. EDELSTEIN CONTINUED THAT IF YOU GO TO <br />SCHEDULE C AND COMPARE INCOME FOR THE TWO YEARS IN QUESTION, YOU <br />WILL NOTE THERE IS AN OPERATING LOSS OF $45,000, WHICH•HAD TO BE <br />CHARGED AGAINST THE RETAINED EARNINGS. HE STATED REPAIRS WERE DONE <br />IN 1976 AND ARE DETAILED IN SCHEDULES C-1 AND C -Z. MR. EDELSTEIN <br />CONTINUED REVIEWING FIGURES AND•STATED THAT MAINTENANCE DROPPED <br />BECAUSE OF THE REMEDIAL WORK THAT WAS DONE, <br />CHAIRMAN WODTKE ASKED WHAT THE GENERAL AND ADMINISTRATIVE <br />EXPENSE INCLUDED. <br />145 <br />35 PYgJ' <br />JUL 1 9197 <br />1 <br />