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CHAIRMAN WODTKE FELT, THEREFORE, THE DEVELOPER WOULD BE RECEIVING A RETURN ON HIS INVESTMENT BECAUSE THE COSTS WERE INCLUDED IN THE CONSTRUCTION COSTS. COMMISSIONER SIEBERT FELT THE BOTTOM LINE QUESTION IS WHETHER TODAY IS RATE PAYERS ARE BEING ASKED TO CORRECT THE IN— EFFICIENT OPERATION OF THE SYSTEM OVER THE LAST 16-18 YEARS. NATHAN TANEN STATED THAT IS NOT THE CASE. THE PROBLEM IS -NOT WITH THE OPERATION OF THE PLANT AS IT WAS DESIGNED, BUT THAT IT JUST IS NOT DESIGNED TO MEET THE STANDARDS REQUIRED BY THE DER TODAY. CHAIRMAN WODTKE NOTED THAT THE BULK OF TESTIMONY RE= CEIVED TODAY FROM THE USERS HAS DEALT 100% WITH THE QUALITY OF THE WATER, AND ALTHOUGH IXORA UTILITIES IS ASKING FOR A RATE INCREASE IN WATER AND SEWER CHARGES, THEY ARE PROPOSING TO CORRECT ONLY THE SEWER. MR. TANEN STATED THAT THE SEWER PLANT IS THE PROBLEM, AND THEY CANT MAKE WATER IMPROVEMENTS AT THE PRESENT TIME. COMMISSIONER SIEBERT ASKED MR. TANEN IF AFTER THE PRE— VIOUS HEARING HE LEFT REALLY THINKING THAT ALL THEY DID WAS GET •A RATE INCREASE AND THERE WOULD BE NO CAPITAL EXPENDITURES NECESSARY? MR. TANEN FELT HE HAD MADE IT CLEAR AT THE PREVIOUS HEARING THAT WITH THE LOWER RATE GRANTED THERE WOULD BE NOTHING LEFT FOR CAPITAL IMPROVEMENTS, EVEN THOUGH THIS APPARENTLY IS NOT RE— FLECTED-IN THE MINUTES. COMMISSIONER SIEBERT STATED THAT HE WAS LEAD TO BELIEVE THAT, WITH OR WITHOUT A RATE INCREASE, THEY HAD NO CHOICE BUT TO IMPROVE THAT PLANT, MR, TANEN STATED THAT HE WAS SORRY IF HE GAVE THAT IMPRESSION. CHAIRMAN WODTKE ASKED IF THE FIGURES ARE AVAILABLE THROUGH MAY OF 1978, AND MR. EDELSTEIN STATED THEY ARE NOT READY TODAY, BUT SOON WILL BE AVAILABLE. COMMISSIONER.SIEBERT ASKED WHEN MR. EDELSTEIN CALCULATED THE RATE OF INVESTMENT IF HE CALCULATED ALSO ON THE $100,000 AND MR. EDELSTEIN SAID HE DID BECAUSE IT IS A'PRO FORMA FIGURE. 147 JUL 191978 a \ CHAIRMAN WODTKE FELT, THEREFORE, THE DEVELOPER WOULD BE RECEIVING A RETURN ON HIS INVESTMENT BECAUSE THE COSTS WERE INCLUDED IN THE CONSTRUCTION COSTS. COMMISSIONER SIEBERT FELT THE BOTTOM LINE QUESTION IS WHETHER TODAY IS RATE PAYERS ARE BEING ASKED TO CORRECT THE IN— EFFICIENT OPERATION OF THE SYSTEM OVER THE LAST 16-18 YEARS. NATHAN TANEN STATED THAT IS NOT THE CASE. THE PROBLEM IS -NOT WITH THE OPERATION OF THE PLANT AS IT WAS DESIGNED, BUT THAT IT JUST IS NOT DESIGNED TO MEET THE STANDARDS REQUIRED BY THE DER TODAY. CHAIRMAN WODTKE NOTED THAT THE BULK OF TESTIMONY RE= CEIVED TODAY FROM THE USERS HAS DEALT 100% WITH THE QUALITY OF THE WATER, AND ALTHOUGH IXORA UTILITIES IS ASKING FOR A RATE INCREASE IN WATER AND SEWER CHARGES, THEY ARE PROPOSING TO CORRECT ONLY THE SEWER. MR. TANEN STATED THAT THE SEWER PLANT IS THE PROBLEM, AND THEY CANT MAKE WATER IMPROVEMENTS AT THE PRESENT TIME. COMMISSIONER SIEBERT ASKED MR. TANEN IF AFTER THE PRE— VIOUS HEARING HE LEFT REALLY THINKING THAT ALL THEY DID WAS GET •A RATE INCREASE AND THERE WOULD BE NO CAPITAL EXPENDITURES NECESSARY? MR. TANEN FELT HE HAD MADE IT CLEAR AT THE PREVIOUS HEARING THAT WITH THE LOWER RATE GRANTED THERE WOULD BE NOTHING LEFT FOR CAPITAL IMPROVEMENTS, EVEN THOUGH THIS APPARENTLY IS NOT RE— FLECTED-IN THE MINUTES. COMMISSIONER SIEBERT STATED THAT HE WAS LEAD TO BELIEVE THAT, WITH OR WITHOUT A RATE INCREASE, THEY HAD NO CHOICE BUT TO IMPROVE THAT PLANT, MR, TANEN STATED THAT HE WAS SORRY IF HE GAVE THAT IMPRESSION. CHAIRMAN WODTKE ASKED IF THE FIGURES ARE AVAILABLE THROUGH MAY OF 1978, AND MR. EDELSTEIN STATED THEY ARE NOT READY TODAY, BUT SOON WILL BE AVAILABLE. COMMISSIONER.SIEBERT ASKED WHEN MR. EDELSTEIN CALCULATED THE RATE OF INVESTMENT IF HE CALCULATED ALSO ON THE $100,000 AND MR. EDELSTEIN SAID HE DID BECAUSE IT IS A'PRO FORMA FIGURE. 147 JUL 191978