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THAN A GREAT AMOUNT OF MAINTENANCE, NO CAPITAL IMPROVEMENTS HAVE <br />BEEN MADE, <br />ATTORNEY BOGOSIAN INFORMED THE BOARD THAT THE DER HAS <br />CITED THE CORPORATION PRIMARILY FOR DEFICIENCES IN THE SEWER PLANT <br />AND HAS ISSUED A FINAL ORDER, WHICH GIVES IXORA UTILIITES SIX <br />MONTHS TO CORRECT THE PROBLEMS - THE MAIN PROBLEM BEING THAT 90% <br />REMOVAL IS REQUIRED. HE STATED THAT LACKING THE MONEY AND ABILITY <br />TO COMPLY, IXORA UTILITIES AT THE END OF SIX MONTHS WILL BE SUBJECT <br />TO A $10,000 -A -DAY FINE, ATTORNEY BOGOSIAN CONTINUED THAT THE PRO- <br />POSED SOLUTION TO THE FINAL ORDER FROM THE DER IS THE INSTALLATION <br />OF AN ENTIRELY NEW SEWER PLANT, AND POINTED OUT THAT THEIR AUDIT <br />REPORT TAKES INTO ACCOUNT THE INSTALLATION OF A NEW SEWER PLANT AT <br />AN EXPENDITURE OF APPROXIMATELY $100,000. ATTORNEY BOGOSIAN INFORMED <br />THE BOARD THAT THE DER APPARENTLY ACCEPTS THE OPERATION OF THE WATER <br />PLANT BECAUSE THEY HAVE A REPORT FROM THE DER ON A WATER SAMPLE <br />COLLECTED JULY 101 1978, INDICATING THAT THE APPEARANCE OF THE WATER <br />IS CLEAR AND THERE ARE NO ADVERSE COMMENTS ON IT. HE NOTED THAT <br />" IXORA UTILITIES, THERFORE, IS CONCERNED ONLY WITH THE ECONOMICAL <br />OPERATION OF THE WATER PLANT AND FEELS THE BIG PROBLEM IS THE SEWER <br />PLANT. <br />ATTORNEY BOGOSIAN CONTINUED THAT IXORA UTILITIES REQUESTED <br />JOSEPH EDELSTEIN, CPA, TO PREPARE A REPORT BASED ON A 10% RETURN, <br />AND THE ULTIMATE FIGURES HE ARRIVED AT CALCULATED OUT TO A WATER <br />RATE OF $15.00 FOR THE FIRST 4,500 GALLONS WITH AN OVERRIDE OF <br />$1,50 AND TO A FLAT SEWER RATE OF $14.00. THE OWNERS OF IXORA <br />UTILITIES FELT THAT THOSE RATES WOULD MEET SO MUCH RESISTANCE THAT <br />IT WOULDNIT DO ANY GOOD TO PRESENT THEM TO THE BOARD. ATTORNEY <br />BOGOSIAN INFORMED THE BOARD THAT EXHIBIT E OF THE PRO FORMA STATEMENT <br />OF INCOME IS BASED ON THE FIGURES THAT WOULD GIVE A 10% RETURN. <br />THEY HAVE REFIGURED THIS BASED ON THE RATES THEY NOW ARE REQUESTING, <br />AND WITH THESE RATES WOULD JUST ABOUT BREAK EVEN, TAKING INTO CONSIDER- <br />ATION THE INSTALLATION OF A NEW SEWER PLANT. ATTORNEY BOGOSIAN <br />STATED THAT THEY ARE AWARE OF THE FACT THAT QUITE A FEW COMPLAINTS <br />