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DEC 111979 Bo 42 VALE 281 SENSE THAT ANY COMPANY WOULD HAVE TO RECOVER THE COST. THE PRACTICE AT THE TIME WAS FOR THE COMPANY TO INVEST THE MONEY AND INSTALL THE LINES. THE CHAIRMAN NOTED THAT THEY STILL HAVE THAT ORIGINAL MONEY INVESTED. EVEN THOUGH THEY SOLD 200 TO 300 HOUSES WHEN THERE WERE NO CONNECTION CHARGES, HE FELT WE CAN ASSUME THEY DID NOT GIVE THE WATER AND SEWER AWAY, AND NOW THEY WANT A RETURN ON THAT MONEY WHEN ACTUALLY THIS CORPORATION RECOUPED THE INVESTMENT. MR. MOSIAN STATED THAT WAS A PERIOD WELL BEFORE HIS TIME WITH THE COMPANY, AND HE IS NOT SURE THAT IS A FACT. COMMISSIONER SIEBERT ASKED WHY THEY DID NOT COME IN FOR A RATE INCREASE PRIOR TO GOING INTO PLANT EXPANSION. MR. MOSIAN EXPLAINED THAT IN 1972 AND 1973 THE IMPACT OF GROWTH AND INFLATION HIT THE COMPANY VERY BADLY, AND IT BEGAN FOR THE FIRST TIME TO LOOK AT ITS RATES AND BEGAN FILING RATE CASES TO RAISE THE RATES IN EVERY DIVISION THEY OPERATE. IT TAKES UPWARDS OF TWO YEARS TO'PROSECUTE A CASE BEFORE THE STATE OF FLORIDA, AND THEY USE THE SAME DOCUMENTATION THAT THEY HAVE HERE TODAY. BECAUSE OF THE TIME AND THE MANPOWER IT TAKES, THEY DECIDED TO FILE THE CASES IN ORDER OF MAGNITUDE, AND THEY ARE JUST NOW GETTING TO VERO. MR. MOSIAN NOTED THAT WITH A SYSTEM THIS SMALL, IT IS VERY DIFFICULT TO MAINTAIN A PROFIT, BUT THEY WERE ABLE TO ABSORB WHAT WERE SMALL LOSSES UNTIL RECENT YEARS. MR. MOSIAN THEN INFORMED THE BOARD THAT THE NUMBER OF CUSTOMERS AS OF MARCH, 1979, WAS 338 FOR WATER AND 238 FOR SEWER. HE EXPLAINED THAT THEY HAVE THREE PERMANENT EMPLOYEES, AND THE LABOR CHARGES SHOWN ARE DIRECT LABOR PLUS A PORTION OF THE LABOR FROM PORT ST. LUCIE FOR MR. VAUGHN AND THE BILLING OFFICE, WHICH CONSISTS OF FOUR PEOPLE. A PORTION OF THEIR TIME IS ALLOCATED TO VERO BEACH ON THE BASIS OF THE NUMBER OF CUSTOMERS. HE NOTED THAT PORT ST, LUCIE HAS APPROXIMATELY 6,000 WATER CUSTOMERS AND 3:500 FOR SEWER. THAT IS WHY THE ALLOCATIONS TO VERO BEACH ARE (QUITE MINIMAL. 36