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Attorney Collins explained to Ms. Roen that bonds do have limitations, and we have had some serious problems with older franchises where the developers walk away from them. Mr. Fancher wished to know if the cash dollars required for maintenance of the system would come of such a fund because they address the problems that arise as they happen and would not want to have to go through an additional process to get at the dollars for maintenance. Attorney Collins felt the fact that they are a large company is mitigating, but felt the bond is no help because it requires going through a judicial process. Ms. Roen commented that apparently the main concern is a default situation. She pointed out the plant is inspected by the D.E.R. on a regular basis and they can furnish those reports which would make the Board aware of any problems. They would have no objection to posting a corporate performance bond of the parent company that would cover problems that could not be remedied within a 30 day time period, but to put cash up front in a system where they are cash poor seems to be self-defeating. Chairman Lyons noted that General Development obviously will be coming back to the Board one of these days to talk about rates, and he felt the Board should indicate at this time that we want to have something like a repair and replacement fund which will be set up at a certain level. This will give General Development time to get that settled between now and the next rate hearing. Mr. Fancher felt that could be worked out as part of the rate making process. Commissioner Scurlock noted that if the Board would allow him to work with General Development in a similar manner as he did with Hutchinson Utilities, he could go over the questions he has in mind and then they can be addressed when they come back in for a rate increase. NOV 4 1991BOOK 4 PAGE 9 96