11/9/1983 - Laserfiche WebLink

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NOV 9 1993 I AZACIT ENT A Box 5.5 fAa7 The following is an analysis of General Development Utilities submitted rate increase: Operating revenue and expenses for the 1982 test year seemed reasonable and prudent overall. The adjustments made by General Development Utilities to operating revenues and expenses were as follows: 1. Operating Revenue: The operating revenue adjustment was to reflect the additional operating revenues that would be generated based upon the proposed rates which is an amount of $233,830 and seems reasonable. 2. Operating Expense: Rate case expense estimated to be in the neighborhood of 5,000 was amortized overa two-year period. The $5,000 estimate is extremely reasonable and the amortization over a two-year period is an acceptable practice. 3. Depreciation, Net: The adjustments to reduce depreciation expense is for that portion of Utility Plant in Service considered to be held for future use. The portion of Utility Plant held for future use coincides with the percentage in the used and useful analysis done on the General Development which is acceptable. 4. Taxes Other Than Income Taxes: Property Taxes were reduced by the portion of Utility Plant in Service considered held for future use which was $1,410. This is also based on the=used and usefulness analysis which we find acceptable. Rate Base: Cost of Utility Plant in Service For 1982 has been verified and is correctly stated in the rate base. The adjustments made by General Development Utilities were as follows. 1. UtilitX Plant in Service: This adjustment to reduce Utility Plant in Service y $456,550 is for that portion considered held for future use. This is based on their used and usefulness study that we found acceptable. 2. Accumulated Depreciation: This $69,166 adjustment is to reduce accumulated epreciation for the portion of the Utility Plant in Service held for .future use that has been already depreciated on the books. 3. Working Capital- Working Capital was increased by $312 to compensate for the estimated additional rate case expense of $5,000 that will be incurred. This $312 was based on the cost of money being 12 1/2a. The present cost of money is slightly lower, however, not a significant amount. Rate of Return: The rate of return is definitely within the perimeters of a fair rate of return since they are asking for only 1 1/21 water and zero for sewer. Mr. Pinto stated that they were very concerned about contributions in aid of construction; they have looked into that and did find that the contributions have reduced the cost of the plant in service and, therefore, it is not a return on investment Staff has gone into the number of employees - the salaries they are paid - the expenses of operation based on the size of this facility as compared to 22