1/18/1984 - Laserfiche WebLink

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Utility Services Director Pinto made the staff presentation, noting that the utility primarily serves The Moorings area and St. Edward's School. The rates they are requesting would not go into effect until the new plant goes into service, and the reason the rates are requested prior to construction is to acquire reasonable financing which would eventually result in lower costs to the customer. Mr. Pinto noted that with this particular utility, there are many circumstances that become a concern in the rate proposal, and staff is looking very hard at what should be built there to protect the territory. Staff does not agree with the manner in which Hutchinson Utilities has calculated depreciation on contributions in aid of construction, and there are also two minor expense items they question. In view of these questions, staff is recommending the requested rate increase not be granted. In addition, the Moorings Homeowners have petitioned for relief on the existing rates. Mr. Pinto believed we are looking at a test year of 1982 which indicates a concern over some salaries and other expenses. He expressed concern that the way the franchise is written, it is very unclear as to what allowable expenses were, how the initial rate was based, and what it was based on in regard to determining a fair rate of return, etc.; therefore, what staff is recommending is that the County bring in a consultant to audit the entire operation of the utility, not only the financial part but the management part, and report that back to the Commission so that a determination can be made as to a rate base. Director Pinto further noted that there is also a legal area not considered yet, which involves what happens to this franchise if this area is annexed into the City of Vero Beach. Administrator Wright reported that he had a discussion with some representatives of the City of Vero Beach in this regard and he was asked to relay the message that if the new N 1 2 r. JA 1 994