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MAY 21984 <br />p_ <br />BooK 56 PAGE 852 lj� <br />e. Professional fees were reduced for amounts <br />incorrectly included in this category but more <br />correctly belong as rate case expense. <br />(Adjustment 5 - $ 10,142.) <br />f. Travel expenses were adjusted to remove <br />those credit card charges more properly <br />classified as rate case expense, construction <br />work in progress, personal expenditures and <br />non-utility business [non-regulated activities]. <br />(Adjustment 6 - $ 3.331.) <br />g. Rate case expenses were incurred by the <br />applicant but were incorrectly posted to various <br />accounts. I have accumulated such costs and <br />amortized them over two years. The resultant <br />dollar amount appears in Schedule attached <br />hereto. (Adjustment 7 - $ 17,835.) <br />h. Officer's salary was reduced by an amount in <br />excess of 55% of the amount claimed by the <br />applicant. This adjustment was necessitated by <br />the finding of the claimed salary as --excessive <br />under the circumstances. The salary as claimed <br />was not necessarily unreasonable per se but <br />rather a finding of excessive cost under the <br />circumstances was made because I could not find <br />justification for adjustment other than <br />comparable costs. (Adjustment 8 - $ 31,020.) <br />i. Payroll taxes were adjusted as a result of <br />the previous adjustment to Officer's Salary. <br />(Adjustment 9 - $ 31969.) <br />j. Wastewater revenues <br />the amount needed <br />requirement calculated <br />$ 16,722.) <br />were adjusted to reflect <br />to meet the revenue <br />by me. (Adjustment 10 - <br />The rate of return calculated by me for use in this case <br />was 12.44%. I arrived at the overall rate of return by averaging <br />the weighted cost rate of money as follows: <br />Type <br />Total Common Stock Equity <br />Long Term Debt: <br />Florida National Bank <br />AVCO Financial Services <br />Totals - <br />Weighted <br />Cost Cost <br />Ratio Rate Rate <br />15.19 15.7 2.38 <br />4.87 18.0 0.87 <br />79.94 11.5 9.19 <br />100.00 12.44 <br />The calculated rate (12.44%) was the applied to a rate <br />basecalculatedbymetobe$217,368.exclusiveof depreciation, <br />contributions in aid of construction (CIRC) and depreciation <br />calculated on CIRC but inclusive of a working capital allowance <br />of $ 21,206. based upon the industry accepted 145 day <br />convention". <br />The information set out <br />my findings based upon my review <br />purposes of reporting to you. <br />56 <br />M <br />above constitutes a summary of <br />and concludes my analysis for <br />Respectfully submitted, <br />Warren E. Silverman <br />Certified Public <br />Accountant <br />Consultant to Indiar�- <br />River Count <br />