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TO: The Honorable Members of DATE: April 19, 1984 FILE: the Board of County Commissioners THRU: �€raA-6r-�-3n 3a--� SUBJECT. BREEZY VILLAGE WATER AND Utility Service Director SEWER, INC., REQUEST FOR RATE INCREASE RATE REVIEW COMMITTEE REPORT FROM: Joseph A. Baird REFERENCES: Assistant Utility Director The staff recommends the denial Village Water and Sewer Company, furnished below. RATE BASE: of the rate increase by Breezy Inc., based on the information The staff has the following exceptions as to the calculation of rate base: 1. "Contributions in Aid of Construction": Connections charges which compose the "Contributions in Aid of Construction" were collected at the owners dis- cretion from some customers but not from others. This policy was followed by both the prior owner and Dr. Wilson, the current owner. Both owners function under Franchise Resolution 73-76 that had under Section XIV a minimum con- nection charge of $300.00 for water and $300.00 for sewer. The Resolution under Section XI also states "The Company shall not as to rates, charges, service facilities, rules, regulations or in any other respect make or grant any pre- ference or advantage to any person nor subject any persoa to any pre'u ice or disadvantage." Since the Utility Company did notcharge arge some customers connection fees, they forced more of the "Utility Plant Service" to be absorbed through monthly water and sewer rates. In the staff's opinion, this was preferential treat- ment by the owners and they should absorb the difference between what was collected and what should have been col- lected in connection fees. By the staff's calculations, this will increase Contributions in Aid of Construction for water and sewer to a minimum of $49,200. 2. Used and Useful: The used and useful adjustment percentage of 11.70 calculated by Breezy Village was based on buildable lots, not daily flows and plant capacity. The staff did a cal- culation based on the highest daily sewer flow and plant capacity and found the percentage of plant reserved for future customers to be 26%. It is the staff's feeling that the Used and Useful adjustment percentage be 26 for the following reasons: 1. Highest daily flows and plant capacity is the most commonly accepted method of computing the percentage of plant capacity being used. 2. It also is felt plant that he should since this would be the customer.. that if the developer oversizes his absorb those costs, not the customer, an oversight or fault of his and not MAY 2 1984 92 BOOK 56 PAGE 891