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but if the Commission wishes an escrow account to be set up to replace the facilities, then they could retain an engineer to do a replacement cost study, which could jack up the rates another $20 a month or so. Attorney Collins asked Mr. Hunsberger if the Utility had asked the customers if the reason they had cut back on their water consumption was due to the quality of the water, and Mr. Hunsberger stated that he had not questioned the customers, but he had looked at the historical consumption and asked Dr. Wilson to inquire as to whether there had been any water quality complaints filed with the Health Dept. Attorney Collins stated that rather than cross examine Mr. Hunsberger any further, he would prefer to make an affirmative presentation to the Commission. Attorney Henderson interjected that he wanted to clear up the matter of the sinking funds and explained that the County has required a repair and replacement account which is similar to a sinking fund into which the Utility would be paying monies. He asked Utility Services Director Pinto what actually happens if money is used from that account. Director Pinto confirmed that the Utility is required to have a 2h% gross revenue replacement fund which is controlled by the County. That money cannot be expended unless it is approved by the County. If the County allows any of that money to be spent for repair or replacement of equipment, it will be shown as CIACs in future rate cases and will reduce the rate base accordingly. He further noted that to protect the customers, the County can draw funds from that account and make the repair itself if it finds that the Utility has not made proper equipment repairs. Attorney Henderson understood then that the Utility does not actually benefit by this fund in terms of getting a higher rate of return. 15 NOV 8 1984 BOOK 5 8 Ftk,E 81