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r JAN 9 1985 BOOK 59 P�,H- 407 Amortization of Capital Costs: There were capital items which were amortized over five years instead of being depreciated. When the capital items were amortized, the cost of the assets were not entered into the rate base calculation. This means rates would be lower for consumers if you amortized the capital items rather than depreciate. The utility would prefer to amortized and staff has no problem with this. Management of Utility: There was a great deal of dialogue, at the meeting, over the poor managment of the Utility, there- fore, staff recommends no rate of return the first year and increased to 12 percent thereafter provided the Board of County Commissioners deems the Utility is operating under efficient and economical management. Utility Service Director Terry Pinto reported that after reviewing all the testimony given at the recent rate hearings, staff is recommending that the revenue requirement for Breezy Village be set at $27,504 for the first year, which will allow the company to receive only that which is needed for operational purposes, and no rate of return on their investment. At the end of the year, staff will request that the Utility's operations be reviewed and if it is determined that they have operated satisfactorily, then they will allow them a rate which will provide a 12% return. Commissioner Bird asked if there was some level of achievement that they can follow during the first year so that they will know if they are qualifying, and Director Pinto felt that the Utility was very aware of what we expect, mainly better record keeping. He advised that they will bring this back to the Board with their report. MOTION WAS MADE by Commissioner Scurlock, SECONDED by Commissioner Bird, that the Board adopt Resolution 85-05, the Final Order for Breezy Village Sewer and Water Company, Inc. 12