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EXHIBIT 3: CONSULTANT'S SUMMARY - RATE PACKET Based upon the consultant's evaluation (item #2, pages 69-70 Exhibit 3), indicates that during the fiscal years 1982 and 1983, the present rates charged for service produced a rate of return on rate base, excluding Pay -TV, which was somewhat lower than could be justified. In the fiscal years 1984 and 1985, with the increased rate base in Indian River County resulting from the system rebuild in progress, the indicated rate of return on rate base at present rates is also lower than can be justified. The rates proposed by the Company for service in Indian River County, Florida, will not produce revenues which are sufficient to generate a rate of return which is fully compensatory on the system rate base resulting from the rebuild of the system in the County. The rates proposed of $9.00 per month for primary service and $2.00 per month for each additional outlet will be charged because it is believed that these are the rates that the market place will be willing to accept for service at the present time. The proposed rates for service are believed to be reasonable. They are consistent with rates charged for similar service in surrounding communities. It is believed to be in the public interest that uniform rates be adopted in both the City of Vero Beach and Indian River County. RECOMMENDATION: The consultants and the franchise department staff recommend the Board give all parties involved the opportunity to comment upon the proposal and other relevant matters and take the request under advisement for a final order to be rendered within sixty days. Director Pinto suggested that Mr. Crosby of Florida Cablevision make his presentation first. Attorney Brandenburg swore in Bill Crosby, Manager of Florida Cablevision, who -requested that the CATV System Rate Study and Proposal be made a part of the record. (RATE STUDY AND PROPOSAL ARE ON FILE IN THE OFFICE OF THE CLERK) Air. Crosby felt that the rate increase was certainly justifi- able and fair as confirmed in the report submitted by Alexander & Associates, the cable television consultants hired jointly by the County and the City of Vero Beach. Mr. Crosby urged the Board to approve the rate increase tonight effective as of March 1, 1985. He stressed that the company is not basing this rate increase on 4 FEB 18 1985 BOOK 59 Four. �'��