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2. Truck operating expenses had decreased 31% over the past few <br />years. This seems to be attributable to a corresponding decrease <br />in fuel costs as well as the purchase of fuel efficient vehicles. <br />3. Maintenance expenses have decreased 10% since 1987. According to <br />Harris Sanitation staff, this outlay was reduced by the purchase <br />of a new vehicle, replacing an old truck that was in constant <br />need of repair. <br />4. The depreciation schedule accounted for all assets and the method <br />used was acceptable. <br />5. Salaries and general administration costs turned out to be an <br />area of major increase (up 46.2%). These costs, (which include <br />management and accounting salaries, corporate expenses, office <br />supplies, and billing costs) rose in part from the addition of an <br />Indian River County area supervisor. _ <br />6. Interest expenses rose substantially (55%). This increase was <br />primarily due to the interest costs affiliated with the purchase <br />of trucks, as well as money borrowed to cover operating losses. <br />RECOMMENDATION: <br />After reviewing the revenues and expenses for Harris Sanitation, Inc., <br />and the attached documentation, we find their request for a rate <br />increase to be a reasonable one, and recommend that the Board of <br />County Commissioners approve the attached resolution to increase the <br />residential rates to $8.50 per residential customer, and to increase <br />franchise fees from one percent to six percent annually, based upon <br />the outcome of the Public Hearing. <br />Commissioner Scurlock asked what approved tax year Harris's <br />rate increase presentation is based on, and OMB Director Joe <br />Baird advised that it is 1988. <br />Attorney Robert Stone, representing Harris Sanitation, <br />advised that Stan Harris, who originally founded the company <br />which is now a wholly-owned subsidiary of Waste Management <br />Corporation of Florida, and is now in charge of marketing is in <br />attendance today along with general manager Peter Jergle and <br />comptroller Steve Tatoul to answer any questions the Board may <br />have. <br />Attorney Stone gave a brief history of the firm and stated <br />that Harris Sanitation has never received a rate increase for <br />service. They did receive a rate increase in 1986, which was a <br />pass-through rate for the Landfill. He noted that their <br />t <br />19 <br />BOOK % f'a,c 4 <br />