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r- AUG 1993 Wastewater Treatment Plant and Collection System BOOK 90 PAGE 226 1 The wastewater treatment plant is in good operating condition. GDU being a County franchised utility is inspected on a quarterly basis by the County staff. GDU has responded promptly to any deficiencies noted in these inspections. A copy of the May, 1993,inspection and the deficiencies noted and GDU's response is attached. There are currently several maintenance deficiencies associated with the wastewater plant and collection system. The costs necessary to correct these deficiencies have been evaluated and are included in the revenue requirements to maintain the system. Water Distribution System The water distribution system is in good operating condition with normal maintenance requirements. There are several maintenance deficiencies with the water system. The costs necessary to correct the deficiencies have been evaluated and are included in the revenue requirements to maintain the system. 5. The reasonableness of the purchase or sales price and terms: The Net Plant in Service as of 12/31/92 was $6,040,567. The negotiated purchase price is $3,000,000 plus approximately $25,000 in closing costs. The purchase price represents a 50% discount in the Net Book Value of the system. The staff believes that the reason for the opportunity to purchase the system at this price is solely due to the fact that the larger GDU systems have been sold. The staff does not believe that this opportunity would be available in the future. The terms of the sale are payment in full at closing. 6. Impacts of the Purchase or Sale price on the Utility customers: The current Indian River County utility customers would not be impacted by the purchase of the utility. This is because the debt service for the acquisition cost, operational and maintenance requirements will be supported with revenues generated from the existing GDU customer base under current County uniform rates. A current GDU customer using an average of 5,000 gallons per month would realize a 19% increase over his current GDU rate under current County uniform rates. The same customer could be paying up to 113% more under the proposed GDU rates as filed in its May,1993, rate increase. Analysis of IRC and GDU Current Rates Monthly Usage IRC Current Rates GDU Current Rates Increase on IRC Rates Increase 0 Gal(Min) $26.70 $18.35 $8.35 45.5% 5,000 Gals $50.49 $42.30 1 $8.19 19.36% 7,000 Gals $60.49 $52.36 1 $8.13 15.55% The long-term effect of service to the GDU rate environment. of this purchase will be higher level utility customer and a more stable 34