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40 <br />40 1 <br />Amortization of Ca ital Costs: There were capital items <br />t wi c were amortize over dive years instead of being <br />depreciated. When the capital items were amortized, the cost <br />® <br />of the assets were not entered into the rate base calculation. <br />This means rates would be lower for consumers if you amortized <br />the capital items rather than depreciate. The utility would <br />j prefer to amortized and staff has no problem with this. <br />Management of Utility: There was a great deal of dialogue, <br />• at the meeting, over the poor managment of the Utility, there- <br />fore, staff recommends no rate of return the first year <br />and increased to 12 percent thereafter provided the Board of <br />County Commissioners deems the Utility is operating under <br />efficient and economical management. <br />Utility Service Director Terry Pinto reported that after <br />reviewing all the testimony given at the recent rate hearings, staff <br />is recommending that the revenue requirement for Breezy Village be set <br />at $27,504 for the first year, which will allow the company to receive <br />only that which is needed for operational purposes, and no rate of <br />return on their investment. At the end of the year, staff will <br />request that the Utility's operations be reviewed and if it is <br />determined that they have operated satisfactorily, then they will <br />allow them a rate which will provide a 128 return. <br />Commissioner Bird asked if there was some level of achievement <br />that they can follow during the first year so that they will know if <br />they are qualifying, and Director Pinto felt that the Utility was very <br />aware of what we expect, mainly better record keeping. He advised <br />that they will bring this back to the Board with their report. <br />MOTION WAS MADE by Commissioner Scurlock, SECONDED by <br />Commissioner Bird, that the Board adopt Resolution 85-05, <br />the Final Order for Breezy Village Sewer and Water <br />Company, Inc. <br />12 <br />