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Water Rate Study Recommendations <br />September 17, 2019 <br />Proposed Water Rate Design Approach <br />1. Enhance connection between water rates and the cost to provide water <br />service <br />Water usage rates are directly tied to the cost of purchased and pumped water... <br />... this will result in increased fixed revenue and decreased variable revenue <br />2. Update Pass -Through Provision <br />Automatic updates to rates to reflect changes in wholesale water costs <br />3. Minor modifications to meter equivalency schedule <br />Bringing the meter equivalency schedule in line with industry standards <br />Reflects the hydraulic capacity of the respective meter sizes. <br />n <br />G <br />Rate Structure Cost Categories <br />Commodity Costs <br />Driven by the volume of water sold <br />Water purchases <br />Pumping electricity <br />Associated general & <br />administrative <br />1 <br />Water Usage Charge <br />(variable) <br />10 66% Revenue <br />10 <br />0 <br />Utility Costs <br />Driven by the size of the utility infrastructure <br />Salaries & benetits <br />Operations & maintenance <br />Capital <br />Associated general & <br />administrative <br />1 <br />Water Utility Charge <br />(fixed) <br />34% revenue <br />I l <br />Current fixed revenue: <br />16.2% <br />Stantec Consulting & Hildebrand Consulti'65B_1 1 5 <br />