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2019 Water, Recycled Water, and Sewer Rate Study <br />Table of Contents <br />TABLE OF CONTENTS <br />ExecutiveSummary......................................................................................................1 <br />1. <br />Introduction...........................................................................................................4 <br />1.1 Utility Background.......................................................................................................................4 <br />1.2 Objectives................................................................................................................................... <br />4 <br />1.3 Study Drivers...............................................................................................................................5 <br />1.4 Study Methodology.....................................................................................................................5 <br />2. <br />Financial Plan........................................................................................................7 <br />2.1 Description..................................................................................................................................7 <br />2.2 Data and Assumptions................................................................................................................7 <br />2.2.1 Beginning Fund Balances....................................................................................................7 <br />2.2.2 Customer Growth & Volume Forecast.................................................................................7 <br />2.2.3 Rate Revenues....................................................................................................................8 <br />2.2.4 Non -Rate Revenues............................................................................................................9 <br />2.2.5 Operation, Maintenance and Existing Debt Service Expenditures......................................9 <br />2.2.6 Cost Escalation..................................................................................................................10 <br />2.2.7 Capital Improvement Plan.................................................................................................11 <br />2.2.8 Interest Earnings on Invested Funds.................................................................................13 <br />2.2.9 Proposed Debt Strategy....................................................................................................13 <br />2.2.10 Reserve Targets................................................................................................................14 <br />2.3 Proposed Rate Revenue Increases..........................................................................................15 <br />3. <br />Cost -of -Service Analysis...................................................................................17 <br />3.1 Process.....................................................................................................................................17 <br />3.1.1 Step 1: Allocate Costs to System Functions......................................................................19 <br />3.1.2 Step 2: Assign Functionalized Costs to Cost Groups........................................................20 <br />3.1.3 Step 3: Credit Non -Rate Revenue to Cost Groups............................................................22 <br />3.1.4 Step 4: Distribute Costs to Customer Classes.................................................................. <br />23 <br />4. <br />Rate Structure.....................................................................................................26 <br />4.1 Current Rates............................................................................................................................ <br />26 <br />4.2 Proposed Rate Structure Changes...........................................................................................28 <br />4.3 Rate Structure Cost Categories................................................................................................28 <br />4.4 Calculation of Fixed Utility Charges..........................................................................................30 <br />4.4.1 Water Utility Costs.............................................................................................................30 <br />4.4.2 Sewer Account Costs........................................................................................................ <br />31 <br />City of Santa Ana Stantec 11 <br />