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2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis <br />3.1.1 Step 1: Allocate Costs to System Functions <br />The operating expenses, debt service, and cash -funded capital requirements were distributed to specific <br />functional components within each respective enterprise. While many costs can be allocated directly to a <br />functional component (e.g. Water Purchase costs are allocated to the Water Purchase function), some <br />costs are divided among multiple functional components. For example, costs that are best allocated <br />based on the proportionate value of the system's assets, such as capital costs and debt service, were <br />allocated based on the book value of existing assets ("Fixed Assets"). <br />A summary of cost functionalization (for water and sewer, respectively) are presented in Table 3-1 and <br />Table 3-3. Subsequently, each line item in the budget is assigned one of the cost categories shown in <br />Table 3-1 (for water) and Table 3-3 (for sewer). These assignments are detailed in Appendix C <br />(Schedule 11) for water and Appendix D (Schedule 12) for sewer. The summary results from those <br />assignments (by budget category) are provided in Table 3-2 and Table 3-4. <br />Table 3-1: Allocation of Water System Costs to Functional Components <br />vvawi rUIUIIax iwio - - - - - - - - - <br />Production and Supply - 1uu% - - - - - - - - <br />Pumping Electricity - - 100% - - - - - - - <br />Tr.afm.nf_ nc.mi,a lc _ _ _ 1nnO <br />Treatment - - 100% - - - - - <br />Transmission & Distribution - - - - - 100% - - - - <br />Storage - - - - - - - 100% - - <br />General & Administrative - - - - - - - - 100% - <br />Recycled Water - - - - - - - - - 100% <br />Fixed Assets 5.0% 0.3% 0.0% 0.1% 0.2% 67.3% 3.8% 18.4% 4.7% 0.2% <br />Table 3-2: Summary of Water Cost Functional ization by Budget Category <br />City of Santa Ana Stantec 119 <br />