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City of Santa Ana, CA I SANITARY SEWER AND WATER FINANCIAL PLAN <br />tabulation is a critical element in examining usage trends, <br />potential structure modifications, and the creating new <br />customer classes, In evaluating bill tabulation data, the basis for <br />establishing new tiers, break points, exceptions and promoting <br />water conservation can be determined, <br />4.3 Develop an Operating Fund financial plan based on forecasted <br />revenue and expenses for the systems. The financial plan will <br />cover a five (5) year period. The financial plan will incorporate the <br />following elements: <br />0 Forecast sanitary sewer and water revenues under existing <br />rates for the planning period recognizing projected accounts, <br />volumes, and usage patterns by customer class, <br />Forecast sanitary sewer and water 0 &M expenses, power costs, <br />distribution systems, debt service, transfers, reserves, and other <br />expenditures, <br />4.4 Develop a Capital Fund long-term financial plan based on the <br />capital needs assessment in subtask 4.1. The financial plan will <br />include considerations for various financing alternatives and <br />include a review for affordability based on current and expected <br />rates. <br />4.5 Develop a R &R Fund financial plan based on capital needs <br />identified in R &R Program that will incorporate annual <br />depreciation expense. <br />4.6 Develop a profit and loss statement and cash flow forecast to <br />determine the cash flow needs of the systems, The cash flow will <br />serve as the basis for the cost of service and rate design analysis. <br />4.7 Review reserve fund levels and policy for operating, capital <br />improvement, R &R, and emergencies. <br />Tasic 5 — Cost of Service Analyses <br />The objective of this task is to perform a cost of service analysis tailored <br />to the City. The goal is to achieve revenue self- sufficiency between <br />services and customer classes within the rate framework. Specific <br />subtasks are: <br />5.1 Determine the appropriate functional classifications of costs for <br />allocation purposes. <br />5.2 Classify functional expenses to cost components such as capacity <br />costs, commodity costs, customer costs and other direct costs. <br />BLACK & VEATCH I Methodology <br />25C -12 <br />