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SEWER RATE STUDY I City of Santa Ana, CA <br />Sewer Rate Study <br />REVENUE AND REVENUE REQUIREMENTS <br />To meet the costs associated with providing sewer services to its customers, the Sewer Enterprise <br />derives revenue from a variety of sources including sewer service charges, interest earned from the <br />investment of available funds, and other miscellaneous revenues. A combination of an analysis of <br />historical and future system growth in terms of wastewater billed serves as the basis for projecting <br />future revenues. <br />With revenue derived from the various sources, the Sewer Enterprise meets the cash requirements of <br />operation and maintenance (O &M); principal, interest, and reserve payments on revenue and other <br />bond indebtedness; and recurring annual capital expenditures for replacements, system betterments, <br />and extensions not debt financed. 0 &M expenses are those expenditures necessary to maintain the <br />system in good working order. Routine annual capital expenditures, which include equipment <br />replacements, consist of recurring annual replacements, minor extensions, and betterments, which are <br />normally revenue financed. Other capital costs include principal and interest payments, bond covenant - <br />required payments, and cash financed capital improvements. <br />Accounts and Customer Usage Projections <br />To forecast revenue, the billed sewer sales volume needs to be determined within the Sewer <br />Enterprise's service area. Billed sewage is incorporated into the equation by projecting the average <br />number of customer accounts illustrated in Table 1 and assessing an average use per account to produce <br />the billed sewage volumes in hundred cubic feet (HCF) shown in Table 2. Based on the sewer master <br />plan and discussions with City staff, sewage growth is estimated to remain constant at 15,269,300 <br />between FY 14/15 and FY 18/19. The City is at near built -out conditions and increase in sewage flow will <br />result of increased density or infill of vacant properties. <br />Table 1: Average Number of Accounts <br />• PROJECTED NUMBER OF • <br />CUSTOMER <br />Single Family Residential 35,244 35,244 35,244 35,244 35,244 35,244 <br />Multi - Family Residential 3,608 <br />Commercial <br />4,398 <br />Industrial <br />83 <br />Institutional <br />226 <br />Irrigation <br />16 <br />Outside City <br />12 <br />Reclaim Water <br />2 <br />Total Accounts <br />43,589 <br />3,608 <br />3,608 <br />3,608 <br />3,608 <br />3,608 <br />4,398 <br />4;398 <br />4,398 <br />4,398 <br />4,398 <br />83 <br />83 <br />83 <br />83 <br />83 <br />226 <br />226 <br />226 <br />226 <br />226 <br />16 <br />16 <br />16 <br />16 <br />16 <br />12 <br />12 <br />12 <br />12 <br />12 <br />2 <br />2 <br />2 <br />2 <br />2 <br />43,589 <br />43,589 <br />43,589 <br />43,589 <br />43,589 <br />22 NOVEMBER 2014 <br />65B -181 <br />