COM 0689.004 1996-1998 - Laserfiche WebLink

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design wastewater rates based on cost of service which will generate adequate revenues to support revenue requirements; develop an approach for gradually making the services provided by the Sewer Utility a self supporting enterprise activity; develop a computer model for the County to use in updating the wastewater rates; and develop aCounty-wide wastewater treatment plant assessment fee. The first step of the sewer user charge system review is to estimate future revenues of the wastewater system under existing rates. Projections are then also made for operating expenses and financing requirements associated with the capital improvement program. The corresponding revenues are then evaluated to determine if they are adequate to meet the operating expenses and capital improvement program needs. Six years are shown for planning purposes (fiscal years 1995-2000). The second step is a cost of service analysis which distributes expenses in accordance with various customer class demands. This distribution of costs provides for uniform unit costs to customers. Customer classifications are then assigned costs of service based on their own customer demands or loadings to the wastewater facilities. The cost of service analysis provides a guide toward making rate adjustments for each customer class. From the results of the cost of service analysis, the final step, rate design, is accomplished. We recommend that residential customers be charged a fixed base charge plus a charge based on metered water usage, subject to a volume cap. Such an approach more closely corresponds with the cost of providing service. The billing process must be coordinated with the Department of Water before usage- based rates can be implemented. The maximum volume cap for residential units is recommended to be 9,000 gallons per month which assumes a family of three at 100 gallons per capita per day. This amount is fairly standard and is the same maximum cap used in both Honolulu and Maui. (Honolulu eliminated its cap last year). Scope This study includes the results of analyzing the costs of providing wastewater services by the Sewer Utility. As discussed earlier, total revenue requirements are developed, allocation of costs to customer classes is completed with the resulting proposed wastewater rates based on a system of metered water and metered wastewater usage. Analyses of historical trends are included which show the number of customers, number of units, water sales and wastewater flows and strengths. Annual growth projections are included for the study period. Revenue requirements include operation and maintenance, existing and proposed debt service requirements, capital improvement projects, and equipment replacement reserves. Changing conditions such as additional facilities, recognition of growth, and nonrecurring maintenance expenditures are recognized. Inflation for ongoing expenditures as well as capital improvement projects is included to reflect cost escalation. 2