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<br /> I Z:¡j <br /> structures will reflect the a¡:7plicability of meeting the goals and <br /> objectives of the Owner. <br /> b. For each rate structure designed, compare revenue under <br /> proposed rates from each customer class with their allocated cost <br /> of service to determine the adequacy of cost recovery for the <br /> water utility. <br /> ,0- c. For each structure designed, prepare comparisons of typical bills <br /> under existing and proposed rates for various levels of usage for <br /> , - the water utility. <br /> 6. Computer Model <br /> Concurrent with the rate study and utilizing key components of the <br /> Owner's recent sewer rate model, Program Manager will develop user- <br /> friendly software which will enable Owner's staff to analyze water <br /> system revenue requirements, Project revenues, identify projected costs <br /> of service, and develop rates in the future. Specifically, the software will <br /> include the following: <br /> a. Revenue Requirements. This portion of the rate model will project <br /> revenues based on the existing utility rates and fee schedules. <br /> The model will determine projected revenues to meet revenue <br /> requirements by showing the level of revenue adjustments which <br /> may be needed to operate the utility on a sound financial basis. <br /> The rate model will include elements required to accomplish tasks <br /> described in Section 3 above. <br /> b. Cost of Service Allocations. The rate model will have the capability <br /> of developing costs of service for any test year within the study <br /> period of the model. For each test year, revenue requirements, or <br /> costs of service to be met from rates, will be allocated to customer <br /> classes. The process will include the elements required to accom- <br /> plish tasks described in Section 4 above. <br /> c. Rate Design. The design portion of the rate model will qevelop <br /> water rates for any test year during the study period. The rates <br /> will recognize revenue requirements and cost of service changes <br /> as well as Owner policy considerations. The rate design portion <br /> of the model will include elements required to accomplish tasks <br /> described in Section 5 above. <br /> A-9 <br />