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<br />125Y <br /> <br />structures may include service charge/volume charge, mlnlmum bill/volume <br />charge, both with varying rate blocks. Rates schedules can also promote <br />conservation or provide rate relief to certain classes of customers as <br />indicated by City policy. <br /> <br />2. Design schedules of rates for up to three alternative rate <br />structures for the utility which will equitably recover the total <br />revenue requirements from respective customer classes in accordance with <br />the cost of service analysis. <br /> <br />3. For each rate structure designed, compare revenue under proposed <br />rates from each customer class with their allocated cost of service to <br />determine the adequacy of cost recovery for the sewer utility. <br /> <br />4. For each structure designed, prepare comparisons of typical bills <br />under existing and proposed rates for various levels of usage for the <br />sewer utility. <br /> <br />5. Meet with representatives of the City to discuss the advantages and <br />disadvantages of each rate structure in meeting the City.s objectives. <br /> <br />F. Computer Model. <br /> <br />Concurrent with the rate study, Black & Veatch will develop user-friendly <br />software which will enable City.s staff to analyze revenue requirements,' <br />project revenues, identify projected costs of service, and develop rates in <br />the future. Selected operating data will be analyzed in a manner which lends <br />itself to assisting management in planning and financial management. <br />Specifically, the software will include the following: <br /> <br />1. Revenue Requirements <br />This portion of the rate model will project revenues based on the <br />existing utility rates and fee schedules. The model will determine <br />projected revenues to meet revenue requirements by showing the level or <br />revenue adjustments which may be needed to operate the utility on a <br />sound financial basis. The rate model will include elements required to <br />accomplish tasks described in Section C above. <br /> <br />2. Cost of Service Allocations <br />The rate model will have the capability of developing costs of <br />service for any test year within the study period of the model. For <br />each test year, revenue requirements, or costs of service to be met from <br />rates, will be allocated to customer classes. The process will include <br />the following elements required to accomplish tasks described in Section <br />D above. <br /> <br />3. Rate Desiqn <br />The design portion of the rate model will develop sewer rates for <br />any test year during the study period. The rates will recognize revenue <br />requirements and cost of service changes of policy considerations can be <br />recognized as well. The rate design portion of the model will include <br />elements required to accomplish tasks described in Section E above. <br /> <br />06/02/93 <br /> <br />A-18 <br />