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<br /> Page 3 <br /> Letter to T. Anthony Reid, P.E. <br /> (c) Identify, as a minimum, the revenues contributed by <br /> residential, mul ti- family, conunercial, industrial and <br /> educational users, so that rate structures by class can be <br /> adjusted to arrive at the total income amount necessary to <br /> support the operation for that customer class. <br /> Task 5. Recommend ~aanges to the Rate Structure. <br /> (a) The proposed rates for providing services to each class of <br /> customer will be designed, to the maximum extent practicable, <br /> to reflect the actual costs of providing services to that <br /> class. <br /> (b) In e!';tablishing the proposed rates, revenue expected from <br /> such sources as contributions, interest income, surcharges, <br /> fees, pro rata, and permit fees will be considered. Special <br /> consideration will be given to <br /> l. Residential, Multi-family, Commercial and Industrial <br /> Water Rates <br /> 2. Wholesale Water Rates <br /> 3. Water Treatment Rates <br /> 4. Wastewater Treatment Rates <br /> 5. User Charges and Industrial Cost Recovery <br /> 6. Commercial Office Service Fee <br /> 7. Water Conservation-Based Rates and Impact of Water <br /> Conservation on Revenues <br /> 8. Impact Fees <br /> 9. Utility Deposit Policy and Administration <br /> Task 6: Preparation and Presentation of Final Report. <br /> <br /> A final report will be prepared summarizing the results of the <br /> water and wastewater studies and recommending rate structures for <br /> these services. Thirty copies of the report will be provided to <br /> the City. After delivery of the final report, the Pro j ect Team <br /> will make a presentation to the City Council on the study. <br /> Rate Design Software for Microcomputers <br /> In addition to the six tasks listed above, Freese and Nichols will <br /> develop comprehensive rate design so ft war e for the City which <br /> parallels the water and wastewater utility rate study. This rate <br /> design program \.,ill be an effective tool to permit in-house <br /> revisions in the future. As a test of its completeness, the <br /> software developed will be used to analyze the historical <br /> operating expenses and revenue requirements and project future <br /> rates that will be presented in the final report. The Lotus-based <br /> software will be tailored to the City's needs and will address <br /> relevant factors included in current rate design methodology. <br /> This software will be similar to that recently developed by Freese <br /> and Nichols for the City of Grand Prairie, and will include a <br /> financial planning model to evaluate historical expense and <br />