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<br />CAMPBELL's water rate (as shown in Exhibit 1 <br />of this contract) will utilize the most recent <br />12-month CAMPBELL water consumption data, as <br />measured by the CITY, adjusted for known and <br />measurable changes. <br /> <br />4. The first 1 million cubic feet of monthly <br />consumption shall be billed at the prevailing <br />rate established for a 5/8" meter with the <br />remainder billed at the calculated volume rate <br />according to the most recent cost of service <br />study or annual update. <br /> <br />7.2 Every three (3) years, a detailed Cost of Service <br /> <br />Study shall be developed on an actual historical cost test <br /> <br />year basis allowing for reasonable and necessary expenses of <br /> <br /> <br />providing such water service and allowing for known and <br /> <br />measurable adjustments. <br /> <br />Such adjustments should allow for <br /> <br />year-end trending and the spreading of non-recurring expenses <br /> <br />over an appropriate benefit period. CITY shall be allowed an <br /> <br />adequate opportunity to recover all of its cost of service. <br /> <br />The next detailed Cost of Service Study shall be performed by <br /> <br />an independent utility rate consultant during the last <br />calendar quarter of 1993 and the first calendar quarter of <br />1994, based upon actual operating data for the immediate past <br /> <br />fiscal year ended September 30, 1993. <br /> <br />On a three (3) year <br /> <br />cycle thereafter, a complete detailed rate study will be <br />performed with the same methodology used in the previous rate <br />study by an independent utility rate consultant, unless and <br />until a different methodology is mutually agreed upon by CITY <br /> <br />and CAMPBELL. <br /> <br />In the interim periods between complete <br /> <br />WATER PURCHASE CONTRACT - Page 8 <br />