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I. EXECUTIVE SUMMARY <br />A. Introduction <br />Tlte City of Paris ("City") currently has treated water purchase contracts with Campbell Soup <br />Company ("Campbell Soup") and Lamar County Water Supply District ("LCWSD"). Per the <br />contracts, a cost of seivice shidy is required prior to May 315` of each year to deterniine the rates <br />to be charged to Campbell Soup and LCWSD for the next twelve-month period. To comply with <br />the contractual terms, J. Stowe & Co., LLC has conducted a cost of service study. Contractual <br />rates were presented to these contract customers on May 25, 2010. This report describes the <br />study perfornled for the City's contract customers as well as makes recornmendations with <br />respect to the rates to be charged to the City's retail water and wastewater customers. The <br />report consists of nine sections, including the Executive Summary section. Also attached are <br />three appendiccs to supplement the findings of the report. <br />Following the Executive Summary, Sections II througli VI develop the methodology, <br />assuniptions, and the revenue requirement for the water utility portion of the City's Water and <br />Wastewater Utility. Sections VII and VIII develop the methodology, assumptions and the <br />reventie rcquircmcnt fo►• the wastewater utility portion of the City's Water and Wastewater <br />Utility. Finally, Section IX of the report provides the anticipated contract customer revenues and <br />the retail rate reconnnendations. The three appendices following the report consist of Appendix <br />A, operating characteristics of the system, Appendix B, conh•act customers and, Appendix C, the <br />determination of the retail water and wastewater rates. <br />B. Findiuas of Rate Study <br />a. The total budgeted revenue requirement for the Water Utility portion of the test <br />year used in detennining the retail heated water rate is estirnated to Ue $7,377,263 <br />(TaUle C-1), a 0.0% change fiom the City's last cost of service study. <br />b. The total budgeted retail revenue requirement for the Wastewater Utility portion <br />of the test year is esrimated to be $4,687,924 (TaUle G1), a 4.8% decrease from <br />the City's last cost of service study, with a decline in chemical and electricity <br />costs as the primary reasons for the decrease. <br />1 CityofPar•is, Teras <br />Water and FI'asleuvarer Cost ojService Sttidj, <br />Jtune 20/0 <br />-1 226 <br />