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9• <br />h. <br />economic conditions and reduced energy costs, the FY 2010 Budget estimated <br />chemical costs approximately $320,000 lower than FY 2009 for water treatment <br />chemical costs and electricity costs for water supply and treatment approximately <br />$100,000 lower than FY 2009. Since the treated water contracts are based on <br />achial and not budgeled expenditures, these cost increases are now being reflected <br />in the treated 4vater contract customers' rates developed in this study, resulting in <br />an increase in revenues required from the treated water contract customers for this <br />year's study. This increase in revenue fi•om the treated water contract customers, <br />coupled with the ciccrease in the Water and Wastewater Utility's budgeted <br />revenue requirement, results in the City's current retail rates being sufficient to <br />meet the Rate Maintenance Policy's Interest and Sinking Fund requirement and <br />net revenues of 1.1 times the test year principal and interest payments. <br />Reviewing the City's Water and Wastewater Capital Improveinents Plan, it <br />appears that projected capital expenditures for the next few years will be in line <br />with the City's current budgeted levels. However, beginning in FY 2013, it is <br />projected that the City will see a considerable increase in capital improvement <br />expenditures. IIased on discussions with City staff, it is anticipatcd that this <br />increase iii capital improvement expenditures will be funded through debt <br />fina»cing in recognition of the signifieant decrease in outstanding deUt principal <br />and interest payments commencing in FY 2013. <br />Recognizing the adjustmenls to the contract customers' rates, and maintaining the <br />current retail water and wastewater rates, the following revenues are estimated to <br />be generated. <br />Water Wastewater <br />Retail $ 4,517,090 Retail $ 4,812,279 <br />Campbell Soup 1,529,513 Sara Lee 272,449 <br />Lamar County WSD 1,527,020 Total $ 5,084,728 <br />Direct Energy 287,726 <br />Lamar Power 249,248 <br />Total $ 8,110,597 <br />3 c;n, oJPnris, Tesas <br />FVnler nnd IVnslewnter Cast ojService Sludj, <br />Jtuie 20/0 <br />228 <br />