25-AGREEMENT BETWEEN THE CITY OF PARIS AND DAISY FARMS

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TII. ANALYSIS OF TEST YEAR DATA A. Water Utilitv Svstem Data The City maintains daily treated water production data at the treatment plant. Over the lasl eleven fiscal years, the City's peak to average day ratio has ranged from a high of 2.00 in FY 2009 to a low of 1.50 in FY 2004. For purposes of allocating the fiinctional water costs of Base and Extra-Capacity, a peak to average day ratio of 1.70, which represents the average system average day to peak day ratio over the last eleven years, was applicd. B. Altocation Operation and Maintenance Expenses to Functional Cost Components In order to recognize that certain facilities of the City's water utility system are used in common by two, three, four or all five of the customer classes identified in Section II, five customer groups have been formed for system cost allocation puiposes. Thcse cost factors havc also been separated into three principal components of Base, Extra Capacity, and Customer costs to provide a means of fiirther distriUuting fiinctionalized costs to tlie various customer classes on the Uasis of the respective responsiUilities of each group for each particular cost fiinetion. Each element of cost is allocated to fiinctional cost components of the system on the basis of the parameter or parameters having the most significant iilfluence on the magnitude of the element of cost. Operation and maintenance expenses ("O&M") are allocated directly to appropriate cost components. Similarly, deUt service costs are allocated to the appropriate cost fiinctions. C. Distribution of Functionalized Cost Comuonents to Customer Groups This is ihe final step in determining the revenue requirement of each individual group of customers from the total revenue requirement of the water system as a whole. The functionalized cost factors are detennined for each individual customer group on the basis of each broup's annual usage characteristics. Due to the point-of-take of water, use of the system, and contractual agreements for the treated water contract customers, transmission and distriUution costs were isolated. While the water g Ciq, of Parrs, Te.rns 61'nler njrd k'asle trnter Cast of Service Slurt v Jiuie 2010 233