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VIII. DETERMINATION OF TEST YEAR REVENUE REQUIREMENT <br />TaUle C-1 in Appendix C shows the revenue requirement, as adjusted for the test year. As <br />shown in this exhibit, the total revenue requirement for the City's Wastewater Utility is <br />estimated to be $4,687,924. The wastewater utility revenue requirement is based on the City's <br />FY 2010 budget. <br />A. Functionalization of Revenue Reauirement <br />Unlike the water utility system, where separate consideration of extra capacity components of <br />plants and facilities is crucial to equitaUle allocation aud cost distribution among customer <br />classes, it is not necessaiy to account for extra capacity in the allocation and distribution of costs <br />among wastewater utility customcrs unless there is large reserve capacity in the system. <br />Tl1e City's wastewater operation and maintenance expenses can be functionalized into the <br />following service cost functions: <br />a. Warehouse <br />b. Billing and Collectiilg <br />c. Sewer Maintenance (Wastewater Collection) <br />d, Wastewater Treatment <br />e. Lift Station <br />Warehouse <br />Since wastewater warehouse operations serve Uoth treatment and collection, warehouse costs are <br />functionalized Uased upon composite allocation factors. <br />Billing and Collecting <br />These are costs associated with meter reading, billing, administration and other functions of the <br />wastewater utility that are independent of quantity and quality of thc wastewater contribution by <br />a custonier. <br />16 crry of Pnris, reias <br />Wnrer (oid 4Ynsremater Cosr ojService Study <br />June 2010 <br />-1 241 <br />