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VIII. DETERMINATION OF TEST YEAR REVENUE REQUIREMENT <br />Table 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. Fwictionalizatioii of Revenne Requirement <br />tJnlike the water utility systein, where separate consideration of extra capacity components of <br />plants aiid facilities is crucial to equitable allocation and cost distriburion among customer <br />classes, it is not necessary to account for extra capacity in the allocation and distribution of costs <br />among \vastewater utility customers unless there is large reserve capacity in the system. <br />The City's wastewatee opei•ation and maintenance eapenses can be functionalized into tlle <br />Collo«ing secvice cost functions: <br />a. Wareltouse <br />U. Billing and Collecting <br />c. Sewer Mainteuance (Wastewater Collection) <br />d. Wastewater Treatment <br />C. Lift Station <br />N\'arehouse <br />Since wlstewater warehouse operations serve both treatment and collection, warehouse costs are <br />functionalized based upon composite allocation factors. <br />Billin2 and Collectin2 <br />These are costs associated with meter reading, billing, administration and other fimctions of the <br />wastewatcr utility that are independent of quantity and quality of tlie wastewater conh•iUution by <br />a customer. <br />16 Ciq, oJPnris, Tesas <br />li'nrer m7r16Vnstewnrer Cosr of Service SYurt>> <br />Jtaie 2010 <br />