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<br />, , <br /> <br />(3) <br /> <br />The rate for water usage after October 1, <br /> <br />1991, <br /> <br />shall be as <br /> <br />determined by the cost of <br /> <br />service <br /> <br />study as described in Section 7.2. <br /> <br />7.2 <br /> <br />Every <br /> <br />three <br /> <br />(3) <br /> <br />years, <br /> <br />a <br /> <br />detailed <br /> <br />revenue <br /> <br />requirement shall be developed on an actual historical cost <br /> <br />test <br /> <br />year <br /> <br />basis <br /> <br />allowing <br /> <br />for <br /> <br />reasonable <br /> <br />and <br /> <br />necessary <br /> <br />expenses of providing such water service and allowing for <br /> <br />known and measurable adjustments. <br /> <br />Such adjustments shall <br /> <br />allow <br /> <br />for <br /> <br />year-end <br /> <br />trending <br /> <br />and <br /> <br />the <br /> <br />spreading <br /> <br />of <br /> <br />non-recurring expenses over an appropriate benefit period. <br /> <br />CITY shall be allowed an adequate opportunity to recover all <br /> <br />of <br /> <br />its <br /> <br />cost <br /> <br />of <br /> <br />service. <br /> <br />The <br /> <br />first <br /> <br />test <br /> <br />year <br /> <br />shall be <br /> <br />October 1, 1989, through September 30, 1990, and the first <br /> <br />detailed <br /> <br />cost-of-service <br /> <br />study <br /> <br />shall be performed by <br /> <br />an <br /> <br />independent utility rate consultant engaged by CITY during <br />~ <br /> <br />the first two (2) calendar quarters of 1991 based on audited <br /> <br /> <br />data for the immediate past six (6) months ended September <br /> <br />30, 1990. <br /> <br />On a three (3) year cycl-e thereafter, a complete <br /> <br />detailed <br /> <br />rate <br /> <br />study <br /> <br />will <br /> <br />be <br /> <br />performed <br /> <br />with <br /> <br />the <br /> <br />same <br /> <br />methodology <br /> <br />used <br /> <br />in <br /> <br />the <br /> <br />previous <br /> <br />rate <br /> <br />study <br /> <br />by <br /> <br />an <br /> <br />independent utility rate consultant engaged by CITY, except <br /> <br />that the study shall be based on the entire test year rather <br /> <br />than the last six (6) months. <br /> <br />In the interim period between <br /> <br />complete detailed rate studies, <br /> <br />this contract water rate <br /> <br />shall be adjusted by CITY using the same methodology adopted <br /> <br />-7- <br /> <br />I <br />