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<br />REVISED DRAFT <br /> <br />v. <br /> <br />WATER AND WASTEWATER UTILITY FINANCIAL OPERATIONS <br /> <br />A. <br /> <br />Determination of Test Year Revenue ReQuirements <br /> <br />To recognize the City's contract customers' contractual terms two test year revenue requirements <br /> <br />were developed, on¡:: for the contract customers, and one for the retail customers. Table B-1 in <br /> <br />Appendix B shows the revenue requirement, as adjusted, for the test year for the contract <br /> <br />customers. Table C-l in Appendix C shows the revenue requirement, as adjusted, for the test <br /> <br />year for the retail customers. The revenue requirement for the contract customers was developed <br /> <br />on the fiscal year ended September 30, 2001 actual expenses, while the retail customer revenue <br /> <br />requirement was based on the City's FY 2001/2002 budget. Adjustments and reclassifications to <br /> <br />the revenue requirements are as follows: <br /> <br />Raw Water Supply <br /> <br />Since the City budgets both raw water supply and water treatment O&M expenses in <br /> <br />Water Production, it is necessary to separate raw water supply costs into their own <br /> <br />separately-allocable cost section. Production electricity is allocated between supply and <br /> <br />treatment based upon the ratio of supply and treatment electricity expense to production <br /> <br />electricity expense. <br /> <br />Water Distribution and Transmission <br /> <br />Water distribution and transmission costs must be reclassified from expense type to cost- <br /> <br />causal categories. Personnel, supplies, contractual, building maintenance, equipment <br /> <br />maintenance, sundry costs, and equipment capital outlay are classified into the three <br /> <br />categories of distribution and transmission (less than 8", 8" to 24", and greater than 24") <br /> <br />City of Paris. rems <br />Walerand Was/ewaler Cos/af&rviceSllldy <br />March 2001 <br /> <br />17 <br />