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<br />REVISED DRAFT <br /> <br />VIII. DETERMINATION OF TEST YEAR REVENUE REOUIREMENT <br /> <br />Table C-l in Appendix C shows the revenue requirement, as adjusted for the test year. As <br /> <br />shown in this exhibit, the total revenue requirement for the City's Wastewater Utility is <br /> <br />estimated to be $4,372,792. The initial beginning point in developing the total wastewater utility <br /> <br />revenue requirement was the City's FY 2001/2002 budget adjusted to incorporate the projected <br /> <br />FY 2002/2003 debt service. <br /> <br />A. <br /> <br />Functionalization of Revenue ReQuirement <br /> <br />Unlike the water utility system, where separate consideration of extra capacity components of <br /> <br />plants and facilities is crucial to equitable allocation and cost distribution among customer <br /> <br />classes, it is not necessary to account for extra capacity in the allocation and distribution of costs <br /> <br />among wastewater utility customers unless there is large reserve capacity in the system. <br /> <br />The City's wastewater operation and maintenance expenses can be functionalized into the <br /> <br />following service cost functions: <br /> <br />a. <br /> <br />Warehouse <br /> <br />b. <br /> <br />Billing and Collecting <br /> <br />c. <br /> <br />Sewer Maintenance (Wastewater Collection) <br /> <br />d. <br /> <br />Wastewater Treatment <br /> <br />e. <br /> <br />Lift Station <br /> <br />CityojP.,;s, Texas <br />Wolerand Wastewaler Cost ojServiceS/lldy <br />March 2003 <br /> <br />25 <br />