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City of Everett 12020 Water,Filtration,Sewer,and Stormwater Rate Study Fe <br /> 1.Project Approach <br /> each customer class of service to their distributed cost of service. This will provide a measure <br /> of the relative equity between each of the customer classes of service. In addition, average unit <br /> costs will be developed (e.g., $/CCF, $/lb.for BOD and TSS, and $/customer/month). Average <br /> unit costs are a useful starting point for rate design (further discussed in Task 5). <br /> Task 4 Assumptions: <br /> • Review of the customer classes and customer class characteristics. <br /> • Equitable allocation of the water transmission and distribution costs to the applicable <br /> customers classes. <br /> • Equitable allocation of the water filtration costs to the applicable customer classes of <br /> service. <br /> • Average unit costs for each utility will be developed for use in developing rates in task 5. <br /> Task 4 Deliverables: <br /> • An electronic copy of the rate model with the updated cost of service analysis for each <br /> utility. <br /> Task 5: Rate Design Analysis <br /> This task will review and analyze the current utility rate structures for water, water filtration, <br /> sewer and stormwater. HDR will recommend rate structure modifications reflective of the cost- <br /> of-service findings and the City's policy objectives for rate and revenue stability, customer <br /> equity, efficiency of use, and administrative practicality. For each proposed rate design, the <br /> revenues to be generated from the fixed and volume-based components of the rate structure <br /> will be identified to help better address the issue of revenue stability. Bill comparisons will be <br /> developed to numerically and graphically show the bill impacts of the proposed rates compared <br /> to the present rates. <br /> The City has identified a number of specific issues to be addressed within the rate design task. <br /> These issues vary by utility and are discussed in more detail below. <br /> Water and Filtration Charges—The City has a water rate structure which separates the <br /> filtration charges from the other water-related T&D charges. The City currently has four retail <br /> rate schedules. The present rate design for retail customers includes a minimum volume of <br /> water within the base (meter)charge. For a 1/2"—3/4" meter, 5 hundred cubic feet(CCF)of <br /> water is included within the base charge. All usage, over and above 5 CCF is billed at the <br /> consumption charge ($/CCF). The volume of water included within the minimum charge varies <br /> by meter size with larger meters receiving a larger volume allowance within the base charge. <br /> The City would like to review the issue of the inclusion of water within the base charge, as well <br /> as a review of the amount of water included within the base charge (i.e., the 5 CCF). For a <br /> variety of reasons, many utilities have transitioned away from the inclusion of water within base <br /> (fixed)charges. <br /> In order to provide a comprehensive review of this issue, HDR will first review individual <br /> customer billing data to determine usage patterns and the impact of the volume allowance. At <br /> the same time, the value of 5 CCF of water must be viewed in the context of the fixed base <br /> charge. Elimination of the 5 CCF will have an impact upon the level of the base charge for each <br /> meter size and the amount of revenue collected regardless of the customer's total usage. HDR <br /> will discuss with the City our initial findings and conclusions regarding the inclusion of water <br /> Page 6 <br />