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Exhibit A (Scope of Work)   <br />upon accounting codes (e.g., pumping, transmission, storage reservoirs). The functionalized <br />data is then allocated into the cost components of commodity, demand, storage, pumped water <br />volumes and number of connections. These allocated costs are equitably distributed to <br />individual customers and then summarized into the following customer groups: <br /> City and City Metered <br /> Alderwood1 <br /> East of River = Marysville + Other Wholesale + Monroe +Tulalip + Class B water <br />systems <br />A summary page of the cost of service for the water T&D indicates the cost responsibility of <br />each of the major customer groups (City, and East of River). <br />Water Filtration – Water filtration costs are a separate set of costs from the Water T&D costs. <br />At the same time, the water filtration cost of service methodology is much different from the <br />Water T&D cost of service methodology. In the case of water filtration, Alderwood has a <br />specific formula for filtration charges. Alderwood’s formula requires the use of historical (actual) <br />data. There is a specific formula for the calculation, but in very simplified terms, it is essentially <br />a “cash basis” calculation which includes Alderwoods proportional share of the costs of O&M, <br />debt service and capital costs for filtration. Given that the rate is based on actual/historical <br />costs must be used, this study will not project the Alderwood filtration costs for the projected <br />years of 2025 – 2028. As part of the review, a revision to the filtration rate structure for <br />Alderwood may be necessary to stabilize the rates based on capital expenditure fluctuations <br />and changes in the sinking fund minimum target. HDR will assist with the information provided <br />to Alderwood as this will require an amendment to the water agreement between the City and <br />Alderwood. <br />Filtration costs for all other water customers (i.e., retail and other wholesale) will be calculated <br />as a part of this study. As a part of the prior comprehensive rate studies, the filtration charges <br />were adjusted by the overall proposed annual filtration rate adjustments. This rate was then <br />compared to a calculation which analyzed the total filtration costs, less Alderwood filtration <br />revenues, to derive and average cost (rate) for filtration to retail and other wholesale customers. <br />This same approach is proposed for this study to evaluate the filtration charges. <br />Sewer –This study will conduct a sewer cost of service study and equitably allocate costs to the <br />various customer groups. The sewer cost of service study is important at this point in time, as <br />the City is anticipating a change in their stormwater rate structures by moving to impervious <br />area based stormwater rates in the near future. At the present time, the stormwater rates are <br />incorporated into the City’s sewer rates. Movement to impervious area-based stormwater rates <br />will segregate the costs of stormwater out of the City’s sewer rates. Hence, a sewer cost of <br />service analysis will equitably allocate only sewer-related costs to each customer class of <br />service. <br />The City currently serves the following sewer customer classes of service: <br /> Residential – Inside and Outside City (1.5 outside City rate multiplier) <br /> Non-Residential – Inside and Outside City (1.5 outside City rate multiplier) <br /> <br />1 The cost allocation for Alderwood is not relevant in that their cost responsibility, in accordance with their <br />wholesale agreement, is determined (calculated) each year and based upon their actual usage.