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<br />Determine Revenue Reauirements <br />In cooperation with financial managers for Firestone, we will determine <br />annual revenue requirements. Revenue requirements reflect the total <br />costs anticipated by the water utility during the current budget year. Any <br />anticipated changes in costs will also be included in the revenue <br />requirements. The wholesale contract with Central Weld County Water <br />District will be studied to determine existing and future cost implications <br />and opportunities to limit costs. <br /> <br />Determine Customer Classes and Water Usaae Characteristics <br />The utility billing system for Firestone will be utilized to determine <br />customer classifications and water use within each customer category. <br />Customers will be analyzed by meter size and usage characteristics. The <br />potential to further differentiate customers will be considered. It may be <br />beneficial to differentiate between single-family and multi-family <br />customers, non-residential and irrigation-only customers, and commercial <br />and industrial customers. The number of customer classifications will be a <br />function of the capability of the existing utility billing system. The number <br />of categories needs to be adequate to insure equity between customers, <br />but limited in number to insure rates are easily administered and <br />understood by the public. <br /> <br />Allocation of Costs <br />Annual costs for operation, maintenance, and system improvements will <br />be categorized and allocated to one of the following cost functions: water <br />supply, transmission, distribution, treatment, storage and customer costs <br />(billing, meter reading, administration, etc.). Different customers place <br />different demands on the water system, so it will be critical to adequately <br />determine costs by function. <br /> <br />Allocation of Costs to Customer Service Characteristics <br />The functionalized costs will be allocated to the different service <br />characteristics. The result of this process will be the determination of unit <br />costs of capacity for the various functions within the water utility; for <br />example, base, maximum day, peak hour, meter and customer costs. <br /> <br />Determination of Revenue Reauirements bv Class <br />The revenue requirements for each customer category will be determined <br />by multiplying the unit cost of capacity by the respective customer <br />demands for each customer class. The resulting product of the <br />multiplication is the revenue requirement for each customer classification. <br /> <br />Rate Desian <br />The final step in the rate study will be the design of equitable rates for all <br />customers. Rates will be designed to incorporate a minimum fixed charge <br /> <br />@ Clear Water Solutions, Inc. <br />Town of Firestone CWCB Water Efficiency Grant Application <br /> <br />7 <br />