NS Purchasing - Raftelis Financial Consultant - Efland Sewer Rates Study

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0~~~~C. + ~~;~~ EELAND SE'~ER SYSTEM ~y- Proposal for Rate Study for Small Wastewater Collection Utility revenues Roam rniscellaneous sources. 'I`he cost of service module a.s designed to support the equitable allocation of costs to different customer groups. The rate calculation module deexmin.es rates by taking into account the utility's pricing objectives. The model created fox this engagement will be developed using Microsoft Excel® and will. be based on a model framework that incorporates industry standard rate setting methodology. During the course of the project; County staff will be provided with working copies of the rate model such that they will. be able to provide input into the development of the xnadel, if desired. TASK 3: Faarecast Revenue Requirements Fox this study, revenue requirements will be projected fax a f ve-year foxecast period based upon histo~cal results; the current budget and the planar-ed capital costs associated with the ~fland system.. All casts allocated fox the operat~.an of the Ffland system ~ be incorporated into the xevenue requirements, including the treatment charges assessed by the Town of ~aillsboxough. It will be important to consider any prospective increases in the cost of treatment from the 'Town, as these costs ~ have a significant impact on the forecast of xevenue requirements. ~n addition, the xevenue xequirements ~ incorporate any proportionate allocations of County cont~.butions to reserve fund balances and debt service coverage requirements. RFC ~ work closely with the County's p`inance Department in oxdex to develop a plan fax funding the capital projects associated with the :~fland System, tv ensure that these costs can be incorporated accurately into the total. xevenue xequire~ments. ~.timately, RFC will. project exactly how much cash needs to be collected through wastewater rates in oxdex to meet expenses, both operations and maintenance ~"C~&M"} and capital, in each year of the foxecast period. TASK 4. Rate Calculation. Since the :~fland System consists pay of residential customers that exhibit similar flow characteristics, RFC does not an~tiapate conducting a detailed cost of service analysis that allocates costs into functional components and then to customers classes based on usage chaxacteristi.cs. l~owevex, RFC may consider certain modifications to the exiting rate st~ructvre that could require the allocation of xevenue requirements to different rate components. l~`or example, depending on the usage characteristics of the Ffland System's customers, a potential. alternative fox consideration is the use of a base charge rather tha:a a minimum charge. If it is detexrnined that a signibcant number of lowwincome customers are using less than 3,044 gallons per month, a base charge could provide rate relief to those customers who axe currently paying fox more than they are using. Conversely, those customers that axe using mare than ~,DDD gallons pear month wall. be required to absorb the additional xevenue xequirenaents, which is more consistent with. cost of service parin.ciples. R.FC will use projected flows, accounts, and xevenue requirements to calculate rates. we will project these rates fox five years so the County can gain an understanding of the long-term: axnpact of the proposed rates. c)nce proposed rates have been calculated, the model will also generate rate unpact schedules ,that will demonstrate the impact of the proposed rates on the bills paid by various types of customers. This is especially important since the County is sensitive to affordability issues impacting disadvantaged customers. ONSULTANTS, NC 8