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15 <br />O~~f~i • [~~y, <br />u c <br />Rate Affordability <br />EF~AND SEWER SYSTEM <br />Proposal for Rate Study for Small Wastewater Collection Utility <br />As noted previously, the County indicates in its RFP that it is currenflp subsidizing the Efland System by <br />approximately X100,000 per year. The RFP also indicates that this shortfall in revenue is associated with the <br />Board's decision to leave rates unchanged in Efland since they were first established in 1987. The basis of the <br />Board's decision not to increase rates relates directly to the significant number of existing customers that are <br />considered to be low-income. Although the County is interested in the Efland System beconvng self- <br />sufficient, it still wants to evaluate alternative strategies for addressing rate affordability. <br />Since there are so few customers in the Efland System, and since such a high percentage of these customers <br />axe considered to be low income, the County will need to carefully balance the customer impacts of a self- <br />sufficient operation with its desire to provide relief to disadvantaged customers. RFC will work closely with <br />County staff to understand its objectives and goals for addressing rate affordability. Several objectives that <br />will be considered include: <br />• Defining the appropriate target customer group; <br />• Evaluating program alternatives (e.g. life line rates, rate vouchers, low-income rates); <br />• Defining the correct criteria for qualifying participants; <br />• Assessing the feasibility of implementation; and <br />• Understanding program costs, including risk. <br />Care must be take to ensure that affordability options are permissible under state law. RFC will work with <br />the County's legal counsel to ensure affordability recommendations are not in violation with applicable <br />regulations. <br />TASK 5: Finalize Rate Model and Report <br />The financial planning and rate development process will be described along with preliminary rate <br />recommendations in a draft report of findings and recommendations. This report will also include an <br />executive stunmary highlighting the major issues and decisions, the results, findings and recommendations. A <br />comprehensive section on the rate design assumptions and methodologies used to develop the user rate <br />calculations and the financial plan will be included. A preliminary version of the rate model will also be <br />provided to the County for comment. Comments from the County will be incorporated into the final report <br />and the rate model to be delivered to the County. <br />TASK 6: Presentation of Results (Optional) <br />At the County's request, RFC can be available to present the results and recommendations of the Study to the <br />Board and local stakeholders in a comprehensive, yet simplistic format. Any comments at the presentation <br />will be documented and, if appropriate, will be incorporated into the rate model and report so the rate study <br />report can be finalized. <br />ONSUI.TANTS, INI Ci.9 <br />