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�i <br />TABLE 2 <br />MONTHLY INCREMENTAL & TOTALIZED COSTS INCURRED BY EXPANSION <br />OF THE <br />EFLAND SEWER SYSTEM <br />Assumptions <br />1. Debt reduction is over a 20 year period at 7.0% <br />2. Existing debt to General Fund is $236.000 or $1850 per month <br />3. Existing customer base is 130-households <br />4. Existing and new customers generate 300 gpd waste flow <br />5. Administrative cost average $3.00 per customer <br />6. Treatment costs are $3.30 per 1000 gallons <br />7. Existing maintenance costs are approximately $900 per month, <br />including funds set aside for equipment replacement, and <br />future costs will be $200 per new pump station <br />PHASE <br />DEBT <br />SERVICE <br />I - 0 <br />& M <br />ADMINISTRATIVE <br />I TREATMENT <br />I TOTAL <br />INC.-J <br />TOTAL <br />IINC. <br />I TOTAL <br />INC. <br />I TOTAL AINC. <br />I TOTAL I <br />INC. <br />I TOTA <br />I <br />6550 <br />8400 <br />1 200 <br />1100 1 <br />200 <br />1 550 <br />1 1800 <br />1 5700 1 <br />8750 <br />1 15750 <br />II <br />1800 <br />10200 <br />1 50 <br />1150 1 <br />100 <br />1 650 <br />1050 <br />6750. 1 <br />3000 <br />1 18750 <br />III <br />2200 <br />12400 <br />1 150 <br />1300 <br />150 <br />1 800 <br />1350 <br />8100 1 <br />3850 <br />1 22600 <br />IV <br />1600 <br />14000 <br />1 150 <br />1450 <br />100 <br />1 900 <br />900 <br />9000 <br />2750 <br />1 25350 <br />V <br />700 <br />14700 <br />1 150 <br />1600 <br />50 <br />1 950 <br />400 <br />9400" <br />1300 <br />1 26650 <br />As can be seen from the table above, the monthly operational costs <br />for an expanded sewer system can be quite expensive. It should be <br />noted that debt service ranges from fifty -three to fifty -five <br />percent of the total operating expense for every phase of sewer <br />development. It is nearly impossible to cover the costs of debt <br />service within sewer use rates. For this reason. most utilities <br />utilize sewer assessments as construction cost recovery method. <br />When the assumptions and the total costs for all debt service <br />and operation expenses per phase from the table above are used to <br />calculate the average customer's monthly sewer bill. Phase I <br />expansion sewer_ bill would be approximately $85 for existing and <br />new customers. This rate compares unfavorably with a monthly bill <br />of $42 for the same amount of sewer usage at the existing rate <br />structure and with OWASA's rate of approximately $20 month for a <br />slightly higher sewer usage. Assuming that Phase I and its <br />customer base is developed first, the development of any or all <br />successive phases will have very little impact on the average <br />sewer bill. If other phases of the sewer system are constructed <br />singly or together before the construction of Phase I. the <br />incremental increase in the average sewer bill would be less than <br />it would be with Phase I construction alone. However, whenever <br />Phase I is constructed, the sewer bill will rise above $80. It is <br />also important to remember that construction of Phases III and V <br />would be difficult if Phase I were not constructed first. <br />