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Table 1 -2 compares the <br /> projected operating Composition of FYE 2010 <br /> revenues to the projected $1,200 Revenue Requirements <br /> expenses of the utility on 2 <br /> an annual basis. The nn <br /> results shown in Table 1 -2 •o i <br /> indicate the need for the DebtService <br /> City to adjust their local CIP From Rates <br /> sewer rates. Overall, it <br /> appears that the City's $579 $2,705 <br /> rates will be deficient by 1i% 60% <br /> approximately 35% at the <br /> end of this planning period L_ <br /> (FY 2017). In reviewing this table, it should be noted that the level of adjustments are <br /> cumulative. That is, any adjustment in the initial years will result in the need for lower <br /> adjustments in the future. <br /> The figure to the right <br /> shows the breakdown of Composition of FYE 2017 <br /> the revenue requirements $26ao Revenue Requirements <br /> in FY 2010. As can be 44% <br /> seen, the majority, 60 of <br /> the expenses are for O &M. o &r <br /> In comparison, in FY 2017, <br /> Debt Service <br /> 56% of the costs go to <br /> O &M while 44% is spent CIP From Rates <br /> on CIP from rates. The $3,349 <br /> increase in CIP from rates 56% <br /> is for the City to fund the $0 <br /> extensive replacement o% <br /> projects planned for the <br /> future based on the asset management study. <br /> 1.8 Rate Transition Plan <br /> Given the size and magnitude of the projected rate adjustments, the need for a transition plan was <br /> explored with the City. The purpose of the rate transition plan is to determine the size and <br /> timing of the rate adjustments to meet Pleasanton's needs, but also to help minimize impacts to <br /> customers. <br /> The City Council has directed staff to adjust rates based on the annual Consumer Price Index <br /> (CPI), and equally to all customers at this point in time. As a result the proposed rate transition <br /> plan assumes annual increases based on the CPI, which for the purposes of this study is <br /> estimated at 3% per year beginning July I, 2011. It should be noted that this level of rate <br /> adjustments will not provide adequate funding based on the revenue requirement assumptions <br /> developed as part of this study after FY 2014. As a result, capital improvement funding or <br /> ED Development o! the Revenue Requirement 1 -7 <br /> City o! Pleasa Local Sewer Rate Study <br />