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FIN 4. Detailed Proposal City of Pleasanton I Water and Wastewater Rate Study • Develop equitable distribution factors for each of the water and wastewater cost-component using City-specific data. a Distribute the classified costs to customer classes of service (e.g.. single-family residential,condos, townhome, multi-family dwellings, commercial, schools, and industrial). • Summarize the distributed costs and compare to the current revenue received from each customer class of service. • Develop average unit costs or cost-based rates (e.g., $/CCF, $/customer/month). Expected City • Attend a three-to four-hour project meeting to review the findings and • Staff Support: results of the cost of service analyses. • • Provide as needed" data refinements or additional data needs. Deliverables: • Review of the current customer classes of service and determine revisions for cost allocation purposes. • A lair and equitable" allocation of the water and wastewater revenue requirements to the various classes of service for the City's utilities. • Cost of service average unit costs (cost-based rates) for each customer class. NOR will develop an average embedded cost of service study to equitably allocate the revenue requirements to the various customer groups (classes of service) served by each utility. In simplified terms, a cost of service study attempts to equitably allocate the revenue requirements between the various customer classes of service. The results of this analysis provide the nexus between each utility's costs and benefits to each utility's customer class of service to meet the proportionality requirements of Proposition 218. Current Vs.Proposed Unit Cost S/c The summary page graphically 57m presents the SSW - -- - - - difference between Ss.m the current level of sum - - — -- - rate revenue and Saw the allocated cost 52.0) - - — - - of service by 5100 • - - - - customer class. saw - Residential NuMIFFanry trnmerdal Interest Proposed 2 .erwe S/c f r current Revenue$/o6 It should be noted that a cost of service analysis is not a simple fixed versus variable analysis. Rather, the analysis is developed to reflect how the City incurs costs to provide service and how the customers benefit from those costs. For the City's wastewater utility, this is primarily on a volume (wastewater flow) basis, while the water utility should reflect the impacts of peak day 4-8 15007