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3.2. Revenue Requirement
<br /> Table 3-1 shows the water revenue requirement for the base year, FY 2024.The revenue requirements(Line 5)are
<br /> comprised of the O&M expenses(Column D, Line 2),debt service(Column D, Line 3),and rate funded CIP
<br /> (Column D,Line 4).The revenue offsets(Line 10)represent the miscellaneous, non-rate revenues(Lines 8 and 9)
<br /> that are used to offset the revenue requirement.The adjustments for cash balance(Line 13)is equal to net cash flow
<br /> for FY 2024(Table 2-20, Column C,Line 27)and represents the amount that is drawn down from reserves to fund
<br /> costs. The adjustment to annualize rate increase(Line 14)represents the difference in additional revenue that
<br /> would have been collected had the rate adjustments been implemented at the start of the fiscal year. The total
<br /> revenue requirement(Line 17)is equal to revenue requirements(Line 5)less revenue offsets(Line 10)and
<br /> adjustments(Line 15). The revenue requirement is comprised of two components:operating costs(Column B)and
<br /> capital costs(Column Q. The operating and capital components will be allocated based on O&M expenses and
<br /> long-term asset values.
<br /> Table 3-1: FY 2024 Water Revenue Requirement
<br /> RequirementLine Water Revenue I Operating
<br /> 1 Revenue Requirements
<br /> 2 O&M Expenses(Less Zone 7 Costs) $10,842,999 $10,842,999
<br /> 3 Debt Service $1,385,849 $1,385,849
<br /> 4 Rate Funded Capital Projects $3,955,000 $3,955,000
<br /> 5 Total-Revenue Requirements $10,842,999 $5,340,849 $16,183,848
<br /> 6
<br /> 7 Revenue Offsets
<br /> 8 Other Revenues ($2,720,041) ($2,720,041)
<br /> 9 Interest Income ($275,000) ($275,000)
<br /> 10 Total-Revenue Offsets ($2,995,041) $0 ($2,995,041)
<br /> 11
<br /> 12 Adjustments
<br /> 13 Adjustment for Cash Balance ($3,163,870) ($3,163,870)
<br /> 14 Adjustment to Annualize Rate Increase $4,037,822 $4,037,822
<br /> 15 Total-Adjustments $873,952 $0 $873,952
<br /> 16
<br /> 17 Revenue Required From Rates $8,721,910 $5,340,849 $14,062,759
<br /> Table 3-2 shows the recycled water revenue requirement for the base year,FY 2023.The revenue requirements
<br /> (Line 5)are comprised of the O&M expenses(Column D, Line 2),debt service(Column D,Line 3), and rate
<br /> funded CIP(Column D,Line 4). The revenue offsets(Line 10)represent the miscellaneous,non-rate revenues
<br /> (Lines 8 and 9)that are used to offset the revenue requirement. The adjustments for cash balance(Line 13)is equal
<br /> to net cash flow for FY 2023(Table 2-20, Column C,Line 28)minus the proportionate share of adjustments for
<br /> recycled water and represents the amount that is drawn down from reserves to fund costs.The adjustment to
<br /> annualize rate increase(Line 14)represents the difference in additional revenue that would have been collected had
<br /> the rate adjustments been implemented at the start of the fiscal year.The total revenue requirement(Line 17)is
<br /> equal to revenue requirements(Line 5)less revenue offsets(Line 10)and adjustments(Line 15).
<br /> The revenue requirement is comprised of two components: operating costs(Column B)and capital costs(Column
<br /> C).The operating and capital components will be allocated based on O&M expenses and long-term asset values,
<br /> respectively.
<br /> WATER AND RECYCLED WATER RATE STUDY REPORT 33
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