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Exhibit A -Scope of Work ^ Provide any "as needed" data refinements or additional data needs as determined during the process of developing the cost of service analysis Deliverables as a Result of Task 1.6 -Prepare Cost-of-Service Analysis. From the work accomplished above, the deliverables for this task will be as follows: ^ Development of the cost-of-service model ^ Review of the City's sewer utility, current system data and the cun-ent customer classes of service ^ A "fair and equitable" allocation of the revenue requirements to the various classes of service for the City's local sewer system. ^ A summary of the cost of service (comparing present revenues to allocated requirements), along with average unit costs (cost-based rates) for the various customer classes of service. Task 1.7-Working Session With Finance and Public Works Staff Task Objective: Review the results of the revenue requirement financial plan) and the cost of service to gain policy direction on alternative rate designs. As the study progresses, HDR will be working closely with the City's project team (Finance and Public Works) to assure that the methodology and analyses developed for the revenue requirements and cost of service properly reflect the City's data, information and specific facilities/characteristics. For the study to move forward to Phase Two (Rate Design), certain policy decisions will need to be made. Specifically, the City will need to make a determination of the following: - The overall level of adjustment to rates and the timing of those adjustments (revenue requirements and transition plan). - The target revenue levels from each class of service (cost of service) for purposes of designing rates - The rate structure alternatives that the City would like to analyze in Phase Two To gain policy direction on these key decisions, a formal working session with the project team will be scheduled. This meeting is intended to be a formal working session with the project team to discuss three key issues. These three issues are as follows: - Regulation Requirements and Government Codes -Discuss and review the impacts that current regulations and government codes may have on the City's sewer rate structures, senior and low-income programs and rate equity. - Cost of Service Rates - A comparison will be provided of City's current rates and the average unit costs (cost-based rates) from the cost of service study. This comparison typically provides the basis for any changes in inter-class rates and/or fixed and variable charges. - Alternative Rate Structures -Review and discuss alternative (conceptual) rate structures for possible technical evaluation in the Phase Two portion of the study. Within this task, it has been assumed that no detailed technical analysis will be required (i.e. calculation of rate design altematives). This task is intended to be a conceptual discussion and ^^ Comprehensive Local Sewer Rate Study A•9 1 L~ City of Pleasanton