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5.3• Drought Rates <br />The next step after determining the drought costs by stage is evaluating the drought cost recovery mechanism, or <br />drought rate structure,that best meets the needs of the City and its customers. Based on direction provided by City <br />staff,the drought rates were developed as a proportional commodity charge increase to the proposed commodity <br />charges for FY 2024,which allows for the ability of customers to change their water bill,encourages conservation, <br />and promotes affordability. <br />5.3.1.DROUGHT RATE CALCULATION & PROPOSED DROUGHT RATES <br />Table 5-8 shows the drought rate percentage calculation. This is calculated by dividing the total drought cost(Line <br />2)by the total expected commodity revenue excluding the revenue from the allotment usage. This drought rate <br />percentage is then multiplied with the proposed FY 2024 commodity rates(Table 4-9)to obtain the proposed <br />commodity drought rates shown in Table 5-9. It is important to note that the drought rates are rounded to the <br />nearest cent and therefore may not match hand calculations. <br />WATER AND RECYCLED WATER RATE STUDY REPORT 65