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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 />RequirementLineWaterRevenueIOperating
<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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