ITEM 24 ATTACHMENT 2 - Laserfiche WebLink

City of Pleasanton 2025 Water Rate Study Water Resources Economics 77 5.6 ALLOCATION TO COST COMPONENTS PRELIMINARY COST-OF-SERVICE ALLOCATION AND GENERAL REALLOCATION Table 5-10 shows the preliminary cost-of-service allocation prior to any adjustments and the adjusted cost-of-service allocations after the General cost reallocation. The Operating costs (Line 1) are equal to the total Operating revenue requirements (Table 5-1, Line 17) allocated to each cost component based on the Operating allocation (Table 5-6, Line 8). The Capital costs (Line 2) are equal to the total Capital revenue requirements (Table 5-1, Line 17) allocated to each cost component based on the Capital allocation (Table 5-7, Line 8). The Revenue Offsets (Line 3) are equal to the total Revenue Offset requirements (Table 5-1, Line 17) and are allocated based on the Revenue Offset allocation (Table 5-8, Line 7). Note that the total cost-of-service (Line 4) is equal to the total rate revenue requirement for FY 2025 (Table 5-1, Line 17). The next step is to reallocate General costs (Line 5) based on the proportion of costs in each cost component (except General and Revenue Offset, which is restricted to specific revenues only) in the preliminary allocation. The total revenue requirement (Line 6) stays the same after the General cost reallocation. Table 5-10: Recycled Cost-of-Service Allocation by Cost Component (Preliminary, General) Line Revenue Requirement Meter Customer Water Supply Delivery Rev. Offset General Total 1 Operating Costs $7,849 $4,288 $1,086,633 $336,285 $0 $433,194 $1,868,249 2 Capital Costs $0 $0 $0 $434,895 $0 $0 $434,895 3 Revenue Offsets $0 $0 $0 $0 ($9,500) $0 ($9,500) 4 Preliminary Allocation $7,849 $4,288 $1,086,633 $771,180 ($9,500) $433,194 $2,293,644 5 General Cost Allocation $1,818 $993 $251,730 $178,652 $0 ($433,194) $0 6 Adjusted for General $9,667 $5,282 $1,338,363 $949,832 ($9,500) $0 $2,293,644 Table 5-11 shows the final cost-of-service allocation after reallocating delivery costs to meter, ensuring that the meter and customer unit costs for recycled water match those for potable water. The rationale behind this reallocation is that the City incurs the same amount of meter maintenance costs per equivalent meter and the same amount of customer service costs per bill regardless of service type. The cost-of-service after general reallocation (Line 1) is from Table 5-10 (Line 6).