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7.A. - Page 29 <br /> 1.3 Rate-Study Process <br /> The general process used in this study is summarized on the following diagram. Two key elements <br /> of the study included: <br /> a) 10-Year Financial Plans - Development of financial projections to evaluate annual revenue <br /> requirements and the overall level of rate increases needed to fund the costs of providing <br /> service and support long-term financial stability, and <br /> b) Cost of Service Rate Design - Development of new rates designed to equitably recover the <br /> costs of providing service from the City's water and sewer customers. <br /> Rate Study Process <br /> 1111) Financial Cost of Service Outreach & <br /> Plan Rate Design Adoption <br /> Clarify Objectives 10-Year Financial Projections Analyze Usage&Billing Data Build Consensus <br /> Establish Process&Schedule CIP Financing Alternatives Evaluate Rate Alternatives Public Education <br /> Review Data&Assumptions Evaluate Financial Scenarios Cost Allocation&Rate Design Proposition 218 Process <br /> 1.4 Utility Billing <br /> The City issues a combined utility bill to its customers for water, sewer, and solid waste collection <br /> services. Residential customers are typically billed on a bi-monthly basis while commercial <br /> customers are typically billed on monthly basis. Utility bills are due and payable within 30 days of <br /> the bill date. Customers who are delinquent on payment are provided a 10-day reminder notice, a <br /> subsequent 7-day notice warning of the potential for shutting off water service, and a subsequent <br /> 48-hour notice of potential disconnection. If no effort has been made to contact the City and pay <br /> the delinquent bill, the City may subsequently shut off the customer's water service. <br /> 1.5 Constitutional Requirements for Rates <br /> The water and sewer rates proposed in this report are designed to comply with two key articles of <br /> the California Constitution: Article X and Article XIII D. <br /> 1.5.1 Article XIII D, Section 6 <br /> Proposition 218 was adopted by California voters in 1996 and added Articles XIII C and XIII D to the <br /> California Constitution. Article XIII D, Section 6 governs property-related charges, which the <br /> California Supreme Court has ruled includes ongoing utility system charges such as water, sewer, <br /> B Background, Objectives& Legal Requirements 2 <br /> Water&Sewer Financial Plans&Rate Studies <br />