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EXHIBIT "A" <br /> SCOPE OF SERVICES <br /> A. STUDY OBJECTIVES <br /> To set equitable rates which are necessary to meet the revenue requirements of the water <br /> system . <br /> The new rate structure should provide for a stable and dependable revenue stream , and <br /> eliminate to the greatest extent possible future generational subsidies. Under the new <br /> rate structure fluctuations in revenue should be proportional to fluctuations in variable <br /> costs. Base rates should be adequate to recover fixed costs on an annualized basis. <br /> B. STUDY REQUIREMENTS <br /> Water Enterprise <br /> 1 . Vendors should have a detailed understanding of current water rates , service charges , <br /> and fees. <br /> 2 . The rate structures shall : <br /> a . Comply with existing statutory regulations. <br /> b . Be easy to administer and understand . <br /> c. Be equitable within and between customer classifications . <br /> d . Promote water use efficiency and water conservation <br /> e . Account for decreased revenue due to drought or economic activity <br /> 3 . The Study shall identify utility costs to determine revenue requirements including : <br /> a. Operations and Maintenance <br /> b . Cash- Funded capital expenses <br /> c. Future capital expenses including expansion of the Recycled Water System <br /> d . Debt Service obligations <br /> e . Financial reserve policies <br /> 4. The Study shall allocate costs through a Cost of Service Analysis by: <br /> a . Functionalizing costs <br /> b . Allocating costs to functions, and <br /> c. Distributing the functionalized costs to customer classes <br /> 5 . Customer Classes should include (subsets of customer classes may be required) <br /> a . Residential <br /> b. Commercial/Industrial/Institutional <br /> c. Irrigation <br /> d . Recycled Water <br /> 6. The Study should include the potential for discounted rates or subsidies for special <br /> classes . (i .e . low income households , senior citizens , etc. ) <br /> ATTY/AGR/2016.062/BARTLE WELLS ASSOCIATES <br /> REV: 03-28-16 FF <br /> Page 10 of 12 <br />