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ATTACHMENT NINE <br /> RECYCLED WATER PRODUCTION <br /> O&M COST ALLOCATION AND BUDGET SETTING METHODOLOGY <br /> The Commission of the SBSA shall establish a Recycled Water Operations Fund on or <br /> before July 1, 2006. <br /> All monies received by SBSA for operating and maintaining the Recycled Water program <br /> will be deposited in the Recycled Water Operations Fund. All expenses incurred in the <br /> production of Recycled Water will be charged to the Recycled Water Operations Fund. <br /> The Commission of the SBSA shall adopt a budget for Recycled Water production prior <br /> to May 1st of each year, commencing May 1, 2006. The budget will be based on an operations <br /> and maintenance plan developed for the City's anticipated demand for Recycled Water, as shown <br /> on the estimate of monthly demand furnished by the City pursuant to Section 6.4. <br /> In accordance with the adopted budget, the City shall make separate contributions into <br /> the SBSA Equipment Replacement Fund in order to fund the planned refurbishment and <br /> replacement of Recycled Water Facilities 1, 2, 3 and 10, and utilizing the same methodology to <br /> determine City contributions as is used for all other SBSA facilities. <br /> The operation and maintenance costs charged to the Recycled Water Operations Fund, <br /> and included in the Recycled Water production budget shall be as follows: <br /> 1. Direct labor costs for operation of Recycled Water Facilities 1, 2, 3 and 10. <br /> 2. Direct labor costs for maintenance repair of Recycled Water Facilities 1, 2, 3 and <br /> 10. <br /> 3. Actual costs for purchase of chemicals used directly in production of Recycled <br /> Water <br /> 4. Actual costs for parts used in maintenance repair of Recycled Water Facilities 1, <br /> 2, 3 and 10. <br /> 5. Costs for laboratory analyses,predictive maintenance, and preventive <br /> maintenance of Recycled Water Facilities 1, 2, 3 and 10. <br /> 6. Actual costs for special studies authorized by City <br /> 7. SBSA overhead markup on all costs listed above. <br /> SBSA shall deliver a draft budget to City on or before April 1 of each year and will meet <br /> with City to review and discuss projected costs. <br /> August 1, 2004 1 of 4 <br />