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Balance revenues and expenditures The Water Fund is an enterprise fund which should be self- sustaining and pay for all on -going operations and maintenance costs. Prudent management practices indicate that revenues and expenditures should be in balance each fiscal year, with an ending fund balance of less than $500,000. Distribute costs equitably across entire water system RESIDENTIAL CUSTOMERS A Dwelling Unit Equivalent (DUE) is defined as equal to one single family residential unit. A Basic Service Charge applying the DUE methodology is charged to every residential dwelling unit within the water system, as follows: Single Family Residential Customer means one (1) independent dwelling unit per parcel of real property and equals one (1) DUE. Multi- Family Residential Customer means more than one (1) dwelling unit per parcel of real property. The conversion schedule for applying the DUE methodology is as follows: 0 to 9 dwelling units: 1.00 DUE applied per unit to basic service charge 10 to 59 dwelling units: 0.75 DUE applied per unit to basic service charge 60 and over dwelling units: 0.50 DUE applied per unit to basic service charge The benefits to customers of the DUE method of calculating bills are: • Each dwelling unit enjoys lifeline rates for the first 10 units of water used. • The conversion schedule takes into account that the potential impact of higher density residential developments to the system is not as great as other types of customers. COMMERCIAL CUSTOMERS The basic service charge for commercial accounts is determined by applying a ratio of the flow limits of a "standard" 5/8 "X3/4" meter, as established by the American Water Works Association (AWWA) in relationship to the flow capacity applied to the size of an individual commercial account meter. This formula is also used in setting water system Facilities Fees in the City: METER SIZE AWWA FLOW LIMITS (GPM RATIO 5/8 11 X3/4" 20 1.0 3/4" 30 1.5 1 50 2.5 1 1/2" 100 5.0 2" 160 8.0 In effect, the Basic Service Charge for a 2 -inch commercial meter will be eight (8) times that of a "standard" 5/8 "X3/4" meter, since the system must be able support eight times the potential flow for that customer. Page 2 of 3