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BOOK V8 P'Ar" V6.1 <br />MAR - 9 199 <br />ANALYSIS OF THE BASE FACILITY CHARGE COMPONENT OF THE CURRENT RATE <br />STRUCTURE <br />The Board reviewed the following memo dated 2/24/93: <br />DATE: FEBRUARY 241 1993 <br />TO: JAMES E. CHANDLER <br />COUNTY ADMINISTRATOR <br />FROM: TERRANCE G. PINT / <br />DIRECTOR OF UTILITY SERVICES <br />PREPARED <br />AND STAFFED HARRY E. ASHERlo� <br />BY: ASSISTANT DIRE TOR OF UTILITY SERVICES <br />SUBJECT: ANALYSIS OF THE BASE FACILITY CHARGE COMPONENT OF <br />THE CURRENT RATE STRUCTURE <br />BACKGROUND: <br />The current rate structure was adopted by the County in 1984 after <br />completion of a Cost of Service and Rate Setting Study by Arthur <br />Young & Company and was updated in 1991 by the CH2MHil1 Rate Study. <br />Some of the major factors considered in adopting the current rate <br />structure were as follows: <br />Financial Sufficiency, - Rate structure would generate <br />sufficient revenues over time to recover operating and capital <br />costs, and provide sufficient working capital. <br />Equity - Rate structure charges customers or customer classes <br />in proportion to the costs of providing service to these <br />customer groups. <br />Impact on Customer Classes - Rate structure results in the <br />least economic impact on classes of water and wastewater <br />customers. <br />..vuL&Ji.Lance wa.Ln Appropriate Legal Authorities - Rate structure <br />is consistent with existing County ordinances as well as <br />state and federal statutes, such as EPA user charge <br />regulations. <br />Avoidance of Discriminatory Rate Relationships - Rate <br />structure avoids relationships which cause one customer class <br />to subsidize another customer class. <br />The cost of providing water and wastewater service must be <br />recovered through appropriate charges to customers. The current <br />rate structure to recover these costs consists of the following: <br />(1) Fixed Charges - The monthly fixed charges which represent a <br />the minimum mount that each customer must pay. The <br />fixed charge recovers two type of costs: <br />(a) Billing Charge - Recovers customer costs for <br />billing, collection, meter reading and customer <br />service. <br />(b) <br />availability costs related to havi <br />available for use by customers. Avai <br />are allocated to each customer <br />63 <br />- Recovers <br />facilities <br />bility costs <br />based upon <br />