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r� OCT 9 1993 aooK 90 F'acr 895 2. Allocating operating and maintenance expense for effluent disposal/reuse in a manner consistent with the allocation of similarly related capital costs (i.e., the least cost alternative approach). 3. The amounts used to estimate total sewer system flows during fiscal year 1994 for the City of approximately 2.7 mgd appears low in comparison with fiscal year 1993 flows of approximately 3.1 mgd and the four-year historical average of approximately 2.9 mgd. It also contradicts Mr. Goffs memo of June 19, stating an average of 3.942 mgd. While the rate study notes that the projected water sales volumes have to be reduced primarily to account for the effect of reclaimed water sales, we do not believe that such reductions will ultimately impact sewer system flows. The majority of the displaced potable water sales were for irrigation purposes, which ultimately do not return to the sewer system. The flows also do not match the projected flows stated in your sludge report. If this allocation were adjusted to reflect the higher historical flows, or the actual flows stated by Mr. Goff, it would reduce the amount of the proposed rate increase. After these factors are taken into account in the City's wholesale wastewater rates, the City will need to reduce wholesale wastewater rates which may in turn necessitate a further increase in retail wastewater rates. For this reason, it will be in the City's best interests to implement the rate increase presented in the rate study to the retail customers as soon as possible, then make additional modifications as necessary after the wholesale rates have been corrected. This course of action will reduce the amount of the total rate increase to retail customers. We recommend that the City approve the recommended wastewater rates with the caveat that the wholesale rates will be adjusted to reflect the issues addressed above and that additional increases in the retail rate may be necessary. County staff and our consultants will work with you on the appropriate adjustment to•the wholesale rates. our utility financial consultant will be present at the October 19, 1993, public hearing on the City's proposed rates to summarize our position. In the meantime, please call me if you have any questions concerning this matter. Sincerely, C�� j. ! �� ames E. Chandler County Administrator ANNUAL APPOINTMENTS TO TREASURE COAST REGIONAL PLANNING COUNCIL The Board reviewed the following letters dated October 8, 1993, and October 14, 1993: 50 M M r