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1. Executive Summary Table 1 - Annual Rate Adjustments Description FY 25 FY 26 FY 27 — FY 31 FY 32 — FY 34 Proposed Projected Effective Date 10/1/20243 10/1/2025 10/1 of each Fiscal Year Water 12.0% 12.0% 5.0% 10.0% Sewer 2 24.0% 12.0% 5.0% 10.0% These rate adjustments result in the overall revenue increases needed to stabilize cash flows for FY 2025 and FY 2026 while generating revenues to meet IRCDUS' projected cost requirements through FY 2034. The cost -of -service analysis described herein identified that the water system is partially covering the costs of the sewer system which supports the higher sewer rate adjustment in FY 2025 relative to the water system to recover the overall cost requirements of the system. C7 This plan of rate adjustments was developed as part of the 10 -year financial management plan for IRCDUS. However, Stantec recommends that the BCC adopt only the FY 2025 and FY 2026 rate adjustments shown in Table 1 during the FY 2025 Budget process because IRCDUS is initiating a master plan which will identify the overall capital needs of the utility systems and therefore result in the need for alternative rate indexing plans. Additionally, IRCDUS intends to perform annual updates to the revenue sufficiency analysis as part of proactive financial management that will allow the incorporation of updated revenue and expense information, changes in economic conditions, changes in the number of customer accounts and usage • levels, regulatory requirements, and other factors that can materially affect the financial management plan. This will also ensure that the IRCDUS will be able to meet its financial and operating requirements in the future and minimize rate impacts to customers from future events occurring differently than currently projected. The developed 10 -year financial management plan and corresponding plan of annual water, sewer, and reclaimed water rate revenue adjustments are based upon the revenue and expense information, beginning fund balances, and assumptions as described in Section 2 of this report. Appendix A includes detailed schedules presenting all components of the financial management plan. 3 The Study and supporting schedules described herein assumes an implementation date of 10/1/24 for the FY 2025 rate adjustments. However, actual implementation may be 1/1/25 due to the County's planned stakeholder communication and engagement activities regarding utility rates. a 4 •