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7. Conclusions and Recommendations • The cost -of -service analysis found that the water system revenues were partially funding the sewer system's costs which informed the recommendation for a higher sewer rate indexing plan in FY 2025 relative to the water rate adjustment. Upon implementation of these proposed rates in FY 2025, the projected revenues and costs by system are within acceptable ranges based on Stantec's industry experience. As such, beginning in FY 2026, the annual water, sewer, and reclaimed water rate indexing plan is applied across all services (water, sewer, and reclaimed water) effective annually on October 1 of each fiscal year. • IRCDUS' retail monthly service availability and volumetric rate structure is generally consistent with overall industry practices. However, detailed customer billing records required to perform a more in-depth analysis were not available to Stantec at the time of the conduct of the Study. Such data would allow the review of IRCDUS' current water tiers, pricing, and inform potential future modifications to the rate structure. As such, IRCDUS has been actively working to gather this information to be available for future evaluations. • Stantec evaluated certain other user rates charged by IRCDUS including bulk water and sewer, private fire, and septage and sludge and recommends that IRCDUS adopt the proposed cost -based rates to be effective in FY 2025 and apply future annual rate indexing. • Stantec identified IRCDUS' costs associated with reclaimed water and found that the current rate is below the cost of service. However, because of the operational benefits and use of reclaimed • water as a means for wastewater effluent disposal, Stantec recommends only modifying the reclaimed water rate commensurate with the overall sewer system rate indexing plan. • ■ Stantec recommends that IRCDUS update the revenue sufficiency analysis portion of the Study annually to evaluate the adequacy of its revenues and water and sewer rate adjustment plan. Doing so will allow for the incorporation of updated costs for the CIP from the upcoming master plan and associated financing plan, 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. ■ Stantec also reviewed the Utility's updated miscellaneous fees related to Utility services and recommends that IRCDUS adopt the fees as summarized herein to be effective 10/1/24. Additionally, IRCDUS should evaluate these periodically thereafter to ensure that they are commensurate with the costs and overall objectives. Miscellaneous fees that are more closely aligned with IRCDUS' costs provide additional revenue that can mitigate a portion of the need for additional monthly user rates. • Stantec recommends that IRCDUS implement the proposed utility customer deposits as presented in FY 2025 and review every three to five years to account for changes in monthly user rates and/or collection policies and practices. 39