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<br /> <br /> <br />The current recommendation is to modify the rate structure as follows: <br /> <br /> Eliminate the use of a Minimum charge. <br /> Phase-in a flat quarterly fee over time. <br /> Usage rate growth decelerates as flat fee is phased-in. <br /> <br />The recommended 2017 rates based upon these steps are below: <br /> <br /> <br /> 2016 2017 <br />Per 1000 gallons Rates Rates $ Increase <br />Water Tier I 3.10 3.10 0.00 <br />Water Tier II 3.27 3.27 0.00 <br />Water Tier III 3.59 3.59 0.00 <br />Water Tier IV 4.12 4.12 0.00 <br />Water Tier V 5.17 5.17 0.00 <br />Irrigation 4.12 4.12 0.00 <br />Quarterly flat fee 3.35 0 3.35 <br /> <br /> <br /> <br />The recommendation’s impact on 2017 billings is reflected below: <br /> <br /> <br /> <br />Please note that using the existing rate structure a 6% increase in rates alternatively would have <br />been recommended. That adjustment would yield an additional quarterly cost of $2.94 to the <br />15,000 user (approximate median tier use) vs the $3.35 additional quarterly cost proposed. The <br />$1.63 results in an annual difference of $6.51. <br /> <br /> <br />See Exhibit C for 2018-2019 modeling of rates based on successive phase-in of flat fee <br />and expected increases in overall costs. <br />Modified Structure <br />2017 Tier Rates 3.10 3.10 3.27 3.59 4.12 5.17 <br />2017 Usage levels 4,600 7,500 15,000 22,500 30,000 37,500 <br />Flat Fee 3.35 3.35 3.35 3.35 3.35 3.35 <br />Usage Charge 14.26 23.25 49.05 80.78 123.60 193.88 <br />2017 Billing 17.61 26.60 52.40 84.13 126.95 197.23 <br />2016 Billing 23.25 23.25 49.05 80.78 123.60 193.88 <br />DIFFERENCE (5.64) 3.35 3.35 3.35 3.35 3.35 <br />% of Accounts within Tier 46%16%3%2%32%