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requirements for the quantity, quality~ystreet related and administrative components. The <br /> total revenue requirements for any fiscal year (Revenues) are the sum of each of the <br /> component's revenue requirements. <br /> Revenue„~s = Revenuegia1ety + Revenueq,~,;ry + Revenue~~ + Revenues,,,;,, <br /> Revenue requirements represent the total amount the City must collect from its service <br /> charges to pay for the stormwater programs funded by service charges. As such, the <br /> revenue requirements are made up of two types of costs, 1) direct stormwater program <br /> costs and 2) adjustments for the following: <br /> • revenue lag <br /> • reductions aid-e~~~nptiens <br /> • operating interest income. <br /> • billing write-offs. <br /> Whenever there is a rate increase, the revenue lag affects collected revenues at the <br /> beginning and end of the fiscal year. For example, the City will receive revenue that was <br /> generated at the end of FY1993-94 in the beginning of FY1994-95. Similarly, the <br /> revenue generated at the end of FY1994-95 will be received by the City in FY199S-96. <br /> Thus, in any one fiscal year, the City will receive revenue that was generated with the <br /> rates of the previous year and will not collect all of the revenue that was generated with <br /> the rates of the current fiscal year. All else being equal, an increase in rates from one <br /> year to the next would mean that the cash received during the first year the rates are <br /> increased would be less than the revenue requirements for the year. The rate model <br /> adjusts for the revenue lag by increasing the revenue requirements so that the City will <br /> collect all of the revenues that it needs to cover program costs. <br /> Accounting for reductions a~;mptierts (see section 6.0) is another adjustment that <br /> the rate model makes to assure the revenue requirements _ <br /> a~rpe~q, met. Reductions e~ <br /> r_...Y.. . <br /> e~c~~s ,mean that fewer customers are paying €er the quantity . ~~l yahtq <br /> components of stormwater services charges. When a reduction or exemption is given <br /> to those customers who have contained all or a portion of their #~ewnin~~ on site, the <br /> budgeted service charge revenue requirements for the stormwater program do not <br /> change. Most of the City's storm system capacity to serve existing development is <br /> already in place. To maintain the existing system, there are on-going costs that will not <br /> be affected by individual properties' efforts to reduce or remove their runoff from the <br /> public system. The rate model adjusts the revenue requirements to make up for the lost <br /> Stormwater Service Charge: Methodology Paper -Page 10 <br /> <br /> Draft Revisions -April 10, 1995 <br /> <br />