Admin Order 58-06-12-F - Laserfiche WebLink

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beginning and end of the fiscal year. For example, the City received revenue that was generated at the end of FY1993-94 in the beginning of FY1994-95. Similarly, the revenue generated at the end ofFY1994-95 was received by the City in FY1995- 96. Thus, in anyone fiscal year, the City will receive revenue that was generated with the rates of the previous year and will not collect all of the revenue that was generated with the rates of the current fiscal year. All else being equal, an increase in rates from one year to the next would mean that the cash received during the first year the rates are increased would be less than the revenue requirements for the year. The rate model adjusts for the revenue lag by increasing the revenue requirements so that the City will collect all of the revenues that it needs to cover program costs. Accounting for reductions (see section 6.0) is another adjustment that the rate model makes to assure the revenue requirements are met. Reductions mean that fewer customers are paying the quantity and quality components of stormwater service charges. When a reduction is given to those customers who have contained all or a portion of their runoff on site, the budgeted service charge revenue requirements for the stormwater program do not change. Most of the City's stormwater system capacity to serve existing development is already in place. To maintain the existing system, there are on-going costs that will not be affected by individual properties' efforts to reduce or remove their runoff from the public system. The rate model adjusts the revenue requirements to make up for the lost revenue due to reductions. When calculating revenue requirements, the rate model also takes into account the effect of interest income and billing write-offs on the amount of service charges revenue collected over the year. Interest income is a source of revenue just like the service charges. The more interest that the City earns, the less that it has to collect from service charges to cover program costs. Billing write-offs are the amount of revenue that the City does not collect because of non- or under-payment of bills. Revenue requirements not collected due to billing write-offs must be collected from other customers to cover program costs. 5.3.2 General Customer ESU Truncation As explained above, general customers' ESUs are calculated by dividing their impervious surface by 1000 and truncating the result. In effect, the number of billed general customer ESUs used by the rate model is less than the aggregate total number of general customer ESUs existing in Eugene. To maintain equality between customer categories, typical residential ESUs are adjusted by the same factor as the decrease in the total number of general customer ESUs. 5.3.3 Inactive Accounts Administrative Order - Page 12 of 17