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= CITY OF SANTA ANA <br />II. TASK 2 -COST OF SERVICE RATE MODEL & SCENARIO DEVELOPMENT <br />A. GENERAL <br />As part of the work required in preparing a comprehensive cost of service and rate study <br />report, the Consultant may develop various forecasting models, projections, and rate <br />adjustment scenarios for the City's consideration. The cost of service rate model and <br />scenario covers, but is not limited to, all expenses related to Sanitation Services, including <br />Environmental Sanitation, Weed Abatement, Roadway Cleaning, Street Sweeping, and any <br />other costs identified during the process. <br />B. CONTENT/TASKS <br />Consultant shall perform the following tasks: <br />1. Classify functional expenses to cost components: capacity (demand) costs (e.g., <br />Environmental Sanitation, Weed Abatement, Roadway Cleaning, Street Sweeping), <br />commodity costs - related to Sanitation Services, customer costs and other direct <br />costs; <br />2. Classify operating, administrative, operations and maintenance (O&M) expenses, <br />collection/disposal cost, and reserve fund requirements; <br />3. For each rate scenario, assess the sensitivity of the projected results to changes in <br />certain key variables, including but not limited to, changes in units changes and <br />changes in the cost of the operation. <br />4. Propose changes to existing or creation of new sanitation fees and surcharges, as <br />are necessary and/or expedient to achieving the goals of the study. <br />5. The rate design shall continue to support current service level for all customer <br />classes, provide funding for capital replacement while ensuring the ability of the <br />sanitation enterprises to meet fixed and variable cost obligations. <br />C. DELIVERABLES <br />There are no deliverables for this section. Consultant shall meet and confer with City in <br />regards to the cost of service rate model development and various scenarios prior to <br />preparing report. <br />III. TASK 3 - COST OF SERVICE REPORT <br />A. GENERAL <br />Consultant shall prepare comprehensive cost of service reports which satisfies the City's <br />stated goals in Section II, "Description of Work' above. <br />At a minimum the reports shall be comprised of the following: <br />1. Executive Summary <br />2. Introduction/Background including discussions on <br />a. Purpose of study <br />b. Applicable laws and regulatory framework <br />c. Generally accepted rate setting standards <br />3. Revenue Requirements <br />COST OF SERVICE STUDY 20 <br />