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Table 65. Other Water Supply Unit Cost <br />$7,791,935 - 13,536,745 = $0.58 <br />Base Delivery Costs <br />Base delivery costs are divided by total water use to determine the unit cost shown in Table 66 . The <br />base unit cost is applied to all water use. <br />Table 66. Base Delivery Unit Cost <br />$5,789,032 = 13,536,745 = $0.43 <br />Revenue Offset <br />Revenue offsets are only applied to tier 1 water use, so the total available funds are divided by the <br />projected use in that tier. Allocating offsets to tier 1 ensures all customers benefit from the non -operating <br />revenue for all usage. Table 67 shows the calculation to determine unit values for the revenue offset. <br />Table 67. Revenue Offset Unit Credit <br />Tier 1-$1,496,196 - 10,156,619 = -$0.15 <br />Tier 2 $0 - 0 = $0.00 <br />Table 68 shows the calculation used to determine the variable rates. Supply costs are added to base <br />costs to calculate the variable rates. Rates are then reduced by revenue offsets, which were set aside in <br />the cost of service analysis. <br />Table 68. Variable Rate Calculation <br />Tier 1 $2.04 + $0.58 + $0.43 + -$0.15 = $2.90 <br />Tier 2 $3.69 + $0.58 + $0.43 + $0.00 = $4.69 <br />The rates will be escalated by the revenue adjustments and the five-year rate schedule is shown in Table <br />69. Each adjustment will occur in January, midway through the fiscal year. <br />Table 69. Proposed 5-Year Variable Rate Schedule <br />Revenue Adiustment 9.0% 9.0% 9.0% 9.0% <br />Tier 1 <br />Tier 2 <br />8.0% <br />$3.16 $3.44 $3.75 $4.09 $4.42 <br />$5.12 $5.58 $6.08 $6.63 $7.16 <br />City of Santa Ana - 2026 Water and Sewer Rate Study <br />45 <br />