08.01 - Request for Proposals for Water/Sewer Rate Study

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Bonne Terre, MO, Proposed Sewer Rates Scenario 2.7 Return on Investment CBGreatRates©Version 3.5 To produce this user charge analysis,you invested funds to hire Carl Brown Consulting and you invested in staff time and incidental costs to support the analysis. Subsequently,these investments produced a return on investment(ROI). Following is your Rol for getting this analysis.To understand how this calculation was made,you first need to understand what"current position"means.Current position is the sum of all revenues plus reserves for a year, minus the sum of all current financial obligations paid or payable during that year. Your ROI was calculated in this way. For each year we calculated the dollar increase(or decrease)in current position by subtracting the current position that would result if you did not adjust your rates or anything else that you have control over from the current position that would result from the rate and other adjustments depicted in this proposed rates scenario.To get the percentage return on investment,we divided those amounts by the investment you made in our services plus the estimated internal costs you experienced.This method does not consider other important outcomes such as rate restructuring and capital improvement planning but it does at least tell you,on a dollar and percentage basis,what the analysis was worth. Investments made to acquire this analysis and to perform follow-up work shown in chart 5A $4,261 Fees to Carl Brown Consulting $500 Estimated value of city staff time and incidentals to assemble needed information $4,761 Total Investment Performance During the Following Years Beginning on 10/1/07 110/11/08 10/1/09 10/1/110 10/1/11 Current Position From This $2,140,730 $2,390,789 $2,923,818 $2,805,711 $2,726,741 Scenario Current Position From The Current $2,140,730 $2,234,433 $2,431,910 $1,901,597 $1,327,220 Rates Scenario Increase(or Decrease)in Current $0 $156,356 $491,907 $904,113 $1,399,521 Position due to This Analysis Return on Investment due to 0% 3099% 9228% 8546% 12847% This Analysis