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Elk River <br /> Municipal Utilities COMMISSION POLICY <br /> Section: Category: <br /> Governance Delegation to Management Policies <br /> Policy Reference: Policy Title: <br /> G.4j Cost Allocation and Recovery <br /> PURPOSE: <br /> With this policy,the Commission sets forth its expectations for the General Manager <br /> concerning cost allocation and recovery of costs for ERMU's core customer services (See <br /> Core Customer Services Policy). <br /> POLICY: <br /> The General Manager shall operate ERMU in accordance with the Financial Plan(See Financial <br /> Planning and Budgeting Policy). <br /> Consistent with this general statement,the General Manager shall: <br /> 1. Annually report to the Commission on the performance and adequacy of ERMU's rates, fees, <br /> and charges for utility services with respect to revenue requirements,provide an updated <br /> projection of revenue and revenue requirements in the Financial Plan(See Financial <br /> Planning and Budgeting Policy), and recommend an appropriate plan for rate adjustments as <br /> needed. <br /> 2. Provide, at least once every ten(10) years or sooner at Management or Commission <br /> discretion, and in conjunction with development of the Financial Plan, a full cost-of-service <br /> rate study for each of ERMU's core customer services which fairly allocates costs among <br /> customer classes,provides for sufficient revenues, demonstrates that recommended rates are <br /> just and reasonable, and provides for competitive positioning with nearby service providers. <br /> 3. Recommend any new or adjusted rates, fees, or charges to the Commission for consideration <br /> and approval. <br /> 4. Implement any Commission-approved rates, fees, charges(or changes to same),provide <br /> adequate advance public notice and information to affected customers. <br /> Page 1 of 2 <br /> 40 <br />