The process of tariff approval as well as the guidelines to prepare the required annual report are described in detail. Furthermore, the document gives advice on tariff structures and water rate adjustments. Water Districts. In water districts, tariffs increased notably since 1996. The tariff structure is similar to the model used in Metro Manila, with an average tariff for the first 10m³ and increasing tariffs for additional consumption. At the end of 2006, the national average tariff for 30 m³ was US$0.36 per m³, which is more than double of 1996. The NWRB found an average tariff of US$0.41 within a sample of 18 water districts in 2004, which is the highest average tariff of all management models. The average connection fee was US$55, somewhat lower than among private operators. Metro Manila. In the capital region, an initial tariff is to be paid for the first 10 m³ consumed, with increasing blocks for additional consumption. Furthermore, consumers connected to sewerage pay an additional charge of 50% and all users must pay a 10% environmental surcharge. For new consumers, a connection fee is charged, which was US$134 in April 2007 in the East Zone For new consumers, a connection fee is charged, which was US$134 in April 2007 in the East Zone According to the MWSS Regulatory Office, just before privatization, the average tariff per m³ in Metro Manila was US$0.26. After the concession contracts came into force in 1997, tariffs dropped to US$0.05 (East Zone) and US$0.12 (West Zone). In 2006, the average tariff rose to US$0.31 in the East Zone and US$0.43 in the West Zone (all figures converted into real 2006 prices). While the tariff was highest among private operators, the connection fee was higher within water districts. Others. Users who rely on other sources such as private small-scale operators mostly pay more for water. In the capital region, it is a common practice to buy water from MWSS and resell. In this case, small-scale operators pay a higher tariff than the residential one and pass the higher cost on to the end-user. The operation ratio (O) of a certain water service provider reflects its cost-recovery situation. It is computed by the following formula:  formula_1  where O is the operation cost, C is the total annual cost, and R is the annual revenue. An operation ratio under 1 means that revenues cover the costs of operation and maintenance.