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<br />Costs by capacity parameter are allocated to growth as follows: <br />Capacity Projects: Growth's share of capacity expansion (%) X project cost ($) <br />Performance Upgrades: Growth's share of total future system capacity (%) X project cost ($) <br />Rehabilitation Projects: Allocation to growth = 0% <br /> <br />Where: <br /> <br />1. Growth's share of capacity expansion = Projected growth capacity requirement (not met <br />by existing available capacity) divided by additional capacity to be added to the system <br />by planned improvements. <br /> <br />2. Growth's share of total future system capacity = Projected growth capacity requirement <br />(total) divided by total future system capacity requirement. <br /> <br />Table 6 summarizes the growth allocation percentages by project type. The documentation <br />for these figures is provided in Appendix C. <br /> <br />TABLE 6 <br />Growth Allocation Percentages by Project Type <br /> <br />,00' <br /> <br />Project Type <br /> <br />Capacity (growth's share of capacity <br />expansion) <br /> <br />Performance (growths share of total <br />future system capacity) <br /> <br />Rehabilitation <br /> <br />Average Flow <br />100% <br /> <br />Peak Flow <br /> <br />BOD <br /> <br />TSS <br /> <br />29.4% <br /> <br />100% <br /> <br />100% <br /> <br />26.1% <br /> <br />10.8% <br /> <br />25.9% <br /> <br />26.1% <br /> <br />0% <br /> <br />0% <br /> <br />0% <br /> <br />0% <br /> <br />Source: 2004 Facilities Plan <br /> <br />Step Four. Adjustments <br /> <br />The methodology includes the following adjustments to the reimbursement and <br />improvement fee cost bases: <br /> <br />. Gifts or grants from federal or state government or private persons. Existing (and if <br />applicable in the future, planned) asset costs are reduced by the percent of the asset that <br />is funded by grants. <br /> <br />. Ratemaking principles employed to finance the capital improvements. Projected <br />capital financing cost (i.e., interest expense) is added to the cost basis, based on the <br />recommended project phasing and the need to borrow funds. <br /> <br />Methodology Element Three: Develop SDC Schedule <br /> <br />Unit costs for each capacity parameter are determined by dividing the adjusted cost basis by <br />the projected growth capacity requirements. The unit costs are then multiplied by the <br />estimated capacity requirements of diffE:rent types of users, as determined from industry <br />reference data. Figure 4 illustrates this process. <br />