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<br />Step Three - Project Valuation <br /> <br />Calculation of the improvement fee begins with a review of MWMC's adopted 20- Year , <br />Project List to determine the value of future projects. Future proi.~cts ar~ val\led based on the <br />inflation adjusted original cost estimate approach. Under this approach, the original <br />estiinated cost of future projects is ~djusted by the Engineering News-Record national20-city <br />average Construction Cost Index from the time of the original estimate to estimate current <br />values. The inflhtion adjusted original cost estimate approach recognizes inflation since the <br />original estimate. ' <br /> <br />Step Four.. Project CostAUocation <br /> <br />The project cost allocation m.ethodology, for ttse 'in detert11.i!miri:.g the improvement fee cost <br />basis, is a four-step allocation process consisting of the fQlipwing steps: <br /> <br />1-1. Allocate project costs to facility process components (e.g., primary treatment, secondary <br />treatment). <br /> <br />1"'"2. Allocate costs by components to system capacity parameters (e.g., average flow, peak <br />flow). <br /> <br />1-3. Allocate project costs to type (capacity improvement, performance upgrade, pr <br />rehabilitation). <br /> <br />1-4. Allocate costs to user type (existing customers or projected growth). <br />The project cost allocation methodology provides an equitable basis for determining the <br />projects or portions of proj.ects that are related to growth capacity needs and are, thereby, <br />included in the improvement fee portion of the SOC calculation. The methodology is not <br />tied to a specific list of projects intended to be funded by SDCs (20-year project list), but is <br />intended to provide a consistent framework for allocation of ~ture projects to growth. <br /> <br />Each step of the methodology is described below. The general allocation process is also <br />presented graphically in Figure 3. <br /> <br />FIGURE 3-PROJECT COST ALLCOATION <br />