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<br />Step Three - Project Valuation <br /> <br />CaICl.11ation 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 proj~<;ts ~~ valueq. based on the <br />inflation adjusted original cost estinUite 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. tiine of the original estimate to estimate current <br />values. The infltttion i.\djusted.origin~.cost estinult-eappl'Qach recognizes inflation since the <br />original estimate.. - <br /> <br />:Step Four · Project CostAUocation <br /> <br />The projectcostaIlbCation methodology, for :Use in detertili1Urigthe improvement fee cost <br />basis, is a four~step allqcation process consisting of the fQU9wingsteps: <br /> <br />1-1. Allocate project costs to facility prOcess componeRts(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 (capadty-improvement, perforInance ~pgrade, qr <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 projects that are related to growth capacity needs and are, thereby, <br />included in the improvement fee portion of the SDC 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 stepof the methodology is described below. The general allocation process is also <br />presented graphically in Figure 3. <br /> <br />FIGURE 3-PROJECT COST ALLCOA TION <br />