Item 5: Resolution Adopting Amended SDC Methodologies and Rates

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Step Three -- Project Valuation Calculation of the improvement fee begins with a review of MWl\1C's adopted 20- Year Project List to determine the value of future 'projects. Future projects are valued based on the inflati<?nadjusted original cost estmate approach. Under this approach, the original estimated cost of future projects is adjusted by the Engineering News-Record national2Ckity- averageConstructi<?n Cost Index from the time of the original,es~te to estimate CWTent values. The inflation adjusted original cost estimate approach recognizes inflation since the original estimate. Step Four - ProJect Cost Allocation The project cost allocation methodology, for use in determining the improvement fee cost basis, is a four-step allocation pro~ess consisting of the following steps: 1-1. Allocate project costs to facility process components (e.g., primary treatment, secondary trea tInent). 1-2. Allocate costs by components to system capacity parameters (e.g., average flow, peak 'flow). . 1-3. Allocate project costs to type (capacity improv'ement,performance upgrade, or rehabilitation). ' 1-4. Allocate costs to user ty,pe (existing customers'orprojecte~ growth). The project cost allocation methodology provides an equitable basis for determining th~ projects or porti~1lS OfPIOjects that are related to growth capad;tyneeds and are, thereby, included in the improvement fee portion of the SOC. calcUlation. The methodology is not tied to a specific list of ,projects'.,intended to be fwrtded by SDCs (2Il.;.year project list), but is intended to provide a consistentfram.~work for allocation of future projects to growth. Each step of the methodology is described below. The gene~al allocation process is also presented graphically in Figure 3.