Item 5: Resolution Adopting Amended SDC Methodologies and Rates

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Appendix C1 Local Wastewater System Charge Detail 1.0 Local Wastewater System Methodology 1.1 Local Wastewater SDC Formula The general methodology used to develop SDCs includes the following four steps: · Determine value of growth-related capacity · Define system capacity · Calculate unit cost of growth-related capacity · I Develop SDC rate schedule Each step is discussed below and related information is displayed in Table 6. 1.1.1 Step 1 - Determine Value of Growth-Related Capacity (In 1998 dollars -- see current values in Table 6) In Eugene, as in most communities, a portion of the capacity needed to serve new development will be met through a combination of existing available system capacity, and additional capacity added by planned system improvements. The reimbursement fee is intended to recover the costs associated with the growth- related (or available) capacity in the existing system, and the improvement fee is based on the costs of capacity-increasing future improvements needed to meet the demands of growth. Reimbursement Fee Calculation of the reimbursement fee begins with a review of utility fixed asset records to determine the value of the existing local wastewater system. The system value is based on Replacement Cost New which is a method that involves assigning asset values on the basis of what it would cost in current dollars to construct an equivalent set of infrastructure assets subject to current market conditions, regulatory requirements, and technological advances. The total value of the existing local wastewater system, including gravity lines (net of assessments), force mains (or pressure lines), and pump stations was estimated to be $96.1 million. Approximately $8.9 million of assets were funded from grants. Like assessments, grant funds are deducted from the system value in the SDC analysis because general system users did not fund these assets. Net of grants, the total value of the existing system is approximately $87.2 million. Because reimbursement fees are intended to recover the value of the system's unused or available capacity, the total equity in the system is split between existing customers and new development based on the estimated proportionate use of capacity. The reimbursement cost basis is equal to the system equity associated with the capacity available to serve new customers. Approximately 520/0 of the existing system is available to meet the demands of new customers. Therefore, the value of available (or growth-related) capacity in the existing system is $45.3 million (net of grants). City of Eugene SDC Methodologies Wastewater,