Item 5: Resolution Adopting Amended SDC Methodologies and Rates

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TABLE 2 Example Calculation for Single (Average Flow) Capacity Parameter* Element *Example only; not MWMC specific " Total Existing System Future . Expansion The example reimb~sement fee cost basis includes 10 percent ($5 million) of existing . system value, associated with providing 5 mgd of capacity. The improvement fee cost basis includes the costs to expand the facilities by 10 mgd, in this case estimated to be $12 million. The total costs allocated to growth are equal to the total capacity required by growth (5 mg~ existing +10 mgd expansion) = 15 mgd-total. . At this point the SDC schedule can be developed. First, the weighted average unit costs are developed. This is accomplished by dividing the r~imburs~ment fee and improvement fee cost bases by the total growthc~pacity units (15 mgd in this case). By' dividing the individual fee elements by the total growth units, th~ combined fee is based on a weighted average cost per unit.. This is demonstrated in Table 2 where the individual unit costs are $333,000 per mgd ($5 million/IS mgd) and. $800,000 per.mgd ($12 million/IS mgd), re$pectively, for reimbtirsementand improvement elements; and $1.1 million per mgd ($17 million/IS mgd) overall. The SDC for a user who requires 350 gallons per day (.000350 mgd) would equal . $116.67 reimbursement ($333,333 X 0.000350) + $280 improvement ($800,000 X 0.00035) for a total of $396.67. The same fee would result from using the total c<?st per unit ($1.13 per gall9nper day) multiplied by the 350-gallon-per;..day user requirements. As the' example de'monstrates, the methodology meets the key requirements of the law, as identified in Table 1: . Determines the amount of available capacity that exists and allocates costs to growth accordingly. . Allocates improvement costs to growth in proportion to future capacity needs. . Does not recover the costs of the same capacity through the reimbursement and iffiprovement fees. Recovers cost associated with e~ting capacity through the reimbursement fee, and recovers costs associated with new capacity through the , improvement fee. The charges to individualdevelopments.are based on a weighted average cost of cal?acity. Each element of the. methodology is discussed in more detail below. Methodology Element One: Determine Growth Capacity Needs The Oregon SDC law requires explicit analysis. of capacity required to serve growth - and demonstration of how those capacity needs will be met through existing and future facilities. Therefore, it is necessary to first determine the appropriate capacity parameter(s), and growth's capacity requirements.