Item 4 - PH on MWMC Reg. SDCs - Laserfiche WebLink

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SYSTEM DEVELOPMENT CHARGE METHODOLOGY The reimbursement fee is based on the value of available capacity in the system that will serve growth. The improvement fee is based on future facility costs associated with providing growth's additional capacity needs (above what is already available in the system). Together, the reimbursement and improvement fees recover costs equal to growth's capacity needs. Existing system available capacity and future improvement costs needed to expand capacity for growth are distributed to capacity parameters (average flow, peak flow, biochemical oxygen demand [BOD], and total suspended solids [TSS]), and spread over the total growth units projected for the period to determine weighted average reimbursement and improvement unit costs. The SDCs for individual developments are then determined by applying the unit costs (by fee element and capacity parameter) to the individual development estimated capacity requirements, and summing the results. The total SDC for each development is then reduced by any applicable credits for past and future capital payments. Table 2 provides an example calculation for a single capacity parameter. The numbers included in the table are intended to illustrate the methodology only (when applied to the single capacity parameter of average flow); the numbers do not represent MWMC planning criteria or cost data. Furthermore, the total SDC would include similar calculations for other capacity parameters (i.e., peak flow, BOD, and TSS). In the example provided, total system capacity needs at the end of the planning period are 60 million gallons per day (mgd). Existing users are estimated to require 45 mgd (90 percent) of existing capacity, leaving 5 mgd (10 percent) available for growth. However, growth's total needs are 15 mgd, meaning that additional investment will be required to expand system capacity by 10 mgd. TABLE 2 Example Calculation for Single (Average Flow) Capacity Parameter* Existing Future Element Total System Expansion Determine Capacity Needs Systemwide Capacity (mgd) 60 50 10 Existing Users (mgd) 45 45 0 Growth (mgd) 15 5 10 Determine Cost Basis Needs 10% 100% Systemwide Cost $50,000,000 $12,000,000 Growth Cost $17,000,000 $5,000,000 $12,000,000 Determine SDC Schedule Weighted Average Unit Cost ($/mgd) $1,133,333 $333,333 $800,000 User Capacity Requirement (mgd) 0.00035 0.00035 0.00035 Total SDC $396.67 $116.67 $280.00 *Example only; not MWMC specific SEA31003271388(DG).DOC~41040034 3