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Item 4 - PH on MWMC Reg. SDCs
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Item 4 - PH on MWMC Reg. SDCs
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6/10/2004 3:21:26 PM
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6/14/2004
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SYSTEM DEVELOPMENT CHARGE METHODOLOGY <br /> <br />SDC methodology therefore considers past and future payments to be made by new <br />developments, which may partially fund the same facilities for which the SDCs were paid. <br /> <br />Past Payments <br />A portion of MWMC's existing facility costs were funded through general obligation (GO) <br />bonds. The debt service on the bonds was retired through property taxes. Undeveloped land <br />in the cities of Eugene and Springfield was subject to property taxes, and therefore a GO <br />bond credit is included in the methodology. The credit is equal to the present value of past <br />payments on bond principal, expressed in dollars per $1,000 of assessed valuation. The <br />credit shall accrue from the year of annexation, and be based upon the assessed value of the <br />real property at the time of application for connection to the system. <br /> <br />Appendix E shows the calculation of the GO bond credit. <br /> <br />Future Payments <br />The methodology considers whether growth will provide a net contribution through <br />wastewater user fee rates to the cost of capital improvements that benefit existing <br />customers. If such a contribution is indicated, a credit is provided. The credit is based on a <br />present-worth analysis, structured as follows: <br /> <br />1. Annual capital costs (adjusted for inflation) associated with 'existing customers' share of <br /> the project list costs (net of rehabilitation costs) are estimated based on the <br /> recommended phasing schedule. <br /> <br />2. The annual capital expenditures are reduced by revenues from reserves and <br /> reimbursement fees to estimate required debt funding <br /> <br />3. Debt services costs are estimated for repayment of borrowed funds <br /> <br />4. Future billing units (average flow and pounds of BOD and TSS) are estimated for the <br /> planning period based on system planning criteria <br /> <br />5. The annual user rate supported debt service per billing unit is determined for the life of <br /> the debt. <br /> <br />6. The present value of the future stream of rate payments is determined for each year of <br /> the planning period. <br /> <br /> A credit amount per unit of capacity is determined based on the year of development and <br /> the projected length of future payments. <br /> <br /> At the time of adoption of the project list upon which SDCs are to be based, or any periodic <br /> modification to such list, an estimate of project financing costs will be made, based upon the <br /> assumed timing of projects and other available funding sources. The proportion of this debt <br /> financing to be funded by user rates attributable to users estimated to connect in each year is <br /> calculated, and the net present value for each year of the planning period of this series of <br /> cash flows is applied as a credit against the improvement SDC generated by the <br /> methodology. <br /> <br /> SEA31003271388(DG). DOC/041040034 <br /> <br /> <br />
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