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ATTACHMENT 4 To 05-06-04 Draft MWMC Minutes the total project allocated to peak flow is 87.5% and is determined as follows: 50% to Preliminary Treatment * 75% to Peak Flow = 37.5% plus 50% to Peak Flow Management * 100% to peak flow = 50% for a total allocation to peak flow of 87.5% (37.5 + 50%) not 75%. The application of an allocation percentage to the amount of required peak flow capacity is irrelevant. Again, purpose of the SDC methodology is to equitably allocate the costs of projects .between growth and existing users not to determine capacity. The 29% allocated to growth would be 35 mgds - five more needed to serve growth during the planning period. [This is an incorrect application of the 29% (which was derived for the SDC methodology by dividing the 30 mgd (growth's share of the required peak flow capacity through 2025) by the ~02 mgd (the total amount of additional peak flow capacity required through 2025). The correct application of the 29% (actually 29.4%) is to multiply it by the portion of a project cost that is allocated to peak flow within the "Capacity" portion. For the headworks expansion project this is calculated as follows: 50% to Preliminary Treatment * 75% to peak flow * ~00% to "Capacity" *29.4 % = ~% and 50% to Peak Flow Management * ~00% to peak flow * ~00% to "Capacity"* 29.4 % = ~4.7 % for a subtotal of 25.7%. Therefore, the total allocation for growth for the Headworks expansion is 38.2 % (IZ5 % from average flow and 25.7% from peak flow).] In total, wc arc being charged for 35 mgds more than the methodology identifies as being needed to serve growth.[This is incorrect based on discussion above.] According to the methodology, growth needs 10 mgds of dry weather (average flow) and 30 mgds of peak flow. That is a total of 25% .[This is incorrect. These numbers do not have any meaning and even if they did it is not correct to add together average flow and peak flow. The SDC methodology is not intended to be used to compute capacity, it is intended to allocate costs.], of thc cost, not thc 35% that is allocated. The difference in cost is $1,664,000. [This number is invalid based on the discussed reasons presented above.] This problem exists throughout the allocation process and our objection is the same to each of the allocation where-this problem exists. You can't charge growth for more than the capacity needed to serve growth during' the planning period. In thc case of the headworks, even under the proposed methodology, you can't charge more than 25% of the cost of the headworks to growth. [This 25% value is invalid for the reasons presented above. A reality check confirms the equity of the 38% allocation to growth. Typically a "Capacity" project would be allocated ~00% to growth. However, since there is a peak flow capacity deficit only 29.4 % of the peak flow capacity is allocated to growth - the remaining 70.6 % of the peak flow parameter is allocated to existing users. For the Headworks Expansion project ~2.5% is allocated to average flow and 87.5 is allocated to peak flow. Since ~00% of this ~2.5 % (average flow portion) is allocated to growth and 29.4 % of the 87.5 % (peak flow portion) is allocated to growth it makes sense that the final resulting allocation to growth is between 25% and 50% of the total project costs. The 38 percent allocation Attachment 4 Page 3 of 17 4-6