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TABLE 1 <br />Summary of Key Methodological Requirements <br />Oregon Law Requirement MWMC Methodology <br />Methodology demonstrates consideration of the Allocates future improvement costs to growth in proportion to <br />need for increased capacity in the system to meet capacity requirements <br />future users’ demands <br />Combined Fee <br /> <br />Demonstrate that charge is not based on Determines total growth capacity requirements and the portion <br />providing the same capacity of capacity to be met through existing system available <br />capacity and future capacity expansion. Calculates a weighted <br />average cost of capacity. <br />Compliance Charge <br /> <br />Annual accounting of revenue attributed to the Includes development of a charge to recover the costs of <br />costs of complying with the statutes complying with the provisions of ORS 223.297 to 223.314. <br /> <br />System Development Charge Methodology <br />Overview <br />The SDC methodology for MWMC is based on a combined reimbursement and <br />improvement structure, as shown in Figure 1. The methodology consists of the following <br />elements: <br />? <br />Determine capacity needs <br /> <br />? <br />Develop cost basis <br /> <br />? <br />Develop SDC schedule <br /> <br />? <br />Calculate revenue offsets and credits <br /> <br />? <br />Application of cost index <br /> <br />? <br />Determine compliance charge <br /> <br />Page 6 OF 39 <br /> <br /> <br /> <br />