water connection fee analysis
DESCRIPTION
Water Connection Fee Analysis. Elk Grove Water District Finance Committee January 30, 2013. What we’ll cover today. Project Overview Existing Fee Structure Review What is a capacity fee? What does the capacity fee cover? Why the increase is needed? How are connection fees calculated? . - PowerPoint PPT PresentationTRANSCRIPT
Water Connection Fee Analysis
Elk Grove Water DistrictFinance CommitteeJanuary 30, 2013
Elk Grove Water District – Connection Fee Study | 2
• Project Overview• Existing Fee Structure Review• What is a capacity fee?• What does the capacity fee cover?• Why the increase is needed?• How are connection fees calculated?
What we’ll cover today
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Project Overview
Background• Water capacity fee was originally established
in 2003• Water meter fee was established in 2006• Fees have been updated periodically, but
have not been comprehensively updated to reflect additional capital needs
Purpose• To identify appropriate fee levels to
recuperate new development’s share of planned water facilities
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• Meter and Installation Charges– Recovers cost of new meter and
installation• Capacity Charges
– Applicable to Service Area 1– Based on cost of CIP in 2003 – Total CIP cost allocated to existing and
new equivalent dwelling units (EDU)– Cost per EDU converted into fee
schedule based on meter size
Existing Fee Methodology
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Existing Fee Schedule
Meter Size EDU
Meter Charge
Capacity Charge Total
1” 1.0 $580 $3,895 $4,475
1-1/2” 2.3 866 8,959 9,825
2” 4.0 1,102 15,580 16,682
3” 9.0 2,645 35,055 37,700
4” 16.0 4,470 62,320 66,790
6” 36.0 8,452 140,220 148,672
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• Cost to serve new development• Supply improvements• Distribution improvements• Information technology• Treatment improvements
What the Capacity Charge Cover?
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• Current fees do not:– Reflect updated system demands – Cover needs for expanded or additional
facilities• Would prevent existing rate payers
from incurring the cost• Prevents reduced levels of service
Why the Adjustment is Needed?
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• To equitably and fairly allocate costs, one of two methodologies are used:1. Plan-Based Methodology – Allocates
future costs related to the District’s Capital Improvement Plan (CIP) via a growth and existing needs basis
2. Buy-In Methodology - used when existing components have excess capacity available
How is the Capacity Fee calculated?
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Questions & Answers