Transcript Slide 1

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?
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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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Existing Fee Methodology
• 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
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Existing Fee Schedule
Meter
Charge
Capacity
Charge
Meter Size
EDU
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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What the Capacity Charge Cover?
• Cost to serve new development
• Supply improvements
• Distribution improvements
• Information technology
• Treatment improvements
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Why the Adjustment is Needed?
• 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
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How is the Capacity Fee calculated?
• 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
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Questions & Answers
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