CITY COUNCIL AGENDA PACKET WORKSHOP

8 of 19 Water connection fees vary based on the required capacity (flow) and are charged on the equivalent water meter size with the single-family home (5/8” meter) as the primary unit. Sewer connection fees for residential are generally charged per unit while commercial units are generally charged by per square foot; because industrial uses can have widely different sewer flows based on the nature of the use, sewer fees are charged based on the expected strength4 and volume (flow) of sewage. The sewer and water connection fee studies currently underway are based on the hydraulic capacity analysis recently completed by Woodward and Curran for the sewer system, and Akel Engineering for the water system. The hydraulic analysis is part of the larger management plans being developed for each utility that will provide a more comprehensive analysis of all aspects of the systems and their costs and will be the basis for the next connection fee study update. The hydraulic capacity analysis is founded on a modeling of the City’s system based on land use and population projections and identifies the necessary infrastructure projects to address current and forecasted infrastructure deficiencies. The general steps in calculating connection fees are: • Determine the value of backbone facilities (existing or future growth-related) • Estimate current system capacity or level of service • Calculate the unit cost of capacity • Determine customer service level demand characteristics • Apply unit cost of capacity to customer’s demand characteristics Water backbone facilities include major infrastructure such as the City’s wells, turnouts, water mains, storage, and pumping facilities. Sewer backbone facilities include pump stations, manholes and piping. The level of service is defined as the relationship between the service capacity and the service demand. In other words, the service capacity is the capacity of the system, and the service demand is the requirement to serve new development. There are three generally accepted methodologies for calculating connection fees; each method is designed to recover the cost of capacity to serve new development. The three methodologies include buy-in (if there is additional capacity to accommodate new growth), incremental (need to build capacity to serve new growth), and hybrid (mixed between the two). The incremental method is recommended based on the hydraulic models that identified there is limited capacity in portions of the City’s networks to support future growth. The costs for the necessary long-term expansion projects developed as part of the modeling projects align best with incremental method. In addition to the City’s connection fees, DSRSD and Zone 7 levy connection fees to address development’s impacts to the regional infrastructure for the wastewater 4 “Strength” refers to the amount of treatment required to treat the water – with “dirtier” water (e.g. wastewater discharge with significant amounts of fats, oils and grease) having higher treatment costs.