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City of Pleasanton Water Drought Rates and Connection Fees Technical Memo Page 5 The graphs below show year 1 bill impacts for drought rates during Stage 2 (20% usage reduction) for a Single Family customer at different levels of water usage with no allotment. Again, if the customer reduces their usage according to Stage 2, for each usage level the customer will have a lower bi-monthly bill than in normal, non- drought conditions despite the drought rate charges. If the low user customer does not reduce their usage the drought rate increases their bill by over 5 percent. CONNECTION FEE METHODOLOGY The City collects one-time connection fees for new connections to the City’s water system. Connection fees are used to equitably recover capital costs incurred by an agency to provide system capacity to new customers. Water agencies can use one of three widely accepted methodologies to calculate connection fees: Methodologies Goal Basis Suitability Effect Equity Buy-In Method Recover the equitable share of historical capital costs to provide capacity Existing system capital assets (based on RCLD asset valuation method)3 Agencies with extra capacity within their existing system New customers "buy in" to system capacity that past and current customers built Incremental Cost Method Recover the equitable share of future capital related capital costs Future capacity related capital costs Agencies that are adding capacity to their existing system New customers pay for capital costs built to build new capacity Hybrid Method Recover the equitable share of historical capital costs and future capital costs related to capacity Existing system capital assets and future capacity related capital costs Agencies that have both existing and future capacity New customers pay a portion to "buy in" to existing system capacity and a portion to build new capacity Page 202 of 226