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This analysis covers the overview, capacity fee, fee coverage, reasons for increase, and fee calculation for new development's share of water facilities. The current fees do not reflect updated system demands and may prevent reduced levels of service. Two methodologies — Plan-Based and Buy-In — are used for fair cost allocation.
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Water Connection Fee Analysis Elk Grove Water District January 22, 2013
What we’ll cover today • Project Overview • What is a capacity fee? • What does the capacity fee cover? • Why the increase is needed? • How are connection fees calculated?
Project Overview Background • Water capacity fee was originally established in 2003 • 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
What the Capacity Fee Cover? • Cost to serve new development • Supply improvements • Distribution improvements • Information technology • Treatment improvements
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 entire cost • Prevents reduced levels of service
How is the Capacity Fee calculated? • To equitably and fairly allocate costs, one of two methodologies are used: • Plan-Based Methodology – Allocates future costs related to the District’s Capital Improvement Plan (CIP) via a growth and existing needs basis • Buy-In Methodology - used when existing components have excess capacity available
