Water Connection Fee Analysis

Elk Grove Water DistrictJanuary 22, 2013

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• Project Overview• 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• 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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• Cost to serve new development• Supply improvements• Distribution improvements• Information technology• Treatment improvements

What the Capacity Fee 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 entire 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