1. 2017 Fee Calculation Methodology – A Case Study
UPDATE ON SYSTEM DEVELOPMENT FEES
Fee Calculation Methodology – A Case Study
Daryll Parker & Lee Connor
Oct 13
2017

2. Overview General Information on SDFs Allowable Calculation Methods
Required Documents
Types of Utility Projects
Fee Calculation Example – A Case Study

3. SDFs - General “Recent” Common Terminology Capacity Fees Impact Fees
Connection Fees
System Development Charges
Facility Fees
Capital Connection Charges
Now Defined as System Development Fees

4. Calculation Methods Buy-In Method Value of Existing System Capacity
Common if System has Excess Capacity
New Customers Pay for Cost of Capacity

5. Calculation Methods Incremental/Marginal Cost Method
Cost of New or Expanded Capacity
Common when Limited or No Capacity
New Facilities to Support New Growth

6. Calculation Methods Combined Approach Method
Blend of Buy-In & Incremental Methods
Applies Both Existing & Future Facilities
Will Apply to Most Utility Systems

7. Analysis Documents Asset Listing Line-Item Detail by Asset Type
Original Cost & Date
Accum. Depreciation
Capital Improvement Program (CIP)
Requires Years
Lists Specific Projects
Estimates Project Costs
Establishes Anticipated Timing

8. Sample Asset Listing

9. Sample CIP

10. Common Capital Needs Expansion Projects (New Growth) Upgrade Projects
Additional Treatment Capacity
Line Extensions
Upgrade Projects
Improved Operational Efficiency
New Regulatory Requirements
R&R Projects
Rehabilitation of Aging Facilities
Replacement of Depreciated Facilities

11. Water Treatment Plant Capacity
Expansion Projects
Water Treatment Plant Capacity

12. Upgrade Projects Example – AMR/AMI Technology
Lower Meter Reading Costs
Fewer Meter Readers in Field
Fewer Vehicles in Service
Example – SCADA System
Instant Information
Transmitted Continuously
Accessed Via the Internet

13. R&R Projects Example – Aging Lines Replace Deteriorated Lines
Repair Broken Lines
Clean Clogged Lines
Lining Pipes

14. Case Study Example Town of Harrisburg, NC High Growth Area
Existing SDFs In Place
Proactive Measures Prior to HB 436
Updating SDF Analysis for Compliance

15. Buy-In - Existing Assets
Adjusted to current replacement cost based on the Handy-Whitman Index of Public Utility Construction Costs for the South Atlantic Region – Bulletin No. 185

16. Buy-In - Recoverable Assets

17. Buy-In - Allocated Assets

18. Buy-In – Debt Credit

19. Buy-In – RCLD Summary

20. Incremental Cost – CIP

21. Recoverable CIP

22. Recoverable CIP

23. Combined Recoverable

24. Combined Recoverable

25. Combined Calculation

26. 2017 Daryll Parker dparker@Willdan.com 407-409-8755 Lee Connor
Contact Information
Daryll Parker
Lee Connor
Oct 13
2017