1. Commissioners’ Briefing on Front Foot Benefit and House Connection Rates November 16, 2011

2. Front Foot Benefit Background WSSC constructs major transmission and collection lines as part of the Capital Improvements Program and pays for them with System Development Charges or bonds. Developers build most of the smaller water and sewer mains serving local and residential communities By law, WSSC can only build the smaller lines for single lot applicants or for health hazard applicants To recover the cost of constructing the smaller water and sewer lines, the State of Maryland has authorized WSSC to levy a front foot benefit charge to those properties benefiting from the construction

3. Front Foot Benefit Rates Rates are effective January 1 and are applied to all properties abutted in the prior year Once set, rates cannot be increased Rates are based on actual costs of construction Rates are established on a per foot basis The front foot benefit charge is uniform for each class of property

4. Front Foot Benefit 2012 Rate Recommendation Establish Front Foot Benefit rates of $4.00 for water and $6.00 for sewer. These rates will also be used for authorized Front Foot Benefit revenue calculations.

5. House Connections Background Rates are effective January 1 and are applied to all connection applications filed in that year and any deferred payment option connections completed during that year The deferred payment option is effective for owner- occupied single family dwelling units Rates are by size and type of connection and are estimates of the future cost of construction The basis for the rates is historical cost, adjusted by factors that have a potential impact on future costs (inflation, revised regulations, etc.)

6. House Connections Improved and Unimproved Rates Separate rates are charged for two types of house connections: Improved connections are made to existing water and sewer lines installed in a street, road, alley or right-of-way which has been paved or otherwise improved All other connections are unimproved (consequently, an extension must also be built)

8. House Connections 2012 Rate Recommendation Establish the following illustrated rates for construction of improved and unimproved house connections effective January 1, 2012.

9. House Connection Charges Proposed 2012 Rates Residential Small Size UNIMPROVED AND IMPROVED RESIDENTIAL SMALL SIZE CURRENT PROPOSED CURRENT PROPOSED UNIMPROVED UNIMPROVED IMPROVED IMPROVED RATES 2011 CHARGES 2012 CHARGES 2011 CHARGES 2012 CHARGES Water (inside and outside meters): 1”$ 2,250 $ 2,250 $ 7,250 $ 7,250 1 ½” 2,750 2,750 7,500 7,500 2” 3,250 3,250 7,750 7,750 Sewer: 1 ¼” & 1 ½” pressure sewer 3,500 3,500 10,750 10,750 4” & 6” 3,500 3,500 10,750 10,750 Deferral option connection, residential only, where allowed: Water (inside and outside meters): 1” $ 2,350 $ 2,350 $ 7,625 $ 7,625 1 ½” 2,875 2,875 7,875 7,875 2” 3,400 3,400 8,150 8,150 Sewer: 1 ¼” & 1 ½” pressure sewer 3,675 3,675 11,300 11,300 4” & 6” 3,675 3,675 11,300 11,300

10. House Connection Charges Other Proposed 2012 Rates CURRENT PROPOSED 2011 CHARGES 2012 CHARGES NON-RESIDENTIAL SMALL AND LARGE SIZE Water (inside and outside meters) Estimated Cost Estimated Cost Sewer Estimated Cost Estimated Cost RIGHTS OF WAY (connection built by plumber) Water: 1” $ 350 $ 350 1 ½” 400 400 2” residential 450 450 2” non-residential and larger @ ½ of the unimproved large connection rate Sewer: 1 ¼” & 1 ½” pressure sewer 500 500 4” & 6” 500 500 8” & larger Estimated Cost Estimated Cost