HomeMy WebLinkAboutCapacity Fee and Connection Fees Study Draft Final
DRAFT FINAL REPORT
City of San Luis Obispo
Capacity and Connection Fees
for Water and Wastewater
September 2017
hdrinc.com
500 108th Ave NE, Suite 1200, Bellevue, WA 98004
T 425-450-6200
September 26, 2017
Ms. Jennifer Metz
Utilities Projects Manager
Public Utilities
879 Morro Street
San Luis Obispo, CA 93401-2710
Subject: DRAFT FINAL - Development of the City’s Water and Wastewater Capacity and
Connection Fees
Dear Ms. Metz:
HDR Engineering, Inc. (HDR) was retained by the City of San Luis Obispo (City) to conduct a
study to develop cost-based water and wastewater capacity and connection fees (previously
referred to as development impact fees). Enclosed please find HDR’s draft final report for this
study. The conclusions and recommendations contained within this report should enable the
City to implement cost-based water and wastewater capacity and connection fees that meet
the City’s growth and financial policy objectives. The City has historically established cost-
based capacity and connection fees and this report is a continuation of those past practices.
This report has been prepared using “generally accepted” financial, rate setting, and
engineering principles. The City’s financial, budgeting and engineering data were the primary
sources for much of the data contained in this report. This report was developed with
significant participation and input by City management and staff.
HDR appreciates the opportunity to assist the City in this matter. We also would like to thank
you and your staff for assistance provided to us.
Very truly yours,
HDR Engineering, Inc.
Shawn Koorn
Associate Vice President
Table of Contents i
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Abbreviations and Acronyms
Capacity and Connection Fee Definitions
Executive Summary
Introduction ............................................................................................................... 1
Capacity and Connection Fee Approach ..................................................................... 2
Water Capacity and Connection Fee .......................................................................... 2
Wastewater Capacity and Connection Fee ................................................................. 5
1 Introduction
1.1 Introduction ............................................................................................................. 10
1.2 Organization of Report............................................................................................. 10
1.3 Disclaimer ............................................................................................................... 10
2 Overview of Capacity and Connection Fees
2.1 Introduction ............................................................................................................. 11
2.2 Defining Capacity and Connection Fees ................................................................... 11
2.3 Economic Theory and Capacity and Connection Fees ............................................... 11
2.4 Capacity and Connection Fees Criteria ..................................................................... 11
2.5 Overview of the Capacity and Connection Fee Methodology ................................... 13
2.6 Summary ................................................................................................................ 16
3 Legal Considerations in Establishing Capacity and Connection Fees
3.1 Introduction ............................................................................................................. 17
3.2 Requirements under California Law ......................................................................... 17
3.3 Proposition 218 and 26 and Capacity and Connection Fees...................................... 18
3.4 Summary ................................................................................................................ 19
4 Determination of the City’s Water Capacity and Connection Fees
4.1 Introduction ............................................................................................................. 20
4.2 Overview of the City’s Water System ....................................................................... 20
4.3 Current Water Capacity and Connection Fees .......................................................... 21
4.4 Calculation of the Allowable Water Capacity and Connection Fees ......................... 21
4.4.1 Water System Planning Criteria .................................................................... 22
4.4.2 Calculation of Water Capacity and Connection Fee by Components ............. 23
4.5 Net Allowable Water Capacity and Connection Fees ............................................... 25
4.6 Key Water Capacity and Connection Fee Assumptions ............................................. 27
4.7 Implementation of the Proposed Water Capacity and Connection Fees ................... 28
4.8 Consultant Recommendations ................................................................................. 28
Table of Contents
Table of Contents ii
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
4.9 Summary ................................................................................................................. 28
5 Determination of the City’s Wastewater Capacity and Connection Fees
5.1 Introduction ............................................................................................................. 29
5.2 Overview of the City’s Wastewater System .............................................................. 29
5.3 Current City Wastewater Capacity and Connection Fees .......................................... 29
5.4 Calculation of the Wastewater Capacity and Connection Fees ................................. 31
5.4.1 System Planning Criteria and Equivalent Dwelling Units ........................... 31
5.4.2 Calculation of Wastewater Capacity and Connection Fee by Component . 32
5.5 Proposed Wastewater Capacity and Connection Fees .............................................. 34
5.6 Key Wastewater Capacity and Connection Fee Assumptions ................................... 38
5.7 Implementation of the Wastewater Capacity and Connection Fee ........................... 38
5.8 Consultant Recommendations ................................................................................. 39
5.9 Summary ................................................................................................................. 39
Technical Appendices
Water Capacity Fee and Connection Fees
Exhibit W-1 Development of the Water Capacity and Connection Fee
Exhibit W-2 Development of EDUs
Exhibit W-3 Supply Capacity and Connection Fee
Exhibit W-4 Treatment Capacity and Connection Fee
Exhibit W-5 Distribution Capacity and Connection Fee
Exhibit W-6 Summary of Debt Service
Exhibit W-7 Summary of Reserve Funds
Exhibit W-8 Development of Future Capital Improvement Projects
Exhibit W-9 Allowable Water Capacity and Connection Fees
Exhibit W-10 Summary of Water Capacity and Connection Fee Schedule
Wastewater Capacity Fee and Connection Fees
Exhibit S-1 Development of the Wastewater Capacity and Connection Fee
Exhibit S-2 Development of EDUs
Exhibit S-3 Treatment Capacity and Connection Fee
Exhibit S-4A Development of Collection Capacity and Connection Fee
Exhibit S-4B Summary of Existing Catchment Assets
Exhibit S-5 Summary of Debt Service
Exhibit S-6 Summary of Reserve Funds
Exhibit S-7 Development of Future Capital Improvement Projects
Exhibit S-8 Allowable Wastewater Capacity and Connection Fees
Exhibit S-9 Summary of Catchment Calculation
Exhibit S-10 Summary of Wastewater Capacity and Connection Fee Schedule
Abbreviations and Acronyms iii
City of San Luis Obispo – Water and Sewer Capacity and Connection Fees
The following abbreviations and acronyms are used within this report.
ADWF Average dry weather flow
City City of San Luis Obispo
CCI Consumer Cost Index
CF Capacity Fee
CIP Capital Improvement Plan
COP Certificates of participation
CPI Consumer Price Index
EDU Equivalent dwelling unit
ENR Engineering News Record
G.O. General Obligation (Bond)
GPD Gallons per day
MGD Million gallons per day
OC Original Cost
OCLD Original Cost Less Depreciation
RC Replacement/Reproduction Cost
RCLD Replacement/Reproduction Cost Less Depreciation
RCNLD Replacement/Replacement Cost New Less Depreciation
WRRF Water Resource Recovery Facility
WTP Water Treatment Plant
Abbreviations and Acronyms
Capacity Fee Definitions iv
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
The following definitions related to the development of the City’s capacity and connection fees
are as follows:
“Allowable” Capacity and Connection Fee: Based upon the calculated fee, it is the maximum
cost-based fee which can be charged. As a matter of policy, a capacity and connection fee
which is less than the “allowable” capacity and connection fee may be charged.
Buy-In Methodology: A generally accepted methodology used to calculate a capacity and
connection fee which considers only the value of the existing assets of the utility.
Capacity and Connection Fee: A one-time fee paid by new development to finance
construction of public facilities needed to serve them.
Capacity and Connection Fee Eligible: The plant assets and value of that plant which are
included within the calculation of the capacity and connection fee. For example, the value of
any contributed or donated assets are not “capacity and connection fee eligible” and are
excluded from the calculation of the capacity and connection fee.
Combined Methodology: A generally accepted methodology used to calculate a capacity and
connection fee which considers both the value of the existing assets of the utility along with the
value of any future capacity/expansion related improvements.
Equivalent Dwelling Unit (EDU): One EDU is the level of service in gallons per day for an
average residential dwelling.
Existing Facilities: Plant assets which are currently in service and booked as an asset on the
City’s plant asset records.
Future/Expansion Facilities: Future planned assets which will be built to accommodate future
customer growth and the need for expanded capacity.
Gallons Per Day (GPD): The average gallons per day (gpd) that a customer or group of
customers use. Gallons per day may be further defined as being related to average day use or
peak day use.
Master Plan: A planning document used by the utility to assess current and future conditions
and needs, particularly as they relate to future customer growth and expansion infrastructure.
A master plan is typically accepted and adopted by the utility governing body.
Rational Nexus: A legal test to determine whether there is a reasonable connection (nexus)
between the burden of new development on the existing or new or expanded facilities required
to accommodate new or expanded development, and the appropriate apportionment of the
cost to the new or expanded development in relation to the benefits reasonably received.
Capacity Fee Definitions
Executive Summary 1
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Introduction
Water Systems Consulting Inc. (WSC) and HDR Engineering, Inc. (HDR) were retained by the City
of San Luis Obispo (City) to conduct a comprehensive study to review and update the City’s
water and wastewater development impact fees. On February 7, 2017, the City Council
supported the name change to “capacity and connection” fees to more clearly communicate
the service provided and therefore this report will incorporate the name change.
This report (the “Report”) documents the results of the water and wastewater capacity and
connection fee study. The purpose of capacity and connection fees is to recover the costs of
public facilities in existence at the time the fee is imposed and/or for new public facilities to be
acquired or constructed in the future that are of proportional benefit to the person or property
being charged. These fees are charged to new customers connecting to the system, or to
existing customers increasing their demand (i.e., capacity requirement).
By establishing cost-based capacity and connection fees, the City will be taking an important
step in providing adequate infrastructure to meet growth-related needs and, more importantly,
providing this required infrastructure to new customers in a cost-based, fair and equitable
manner. The current water and wastewater fees were adopted in 2013. The fees adopted in
2013 were based only on specific growth related future projects and the costs associated with
financing those projects. The fees did not include existing infrastructure and capacity in the
existing system. Per City policy, and generally accepted approaches, the City has been updating
the fees, on an annual basis, using the Consumer Price Index (CPI).
Since the 2013 fee update the City has adopted several key infrastructure planning documents
which are major components in the development of the fees. Following the adoption of the
General Plan’s updated Land Use Element in December 2014, the City completed master plans
to identify and prioritize necessary capital improvements, including those projects to provide
capacity to serve future growth. The City’s Financial and Capital Improvement Plan provide the
basis for identifying future project capital costs along with the following documents:
x The Potable Water Distribution System Master Plan (2015)
x The Wastewater Collection System Infrastructure Renewal Strategy (2015)
x The Water Resource Recovery Facility Facilities Plan (2015)
x The Recycled Water Master Plan (2017)
This Report provides the basis for the City to implement cost-based capacity and connection
fees and includes a detailed determination of the capacity and connection fees using “generally
accepted” engineering and rate setting principles, while incorporating City specific information
on assets, customer base, and growth related capital projects.
Executive Summary
Executive Summary 2
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Capacity and Connection Fee Approach
The City’s capacity and connection fees in the Report are based upon the value of both existing
and future capital infrastructure needed to accommodate future growth, divided by the
number of equivalent dwelling units (EDUs) served by that capacity. This methodology is called
the combined approach and is outlined in the American Water Works Association (AWWA) M1
Manual, Principles of Water Rates, Fees and Charges. Given that the City has previously used
only specific future projects or the “incremental methodology” for calculating the fees, the
current approach along with the combined approach was developed for the City to consider.
The combined approach is based on a blended value of both the existing and expanded
system’s capacity. This method is typically used where there is capacity available in parts of the
existing system (e.g., source of supply), but new or incremental capacity will need to be built in
other parts (e.g., transmission and distribution pipelines) to serve new development at some
point in the future.”1 The calculations also take into account the financing mechanisms of
capital improvements. Based on the sum of the existing and future component costs, the net
allowable utility capacity and connection fee is determined. “Net” refers to the calculated
“gross” capacity and connection fee, net of any debt service credits. “Allowable” refers to the
concept that the calculated capacity and connection fees are the City’s maximum cost-based
charge. The City, as a matter of policy, may charge any amount up to the cost-based maximum
allowable capacity and connection fee, but not in excess of that amount. Charging an amount
greater than the “allowable” capacity and connection fee would not meet the nexus test of a
cost-based capacity and connection fee related to the benefit derived by the customer.
Capacity and connection fees must be implemented according to the capacity requirement, or
impact, each new development has on the utility system. By doing so, the capacity and
connection fee is directly related to the impact the customer places on the system, and to the
proportional benefit the customer derives from the service (i.e., facilities) provided.
Water Capacity and Connection Fee
The City charges new customers connecting to the water system a one-time water capacity and
connection fee. The current City ordinance governing the imposition of capacity and
connection fees provides a capacity and connection fee according to type of use. The EDU is
based on a residential customer and applied to other customer classes based on generally
accepted flow assumptions by customer type.
The City, per City resolution, updates the fees each year by the Consumer Price Index (CPI). The
City’s current water capacity and connection fees for 2017-18, as of July 1, 2017, are shown
below in Table ES-1.
1 AWWA M-1 Manual, p 6th Edition, p. 265-266.
Executive Summary 3
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES - 1
Current Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type
EDU
Unit
Current
Capacity and
Connection
Fee $/EDU [1]
Residential (per unit)
Single Family Residential 1.0 $11,322.16
Multi-Family Residential 0.7 7,925.51
Mobile Home 0.6 6,793.30
Studio Unit (450 s.f. or less) 0.3 3,396.65
Non-Residential
5/8” to 3/4" 1.0 $11,322.16
1-inch 1.7 19,247.68
1-1/2 inch 3.4 38,495.36
2-inch 5.4 61,138.45
3-inch 10.7 121,145.00
4-inch 16.7 185,076.96
6-inch 33.4 378,153.92
[1] – City’s current water capacity and connection fees effective July 1, 2017.
In this Report, the City updated the projections for future residential and non-residential
development in equivalent dwelling units based on reduction in average water use since 2013
from the City’s utility billing data. This reduction is from 150 gallons per day (gpd) per
residential equivalent dwelling unit (EDU) to 134 gallons per day per EDU based on the City’s
three-year average for single family residential units. Based on the City owned wastewater
treatment capacity average dry weather flow of 4.93 MG, the existing average dry weather flow
of 4.15 MGD which includes projected flow for vested and pending projects under construction,
and the 134 gallons per day per equivalent dwelling unit, there are 5,821 equivalent dwelling
units, or “EDUs,” that can be accommodated in the City.
In the 2013 Fee Study, a new fee category was added to reflect water demand for units 450
square feet or less at 0.30 of a full EDU. Based on water demand of similar units, this fee
category is proposed to remain. In this Report, the residential category is modified as water
demand correlates more closely to unit size than a single- or multi-family unit designation as
shown in Table ES-2. Fee categories are proposed to correspond to residential units between
451 and 800 square feet and 801 square feet or more. New State regulations allow accessory
dwelling units within single-family residential zones, these units would not be assessed a
capacity and connection fee. Although no impact fee would be assessed, separate water
metering may still apply, if required by the City’s Municipal Code. Provided in Table ES-2 is a
summary of the residential equivalency factors.
Executive Summary 4
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES - 2
Residential Equivalency Factors
Residential Unit Type
Average Annual Water
Consumption
Equivalency Factor
Residential Unit (801 square feet or more) 0.17 1.0
Residential Unit (451 to 800 square feet) 0.12 0.7
Mobile Home 0.10 0.6
Studio Unit (450 square feet or less) 0.05 0.3
Similar to the 2013 Study, fees for non-residential EDUs in this Report are based on water
meter safe operating capacity ratios from the American Water Works Association (AWWA)
specifications.
On February 7, 2017, the City Council directed staff to explore the following options for the
water capacity and connection fee update.
x Option 1 - Utilize a similar methodology to the 2013 Fee Study which only includes
growth related projects and financing costs.
x Option 2 - Utilize the combined methodology that includes the buy-in to both existing
and future water infrastructure.
Option 1 - The fees calculated in Option 1 are based on a similar methodology to the 2013 Fee
Study where only specific growth related projects and the financing costs are included in the
fee calculation. This option reflects the increased capital costs of these specific projects as well
as the new capital projects related to growth and expansion on the water system. Option 1
does not include a buy-in component to existing water infrastructure. The capacity and
connection fee under Option 1 is $11,872 per EDU.
Option 2 - The water capacity and connection fees calculated for Option 2 are based on the
combined methodology, as outlined in the AWWA M1 Manual, which values the cost of all
existing and future water assets and the proportion allocable to new growth on the system.
The growth related assets are attributed to existing and future development, 84 percent and 16
percent respectively. This split is based on future EDUs to total EDUs (5,821/36,971 = 16%).
The capacity and connection fee under Option 2 is $15,780 per EDU.
Executive Summary 5
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES - 3
Option 1 and 2
Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type EDU Current Option 1 Option 2
Residential (per unit)
Residential Unit [1] 1.0 $11,322.16 $11,872 $15,780
Residential Unit [2] 0.7 7,925.51 8,310 11,046
Mobile Home 0.6 6,793.30 7,123 9,468
Studio Unit (450 s.f. or less) 0.3 3,396.65 3,562 4,734
Non-Residential
3/4-inch 1.0 $11,322.16 $11,872 $15,780
1-inch 1.7 19,247.68 20,182 26,826
1-1/2 inch 3.4 38,495.36 40,365 53,652
2-inch 5.4 61,138.45 64,109 85,212
3-inch 10.7 121,145.00 127,030 168,846
4-inch 16.7 189,076.96 198,262 263,526
6-inch 33.4 378,153.92 396,525 527,052
[1] Residential unit 1.0 defined as 801 square feet or more.
[2] Residential unit 0.7 defined as 451 to 800 square feet.
Option 1 is not recommended since the fees does not represent the total infrastructure costs
(capacity) necessary to serve new development or offer the greatest protection to the water
ratepayer. Option 2 is recommended, at $15,780 per EDU, as this fee represents the costs
associated with both existing and future infrastructure needed to serve future development
and offers the greatest protection to the water ratepayer.
Wastewater Capacity and Connection Fee
The City charges new customers connecting to the wastewater system a one-time wastewater
capacity and connection fee. The current City ordinance governing the imposition of capacity
and connection fees provides a capacity and connection fee according to type of use. The EDU
is based on a residential customer and applied to other customer classes based on generally
accepted flow assumptions by customer type. The EDU equivalency factors shown in water are
the same for wastewater. The City currently has a system wide fee, with additional charges for
catchment areas. The catchment areas are regions in the City served by sewer mains, lift
stations, and force mains. The catchment area fee varies based on area located due to pumped
flow, and land use served.
For the wastewater capacity and connection fee, the City’s gallons per day, per EDU, were
adjusted from 150 gallons per day (gpd) per residential equivalent dwelling unit (EDU) to 134
gallons per day per EDU. Based on the City owned wastewater treatment capacity average dry
weather flow of 4.93 MG, the existing average dry weather flow of 4.15 MGD which includes
projected flow for vested and pending projects under construction, and the 134 gallons per day
Executive Summary 6
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
per equivalent dwelling unit, there are 5,821 equivalent dwelling units, or “EDUs,” that can be
accommodated in the City.
The City, per City resolution, updates the fees each year by the Consumer Price Index (CPI). The
City’s current wastewater capacity and connection fees for 2017-18, as of July 1, 2017, are
shown below in Table ES-4. It should be noted that there is a wastewater fee for City Wide as
well as additional fees for specific catchment area improvements. For those customers in a
catchment area, the City Wide fee is charged along with the appropriate catchment area fee.
Table ES - 4
Current Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit
(EDU)
Type of Use
City
Wide
Margarita
Tank Farm
Silver City
Calle
Joaquin
Laguna
Residential (per unit)
SF Residential $3,830.21 $2,819.50 $3,728,52 1,392.80 $1,878.64 $503.30
MF Residential 2,681.14 1,973.65 2,609.96 974.96 1,315.05 352.31
Mobile Home 2,298.12 1,691.70 2,237.11 835.68 1,127.18 301.98
Studio Unit 1,149.06 845.85 1,118.56 417.84 563.59 150.99
Non-Residential
3/4-inch $3,830.21 $2,819.50 $3,728.52 $1,392.80 $1,878.64 $503.30
1-inch 6,511.35 4,793.15 6,338.48 2,367.76 3,193.69 855.61
1-1/2 inch 13,022.70 9,586.30 12,676.96 4,735.53 6,387.37 1,711.22
2-inch 20,683.11 15,225.30 20,134.00 7,521.13 10,144.65 2,717.81
3-inch 40,983.19 30,168.64 39,895.14 14,902.98 20,101.44 5,385.30
4-inch 63,964.42 47,085.64 62,266.25 23,259.79 31,373.27 8,405.09
6-inch 127,928.85 94,171.28 124,532.51 46,519.58 62,746.54 16,810.17
[1] – City’s current wastewater capacity and connection fee effective July 1, 2017.
On February 7, 2017, the City Council directed the following options for the wastewater
capacity and connection fee.
x Option 1 - Utilize a methodology which includes specific growth related infrastructure
and financing costs only plus the catchment area fees.
x Option 2 - Utilize the combined methodology that includes fair share buy-in to both
existing and future infrastructure plus the catchment area fees.
x Option 3 - Option 1 with area-specific wastewater catchment area fees eliminated and
one citywide wastewater capacity and connection fee.
x Option 4 - Option 2 with area-specific wastewater catchment area fees eliminated and
one citywide wastewater capacity and connection fee
Option 1 - The fees calculated in Option 1 are based on a similar methodology to the 2013 Fee
Study where only specific growth related infrastructure and financing costs are included in the
Executive Summary 7
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
fee calculation. This option reflects the increased capital costs of these projects as well as new
growth related capital projects. Option 1 does not include a buy-in component to existing
wastewater infrastructure. The capacity and connection fee under Option 1 is $8,165 per EDU.
The catchment area fees would be in addition to the city wide fee where applicable.
This option does not include all wastewater infrastructure costs (capacity) necessary to serve
new development or offer the greatest protection to the wastewater ratepayer. Therefore
Option 1 is not being recommended.
Option 2 - The wastewater capacity and connection fees calculated for Option 2 are based on
the combined methodology that values the cost of all existing and future wastewater assets
allocated to new growth. The growth related assets are attributed to existing and future
development, 84 percent and 16 percent. This split is based on future EDUs to total EDUs
(5,821/36,971 = 16%). The capacity and connection fee under Option 2 is $9,522 per EDU and
additional wastewater catchment area fees would apply, where applicable.
Option 3 - The wastewater capacity and connection fees calculated for Option 3 include those
fees calculated in Option 1, and include the cost of all catchment area improvements, for a
single fee for all customers connecting to the City’s system. In this option, the approximately
$15 million in capital improvements would be attributed to all approximately 5,800 future EDUs
in the City. The capacity and connection fee under Option 3 is $10,721 per EDU
Option 3 is not recommended. Like Option 1, Option 3 does not include all wastewater
infrastructure costs (capacity) necessary to serve new development and thereby does not offer
the greatest protection to the wastewater ratepayer.
Option 4 – This option uses the combined methodology from Option 2 with the catchments
area improvement costs included in total, for a single wastewater capacity and connection fee
for all customers connecting to the City’s system.
Option 4 is recommended, at $12,602 per EDU, as this fee represents the costs associated with
both existing and future infrastructure needed to serve future development, offers the greatest
protection to the wastewater ratepayer, and simplifies implementation of the City’s
wastewater capacity and connection fees.
The City’s proposed wastewater capacity and connection fees for Options 1, 2, 3 and 4 are
shown below in Table ES-5. Options 1 and 2 is the city wide fee and the additional catchment
fee shown in Table ES-6 would apply where applicable. Options 3 and 4 are single fees for all
customers regardless of the location.
Executive Summary 8
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES - 5
Options 1,2 , 3, and 4
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Type of Use
Equiv.
Dwelling
Unit (EDU)
Option 1
City
Wide [1]
Option 2
City
Wide [1]
Option 3
Full Cost [2]
Option 4
Full Cost [2]
Residential (per unit)
Residential [3] 1.00 $8,165 $9,522 $10,721 $12,602
Residential [3] 0.70 5,715 6,666 7,505 8,821
Mobile Home 0.60 4,899 5,713 6,433 7,561
Studio Unit 0.30 2,449 2,857 3,216 3,781
Non-Residential
5/8” to 3/4" 1.00 $8,165 $9,522
1-inch 1.70 13,880 16,188 $10,721 $12,602
1-1/2 inch 3.40 27,759 32,375 18,226 21,423
2-inch 5.40 44,088 51,420 36,452 42,847
3-inch 10.70 87,360 101,887 57,895 68,051
4-inch 16.70 136,347 159,021 114,718 134,841
6-inch 33.40 272,695 318,041 179,046 210,453
[1] City wide does not include additional catchment fee.
[2] Option 3 and 4 include catchment area costs and are a full cost fee.
[3] Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
Executive Summary 9
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES – 6
Option 1 and 2 - Additional Catchment Area Charges
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Additional Catchment Area Charges [1]
Type of Use
Margarita
Tank
Farm
Silver
City
Calle
Joaquin
Laguna
Airport
[2]
Foothill
[2]
Buckley
[2]
Residential (per unit)
Residential [3] $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
Residential [3] 2,681 2,234 1,700 2,029 304 4,460 15,623 450
Mobile Home 2,298 1,915 1,457 1,739 261 3,823 13,391 386
Studio Unit 1,149 958 729 870 130 1,912 6,696 193
Non-Residential
5/8” to 3/4" $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
1-inch 6,511 5,426 4,129 4,927 738 10,833 37,943 1,093
1-1/2 inch 13,022 10,852 8,259 9,855 1,477 21,665 75,885 2,187
2-inch 20,683 17,236 13,117 15,651 2,345 34,409 120,523 3,473
3-inch 40,982 34,153 25,990 31,013 4,647 68,181 238,815 6,882
4-inch 63,963 53,304 40,565 48,403 7,253 106,414 372,730 10,741
6-inch 127,925 106,608 81,129 96,807 14,506 212,828 745,460 21,483
[1] – These fees are in addition to the city wide fees in Options 1 and 2.
[2] – Airport, Foothills, and Buckley are new catchment area fees.
[3] Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
The detailed development of the City’s water capacity and connection fee is presented in
Section 4. The development of the wastewater capacity and connection fee is presented in
Section 5. Technical appendices are included within this Report to document the technical
analyses which were undertaken as a part of the study.
Introduction 10
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
“By establishing cost-based
capacity and connection fees
the City maintains an
approach of having “growth
pay for growth” and existing
utility customers should, for
the most part, be sheltered
from the financial impacts of
growth.”
1.1 Introduction
HDR Engineering, Inc. (HDR) was retained by the City of San Luis Obispo (City) to conduct a
study to review and update its water and wastewater capacity and connection fees. The
objective of the study is to calculate cost-based capacity and connection fees for new
customers connecting to the utility system, or those customers requesting additional capacity.
These fees provide the means of balancing the cost requirements for utility infrastructure
between existing customers and new customers. The
portion of existing infrastructure and future capital
improvements that will provide service (i.e., capacity) to
new customers is included in the calculation of the capacity
and connection fees. In contrast to this, the City has future
capital improvement projects that are related to renewal
and replacement of existing infrastructure in service. These
infrastructure costs are included within the rates of the
water and wastewater service fees charged to the City’s
customers, and are not included within the calculation of
the proposed capacity and connection fees. By establishing cost-based capacity and connection
fees the City maintains an approach of having “growth pay for growth” and existing utility
customers should, for the most part, be sheltered from the financial impacts of growth.
1.2 Organization of Report
This Report documents the methodology, approach and technical analysis undertaken by HDR
and the City in conducting the study and developing the City’s water and wastewater capacity
and connection fees. The Report is divided into five sections. Section 1 provides a brief
introduction and overview of the study. Given this brief introduction, Section 2 provides a
general overview of the development of capacity and connection fees and the criteria and
general methodology that should be used to calculate and establish cost-based fees. Next,
Section 3 provides an overview of the requirements under California law for determining
capacity and connection fees. Section 4 reviews the City specific calculations of the cost-based
water capacity and connection fee. Finally, Section 5 reviews the development and calculation
of the wastewater capacity and connection fee.
1.3 Disclaimer
HDR, in its calculation of the water and wastewater capacity and connection fees presented in
this Report, has used “generally accepted” engineering and ratemaking principles. This should
not be construed as a legal opinion with respect to California law. HDR recommends that the
City have its legal counsel review the capacity and connection fees as forth in this Report to
ensure compliance with California law.
Introduction
Overview of Capacity and Connection Fees 11
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
2.1 Introduction
An important starting point in establishing capacity and connection fees is to have a basic
understanding of the purpose of these fees, along with the criteria and general methodologies
that are used to establish cost-based fees. Presented in this section of the Report is an
overview of these fees and the criteria and general methodologies that may be used to develop
cost-based capacity and connection fees.
2.2 Defining Capacity and Connection Fees
The first step in establishing cost-based capacity and connection fees is to gain a better
understanding of what a capacity and connection fee is. Simply stated, a capacity and
connection fee is a contribution of capital to either reimburse existing customers for the
available capacity in the existing system, or help finance planned future growth-related capacity
improvements. The objective of these charges is to provide funds to the utility to finance all or
a part of the existing or new capital improvements needed to serve and accommodate new
customer growth. Absent these fees, many utilities would likely be unwilling to build growth-
related facilities (i.e., burden existing rate payers with the entire cost of growth-related capacity
expansion).
2.3 Economic Theory and Capacity and Connection Fees
Capacity and connection fees are generally imposed as a condition of service. The objective of
a capacity and connection fee is not merely to generate money for a utility, but to ensure that
all customers seeking to connect to or requiring additional capacity in the utility’s system bear
an equitable share of the cost of capacity that is invested in both the existing system and any
future growth-related expansions. Through the implementation of fair and equitable capacity
fees, existing customers should not be unduly burdened with the cost of new development.
By establishing cost-based fees, the City will be taking an important step in providing adequate
infrastructure to meet growth-related needs, and more importantly, providing the
infrastructure required to serve new customers in a cost-based, fair and equitable manner.
2.4 Capacity and Connection Fee Criteria
In the determination and establishment of the capacity and connection fees, a number of
different criteria are often utilized by public agencies, including the following:
Customer understanding
System planning criteria
Financing criteria, and
State/local laws
Overview of Capacity and Connection Fees
Overview of Capacity and Connection Fees 12
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
“System planning criteria
provides the “rational
nexus” between the
amount of infrastructure
necessary to provide
service and the charge to
the customer.”
The component of customer understanding implies that the fee is easy to understand. This
criterion has implications on the way that the fees are implemented and assessed to the
customer. For water systems, the fee is generally based on specific customer usage (demand)
or meter size. The other implication of this criterion is that the methodology is clear and
concise in its calculation of the amount of infrastructure necessary to provide service.
The use of system planning criteria is one of the more important
aspects in the determination of capacity and connection fees.
System planning criteria provides the “rational nexus” between
the amount of infrastructure necessary to provide service and
the charge to the customer. The rational nexus test requires that
there be a connection (nexus) established between the burden of
new development on the existing or new or expanded facilities
required to accommodate new or expanded development, and
the appropriate apportionment of the cost to the new or
expanded development in relation to benefits reasonably received.
To comply with the rational nexus test the calculated fees require the following:
1. “A connection be established between new development and the new or expanded
facilities required to accommodate such development. This establishes the rational basis
of public policy.
2. Identification of the cost of these new or expanded facilities needed to accommodate
new development. This establishes the burden to the public of providing new facilities to
new development and the rational basis on which to hold new development accountable
for such costs. This may be determined using the so-called Banberry factors. [Banberry
Development Company v. South Jordan City (631 P.2d 899, Utah 1981)].
3. Appropriate apportionment of that cost to new development in relation to benefits it
reasonably receives. This establishes the nexus between the fees being paid to finance
new facilities that accommodate new development and benefit new development
receives from such new facilities.”1
The first requirement of the rational nexus test requires the establishment of a rational basis of
public policy. This implies the planning and capital improvement studies that are used to
establish the need for new facilities to accommodate growth. Adopted master plans or facility
plans should firmly meet this first test since these plans assess existing facilities and capacity,
project future capacity requirements, and determine the future capital infrastructure and new
facilities needed to accommodate growth.
The second requirement of the rational nexus test discusses the Banberry Factors. In summary,
“consideration must be given to seven factors to determine the proportionate share of costs to
be borne by new development:
1. The cost of existing facilities
1 Arthur C. Nelson, System Development Charges for Water, Wastewater, and Stormwater Facilities, Lewis
Publishers, New York, 1995, p. 16 and 17.
Overview of Capacity and Connection Fees 13
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
“One of the driving
forces behind
establishing cost-
based capacity and
connection fees is
that “growth pays
for growth.”
2. The means by which existing facilities have been financed
3. The extent to which new development has already contributed to the cost of providing
existing excess capacity
4. The extent to which existing development will, in the future, contribute to the cost of
providing existing facilities used community wide or non-occupants of new development
5. The extent to which new development should receive credit for providing, at its cost,
facilities the community has provided in the past without charge to other development in
the service area.
6. Extraordinary costs incurred in serving new development
7. The time-price differential inherent in fair comparisons of amount of money paid at
different times.”2
The final portion of the rational nexus test is the reasonable apportionment of the cost to new
development in relation to benefits it reasonably receives. This is accomplished in the
methodology to establish the capacity and connection fees, which is discussed in more detail
within this section.
One of the driving forces behind establishing cost-based capacity and connection fees is that
“growth pays for growth.” Therefore, these fees are typically established as a means of having
new customers, and those requiring additional capacity in the utility
system, pay an equitable share of the cost of the infrastructure
(capacity) required to serve them. The financing criteria for
establishing the fees relates to the method used to finance
infrastructure on the system and assures that customers are not
paying twice for infrastructure – once through the capacity and
connection fees and again through water or wastewater service
fees. The double payment can come in through the imposition of
growth-related infrastructure debt service within a customer’s
rates. The financing criteria also reviews the basis under which main line extensions were
provided and assures that the customer is not charged for infrastructure that was provided
(contributed) by developers.
Under California law, and as described in Section 3 of this Report, the amount of a capacity and
connection fee imposed by a public agency does not need to be mathematically exact, but it
must bear a reasonable relationship to the cost burden imposed and benefits received. As
discussed above, the utilization of the planning and financing criteria and the actual costs of
construction and the planned costs of construction provide the nexus for the reasonable
relationship requirement.
2.5 Overview of the Capacity and Connection Fee Methodology
In establishing capacity and connection fees, there are differing methodologies. The AWWA M-
1 Manual discusses three generally accepted methods;
2 Ibid, p. 18 and 19.
Overview of Capacity and Connection Fees 14
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
x “The buy-in method is based on the value of the existing system’s capacity. This method
is typically used when the existing system has sufficient capacity to serve new
development now and into the future.
x The incremental cost method is based on the value or cost to expand the existing
system’s capacity. This method is typically used when the existing system has limited or
no capacity to serve new development now and into the future.
x The combined approach is based on a blended value of both the existing and expanded
system’s capacity. This method is typically used where some capacity is available in
parts of the existing system (e.g., source of supply) and new or incremental capacity will
need to be built in other parts (e.g., transmission and distribution) to serve new
development at some point in the future.”3
For the development and calculation of the City’s capacity and connection fees the “combined
approach” was used since there is available capacity in the existing system and the need for
future (capacity) expansion. Historically the City has used the incremental cost method for
specific growth projects and has not included the backbone infrastructure of the system. For
the combined approach, the value of City assets will be determined and then be divided by the
total number of existing and future EDUs. The expanded capacity projects will be determined
and divided by the number of additional future EDUs. The two components will then be
combined to determine the total capacity and connection fee.
Capacity and Connection Fee Equation:
Where:
A = Value of existing facilities
B = Depreciation of existing facilities
C1 = Value of future growth-related City-constructed facilities
D = Existing City EDUs
E = Purchased, but not installed, EDUs
F = Future EDUs to ultimate buildout
Regardless of the overall methodology selected, a common denominator of the technical
analyses is the various steps undertaken. These steps are as follows:
Determination of system planning criteria
Determination of equivalent dwelling unit equivalents (EDUs)
Calculation of existing system costs
Determination of any credits
3 AWWA M-1 Manual, 6th Edition, p. 265-266.
(A - B)C1 Total City Facilities at Buildout Future Growth Related Facilities
_______D + E + F F Total Customers at Buildout Future EDUs at Buildout
=++
Overview of Capacity and Connection Fees 15
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
The first step in establishing capacity and connection fees is the determination of the system
planning criteria. This implies calculating the amount of water or wastewater capacity required
by a single-family residential customer in the terms of an equivalent dwelling unit (EDU). The
number of EDUs provides the linkage between the amounts of infrastructure necessary to
provide service to a set number of customers.
Once the number of EDUs or capacity components for the system is determined, a component-
by-component system analysis is undertaken to determine the portion of the capacity and
connection fee attributable in dollars per EDU. In this process, the existing assets must be
valued. Existing assets may be valued in a number of different ways. These methods may
include the following:
9 Original Cost (OC)
9 Original Cost Less Depreciation (OCLD)
9 Replacement Cost New (RCN)
9 Replacement Cost New Less Depreciation (RCNLD)
Given these four different methods for valuing the assets, the selection of the valuation
method certainly arises. The American Water Works Association M-1 Manual notes the
following concerning these generally accepted valuation methods:
“Using the OC and OCLD valuations, the [capacity fee] reflects the original investment in
the existing capacity. The new customer “buys in” to the capacity at the OC or the net
book value cost (OCLD) for the facilities and as a result pays an amount similar to what
the existing customers paid for the capacity (OC) or the remaining value of the original
investment (OCLD).
Using the RCN and the RCNLD valuations, the [capacity fee] reasonably reflects the cost
of providing new expansion capacity to customers as if the capacity was added at the
time the new customers connected to the water system. It may be also thought of as a
valuation method to fairly compensate the existing customers for the carrying costs of
the excess capacity built into the system in advance of when the new customers connect
to the system. This is because, up to the point of the new customer connecting to the
system, the existing customers have been financially responsible for the carrying costs of
that excess capacity that is available to development.”4
As a point of reference for this Report, the City’s water and wastewater capacity and
connection fee analysis will use an RCNLD methodology for all assets. The City’s existing assets
are escalated to replacement dollars and then depreciated using a simple straight-line method
based on the useful life of each historical asset, respectively. The total existing assets are then
divided by the sum of existing EDUs and additional future EDUs to determine the “gross existing
capacity and connection fee”.
After the existing infrastructure is analyzed, the future expansion projects are then added to
the total cost component. This total future cost is divided by the total future EDUs to
4 Ibid., p. 268
Overview of Capacity and Connection Fees 16
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
determine the “gross future capacity and connection fee”. The existing and future capacity and
connection fees are combined or added together for a total capacity and connection fee.
2.6 Summary
This section of the Report has provided an overview of capacity and connection fees; the basis
for establishing cost-based fees, considerations in establishing the fees, the burden
development places on the system and the technical or analytical steps typically taken in the
development of the fees. In the development of the City’s capacity and connection fee study,
the issues identified in this section of the Report have been addressed and will be discussed in
more detail in later sections of the Report. The next section of the Report provides a brief
overview of the legal considerations in establishing capacity and connection fees as they relate
to California law.
Legal Considerations in Establishing Capacity and Connection Fees 17
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
“The laws for the
enactment of capacity and
connection fees in
California are found in
California Government
Code sections 66013,
66016, and
66022 within the
‘Mitigation Fee Act.’”
3.1 Introduction
An important consideration in developing a capacity and connection fee is any legal
requirements at the state or local level. The legal requirements often provide the authority to
establish the fees, but also may provide a general methodology around which the capacity and
connection fees must be calculated or how the funds must be used. Given that, it is important
for the City to understand these legal requirements and develop and adopt fees which comply
with those legal requirements. This section of the Report provides an overview of the legal
requirements for establishing capacity and connection fees under California law. A discussion
of the applicability of Proposition 218 and Proposition 26, as it relates to these fees, is also
provided.
The discussion within this section of the Report is intended to be a summary of our
understanding of the relevant California law as it relates to establishing capacity and
connection fees. It in no way constitutes a legal interpretation of California law by HDR.
3.2 Requirements under California Law
Many states have specific laws regarding the establishment, calculation and implementation of
capacity and connection fees. The main objective of most state laws is to assure that these
charges are established in such a manner that they are fair, equitable and cost-based. In other
cases, state legislation may have been needed to provide the legislative powers to the utility to
establish the charges.
The laws for the enactment of capacity and connection fees in
California are codified in California Government Code sections
66013, 66016, and 66022, which are interspersed within the
‘Mitigation Fee Act.’ The above sections set forth the various
requirements for imposition of capacity and connection fees in
California: calculation of the fees, noticing, accounting and
reporting requirements, and processes for judicial review.
Although contained within the Mitigation Fee Act, capacity and
connection fees are not development fees.
Legal Considerations in Establishing
Capacity and Connection Fees
Legal Considerations in Establishing Capacity and Connection Fees 18
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
A summary of the relevant statutes required in the calculation of capacity and connection fees
is as follows:
“66013 (a) Notwithstanding any other provision of law, when a local agency imposes
fees for water connections or sewer connections, or imposes capacity charges, those fees
or charges shall not exceed the estimated reasonable cost of providing the service for
which the fee or charge is imposed, unless a question regarding the amount of the fee or
charge imposed in excess of the estimated reasonable cost of providing the services or
materials is submitted to, and approved by, a popular vote of two-thirds of those
electors voting on the issue.”
“66013 (b) (3) ‘Capacity charge’ means a charge for facilities in existence at the time a
charge is imposed or charges for new facilities to be constructed in the future that are of
benefit to the person or property being charged. . . .”
In addition to the determination of “the estimated reasonable cost of providing the service for
which the fee is imposed,” California law also requires the following:
That notice (of the time and place of the meeting, including a general explanation of the
matter to be considered) and a statement that certain data is available be mailed to
those who filed a written request for such notice;
That certain data (the estimated cost to provide the service and anticipated revenue
sources) be made available to the public;
That the public agency provide an opportunity for public input at an open and public
meeting to adopt or modify the fee; and
That revenue in excess of actual cost be used to reduce the fee creating the excess.
The basic principle that needs to be followed under California law is that the charge be based
on a proportionate share of the costs of the system required to provide service and that the
requirements for adoption and accounting be followed in compliance with California law.
3.3 Propositions 218 and 26 and Capacity and Connection Fees
In 1996, the voters of California approved Proposition 218, which required that the imposition
of certain fees and assessments by municipal governments require a vote of the people to
change or increase the fee or assessment. Of interest in this particular study is the applicability
of Proposition 218 to the establishment of capacity and connection fees for the City.
In Richmond v. Shasta Community Services Dist., 32 Cal.4th 409 (2004), the California Supreme
Court held that water capacity and connection fees are not “assessments” under Proposition
218 because they are imposed only on those who are voluntarily seeking water service, rather
than being charged to particular identified parcels, and therefore such fees are not subject to
the procedural or substantive requirements of Proposition 218. Additionally, the court held
that a capacity and connection fee is not a development fee. The court also held that such fees
can properly be enacted by either ordinance or resolution.
Legal Considerations in Establishing Capacity and Connection Fees 19
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
In November 2010 the voters of California passed Proposition 26, an initiative based state
constitutional amendment, which provided a new definition of the term “tax” in the California
Constitution. Under Proposition 26 a fee or charge imposed by a public agency is a tax unless it
meets one of seven exceptions. Capacity and connection fees fall within exception 2 – i.e., it is
a charge imposed for a specific government service. Provided that a capacity and connection
fee does not charge one fee payor more in order to charge another fee payor less (i.e., a cross-
subsidy), and it does not exceed the reasonable costs to the local government of providing the
service, then the fee is not a tax within the meaning of Proposition 26. Under Proposition 26,
the local government bears the burden of proving, by a preponderance of the evidence, that a
levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover
the reasonable costs of the governmental activity, and that the manner in which those costs are
allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits
received from, the governmental activity.
3.4 Summary
This section of the Report has provided an overview of the legal requirements under California
law for the establishment of capacity and connection fees. As was noted above, an important
legal requirement is that the fees or charges shall not exceed the estimated reasonable cost of
providing the service for which the fee or charge is imposed. The following sections of the
Report provide the City’s calculation of the water and wastewater capacity and connection
fees, and provides the basis for the establishment of reasonable fees.
Determination of the City’s Water Capacity and Connection Fees 20
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
4.1 Introduction
This section of the Report presents the details and key assumptions in the calculation of the
City’s water capacity and connection fees. The calculation of the City’s water capacity and
connection fee is based upon City specific accounting and planning information. Specifically,
the capacity and connection fee is based upon the City’s fixed asset records; the City’s current
capital improvement plans; and determination of existing EDUs and the projection of future
EDUs. As was noted in Section 2 of this Report, these planning documents and projections of
future EDUs provide the required support for a “rationally based public policy” to support the
imposition of cost-based capacity and connection fees.
To the extent that the cost and timing of future capital improvements change, then the capacity
and connection fee presented in this section of the Report should be updated to reflect the
changes.
4.2 Overview of the City’s Water System
The City of San Luis Obispo has three main sources of water. The Salinas Reservoir, also known
as Santa Margarita Lake, the Whale Rock Reservoir, and Nacimiento Lake. The surface water
from the three lakes is treated at the Stenner Creek Water Treatment Plant (WTP). During
2016, the treatment plant delivered 1.63 billion gallons of water to San Luis Obispo.
The City is supplied recycled water from its Water Resource Recovery Facility (WRRF). In 2016,
recycled water is utilized for landscape irrigation and for construction water (dust suppression,
compaction, etc.). The City will be maximizing the production of recycled water with the
upgrade of the WRRF scheduled to begin construction in 2018 and studies are underway to
maximize the use of this resource.
The City’s potable water distribution system delivers water from the WTP to approximately
15,000 metered customers and over 2,000 fire hydrants via two storage reservoirs, eight pump
stations, ten water tanks, and approximately 185 miles of water mains.
The water delivered from the WTP is split into two main distribution networks. The WTP has a
major pump station that pumps water to the high pressure zones which provides service to the
higher elevation areas in the City. The transfer pumps take approximately half of the water,
increase the pressure, and then provide water to Stenner Canyon Reservoir (Reservoir #2), Cal
Poly, and other portions of the City. Water flows by gravity directly into the lower pressure
zone from the WTP's onsite clear well tanks.
Water storage facilities are necessary to provide water during peak demand periods and
emergency situations such as fires. The City has twelve water storage facilities, nine of which
are steel storage tanks ranging in size from 0.04 to four million gallons and three concrete
Determination of the City’s Water Capacity and
Connection Fees
Determination of the City’s Water Capacity and Connection Fees 21
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
facilities with a capacity of 0.35 to 7.5 million gallons. The combined storage capacity is 26.22
million gallons.
4.3 Current Water Capacity and Connection Fees
The City, per City resolution updates the fees each year by the Consumer Price Index (CPI). The
City’s current water capacity and connection fees for 2017-18, as of July 1, 2017, are shown
below in Table 4-1.
Table 4 - 1
Current Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type
EDU
Unit
Current
Capacity and
Connection
Fee $/EDU [1]
Residential (per unit)
Single Family Residential 1.0 $11,322.16
Multi-Family Residential 0.7 7,925.51
Mobile Home 0.6 6,793.30
Studio Unit (450 s.f. or less) 0.3 3,396.65
Non-Residential
5/8” to 3/4" 1.0 $11,322.16
1-inch 1.7 19,247.68
1-1/2 inch 3.4 38,495.36
2-inch 5.4 61,138.45
3-inch 10.7 121,145.00
4-inch 16.7 185,076.96
6-inch 33.4 378,153.92
[1] – City’s current water capacity and connection fees effective July 1, 2017.
The above current water capacity and connection fees includes a residential and non-
residential land use type. The residential fee is based on per unit EDU. The non-residential is
based on meter size.
4.4 Calculation of the Allowable Water Capacity and Connection Fee
As was discussed in Section 2, the process of calculating the City’s water capacity and
connection fee is based upon a four-step process. These steps are as follows:
1. Determination of system planning criteria
2. Determination of equivalent dwelling units (EDUs)
3. Calculation of the capacity and connection fee for system costs
4. Determination of any capacity and connection fee credits
Each of these areas is discussed in more detail below.
Determination of the City’s Water Capacity and Connection Fees 22
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
4.4.1 Water System Planning Criteria
System planning criteria are used to establish the capacity needs of an equivalent dwelling unit
(EDU). The City updated the projections for future residential and non-residential development
in equivalent dwelling units based on current consumption patterns, which was a reduction in
average water use since 2013, when the current fee was established. As a result of the reduced
consumption, the calculation of an EDU was reduced from 150 gallons per day per equivalent
residential unit to 134 gallons per day per equivalent residential unit based on the City’s three-
year average for single family residential units.
Like the 2013 study the water and wastewater EDU calculation were based on the same
criteria. Based on the available wastewater treatment capacity, less Cal Poly share is 4.9 MGD.
This capacity divided by 134 gallons per EDU is a total City existing and future EDUs of 36,971
EDUs. The existing average dry weather flow is 4.15 MGD which includes projected flow for
vested and pending projects under construction. Total existing EDUs would be 30,907 (4.15
MGD/ 134 gallons per day = 30,970). This leaves 5,821 future EDUs.
Table 4-2 provides a summary of the planning criteria used to establish the City’s proposed
water capacity and connection fee.
Table 4-2
Summary of the Planning Criteria for EDU Calculation
Planning Criteria Description Planning Criteria
WRRF Total Capacity
Future Average Dry Weather Flow/WRRF Design Capacity 5,400,000
Less: Cal Poly Average Dry Weather Flow Share 470,000
City Owned WRRF Capacity 4,930,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing and Future EDUs 36,971
WRRF Existing Capacity
Existing Average Dry Weather Flow 4,150,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing EDUs 30,970
Total City Future EDUs 5,821
Detail of the EDU calculation is shown in Exhibit W-2 of the Water Technical Appendix.
In the 2013 Fee Study, a new fee category was added to reflect water demand for units 450
square feet or less at 0.30 of a full EDU. Based on water demand of similar units, this fee
category is proposed to remain. In this Report, the residential category is modified as water
demand correlates more closely to unit size than a single- or multi-family unit designation as
shown in Table 4-3. Fee categories are proposed to correspond to residential units between
Determination of the City’s Water Capacity and Connection Fees 23
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
451 and 800 square feet and 801 square feet or more. With the new State regulations allowing
accessory dwelling units within single-family residential zones, these units would not be
assessed a capacity and connection fee. Although no impact fee would be assessed, separate
water metering may still apply, if required by the City’s Municipal Code. See Table 4-3 for the
residential equivalency factors.
Table 4 - 3
Residential Equivalency Factors
Residential Unit Type
Average Annual Water
Consumption
Equivalency Factor
Residential Unit (801 square feet or more) 0.17 1.0
Residential Unit (451 to 800 square feet) 0.12 0.7
Non-Residential 0.10 0.6
Studio Unit (450 square feet or less) 0.05 0.3
Similar to the 2013 Study, fees for non-residential EDUs in the 2017 Fee Study are based on
water meter safe operating capacity ratios from the American Water Works Association
(AWWA) specifications.
4.4.2 Calculation of the Water Capacity and Connection Fee by Components
The next step of the analysis is to review the system infrastructure to determine the water
capacity and connection fee for the system. In calculating the water capacity and connection
fee for the City, existing components, debt service for existing facilities, future capital
improvements relating to expansion and capital fund reserves were included. The
methodology used to calculate each of these components is described below.
EXISTING OR BUY-IN COMPONENT – To calculate the value of the existing assets for the buy-in
component, the City’s methodology considered the original cost of each asset. The original cost
of the asset was then adjusted to a replacement cost value. The replacement cost of each asset
was then depreciated for the remaining useful life (i.e., replacement cost less depreciation).
The replacement cost method was used since this was the best information available.
The City provided an asset listing for the various existing components and their installation
dates. As was noted, there are different methods for valuing existing assets. In this case, a
replacement cost new, less depreciation method was used. To accomplish this, the asset listing
was reviewed for each asset and a replacement cost was estimated. A second review was
made of the asset listing to eliminate assets that would be decommissioned or obsolete given
the new capital projects listed as replacements or upgrades. Then, based on the installation
date for each asset and an estimated useful life, the replacement cost less depreciation was
calculated to determine the value of each asset for the capacity and connection fee analysis.
Given the value of the assets, the next step was to determine the portion of the project costs
that were determined to be eligible and included in the calculation of the capacity and
Determination of the City’s Water Capacity and Connection Fees 24
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
connection fee. Within this study, contributions (i.e., the costs of donated or contributed
assets) were not included in the capacity and connection fee.
The final value of the assets was reduced by the amount of future principal on the debt
associated with the assets as the principal will be recovered via the debt component within the
City’s current rates. As described below (see Debt Service Component discussion), the
remaining principal portion of the debt associated with the assets was deducted from the total
eligible assets value prior to calculating the capacity and connection fee. This inclusion of a
“debt service credit” avoids double charging the customer for the asset value in the existing or
buy-in component of the capacity and connection fee, and also in the debt service component
of the rates. The principal portion of the debt service balance on existing assets is removed
from the value prior to calculating the buy-in portion of the fee.
DEBT SERVICE COMPONENT - In addition to the buy-in component, a debt service component was
also developed. This component accounts for the principal on existing assets. By segregating
the debt service costs, the costs can be clearly identified and calculated appropriately. To avoid
double-counting of the assets financed with debt, the future principal associated with those
assets was deducted from the existing infrastructure value.
The City has four outstanding debt issues for the water system. They are the 2012 Water
Revenue Refunding Bonds, 2007A Revenue Bonds (Nacimiento Water Project), Reuse SRF
Funding Repayments, and WTP Master Plan Improvements. The total debt service eligible is
approximately $53 million for water. Further detail can be seen on Exhibit W-6 of the Water
Technical Appendix.
OTHER COMPONENTS - In addition to the existing or buy-in component and debt service
component, capital fund reserves were determined to be capacity and connection fee-related.
These components are considered an adjustment to the overall water system asset valuation
since they are capacity infrastructure costs that relate to the water system as a whole and
funded through existing customers. The total capacity and connection fee eligible fund reserve
is $16 million for water. Further detail can be seen on Exhibit W-7 of the Water Technical
Appendix.
FUTURE COMPONENTS – An important requirement for a capacity and connection fee study is the
connection between the anticipated future growth on the system and the required facilities
needed to accommodate that growth. For purposes of this study, the City’s current Capital
Improvement Plan (CIP) provided future projects. The City staff reviewed the current capital
improvement plan and updated it with the best available information. Capital improvements
that were growth-related were included in the water capacity fee calculation and totaled
approximately $8.8 million through 2025. The largest area of capacity and connection fee
eligible projects is treatment projects totaling approximately $4.7 million. Future growth was
approximately 16% based on growth EDUs (5,821 future EDUs/36,791 total existing and future
EDUs = 16%). Exhibit W-8 of the Water Technical Appendix contains the details of this portion
of the fee.
Determination of the City’s Water Capacity and Connection Fees 25
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
4.5 Net Allowable Water Capacity and Connection Fee
Based on the sum of the component costs calculated above, the net allowable water capacity
and connection fees were determined. “Allowable” refers to the concept that the calculated
capacity and connection fee shown on Table 4-5 is the City’s cost-based water capacity and
connection fee. The City, as a matter of policy, may charge any amount up to the allowable
capacity and connection fee, but not in excess of that amount. Charging an amount greater
than the allowable water capacity and connection fee would not meet the nexus test of cost-
based capacity and connection fee. Details are provided in Exhibit W-1 and Exhibit W-9 of the
Water Technical Appendix.
Table 4-5
Summary of Allowable Water Capacity and Connection Fees ($/EDU)
Total “Allowable”
Water Capacity and Connection Fee
Total Existing Plant (RCNLD) $241,639,328
Less: Outstanding Debt Principal ($53,702,781)
Plus: Reserves $16,079,051
Total Existing Plant $204,015,598
Total EDUs 36,791
Total Existing Capacity and Connection Fee per EDU $14,257
Total Future Plant $8,861,869
Total Future EDUs 5,821
Total Future Capacity and Connection Fee per EDU $1,523
Net Allowable Existing and Future per ($/EDU) $15,780
As can be seen in Table 4-5, the calculated water capacity and connection fee was determined
to be $15,780 per EDU. These fees are stated as one (1) EDU.
Table 4-6
Allowable Water Capacity and connection fee Summarized by
Existing and Expansion Components $/EDU)
Total “Allowable”
Water Capacity and
Connection Fee
% of
Total
Existing Plant Related $14,257 90.4%
Expansion Plant Related 1,523 9.6%
Allowable Capacity and Connection Fee ($/EDU) $15,780 100.0%
Determination of the City’s Water Capacity and Connection Fees 26
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 4-6 provides a better understanding of the relationship of the replacement-related
portion of the fee to the expansion related portion of the fee. Slightly more than ninety
percent of the calculated allowable fee is related to the existing facilities.
The fee also varies by customer type, but in all cases it is intended to reimburse the existing
customers for their portion of the system use that has been funded through rates over time on
a per EDU basis. The City’s current ordinance code provides a water capacity and connection
fee according to type of land use. The EDU is based on a residential customer and applied to
other customer classes based on generally accepted flow assumptions by land use or customer
type.
Similar to the City’s current approach, fees for non-residential EDUs in this Report are based on
water meter safe operating capacity ratios as developed by the American Water Works
Association (AWWA) specifications.
On February 7, 2017, the City Council directed staff to explore the following options for the
water capacity and connection fee update.
x Option 1 - Utilize a similar methodology to the 2013 Fee Study which included specific
projects related to growth and expansion of the water system infrastructure plus
financing costs.
x Option 2 - Utilize a methodology that includes fair share buy-in to both existing and
future water infrastructure.
Option 1 - The water capacity and connection fees calculated in Option 1 are based on a similar
methodology to the 2013 Fee Study where only specific water system improvements and the
financing costs of those improvements are included in the fee calculation. This option reflects
the increased capital costs of these projects as well as the financing of these capital projects.
Option 1 does not include a buy-in component to existing water infrastructure as only specific
“major” capital projects are included. These were projects such as the water treatment plant
expansion and upgrade and the Nacimiento pipeline project. This results in a calculated
capacity and connection fee of $11,872 per EDU.
Option 2 - The water capacity and connection fees calculated for Option 2 are based on a
methodology that values the cost of all existing and future water assets. The growth related
assets are attributed to existing and future development, 84 percent and 16 percent. This split
is based on future EDUs to total EDUs (5,821/36,971 = 16%). This results in a calculated
capacity and connection fee of $15,780 per EDU. Provided in Table 4-7 is a comparison of the
current fee, Option 1 (current methodology), and Option 2 (proposed methodology).
Determination of the City’s Water Capacity and Connection Fees 27
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 4 - 7
Option 1 and 2
Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type EDU Current Option 1 Option 2
Residential (per unit)
Residential Unit [1] 1.0 $11,322.16 $11,872 $15,780
Residential Unit [2] 0.7 7,925.51 8,310 11,046
Mobile Home 0.6 6,793.30 7,123 9,468
Studio Unit (450 s.f. or less) 0.3 3,396.65 3,562 4,734
Non-Residential
3/4-inch 1.0 $11,322.16 $11,872 $15,780
1-inch 1.7 19,247.68 20,182 26,826
1-1/2 inch 3.4 38,495.36 40,365 53,652
2-inch 5.4 61,138.45 64,109 85,212
3-inch 10.7 121,145.00 127,030 168,846
4-inch 16.7 189,076.96 198,262 263,526
6-inch 33.4 378,153.92 396,525 527,052
[1] Residential unit 1.0 defined as 801 square feet or more.
[2] Residential unit 0.7 defined as 451 to 800 square feet.
Option 1 is not being recommended as the fees do not include all water infrastructure
necessary to serve new development or offer the greatest protection to the water ratepayer.
Option 2 is recommended, at $15,780 per EDU, as this fee represents the costs associated with
both existing and future infrastructure needed to serve future development and offers the
greatest protection to the water ratepayer.
4.6 Key Water Capacity and Connection Fee Assumptions
In the development of the City’s water capacity and connection fees, a number of key
assumptions were utilized. These are as follows:
The water capacity and connection fees were developed on the basis of the City’s
planning documents, anticipated future connections, and the needed capital
improvements to serve those future connections.
The assumed water gallon per day per equivalent dwelling unit was adjusted from 150
gpd to 134 gpd. This revised definition of an EDU links directly to the City’s planning
documents and current customer consumption patterns.
The City’s asset records and system information were used to determine the existing
infrastructure assets and their value based on replacement cost.
The City provided financial records related to capital reserves available and future water
debt service payments.
The City provided the most recent water CIP for future expansion improvements.
The City determined the portion of future improvements that were growth-related.
Determination of the City’s Water Capacity and Connection Fees 28
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
The base year for the CIP was assumed at 2016.
The calculation of the debt credit component included current outstanding principal on
existing assets.
4.7 Implementation of the Proposed Water Capacity and Connection
Fees
HDR would recommend that the City continue to adjust the water capacity and connection fees
on an annual basis. The City currently uses the Consumer Price Index (CPI) for this annaula
update. This method of escalating the City’s fees should be used for no more than a five-year
period. After five years, HDR recommends that the City update the water capacity and
connection fees based on the actual cost of infrastructure and any new planned facilities that
would be contained in an updated master plan or CIP.
It is further recommended the City to consider using the Engineering News Record Construction
Cost Index (ENR-CCI) to reflect the cost of interest and inflation instead of the CPI. The ENR-CCI
is a reliable and consistent indices that tracks construction costs and is published every month
showing the national average of twenty cities.
4.8 Consultant Recommendations
Based on our review and analysis of the City’s existing water capacity and connection fees, HDR
provides the following recommendations:
The City should revise and update its water capacity and connection fees to the calculated
water capacity and connection fees for Option 2 as shown in this Report. The fees should
be applicable for any new customers connecting to the system, or an existing customer
requesting/requiring additional capacity. The adopted water capacity and connection fees
shall not exceed the calculated fees as set forth in this Report.
The City should make periodic (annual) adjustments to the water capacity and connection
fees based on changes in the Engineering News Record Construction Cost Index. This is
consistent with the City’s past practices using the CPI for these adjustments, as they relate
to these fees.
The City should update the actual calculations for the water capacity and connection fees
based on the methodology as approved by the resolution or ordinance setting forth the
methodology for water capacity and connection fees at such time when a new CIP, facilities
plan, master plan or a comparable plan is approved or updated by the City.
4.9 Summary
The development of the water capacity and connection fees by HDR utilized generally accepted
engineering and ratemaking principles, while applying City specific planning, asset and
customer information.
The City should have legal counsel review the Report and for consistency with applicable City
and State laws and regulations.
Determination of the City’s Wastewater Capacity and Connection Fees 29
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
5.1 Introduction
This section of the Report presents the details and key assumptions in the calculation of the
City’s wastewater capacity and connection fee. The calculation of the City’s wastewater
capacity and connection fee is based upon City specific accounting and planning information.
Specifically, the wastewater capacity and connection fee is based upon: the City’s fixed asset
records; the City’s current wastewater capital improvement plan; existing equivalent dwelling
units (EDUs); and projection of future EDUs. As was noted in Section 2 of this Report, these
planning documents and projections of future EDUs provide the required support for a
“rationally based public policy” to support the imposition of cost-based wastewater capacity
and connection fee.
To the extent that the cost and timing of future capital improvements change, it is
recommended that the wastewater capacity and connection fee presented in this section of the
Report should be updated to reflect the changes.
5.2 Overview of the City’s Wastewater System
The City provides wastewater collection and treatment services to approximately 14,000
service connections. The City serves Cal Poly and the County of San Luis Obispo Airport. The
City’s wastewater collection system includes approximately 136 miles of gravity sewer mains
and 2,900 manholes, as well as nine sewage lift stations with three miles of force main.
The City is in the planning stages for an upgrade to the WRRF, the City’s wastewater treatment
plant. The WRRF is rated for 5.4 mgd maximum daily flow and treats an average of 4.15 mgd
average annual flow according to 2009 to 2016 flow data. After being treated, the water is
either discharged to San Luis Obispo Creek or distributed as recycled water.
5.3 Current City Wastewater Capacity and Connection Fees
The City, per City resolution, updates the fees each year by the Consumer Price Index (CPI). It
should be noted that there is a wastewater fee for City Wide as well as additional fees for
specific catchment area improvements. For those customers in a catchment area, the City Wide
fee is charged along with the appropriate catchment area fee. The City’s current wastewater
capacity and connection fees for 2017-18, as of July 1, 2017, are shown below in Table 5-1.
Determination of the City’s Wastewater
Capacity and Connection Fees
Determination of the City’s Wastewater Capacity and Connection Fees 30
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 5 - 1
Current Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit
(EDU)
Type of Use
City
Wide
Margarita
Tank Farm
Silver City
Calle
Joaquin
Laguna
Residential (per unit)
SF Residential $3,830.21 $2,819.50 $3,728,52 1,392.80 $1,878.64 $503.30
MF Residential 2,681.14 1,973.65 2,609.96 974.96 1,315.05 352.31
Mobile Home 2,298.12 1,691.70 2,237.11 835.68 1,127.18 301.98
Studio Unit 1,149.06 845.85 1,118.56 417.84 563.59 150.99
Non-Residential
3/4-inch $3,830.21 $2,819.50 $3,728.52 $1,392.80 $1,878.64 $503.30
1-inch 6,511.35 4,793.15 6,338.48 2,367.76 3,193.69 855.61
1-1/2 inch 13,022.70 9,586.30 12,676.96 4,735.53 6,387.37 1,711.22
2-inch 20,683.11 15,225.30 20,134.00 7,521.13 10,144.65 2,717.81
3-inch 40,983.19 30,168.64 39,895.14 14,902.98 20,101.44 5,385.30
4-inch 63,964.42 47,085.64 62,266.25 23,259.79 31,373.27 8,405.09
6-inch 127,928.85 94,171.28 124,532.51 46,519.58 62,746.54 16,810.17
[1] – City’s current wastewater capacity and connection fee effective July 1, 2017.
The City current wastewater capacity and connection fees include a city wide fee and additional
catchment area charges for specific area improvements. Similar to the City’s water capacity
and connection fee, the fee also varies by customer type, reflective of the gallon per day (GPD)
capacity use in the equivalent dwelling unit (i.e., EDU %).
The catchment areas are regions in the City served by sewer mains, lift stations, and force
mains. Each catchment area varies in the amount of wastewater flow pumped, due to the
topography, area, and land uses served. These catchment areas are primarily located in the
southern portion of the City, except for the Foothill catchment area located in the northeast
area of the City. The total cost of the catchment area improvements is over $34 million, with
approximately $15 million attributed to new development. The cost of wastewater
improvements is allocated to future development based on flow generation in each of the
catchment areas. Of the over 5,800 future EDUs in the City, approximately 80 percent, or 4,600
future EDUs, are located in areas served by lift stations, identified as “catchment areas”.
New fees are identified for three new catchment areas (Airport, Buckley, and Foothill). The
Airport and Foothill catchment area fees support the replacement of existing lift station
infrastructure. The Buckley catchment area fee is applicable to development in the Airport Area
Specific Plan, including the Avila Ranch project and other development east of that project
along Buckley Road.
Determination of the City’s Wastewater Capacity and Connection Fees 31
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
5.4 Calculation of the Wastewater Capacity and Connection Fee
As was discussed in Section 2, and similar to the approach used for the water capacity and
connection fees, the process of calculating the City’s wastewater capacity and connection fee is
based upon a four-step process. These steps were as follows:
1. Determination of system planning criteria
2. Determination of equivalent dwelling units (EDUs)
3. Calculation of the capacity and connection fees for system costs
4. Determination of any capacity and connection fee credits
5.4.1 System Planning Criteria and Equivalent Dwelling Units
System planning criteria are used to establish the capacity needs of an equivalent dwelling unit
(EDU). The City updated the projections for future residential and non-residential development
in equivalent dwelling units based on reduction in average water use since 2013 from the City’s
utility billing data. This reduction is from 150 gallons per day per equivalent residential units to
134 gallons per day per equivalent residential unit based on the City’s three-year average for
single family residential units. Based on the available wastewater treatment capacity, less Cal
Poly share is 4.9 MGD. This capacity divided by 134 gallons per EDU is a total City existing and
future EDUs of 36,971 EDUs. The existing average dry weather flow is 4.15 MGD which includes
projected flow for vested and pending projects under construction. Total existing wastewater
EDUs would be 30,907 (4.15 MGD/ 134 gallons per day = 30,970). This leaves 5,821 future
EDUs.
Table 5-2 provides a summary of the planning criteria used to establish the City’s proposed
wastewater capacity and connection fee.
Table 5-2
Summary of the Planning Criteria for EDU Calculation
Planning Criteria Description Planning Criteria
WRRF Total Capacity
Future Average Dry Weather Flow/WRRF Design Capacity 5,400,000
Less: Cal Poly Average Dry Weather Flow Share 470,000
City Owned WRRF Capacity 4,930,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing and Future EDUs 36,971
WRRF Existing Capacity
Existing Average Dry Weather Flow 4,150,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing EDUs 30,970
Total City Future EDUs 5,821
Determination of the City’s Wastewater Capacity and Connection Fees 32
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Detail of the EDU calculation is shown in Exhibit S-2 of the Wastewater Technical Appendix.
As discussed in the water capacity and connection fee section, the residential category is
adjusted as water demand correlates more closely to unit size than a single- or multi-family unit
designation as shown in Table 5-3. Fee categories are proposed to correspond to residential
units between 451 and 800 square feet and 801 square feet or more. New State regulations
allow accessory dwelling units within single-family residential zones, these units would not be
assessed a capacity and connection fee. However, where fees are applicable, the fee will vary
depending on the size of the residential unit. Table 5-3 shows the residential definitions for
establishing the equivalent EDU factor.
Table 5 - 3
Residential Equivalency Factors
Residential Unit Type
Average Annual Water
Consumption
Equivalency Factor
Residential Unit (801 square feet or more) 0.17 1.0
Residential Unit (451 to 800 square feet) 0.12 0.7
Non-Residential 0.10 0.6
Studio Unit (450 square feet or less) 0.05 0.3
Similar to the 2013 Study, wastewater fees for non-residential EDUs in this Report are based on
water meter safe operating capacity ratios as developed by the American Water Works
Association (AWWA) specifications.
5.4.2 Calculation of the Wastewater Capacity and Connection Fee by Component
The next step of the analysis is to review the major functional wastewater system infrastructure
to determine the wastewater capacity and connection fee for the City. In calculating the
wastewater capacity and connection fee for the City, existing asset components, debt service
for existing facilities, future capital improvements relating to expansion and capital fund
reserves were included. The methodology used to calculate each component is described
below.
EXISTING OR BUY-IN COMPONENT – To calculate the value of the existing assets for the buy-in
component, the City’s methodology considered the original cost of each asset. The original cost
of the asset was then adjusted to a replacement cost value. The replacement cost of each asset
was then depreciated for the remaining useful life (i.e., replacement cost less depreciation).
The replacement cost method was used since it was the best information available.
The City provided an asset listing for the various existing components and their installation
dates. As was noted, there are different methods for valuing existing assets. In this case, a
replacement cost new, less depreciation method was used. To accomplish this, the asset listing
was reviewed for each asset and a replacement cost was estimated. A second review was
made of the asset listing to eliminate assets that would be decommissioned or obsolete given
Determination of the City’s Wastewater Capacity and Connection Fees 33
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
the new capital projects listed as replacements or upgrades. This is particular important given
the large capital project for the Water Resource Recovery Facility (WRRF) in which some
existing assets will be obsolete and or decommissioned with the new facility project. Then,
based on the installation date for each asset and an estimated useful life, the replacement cost
less accumulated depreciation for each asset can be calculated.
Given the value of the assets, the next step was to determine the portion of the project costs
that were deemed eligible to be included in the calculation of the capacity and connection fee.
Within this study, contributions (i.e., the costs of donated or contributed assets) were not
included in the capacity and connection fee.
The final value of the assets was reduced by the amount of future principal on the debt
associated with the assets as the principal will be recovered via the debt component within the
City’s current rates. As described below (see Debt Service Component discussion), the
remaining principal portion of the debt associated with the assets was deducted from the total
eligible asset value prior to calculating the capacity and connection fee. This inclusion of a
“debt service credit” avoids double charging the customer for the asset value in the existing or
buy-in component of the capacity and connection fee, and also in the debt service component
of the rates. The principal portion of the debt service balance on existing assets is removed
from the value prior to calculating the buy-in portion of the fee.
DEBT SERVICE COMPONENT - In addition to the buy-in component, a debt service component was
also developed. This component accounts for the principal on existing assets. By segregating
the debt service out, the cost can be clearly identified and calculated appropriately. To avoid
double-counting of the assets financed with debt, the future principal associated with those
assets would be deducted from the existing infrastructure value.
The City has three outstanding debt issues for the wastewater system. They are the WRRF
Energy Efficiency Project, Tank Farm Lift Station Financing, and a second Tank Farm Lift Station
Financing. The total debt service eligible is $17 million for wastewater. Further detail can be
seen in Exhibit S-5 of the Wastewater Technical Appendix.
OTHER COMPONENTS - In addition to the existing or buy-in component and debt service
component, capital fund reserves were determined to be capacity and connection fee-related.
These components are considered to be asset valuation adjustments to the overall wastewater
system since they are capacity infrastructure costs that relate to the wastewater system as a
whole. The total capacity and connection fee eligible fund reserve is $28 million for wastewater
as current customers have contributed this revenue source over time. Further detail can be
seen on Exhibit S-6 of the Wastewater Technical Appendix.
FUTURE COMPONENTS –An important requirement for a capacity and connection fee study is the
connection between the anticipated future growth on the system and the required facilities
needed to accommodate that growth. For purposes of this study, the City’s current Capital
Improvement Plan (CIP) provided future projects. The City staff reviewed the current capital
improvement plan and updated it with the best available information. Capital improvements
that were growth-related were included in the wastewater capacity fee calculation and totaled
Determination of the City’s Wastewater Capacity and Connection Fees 34
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
approximately $48 million through 2025. The WRRF project eligible capacity and connection
fee costs were $24.7 million or approximately 51% of the future eligible projects costs. Future
growth was approximately 16% based on growth EDUs (5,821 future EDUs/36,791 total existing
and future EDUs = 16%). Exhibit S-7 of the Wastewater Technical Appendix contains the details
of this portion of the fee.
5.5 Proposed Wastewater Capacity and Connection Fee
Based on the sum of the component costs calculated above, the allowable wastewater capacity
and connection fee were determined. “Allowable” refers to the concept that the calculated
capacity and connection fee shown on Table 5-4 are the City’s cost-based capacity and
connection fee. The City, as a matter of policy, may charge any amount up to the allowable
capacity and connection fee, but not an amount in excess of the calculated fee. Charging an
amount greater than the allowable capacity and connection fee would not meet the nexus test
of a cost-based capacity and connection fee. Details are provided in Exhibit S-1 for Wastewater
of the Technical Appendix.
Table 5 – 4
Summary of Allowable Wastewater Capacity and Connection Fee ($/EDU)
Total “Allowable”
Wastewater Capacity and
Connection Fee
Total Existing Plant (RCNLD) $149,047,830
Less: Outstanding Debt Principal ($17,096,754)
Plus: Reserves $28,271,2583
Total Existing Plant $160,222,334
Total EDUs 36,791
Total Existing Capacity and Connection Fee per EDU $4,354
Total Future Plant $248,010,131
Total Future EDUs 5,821
Total Future Capacity and Connection Fee per EDU $8,248
Net Allowable Capacity and Connection Fee per EDU $12,602
As can be seen, the City’s total wastewater capacity and connection fee is $12,602 based on the
value of the capacity in the existing system and future improvements (capital) necessary to
serve new growth and expansion on the system. Provided below in Table 5-5 is a summary of
the fee between existing-related wastewater facilities and expansion-related wastewater
facilities.
Determination of the City’s Wastewater Capacity and Connection Fees 35
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 5 – 5
Allowable Wastewater Capacity and Connection Fee Summarized by
Existing and Expansion Components $/EDU)
Total “Allowable”
Wastewater
Capacity Fee
% of
Total
Existing Plant Related $4,354 34.5%
Expansion Plant Related 8,248 65.5%
Total Allowable Capacity and Connection Fee ($/EDU) $12,602 100.0%
As can be seen, approximately 34.5% of the wastewater capacity and connection fee is related
to the City’s existing facilities.
The City charges new customers connecting to the wastewater system a one-time wastewater
capacity and connection fee. The fee varies by customer type but, in all cases, it is intended to
reimburse the existing customers for their portion of the system that has been funded through
rates over time on a per EDU basis. The current ordinance code provides a wastewater capacity
and connection fee according to type of use. The EDU is based on a residential customer and
applied to other customer classes based on generally accepted flow assumptions by type.
On February 7, 2017, the City Council directed the following options for the wastewater
capacity and connection fee.
x Option 1 - Utilize a methodology which includes debt-financed infrastructure only (2013
methodology).
x Option 2 - Utilize a methodology that includes fair share buy-in to both existing and
future infrastructure.
x Option 3 - Option 1 with area-specific wastewater catchment area fees eliminated in
favor on one citywide wastewater capacity and connection fee.
x Option 4 - Option 2 with area-specific wastewater catchment area fees eliminated in
favor on one citywide wastewater capacity and connection fee
Option 1 - The fees calculated in Option 1 are based on a similar methodology to the 2013 Fee
Study where only specific growth projects and financing costs are included in the fee
calculation. This option reflects the increased capital costs of these debt-financed projects as
well as growth related projects. Option 1 does not include a buy-in component to existing
wastewater infrastructure. The capacity and connection fee under Option 1 is $8,165 per EDU.
The catchment area fees would be in addition to the city wide fee.
This option does not include all wastewater infrastructure necessary to serve new development
or offer the greatest protection to the wastewater ratepayer. Therefore it is not recommend.
Determination of the City’s Wastewater Capacity and Connection Fees 36
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Option 2 - The wastewater capacity and connection fees calculated for Option 2 are based on a
methodology that values the cost of all existing and future wastewater assets, as outlined in
this Report. The growth related assets are attributed to existing and future development, 84
percent and 16 percent. This split is based on future EDUs to total EDUs (5,821/36,971 = 16%).
The capacity and connection fee under Option 2 is $9,522 per EDU and additional wastewater
catchment area fees would apply, where applicable.
Option 3 - The wastewater capacity and connection fees calculated for Option 3 include those
fees calculated in Option 1, and add the cost of all catchment area improvements. In this
option, the approximately $15 million in capital improvements would be attributed to all
approximately 5,800 future EDUs in the City. The capacity and connection fee under Option 2 is
$10,721 per EDU.
Option 3 wastewater capacity and connection fee is not being recommended. Similar to Option
1, Option 3 does not include all wastewater infrastructure necessary to serve new development
and thereby does not offer the greatest protection to the wastewater ratepayer.
Option 4 – This option uses the methodology established for Option 2, and detailed in this
Report) with the catchments area improvement costs included in total, for a single wastewater
capacity and connection fee.
The Option 4 wastewater capacity and connection fee, at $12,602 per EDU, is the
recommended fee as this fee represents the costs associated with both existing and future
infrastructure needed to serve future development, offers the greatest protection to the
wastewater ratepayer, and simplifies implementation of the City’s wastewater capacity and
connection fees.
The City’s proposed wastewater capacity and connection fees for Options 1, 2, 3 and 4 are
shown below in Table 5-6. Options 1 and 2 are only a city wide fee and the additional
catchment fee shown in Table 5-7 would apply. Options 3 and 4 are a full cost fee and include
catchment costs.
Determination of the City’s Wastewater Capacity and Connection Fees 37
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 5 - 6
Options 1,2 , 3, and 4
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Type of Use
Equiv.
Dwelling
Unit (EDU)
Option 1
City
Wide [1]
Option 2
City
Wide [1]
Option 3
Full Cost [2]
Option 4
Full Cost [2]
Residential (per unit)
Residential [3] 1.00 $8,165 $9,522 $10,721 $12,602
Residential [3] 0.70 5,715 6,666 7,505 8,821
Mobile Home 0.60 4,899 5,713 6,433 7,561
Studio Unit 0.30 2,449 2,857 3,216 3,781
Non-Residential
5/8” to 3/4" 1.00 $8,165 $9,522
1-inch 1.70 13,880 16,188 $10,721 $12,602
1-1/2 inch 3.40 27,759 32,375 18,226 21,423
2-inch 5.40 44,088 51,420 36,452 42,847
3-inch 10.70 87,360 101,887 57,895 68,051
4-inch 16.70 136,347 159,021 114,718 134,841
6-inch 33.40 272,695 318,041 179,046 210,453
[1] City wide does not include additional catchment fee.
[2] Option 3 and 4 include catchment area costs and are a full cost fee.
[3] Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
Determination of the City’s Wastewater Capacity and Connection Fees 38
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 5 – 7
Option 1 and 2 - Additional Catchment Area Charges
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Additional Catchment Area Charges [1]
Type of Use
Margarita
Tank
Farm
Silver
City
Calle
Joaquin
Laguna
Airport
[2]
Foothill
[2]
Buckley
[2]
Residential (per unit)
Residential [3] $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
Residential [3] 2,681 2,234 1,700 2,029 304 4,460 15,623 450
Mobile Home 2,298 1,915 1,457 1,739 261 3,823 13,391 386
Studio Unit 1,149 958 729 870 130 1,912 6,696 193
Non-Residential
5/8” to 3/4" $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
1-inch 6,511 5,426 4,129 4,927 738 10,833 37,943 1,093
1-1/2 inch 13,022 10,852 8,259 9,855 1,477 21,665 75,885 2,187
2-inch 20,683 17,236 13,117 15,651 2,345 34,409 120,523 3,473
3-inch 40,982 34,153 25,990 31,013 4,647 68,181 238,815 6,882
4-inch 63,963 53,304 40,565 48,403 7,253 106,414 372,730 10,741
6-inch 127,925 106,608 81,129 96,807 14,506 212,828 745,460 21,483
[1] – These fees are in addition to the city wide fees in Options 1 and 2.
[2] – Airport, Foothills, and Buckley are new fees.
[3] – Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
5.6 Key Wastewater Capacity and Connection Fee Assumptions
In the development of the capacity and connection fee for the City’s wastewater utility, a
number of key assumptions were utilized. These are as follows:
The City’s wastewater capacity and connection fee was developed based upon the City’s
current EDUs and current capacity costs, as well as the estimated future EDUs and the
needed capital improvements to serve the future EDUs.
The City’s asset records were used to determine the existing infrastructure assets and
updated to replacement cost less depreciation.
The City provided the most recent CIP for future expansion improvements.
The City determined the portion of future improvements that were growth-related.
The base year for the CIP was assumed at 2016.
The calculation of the debt credit component included current outstanding principal
debt service payments on existing assets.
5.7 Implementation of the Wastewater Capacity and Connection Fee
HDR would recommend that the City continue to adjust the wastewater capacity and
connection fees on an annual basis. The City currently uses the Consumer Price Index (CPI) for
this update. This method of escalating the City’s fees should be used for no more than a five-
Determination of the City’s Wastewater Capacity and Connection Fees 39
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
year period. After five years, HDR recommends that the City update the wastewater capacity
and connection fees based on the actual cost of infrastructure and any new planned facilities
that would be contained in an updated master plan or CIP.
It is further recommended the City to consider using the Engineering News Record Construction
Cost Index (ENR-CCI) to reflect the cost of interest and inflation instead of the CPI. The ENR-CCI
is a reliable and consistent indices that tracks construction costs and is published every month
showing the national average of twenty cities.
5.8 Consultant Recommendations
Based on our review and analysis of the City’s wastewater capacity and connection fee, HDR
makes the following recommendations:
The City should revise and update its wastewater capacity and connection fee to the
calculated wastewater capacity and connection fee shown in this Report. The fee is
applicable for any new customers connecting to the system, or an existing customer
requesting/requiring additional capacity. The adopted wastewater capacity and connection
fee shall not exceed the calculated fee as set forth in this Report.
The wastewater gallon per day per equivalent dwelling unit was adjusted from 150 gpd to
135 gpd per EDU and is reflective the City’s changing consumption/usage patterns.
The City should make periodic (annual) adjustments to the wastewater capacity and
connection fees based on changes in the Engineering News Record Construction Cost Index.
This is consistent with the City’s past practices using the CPI for these adjustments, as they
relate to these fees.
The City should update the actual calculations for the wastewater capacity and connection
fee based on the methodology as approved by the resolution or ordinance setting forth the
methodology for capacity and connection fee at such time when a new capital
improvement plan, facilities plan, master plan or a comparable plan is approved or updated
by the City.
5.9 Summary
The development of the wastewater capacity and connection fee by HDR utilized generally
accepted engineering and ratemaking principles, while applying City specific planning, asset and
customer information.
City should have legal counsel review the Report and for consistency with City and State
applicable laws and regulations.
Technical Appendices
Water Capacity and Connection Fee
1 City of San Luis Obispo - Water
2 Exhibit W-1
3 Development of Capacity and Connection Fee
4
5 Plant Description
Estimated
Replacement
Cost
Eligible
Replacement
Cost New (RCN)
Eligible
Replacement
Cost New Less
Depreciation
(RCNLD) EDUs Total Fee
6 Existing Plant [1]
7 Supply $284,894,773 $62,841,035 $60,234,226 36,791 $10,348
7 Treatment 83,831,215 83,831,215 73,535,215 36,791 1,999
8 Distribution 249,712,833 228,321,833 107,869,887 36,791 2,932
9
10 Total Existing Plant $618,438,822 $374,994,084 $241,639,328 36,791 $15,279
11
12 Less: Outstanding Debt Principal (2)($53,702,781) 36,791 ($1,459)
13
14 Plus: Capital Fund Reserves [3]$16,079,051 36,791 $437
15
16 Total Net Existing Plant $618,438,822 $374,994,084 $204,015,598 36,791 $14,257
17
18 Future Plant [4]
19 Supply $6,726,460 $1,414,334 5,821 $243
20 Treatment 29,416,066 4,706,572 5,821 809
21 Distribution 2,740,963 2,740,963 5,821 471
22
23 Total Future Plant $38,883,489 $0 $8,861,869 5,821 $1,523
24
25
26
27 Total Existing and Future Plant [5]$657,322,311 $374,994,084 $212,877,467 $15,780
28
29 Existing EDUs (Includes Vested/Pending Projects)30,970
30 Future EDUs 5,821
31 Total Existing and Future EDUs 36,791
32
33
34 Notes:
35 [1] Existing plant based on replacement cost less depreciation.
36 [2] Remaining principal as of June 2016. See Exhibit W-6.
37 [3] Cash reserves as of June 2016 which are fee eligible. See Exhibit W-7.
38 [4] Future plant based on City capital improvement plan in 2016 dollars.
39 [5] Based on "combined" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 273.
Page 1 of 16
1 City of San Luis Obispo - Water
2 Exhibit W-2
3 Development of EDUs
4
5 EDU = Equivalent Dwelling Unit
6
7
8 5,400,000 Future Average Dry Weather Flow/WRRF Design Capacity
9 470,000 Cal Poly Average Dry Weather Flow/Capacity share of WRRF
10 4,930,000 City owned WRRF Capacity
11 134 EDU gpd Rate [1]
12 36,791 Total City Existing and Future EDU
13 4,150,000 Existing Average Dry Weather Flow, plus pending increment
14 30,970 Existing EDU (Includes Vested/Pending Projects)
15 5,821 Future EDU
16
17
18
19 Notes:
20 [1] City provided gallons per day (gpd) based on a a three-year average from 2012-13 to 2014-15.
21 [2] Future growth is 16% of total EDU, 5,821/36,791 = 16%
Future EDU Calc (derived by using 5.4 mgd design capacity for WRRF)
Page 2 of 16
1 City of San Luis Obispo - Water Page 1 of 2
2 Exhibit W-3
3 Supply Capacity and Connection Fee
4
5
6 System Type Function Description Install Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
7 EXISTING PLANT [1]
8 WRR Pennington Dam Pennington Creek Dam 6/30/1999 $235,617 1.00 $235,617 17 23%75 $235,617 22.7%100%$235,617 $182,210
9 WRR Reservoir Whale Rock Reservoir 1961 7,000,000 1.00 100,000,000 55 73%75 100,000,000 73.3%0%0 0
10 WRR Reservoir Land (1400 Acres Land)1960 0 1.00 0 56 75%75 0 74.7%0%0 0
11 WRR Reservoir Shop structures (2,400 SF)1960 0 1.00 480,000 56 187%30 480,000 100.0%0%0 0
12 WRR Reservoir Security fencing 1960 0 1.00 20,000 56 224%25 20,000 100.0%0%0 0
13 WRR Reservoir Fencing 1960 0 1.00 370,000 56 224%25 370,000 100.0%0%0 0
14 WRR Reservoir Roads 1960 0 1.00 0 56 140%40 0 100.0%0%0 0
15 WRR Reservoir Inlet structure 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
16 WRR Reservoir Outlet structure 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
17 WRR Reservoir Spillway 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
18 WRR Reservoir Pipe 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
19 WRR Reservoir Monitoring instruments 1960 0 1.00 0 56 224%25 0 100.0%0%0 0
20 WRR Reservoir Added instruments 1984 20,000 1.00 50,000 32 128%25 50,000 100.0%0%0 0
21 WRR Reservoir Inlet valves 2003 200,000 1.00 300,000 13 43%30 300,000 43.3%0%0 0
22 WRR Reservoir 24" Khrone ultrasonic meter 2010 12,000 1.00 20,000 6 30%20 20,000 30.0%0%0 0
23 WRR Reservoir Residence (1,150 SF)1930 0 1.00 250,000 86 172%50 250,000 100.0%0%0 0
24 WRR Reservoir Well 2016 3,000 1.00 3,500 0 0%30 3,500 0.0%0%0 0
25 WRR Pump Station A Pump Station A 1998 0 1.00 0 18 90%20 0 90.0%0%0 0
26 WRR Pump Station A Land 1998 0 1.00 0 18 24%75 0 24.0%0%0 0
27 WRR Pump Station A Building 1998 600,000 1.00 2,000,000 18 60%30 2,000,000 60.0%0%0 0
28 WRR Pump Station A Fencing 1998 0 1.00 14,000 18 72%25 14,000 72.0%0%0 0
29 WRR Pump Station A Pumps, valves, motor controls 1998 0 1.00 0 18 90%20 0 90.0%0%0 0
30 WRR Pump Station A Premium efficiency motors 2005 70,000 1.00 100,000 11 55%20 100,000 55.0%0%0 0
31 WRR Pump Station B Pump Station B 1998 0 1.00 0 18 72%25 0 72.0%0%0 0
32 WRR Pump Station B Land 1998 0 1.00 0 18 24%75 0 24.0%0%0 0
33 WRR Pump Station B Building 1998 600,000 1.00 2,000,000 18 60%30 2,000,000 60.0%0%0 0
34 WRR Pump Station B Fencing 1998 0 1.00 14,000 18 72%25 14,000 72.0%0%0 0
35 WRR Pump Station B Pumps, valves, motor controls 1998 0 1.00 0 18 90%20 0 90.0%0%0 0
36 WRR Pump Station B Premium efficiency motors 2005 70,000 1.00 100,000 11 55%20 100,000 55.0%0%0 0
37 WRR Pump Station B Generator 1998 75,000 1.00 100,000 18 90%20 100,000 90.0%0%0 0
38 WRR Building Radio repeater building 1960 0 1.00 0 56 187%30 0 100.0%0%0 0
39 WRR Building Building 1960 0 1.00 25,000 56 187%30 25,000 100.0%0%0 0
40 WRR Building Antennas 2015 0 1.00 10,000 1 3%30 10,000 3.3%0%0 0
41 WRR Building Radio hardware 2015 7,500 1.00 8,000 1 10%10 8,000 10.0%0%0 0
42 WRR Building Microwave radio system 2015 96,000 1.00 150,000 1 7%15 150,000 6.7%0%0 0
43 WRR Pipeline Approx. 18 miles of 30" PCCP pipe 1960 2,000,000 1.00 16,000,000 56 75%75 16,000,000 74.7%0%0 0
44 WRR Pipeline Five-8" surge control valves 1960 0 1.00 30,000 56 187%30 30,000 100.0%0%0 0
45 WRR Pipeline 57-6" blow off valves 1961 0 1.00 28,500 55 183%30 28,500 100.0%0%0 0
46 WRR Pipeline 60 ARV valves 1961 0 1.00 24,000 55 183%30 24,000 100.0%0%0 0
47 WRR Pipeline 39 Cathodic protection stations 1961 0 1.00 78,000 55 183%30 78,000 100.0%0%0 0
48 WRR Pipeline Four-30" valves 1998 0 1.00 120,000 18 60%30 120,000 60.0%0%0 0
49 WRR Rolling Stock 1998 17' Boston Whaler 1996 6,500 1.00 20,000 20 100%20 20,000 100.0%0%0 0
50 WRR Rolling Stock 2001 Jeep Cherokee 2001 0 1.00 32,000 15 136%11 32,000 100.0%0%0 0
51 WRR Rolling Stock 18-foot Equipment trailer 2004 0 1.00 8,000 12 67%18 8,000 66.7%0%0 0
52 WRR Rolling Stock 2004 JD tractor model 4710 2004 37,000 1.00 54,000 12 80%15 54,000 80.0%0%0 0
53 WRR Rolling Stock 2014 Kawasaki Gator utility vehicle 2014 14,000 1.00 18,000 2 20%10 18,000 20.0%0%0 0
54 WRR Rolling Stock 2016 F150 4x4 truck 2016 32,000 1.00 44,000 0 0%11 44,000 0.0%0%0 0
55 WRR Rolling Stock 2016 F350 4X4 truck 2016 60,000 1.00 85,000 0 0%12 85,000 0.0%0%0 0
56 SR Salinas Reservoir Micro surface Dam Access Road 6/30/2013 183,964 1.09 200,009 3 8%40 200,009 7.5%0%0 0
57 SR Salinas Reservoir Micro surface Booster Station Access Road 6/30/2013 78,986 1.09 85,875 3 12%25 85,875 12.0%0%0 0
58 SR Salinas Reservoir Replace Existing Boat 6/30/2013 20,680 1.09 22,484 3 20%15 22,484 20.0%0%0 0
59 SR Salinas Reservoir Cathodic Protection Inspection of Pipe 6/30/2013 10,637 1.09 11,565 3 15%20 11,565 15.0%0%0 0
Page 3 of 16
1 City of San Luis Obispo - Water Page 2 of 2
2 Exhibit W-3
3 Supply Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New
(RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
60 SR Salinas Reservoir Booster Station Reservoir Liner 6/30/2013 294,244 1.09 319,908 3 15%20 319,908 15.0%0%0 0
61 SR Salinas Reservoir Security Improvements 6/30/2013 20,680 1.09 22,484 3 15%20 22,484 15.0%0%0 0
62 SR Salinas Reservoir Booster Office Remodel/Repair 6/30/2013 679,713 1.09 738,997 3 6%50 738,997 6.0%0%0 0
63 SR Salinas Reservoir Salinas Dam Water Line Modification 6/30/2013 8,840 1.09 9,611 3 6%50 9,611 6.0%0%0 0
64 SR Salinas Reservoir Booster Station Environmental Studies 6/30/2013 60,026 1.09 65,261 3 15%20 65,261 15.0%0%0 0
65 SR Salinas Reservoir Army Corp Inspection Repairs 6/30/2013 76,697 1.09 83,386 3 10%30 83,386 10.0%0%0 0
66 SR Salinas Reservoir Rewire Electrical Circuit at Dam 6/30/2013 5,170 1.09 5,621 3 12%25 5,621 12.0%0%0 0
67 SR Salinas Reservoir Equipment Replacement 6/30/2013 10,340 1.09 11,242 3 15%20 11,242 15.0%0%0 0
68 NR Naci Reservoir Nacimiento Pipeline Project 6/30/2013 83,740,000 1.09 91,043,780 3 4%75 91,043,780 4.0%39%35,507,074 34,086,791
69 Water Reuse Water Reuse Water Reuse Project (W/ $2.9M Grant)6/30/2006 9,308,843 1.34 12,465,022 10 20%50 12,465,022 20.0%39%4,861,359 3,889,087
70 Water Reuse Water Reuse MCC Building R 2004 0 1.00 0 12 24%50 0 24.0%39%0 0
71 Water Reuse Water Reuse Chlorine Contact Channels 3 And 4 2004 0 1.00 0 12 40%30 0 40.0%39%0 0
72 Water Reuse Water Reuse Storage Tank 2004 0 1.00 0 12 48%25 0 48.0%39%0 0
73 Water Reuse Water Reuse Wharf Head Hydrant 2004 0 1.00 5,000 12 48%25 5,000 48.0%39%1,950 1,014
74 Water Reuse Water Reuse Pipeline, 9.2 miles of pipe 2004 1,708,459 1.00 1,708,459 12 24%50 1,708,459 24.0%39%666,299 506,387
75 TOTAL EXISTING PLANT $229,590,322 $41,272,299 $38,665,490
76
77
78 PLUS: Interest on Debt Water Reuse Project [2]06/30/06 $2,000,000 1.34 0 10 20%50 $2,678,103 39%$1,044,460 $1,044,460
79 Interest on Debt Nacimiento Pipeline Project [2]06/30/13 52,626,348 1.00 0 3 4%75 52,626,348 39%20,524,276 20,524,276
80 $55,304,451 $21,568,736 $21,568,736
81
82 TOTAL EXISTING PLANT $284,894,773 $62,841,035 $60,234,226
83
84
85 Total Future EDUs [4]5,821
86
87 TOTAL EXISTING SUPPLY PLANT $/EDU $10,348
88
89
90 FUTURE PLANT [3]Total
% Fee
Eligible
% Eligible Cost
in 2016 $
91 Source of Supply
92 Groundwater (Study)$70,000 39.0%$27,300
93 Groundwater (DN)175,000 39.0%68,250
94 Groundwater (CN)1,000,000 39.0%390,000
95 Groundwater (CM)150,000 39.0%58,500
96 Groundwater (ER)75,000 39.0%29,250
97 Recycled Water Projects 5,256,460 16.0%841,034
98 TOTAL FUTURE PLANT $6,726,460 $1,414,334
99
100 Total Future EDUs [4] 5,821
101
102 TOTAL FUTURE SUPPLY PLANT $/EDU $243
103
104
105
106 TOTAL EXISTING AND FUTURE SUPPLY PLANT $/EDU $10,591
107
108
109
110 Notes:
111 [1] Existing plant based on replacement cost less deprecation.
112 [2] See Exhibit W-6 for interest on Reuse project and Naci pipeline debt.
113 [3] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit W-8.
114 [4] See Exhibit W-2 for projected supply capacity.
115 [5] See Exhibit W-2 for average daily flow per EDU.
Page 4 of 16
1 City of San Luis Obispo - Water Page 1 of 2
2 Exhibit W-4
3 Treatment Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New
(RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
7 EXISTING PLANT [1]
8 Land Land 83181 06/30/67 $3,200 9.66 $30,925 0.0% 100% $30,925 $30,925
9 Land Land 83182 06/30/09 8,600 1.21 10,410 0.0% 100% 10,410 10,410
10 Land Land 83183 06/30/63 2,100 11.52 24,191 0.0% 100% 24,191 24,191
11 Land Land 83184 06/30/60 3,400 12.60 42,827 0.0% 100% 42,827 42,827
12 Land Land 83185 06/30/11 70 1.14 80 0.0% 100%80 80
13 Land Land 83186 06/30/69 1,100 8.18 8,997 0.0% 100%8,997 8,997
14 Land Land 83187 06/30/69 2,000 8.18 16,358 0.0% 100% 16,358 16,358
15 Land Land 83188 06/30/00 10,520 1.67 17,552 0.0% 100% 17,552 17,552
16 Land Land 83190 06/30/74 19,100 5.14 98,141 0.0% 100% 98,141 98,141
17 Land Land 83191 06/30/60 2,000 12.60 25,192 0.0% 100% 25,192 25,192
18 Land Land 83192 06/30/09 6,000 1.21 7,263 0.0% 100%7,263 7,263
19 Land Land 83193 06/30/10 16,400 1.18 19,338 0.0% 100% 19,338 19,338
20 Land Land 83194 06/30/09 11,900 1.21 14,404 0.0% 100% 14,404 14,404
21 Land Land 83195 06/30/74 28,300 5.14 145,412 0.0% 100% 145,412 145,412
22 Land Land 83196 06/30/76 29,100 4.32 125,796 0.0% 100% 125,796 125,796
23 Land Land 83197 06/30/69 41,000 8.18 335,343 0.0% 100% 335,343 335,343
24 WTP Treatment WTP with 16 MGD Capacity 06/30/05 1.00 64,350,000 8 0 50 64,350,000 16.0% 100% 64,350,000 54,054,000
25 WTP Tanks Clearwell #1 - 3.0 MG welded steel tank 06/30/05 0 1.00 0 8 0 25 0 32.0% 100%0 0
26 WTP Tanks Clearwell #2 - 2.0 MG welded steel tank 06/30/05 0 1.00 0 8 0 25 0 32.0% 100%0 0
27 WTP Wells Pacific Beach Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
28 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
29 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
30 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
31 WTP Wells Fire Station #4 Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
32 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
33 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
34 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
35 WTP Wells Mitchell Park Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
36 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
37 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
38 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
39 WTP Wells Corp Yard Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
40 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
41 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
42 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
43 TOTAL EXISTING PLANT $65,272,229 $65,272,229 $54,976,229
44
45 PLUS: Interest on Debt Water Treatment Upgrade 06/30/05 $13,859,798 1.34 0 0 0 50 $18,558,986 100% $18,558,986 $18,558,986
46
47 TOTAL EXISTING PLANT $83,831,215 $83,831,215 $73,535,215
48
49 Total Future EDUs [4]36,791
50
51 TOTAL EXISTING TREATMENT PLANT $/EDU $1,999
Page 5 of 16
1 City of San Luis Obispo - Water Page 2 of 2
2 Exhibit W-4
3 Treatment Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New
(RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
53
54 FUTURE PLANT [3]Total
% Fee
Eligible
% Eligible Cost
in 2016 $
55 Water Treatment
56 Major Facility Maintenance $1,637,000 16%$261,920
57 Ozone System Maint 191,523 16%30,644
58 Enc-Xylem 44,610 16%7,138
59 Chemical System Maint 54,000 16%8,640
60 Air Compressor & Dryer Maint 50,000 16%8,000
61 Replace Air Compressor-Design 10,000 16%1,600
62 Misc -free 35 16%6
63 Stenner Canyon Raw Waterline Replacement (Study)7,123 16%1,140
64 Stenner Canyon Raw Waterline Replacement (Design)35,000 16%5,600
65 Stenner Canyon Raw Waterline Replacement (Const)100,000 16%16,000
66 Package Thickner (Construction and CM)50,000 16%8,000
67 Wash Water Tank #1 (Design)40,000 16%6,400
68 Wash Water Tank #1 (Construction)250,000 16%40,000
69 Wash Water Tank #1 (CM)25,000 16%4,000
70 Reservoir 2 Replacement (Study)24 16%4
71 Enc-Nunley 44,739 16%7,158
72 Reservoir 2 Replacement (Design)344,400 16%55,104
73 Reservoir 2 (Construction)10,000,000 16%1,600,000
74 Reservoir 2 (Const Mgmt) 500,000 16%80,000
75 SST PEA (Study)150,000 16%24,000
76 SST IGA (Design)300,000 16%48,000
77 SST - Hydro and Ozone (Const) 13,000,000 16%2,080,000
78 SST - Hydro and Ozone (Const Mgmt) 1,300,000 16%208,000
79 Treatment Plant Ozone Generation Upgrade 100,000 16%16,000
80 Fleet Replacement: Service Body Truck 48,112 16%7,698
81 Forebay and Culvert Rehab (Study)30,000 16%4,800
82 Forebay and Culvert Rehab (Design)80,000 16%12,800
83 Forebay and Culvert Rehab (Const)800,000 16%128,000
84 Forebay and Culvert Rehab (Const Mgmt)80,000 16%12,800
85 Treatment Plant Ozone Generation Upgrade 100,000 16%16,000
86 Fleet Replacement Forecast 44,500 16%7,120
87 TOTAL FUTURE PLANT $29,416,066 $4,706,572
88
89 Total Future EDUs [4] 5,821
90
91 TOTAL FUTURE TREATMENT PLANT $/EDU $809
92
93
94
95 TOTAL EXISTING AND FUTURE TREATMENT PLANT $/EDU $2,808
96
97
98
99 Notes:
100 [1] Existing plant based on replacement cost less deprecation. See Exhibit W-4A for WTP estimated replacement cost.
101 [2] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit W-8.
102 [3] See Exhibit W-2 for treatment capacity.
103 [4] See Exhibit W-2 for average daily flow per EDU.
Page 6 of 16
1 City of San Luis Obispo - Water Page 1 of 2
2 Exhibit W-5
3 Distribution Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date
Original
Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
7 EXISTING PLANT [1]
8 Meters Meters 5/8"2016 $0 1.00 $0 0 0% 20 $0 0.0% 100%$0 $0
9 Meters Meters 3/4"2016 0 1.00 0 0 0% 20 0 0.0% 100%0 0
10 Meters Meters 1"2016 1.00 0 0 0% 20 0 0.0% 100%0 0
11 Meters Meters 1.5"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
12 Meters Meters 2"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
13 Meters Meters 3"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
14 Meters Meters 4"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
15 Meters Meters 6"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
16 Meters Meters 8"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
17 Meters Meters 10"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
18 Meters Meters Unknown 2016 1.00 0 0 0% 15 0 0.0% 100%0 0
19 Fire Hydrants Fire Hydrants 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
20 Fire Hydrants Fire Hydrants 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
21 Fire Hydrants Fire Hydrants 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
22 Fire Hydrants Fire Hydrants Gate 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
23 Fire Hydrants Fire Hydrants Butterfly 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
24 Fire Hydrants Fire Hydrants Unknown 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
25 Fire Hydrants Fire Hydrants Air Relief 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
26 Fire Hydrants Fire Hydrants Blow Off Assemblies 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
27 Mains Potable Water Mains 1970 1.00 214,438,193 50 50% 100 214,438,193 61.7%91% 194,701,193 97,350,597
28 Tanks Tanks Alrita 1 0.00066 MG 2007 331,250 1.00 1,320 9 14% 65 1,320 13.8% 100%1,320 1,137
29 Tanks Tanks Alrita 2 0.00066 MG 2007 331,250 1.00 1,320 9 14% 65 1,320 13.8% 100%1,320 1,137
30 Tanks Tanks Bishop 0.75 MG 2005 1,560,500 1.00 1,500,000 11 17% 65 1,500,000 16.9% 100% 1,500,000 1,246,154
31 Tanks Tanks Edna Saddle 4.0 MG 1974 8,000,000 1.00 8,000,000 42 65% 65 8,000,000 64.6% 100% 8,000,000 2,830,769
32 Tanks Tanks Ferrini 0.16 MG 1985 320,000 1.00 320,000 31 48% 65 320,000 47.7% 100% 320,000 167,385
33 Tanks Tanks Islay 0.35 MG 1996 720,000 1.00 700,000 20 31% 65 700,000 30.8% 100% 700,000 484,615
34 Tanks Tanks Rosemont 0.046 MG 1994 92,000 1.00 92,000 22 34% 65 92,000 33.8% 100%92,000 60,862
35 Tanks Tanks Serrano 0.10 MG 1967 200,000 1.00 200,000 49 75% 65 200,000 75.4% 100% 200,000 49,231
36 Tanks Tanks Slack 0.077 MG 1955 154,000 1.00 154,000 61 94% 65 154,000 93.8% 0%0 0
37 Tanks Tanks Terrace Hill 0.75 MG 1959 1,500,000 1.00 1,500,000 57 88% 65 1,500,000 87.7% 0%0 0
38 Reservoir Reservoir Reservoir 1 7.5 MG 1939 1.00 10,000,000 78 78% 100 10,000,000 78.0% 100% 10,000,000 2,200,000
39 Reservoir Reservoir Reservoir 2 7.5 MG 1942 1.00 10,000,000 75 75% 100 10,000,000 75.0% 100% 10,000,000 2,500,000
40 Pump Station Pump Station Alrita 2007 1.00 300,000 60 80% 75 300,000 80.0% 100% 300,000 60,000
41 Pump Station Pump Station Bishop 1951 1.00 300,000 70 93% 75 300,000 93.3% 100% 300,000 20,000
42 Pump Station Pump Station Bressi 1967 1.00 300,000 65 87% 75 300,000 86.7% 100% 300,000 40,000
43 Pump Station Pump Station Ferrini 1985 1.00 300,000 70 93% 75 300,000 93.3% 100% 300,000 20,000
44 Pump Station Pump Station McCollum 1955 1.00 300,000 70 93% 75 300,000 93.3% 100% 300,000 20,000
45 Pump Station Pump Station Reservoir Canyon 1995 1.00 300,000 67 89% 75 300,000 89.3% 100% 300,000 32,000
46 Pump Station Pump Station Rosemont 2013 1.00 300,000 55 73% 75 300,000 73.3% 100% 300,000 80,000
47 PRV PRV Catalina 2016 1.00 40,000 0 0% 30 40,000 0.0% 100%40,000 40,000
48 PRV PRV Bishop CV 2016 1.00 15,000 0 0% 30 15,000 0.0% 100%15,000 15,000
49 PRV PRV California 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
50 PRV PRV Ella 2016 1.00 15,000 0 0% 30 15,000 0.0% 100%15,000 15,000
51 PRV PRV Madonna 2016 1.00 100,000 0 0% 30 100,000 0.0% 100% 100,000 100,000
Page 7 of 16
1 City of San Luis Obispo - Water Page 2 of 2
2 Exhibit W-5
3 Distribution Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date
Original
Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
52 PRV PRV McCollum 2016 1.00 10,000 0 0% 30 10,000 0.0% 100%10,000 10,000
53 PRV PRV Nipomo 2016 1.00 20,000 0 0% 30 20,000 0.0% 100%20,000 20,000
54 PRV PRV Peach 2016 1.00 200,000 0 0% 30 200,000 0.0% 100% 200,000 200,000
55 PRV PRV Grand & Wilson 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
56 PRV PRV Choro & Foothill 2016 1.00 18,000 0 0% 30 18,000 0.0% 100%18,000 18,000
57 PRV PRV Terrace Hill 2016 1.00 18,000 0 0% 30 18,000 0.0% 100%18,000 18,000
58 PRV PRV San Luis Drive 2016 1.00 10,000 0 0% 30 10,000 0.0% 100%10,000 10,000
59 PRV PRV Southwood 2016 1.00 5,000 0 0% 30 5,000 0.0% 100%5,000 5,000
60 PRV PRV Broad & Caudill 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
61 PRV PRV Patricia 2016 1.00 0 0 0% 30 0 0.0% 100%0 0
62 PRV PRV Skyline 2016 1.00 0 0 0% 30 0 0.0% 100%0 0
63 PRV PRV Industrial 2016 1.00 0 0 0% 30 0 0.0% 100%0 0
64 PRV PRV Foothill & California 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
65 PRV PRV Catalina 2016 1.00 15,000 0 0% 30 15,000 0.0% 100%15,000 15,000
66 TOTAL EXISTING PLANT $249,712,833 $228,321,833 $107,869,887
67
68 Total EDUs [2] 36,791
69
70 TOTAL EXISTING DISTRIBUTION PLANT $/EDU $2,932
71
72 FUTURE PLANT [3]Cost in 2016 $
73 Total Distribution System Improvements $2,467,581
74 Total Water Customer Service Improvements 0
75 Total Utilities Service Improvements 0
76 Total Administration and Engineering Improvements 0
77 Total General for Future Planning 0
78 Total Shared Information Technology Improvements 273,382
79 TOTAL FUTURE PLANT $2,740,963
80
81 Total Future EDUs [4] 5,821
82
83 TOTAL FUTURE DISTRIBUTION PLANT $/EDU $471
84
85
86 TOTAL EXISTING AND FUTURE DISTRIBUTION PLANT $/EDU $3,403
87
88
89
90 Notes:
91 [1] Existing plant based on replacement cost less deprecation.
92 [2] See Exhibit W-2 for total EDUs.
93 [3] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit W-8.
94 [4] See Exhibit W-2 for future EDUs.
Page 8 of 16
1 City of San Luis Obispo - Water
2 Exhibit W-6
3 Summary of Debt Service [1]
4
5
6 2012 Water Revenue Refunding Bonds Total
7 Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Principal
8 I. Debt Status:
9 Interest Rate
10 Principal $4,960,000 2.50%
11 Financing Term 20 30
12
13
II. Outstanding Principal
Payments:
14 2016-17 $435,000 $137,000 $572,000 $1,596,000 $3,392,512 $4,988,512 $420,748 $104,709 $525,457 $435,000 $595,948 $1,030,948 $2,886,748
15 2017-18 450,000 119,600 569,600 1,676,000 3,310,702 4,986,702 431,267 94,190 525,457 455,000 578,548 1,033,548 3,012,267
16 2018-19 470,000 101,600 571,600 1,761,000 3,224,758 4,985,758 442,049 83,408 525,457 475,000 560,348 1,035,348 3,148,049
17 2019-20 485,000 82,800 567,800 1,810,000 3,135,455 4,945,455 453,100 72,357 525,457 490,000 540,873 1,030,873 3,238,100
18 2020-21 505,000 63,400 568,400 1,906,000 3,042,523 4,948,523 464,427 61,030 525,457 515,000 520,293 1,035,293 3,390,427
19 2021-22 530,000 43,200 573,200 2,001,000 2,944,814 4,945,814 476,038 49,419 525,457 0 1,033,405 1,033,405 3,007,038
20 2022-23 550,000 22,000 572,000 2,106,000 2,842,105 4,948,105 487,939 37,518 525,457 0 1,030,400 1,030,400 3,143,939
21 2023-24 0 0 0 2,217,000 2,733,993 4,950,993 500,137 25,319 525,457 0 1,031,119 1,031,119 2,717,137
22 2024-25 0 0 0 2,327,000 2,620,353 4,947,353 512,641 12,816 525,457 0 1,030,744 1,030,744 2,839,641
23 2025-26 0 0 0 2,443,000 2,501,059 4,944,059 0 0 0 0 1,034,275 1,034,275 2,443,000
24 2026-27 0 0 0 2,568,000 2,375,739 4,943,739 0 0 0 0 1,031,494 1,031,494 2,568,000
25 2027-28 0 0 0 2,694,000 2,256,540 4,950,540 0 0 0 0 1,031,794 1,031,794 2,694,000
26 2028-29 0 0 0 2,809,000 2,138,251 4,947,251 0 0 0 0 1,030,744 1,030,744 2,809,000
27 2029-30 0 0 0 2,925,000 2,019,766 4,944,766 0 0 0 0 1,033,344 1,033,344 2,925,000
28 2030-31 0 0 0 3,055,000 1,888,521 4,943,521 0 0 0 0 1,034,369 1,034,369 3,055,000
29 2031-32 0 0 0 3,201,000 1,746,168 4,947,168 0 0 0 0 1,033,819 1,033,819 3,201,000
30 2032-33 0 0 0 3,346,000 1,600,492 4,946,492 0 0 0 0 1,030,663 1,030,663 3,346,000
31 2033-34 0 0 0 3,512,000 1,442,589 4,954,589 0 0 0 0 1,030,888 1,030,888 3,512,000
32 2034-35 0 0 0 3,668,000 1,279,293 4,947,293 0 0 0 0 1,034,263 1,034,263 3,668,000
33 2035-36 0 0 0 3,838,000 1,107,493 4,945,493 0 0 0 0 1,030,556 1,030,556 3,838,000
34 2036-37 0 0 0 4,019,000 927,691 4,946,691 0 0 0 0 0 0 4,019,000
35 2037-38 0 0 0 4,205,000 739,409 4,944,409 0 0 0 0 0 0 4,205,000
36 2038-39 0 0 0 4,396,000 552,820 4,948,820 0 0 0 0 0 0 4,396,000
37 2039-40 0 0 0 5,020,000 349,483 5,369,483 0 0 0 0 0 0 5,020,000
38 2040-41 0 0 0 5,250,000 118,221 5,368,221 0 0 0 0 0 0 5,250,000
39 Total $3,425,000 $569,600 $3,994,600 $74,349,000 $50,290,750 $124,639,750 $4,188,347 $540,766 $4,729,112 $2,370,000 $18,277,881 $20,647,881 $84,332,347
40 Less: Percent Not Eligible 39.0%39.0%
41 $28,996,110 $1,633,455 $30,629,565
42 Net Eligible $45,352,890 $2,554,891 $53,702,781
43
44 Total EDUs [2]36,791 36,791 36,791 36,791 36,791
45
46 Total Debt Service $/EDU $93 $1,233 $69 $64 $1,459
47
48
49
50 Notes:
51 [1] Debt service schedules from the City "Water Fund Analysis-working copy_2016-10-18.xlsx".
52 [2] See Exhibit W-2 for total EDUs.
Reuse - SRF Funding Repayments WTP Master Plan Improvements (Nacimiento Water Project)
2007 A Revenue Bonds
Page 9 of 16
City of San Luis Obispo - Water
Exhibit W-7
Summary of Reserve Funds
For the Year Ended June 30, 2016
Type Total
% Fee
Eligible [1] $ Fee Eligible
Cash $160,747 100%$160,747
Cash & Equivalents 15,918,304 100%15,918,304
Total $16,079,051 $16,079,051
Less:
Restricted
Debt Service $1,654,826 0%$0
Subsequent year expenditures 448,499 0%0
Committed
Rate Stabilization fund $1,650,000 0%0
Contingency fund 2,950,800 0%0
Total $6,704,125 $0
Net Available Cash Reserves $9,374,926 $16,079,051
Total EDUs [2]36,791
Total Cash Reserves $/EDU $437
Notes:
[1] Balance as of CAFR June 2016.
[2] See Exhibit W-2 for total EDUs.
Page 10 of 16
1 City of San Luis Obispo - Water Page 1 of 3
2 Exhibit W-8
3 Development of the Water Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible $ Fee Eligible
8
9 Water Treatment [3]
10 Major Facility Maintenance $0 $360,000 $163,000 $171,000 $179,000 $189,000 $185,000 $190,000 $200,000 $1,637,000 16%$261,920
11 Ozone System Maint 191,523 0 0 0 0 0 0 0 0 191,523 16%30,644
12 Enc-Xylem 44,610 0 0 0 0 0 0 0 0 44,610 16%7,138
13 Chemical System Maint 54,000 0 0 0 0 0 0 0 0 54,000 16%8,640
14 Air Compressor & Dryer Maint 50,000 0 0 0 0 0 0 0 0 50,000 16%8,000
15 Replace Air Compressor-Design 10,000 0 0 0 0 0 0 0 0 10,000 16%1,600
16 Misc -free 35 0 0 0 0 0 0 0 0 35 16%6
17 Stenner Canyon Raw Waterline Replacement (Study)7,123 0 0 0 0 0 0 0 0 7,123 16%1,140
18 Stenner Canyon Raw Waterline Replacement (Design)35,000 0 0 0 0 0 0 0 0 35,000 16%5,600
19 Stenner Canyon Raw Waterline Replacement (Const)100,000 0 0 0 0 0 0 0 0 100,000 16%16,000
20 Package Thickner (Construction and CM)0 0 0 0 50,000 0 0 0 0 50,000 16%8,000
21 Wash Water Tank #1 (Design)0 40,000 0 0 0 0 0 0 0 40,000 16%6,400
22 Wash Water Tank #1 (Construction)0 0 0 250,000 0 0 0 0 0 250,000 16%40,000
23 Wash Water Tank #1 (CM)0 0 0 25,000 0 0 0 0 0 25,000 16%4,000
24 Reservoir 2 Replacement (Study)24 0 0 0 0 0 0 0 0 24 16%4
25 Enc-Nunley 44,739 0 0 0 0 0 0 0 0 44,739 16%7,158
26 Reservoir 2 Replacement (Design)184,400 160,000 0 0 0 0 0 0 0 344,400 16%55,104
27 Reservoir 2 (Construction)0 0 0 10,000,000 0 0 0 0 0 10,000,000 16%1,600,000
28 Reservoir 2 (Const Mgmt) 0 0 0 500,000 0 0 0 0 0 500,000 16%80,000
29 SST PEA (Study)0 150,000 0 0 0 0 0 0 150,000 16%24,000
30 SST IGA (Design)0 300,000 0 0 0 0 0 0 300,000 16%48,000
31 SST - Hydro and Ozone (Const) 0 0 8,000,000 5,000,000 0 0 0 0 0 13,000,000 16%2,080,000
32 SST - Hydro and Ozone (Const Mgmt) 0 0 500,000 800,000 0 0 0 0 0 1,300,000 16%208,000
33 Treatment Plant Ozone Generation Upgrade 0 0 0 100,000 0 0 0 0 0 100,000 16%16,000
34 Fleet Replacement: Service Body Truck 8,112 0 0 0 0 40,000 0 0 0 48,112 16%7,698
35 Forebay and Culvert Rehab (Study)0 0 0 0 0 30,000 0 0 0 30,000 16%4,800
36 Forebay and Culvert Rehab (Design)0 0 0 0 0 80,000 0 0 0 80,000 16%12,800
37 Forebay and Culvert Rehab (Const)0 0 0 0 0 0 800,000 0 0 800,000 16%128,000
38 Forebay and Culvert Rehab (Const Mgmt)0 0 0 0 0 0 80,000 0 0 80,000 16%12,800
39 Treatment Plant Ozone Generation Upgrade 0 0 0 100,000 0 0 0 0 0 100,000 16%16,000
40 Fleet Replacement Forecast 0 0 0 0 0 0 44,500 0 0 44,500 16%7,120
41 Total Treatment $729,566 $1,010,000 $8,663,000 $16,946,000 $229,000 $339,000 $1,109,500 $190,000 $200,000 $29,416,066 $4,706,572
42
43 Water Distribution
44 Distribution System Improvements - Pipelines
45 DN-Casa, Stenner, Chorro, Murray, Pacific Design $150,000 $0 $0 $0 $0 $0 $0 $0 $0 $150,000 16%$24,000
46 CN-Casa, Stenner, Chorro, Murray, Pacific Design 1,560,000 1,900,000 0 0 0 0 0 0 0 3,460,000 16%553,600
47 CM-Casa, Stenner, Chorro, Murray, Pacific Design 150,000 150,000 0 0 0 0 0 0 0 300,000 16%48,000
48 Mt View, Hill, West, Lincoln, etc.-Design 125,000 0 0 0 0 0 0 0 0 125,000 16%20,000
49 Mt View, Hill, West, Lincoln, etc.-Const 0 0 0 0 1,255,000 0 0 0 0 1,255,000 16%200,800
50 Mt View, Hill, West, Lincoln, etc.-Const Mgmt 0 0 0 0 125,000 0 0 0 0 125,000 16%20,000
51 Craig, Christina, Jaycee, etc -Design 0 0 0 0 135,000 0 0 0 0 135,000 16%21,600
52 Craig, Christina, Jaycee, etc -Const 0 0 0 0 0 1,350,000 0 0 0 1,350,000 16%216,000
53 Craig, Christina, Jaycee, etc -Const Mgmt 0 0 0 0 0 135,000 0 0 0 135,000 16%21,600
54 Chorro, El Paseo, El Cerrito, etc - Design 0 0 0 0 0 125,000 0 0 0 125,000 16%20,000
55 Chorro, El Paseo, El Cerrito, etc - Const 0 0 0 0 0 0 1,258,000 0 0 1,258,000 16%201,280
56 Chorro, El Paseo, El Cerrito, etc - Const Mgmt 0 0 0 0 0 0 125,000 0 0 125,000 16%20,000
57 Patricia, Highland, La Entrada - Design 0 0 0 0 0 0 127,000 0 0 127,000 16%20,320
58 Patricia, Highland, La Entrada - Construction 0 0 0 0 0 0 0 1,270,000 0 1,270,000 16%203,200
59 Patricia, Highland, La Entrada - Construction Mgmt 0 0 0 0 0 0 0 127,000 0 127,000 16%20,320
Proposed
Page 11 of 16
1 City of San Luis Obispo - Water Page 2 of 3
2 Exhibit W-8
3 Development of the Water Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible $ Fee Eligible
Proposed
60 Serrano Zone Consolidation-(Study & Design)0 0 0 0 0 0 0 100,000 0 100,000 16%16,000
61 Serrano Zone Consolidation Phase 1 (Const)0 0 0 0 0 0 0 0 1,000,000 1,000,000 16%160,000
62 Serrano Zone Consolidation Phase 1 (Constr Mgmt)0 0 0 0 0 0 0 0 100,000 100,000 16%16,000
63 Trench Repairs 174,789 200,000 200,000 200,000 200,000 200,000 0 0 0 1,174,789 0%0
64 Raise Valve Covers 50,765 25,000 25,000 30,000 30,000 30,000 0 0 0 190,765 0%0
65 Water Meters and Water Meter Boxes 115,477 165,000 180,000 180,000 180,000 180,000 0 0 0 1,000,477 0%0
66 Water Meters and Water Meter Boxes (Contribution from sewer)0 (82,500) (90,000) (90,000) (90,000) (90,000)0 0 0 (442,500)0%0
67 Enc with Corix 1,605 0 0 0 0 0 0 0 0 1,605 0%0
68 Fire Hydrants and Parts 26,743 40,000 0 0 0 0 0 0 0 66,743 0%0
69 Slack Tank Consolidation (Design)0 100,000 0 0 0 0 0 0 0 100,000 16%16,000
70 Slack Tank Consolidation (Const)0 0 920,000 0 0 0 0 0 0 920,000 16%147,200
71 Slack Tank Consolidation (Const Mgmt)0 0 92,000 0 0 0 0 0 0 92,000 16%14,720
72 [2] Wash Water Tank #2 (Const) @ WTP 170,000 0 0 0 0 0 0 0 0 170,000 16%27,200
73 [2]Tank Maintenance (Study)13,100 0 75,000 0 0 0 0 0 0 88,100 16%14,096
74 [2] Enc-Nunley 500 0 0 0 0 0 0 0 0 500 16%80
75 [2]Tank Maintenance (Design)5 0 0 0 0 0 0 0 0 5 16%1
76 [2]Tank Maintenance (Construction)600,000 0 0 675,000 0 0 0 0 0 1,275,000 16%204,000
77 [2]Tank Maintenance (CM)130,000 0 0 70,000 0 0 0 0 0 200,000 16%32,000
78 Terrace Hill Tank Maint 0 0 0 0 0 0 0 0 0 0 16%0
79 Enc-Nunley 65,635 0 0 0 0 0 0 0 0 65,635 16%10,502
80 IT - CityWorks Upgrade 5,942 0 0 0 0 0 0 250,000 0 255,942 16%40,951
81 Enc-Woolpert 11,412 0 0 0 0 0 0 0 0 11,412 16%1,826
82 Distribution Pump Station Upgrades 0 0 0 0 0 0 0 0 0 0 16%0
83 Water Model Maintenance and Analysis 0 20,000 20,000 0 0 0 0 0 0 40,000 16%6,400
84 Water Pump Station Analysis 0 0 0 0 0 0 0 0 0 16%0
85 Fleet replacement: Pickup 0 0 70,000 35,000 35,000 0 0 0 0 140,000 16%22,400
86 Fleet replacement: Caterpillar Backhoe Loader & Attachments 0 0 0 0 0 235,000 0 0 0 235,000 16%37,600
87 Fleet replacement: Service body trucks 0 0 0 0 300,000 0 0 0 0 300,000 16%48,000
88 Fleet Replacement: Medium Duty Truck with bed & crane 0 0 0 0 130,000 0 0 0 0 130,000 16%20,800
89 Extended Cab Pickup Truck 1,079 0 0 0 0 0 0 0 0 1,079 16%173
90 Fleet Replacement: Message Board 0 0 0 0 40,000 0 0 0 0 40,000 16%6,400
91 Foothill/Chorro PRV Replacement (Design)5 0 0 0 0 0 0 0 0 5 16%1
92 Enc-Numley 3,746 0 0 0 0 0 0 0 0 3,746 16%599
93 Foothill/Chorro PRV Replacement (Const)86,950 - 0 0 0 0 0 0 0 86,950 16%13,912
94 Total Distribution $3,442,753 $2,517,500 $1,492,000 $1,100,000 $2,340,000 $2,165,000 $1,510,000 $1,747,000 $1,100,000 $17,414,253 $2,467,581
95
96 Water Customer Service
97 Fleet replacement: Compact Pickups $0 $0 $0 $57,000 $0 $0 $0 $0 $0 57,000 0%$0
98
99 Utilities Services
100 Fleet replacement: Compact Pickup $25,200 $0 $0 $0 $0 $0 $0 $0 $0 25,200 0%$0
101
102 Administration and Engineering
103 879 Morro Refurbishment $481 $0 $0 $0 $0 $0 $0 $0 $0 $481 0%$0
104 Enc Benchmark 3,966 0 0 0 0 0 0 0 0 3,966 0%0
105 Control System Trucks 6,501 0 0 0 0 0 0 0 0 6,501 0%0
106 Enc - Toyota 33,589 0 0 0 0 0 0 0 0 33,589 0%0
107 Fleet replacement: Sedan 0 0 0 35,000 0 0 0 0 0 35,000 0%0
108 Mobile Equipment Lifts & Safety Stands 0 0 0 0 0 0 0 0 0 0 0%0
109 Total Administration and Engineering $44,537 $0 $0 $35,000 $0 $0 $0 $0 $0 $79,537 $0
Page 12 of 16
1 City of San Luis Obispo - Water Page 3 of 3
2 Exhibit W-8
3 Development of the Water Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible $ Fee Eligible
Proposed
110
111 Source of Supply
112 Groundwater (Study)$70,000 $0 $0 $0 $0 $0 $0 $0 $0 $70,000 39.0%$27,300
113 Groundwater (DN)175,000 0 0 0 0 0 0 0 0 175,000 39.0%68,250
114 Groundwater (CN)1,000,000 0 0 0 0 0 0 0 0 1,000,000 39.0%390,000
115 Groundwater (CM)150,000 0 0 0 0 0 0 0 0 150,000 39.0%58,500
116 Groundwater (ER)75,000 0 0 0 0 0 0 0 0 75,000 39.0%29,250
117 Total Source of Supply $1,470,000 $0 $0 $0 $0 $0 $0 $0 $0 $1,470,000 $573,300
118
119 General Assumptions for Future Planning Purposes $0 $0 $0 $0 $0 $500,000 $500,000 $500,000 $500,000 $2,000,000 0%$0
120
121 Shared Information Technology
122 Fox Pro Replace $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0%$0
123 Laserfiche 0 0 0 0 0 0 0 0 0 0 0%0
124 UB System Upgrade 0 0 0 0 0 0 0 0 0 0 0%0
125 Enc - Accela 1,667 0 0 0 0 0 0 0 0 1,667 0%0
126 City Website Upgrade (4% share)0 0 0 0 0 0 0 0 0 0 16%0
127 Water Reuse Automation Impr 51,980 0 0 0 0 0 0 0 0 51,980 16%8,317
128 Wireless Net Infrastructure Replacement 0 0 0 0 0 0 0 0 0 16%0
129 Telemetry System Upgrade (Design)2,704 0 0 0 0 0 0 0 0 2,704 0%0
130 Enc - Cannon 48,588 0 0 0 0 0 0 0 0 48,588 16%7,774
131 Telemetry System Upgrade - Construction 1,462,688 0 0 0 0 0 0 0 0 1,462,688 16%234,030
132 Enc - Applied Technology 2,925 0 0 0 0 0 0 0 0 2,925 0%0
133 Virtual Private Network (VPN) Replacement 0 0 0 9,028 0 0 0 0 0 9,028 0%0
134 Network Firewalls 0 0 0 15,259 0 0 0 0 0 15,259 16%2,441
135 GPS System Replacement 0 0 0 0 0 0 0 0 0 0 16%0
136 Network Switching Infrastructure Replacement 0 0 0 14,140 0 0 0 0 0 14,140 16%2,262
137 Radio Handhelds and Mobile Replacements 24,282 0 0 0 0 0 0 0 24,282 16%3,885
138 VM Infrastructure 8,945 0 0 8,945 0 0 0 0 0 17,890 16%2,862
139 Server Operating System 1,848 0 0 0 0 0 0 0 0 1,848 0%0
140 VoIP 0 20,360 0 0 0 0 0 0 0 20,360 16%3,258
141 Document Management System 0 0 0 0 0 0 0 0 0 0 16%0
142 Tait Radio System 0 0 24,282 0 0 0 0 0 0 24,282 16%3,885
143 MS Office Replacement 0 0 0 16,773 0 0 0 0 0 16,773 16%2,684
144 Enc - Planet Technologies 12,400 0 0 0 0 0 0 0 0 12,400 16%1,984
145 UPS Battery Replacement 0 0 1,885 0 0 0 0 0 0 1,885 0%0
146 Enc - Applied Technology 1,885 0 0 0 0 0 0 0 0 1,885 0%0
147 Enterprise Storage Growth 0 0 0 0 0 0 0 0 0 0 0%0
148 Total Share of Information Technology CIP $1,595,629 $44,642 $26,167 $64,145 $0 $0 $0 $0 $0 $1,730,583 $273,382
149
150 Recycled Water Projects 0 0 50,000 0 250,000 0 1,250,000 0 3,706,460 5,256,460 16%$841,034
151
152 TOTAL WATER FUND CAPITAL PLAN $7,307,684 $3,572,142 $10,231,167 $18,202,145 $2,819,000 $3,004,000 $4,369,500 $2,437,000 $5,506,460 $57,449,098 $8,861,869
153
154 Supply $1,414,334
155 Treatment 4,706,572
156 Notes:Distribution 2,740,963
157 [1] From the City "Water Fund Analysis-working copy_2016-10-18.xlsx".Total $8,861,869
158 [2] These items are included in the estimated replacement cost for the WTP. See Exhibit W-4A.OK
159 [3] These items are estimated growth related based on Exhibit W-2. Future growth is 16% of total EDU, 5,821/36,791 = 16%.
Page 13 of 16
1 City of San Luis Obispo - Water City of San Luis Obispo - Water
2 Exhibit W-9A Exhibit W-9B
3 Allowable Water Capacity and Connection Fees Allowable Water Capacity and Connection Fees
4
5 Component
Calculation
Results
($/EDU)Component Buy-in Future
Debt
Service Total ($/EDU)
6
7 Supply $10,591 Supply $10,348 $243 $0 $10,591
8 Treatment 2,808 Treatment 1,999 809 0 2,808
9 Distribution 3,403 Distribution 2,932 471 0 3,403
10 Debt Service (1,459)Debt Service 0 0 (1,459) (1,459)
11 Cash Reserves 437 Cash Reserves 437 0 0 437
12 -------------------------- ------------ ------------ ------------
13 Net Allowable Capacity and Connection Fee $15,780 Net Allowable Capacity and Connection Fee $15,716 $1,523 ($1,459) $15,780
14
15 Current Capacity and Connection Fee $11,100.16 Current Capacity and Connection Fee $11,100.16
16 ----------------------------
17 Difference $4,680 Difference $4,680
Page 14 of 16
City of San Luis Obispo - Water
Exhibit W-10
Summary of Water Capcity and Connection Fee Schedule
CURRENT WATER DEVELOPMENT IMPACT FEES AS OF 7/1/2017
Land Use Type EDU*Citywide
RESIDENTIAL (per unit)
Single Family Residential 1.0 $11,322.16
Multi-Family Residential 0.7 7,925.51
Mobile Home 0.6 6,793.30
Studio Unit (450 s.f. or less)0.3 3,396.65
NON-RESIDENTIAL (Meter Size)
5/8" to 3/4"-inch 1.0 $11,322.16
1-inch 1.7 19,247.68
1-1/2 inch 3.4 38,495.36
2-inch 5.4 61,138.45
3-inch 10.7 121,145.00
4-inch 16.7 185,076.96
6-inch 33.4 378,153.92
* Equivalent dwelling unit
CALCULATED WATER CAPACITY AND CONNECTION FEE
Land Use Type EDU*Citywide
RESIDENTIAL (per unit)
Residential (greater than 800 s.f.)1.0 $15,780
Residential (451 s.f. to 800 s.f.)0.7 11,046
Mobile Home 0.6 9,468
Studio Unit (450 sf or less)0.3 4,734
NON-RESIDENTIAL (Meter Size)
5/8" to 3/4"-inch 1.0 $15,780
1-inch 1.7 26,826
1-1/2 inch 3.4 53,652
2-inch 5.4 85,212
3-inch 10.7 168,846
4-inch 16.7 263,526
6-inch 33.4 527,052
Page 15 of 16
Current Fee Option #1 Option #2
Future Portion
of Treatment
Project plus
Financing Cost
Current Fee plus
Future Portion of
Project plus
Financing Cost
Existing
(Replacement Cost
Less Depreciation)
plus Future plus
Financing Cost
Difference
between Option
#1 and Option #2
Existing Fee - Future Capacity Projects
Water Reuse Project (39%)$4,514,857 $4,514,857
Nacimiento Pipeline Project (39%)58,678,467 58,678,467
2006 Water Treatment Imp (15%)3,831,389 3,831,389
Sedimentation Process (50%)3,888,350 3,888,350
2007 Bishop Tank (15%)231,665 231,665
1994 Water Treatment Tank (15%)3,480,430 3,480,430
Total Existing Fee Future Plant $74,625,158 $74,625,158
Existing Fee Future EDUs 6,927 6,927
Existing Fee $/EDU $10,773 $10,773 ($10,773)
New Future Plant
Supply [1]$1,477,484 $1,414,334 (11)
Treatment [1]4,916,720 4,706,572 (36)
Distribution 0 2,740,963 471
Total New Future Plant $6,394,204 $8,861,869
Total New Future EDUs [2]5,821 5,821
New Future Plant $/EDU $1,098 $1,523
Future Plant $/EDU $10,773 $11,872 $1,523 ($10,349)
Existing Plant
Supply $60,234,226
Total Future EDUs [2]5,821
Total Supply per EDU $10,348 $10,348
Treatment $73,535,215 1,999
Distribution 107,869,887 2,932
Plus: Cash balances 16,079,051 437
Total Existing Treatment, Distribution Plant $197,484,153
Total EDUs 36,791
Total Other per EDU $5,368
Total Existing Plant $/EDU $15,716 $15,715
Debt Credit ($1,459)($1,459)
Total Future and Existing $/EDU $10,773 $11,872 $15,780 $3,907
Current Fee (ENR 7/1/2017)$11,322.16
[1] Option #1 is existing fee plus 16% of growth related future plant, plus interest at 2%
[2] Future EDUs are net of Vested/ Pending projects
Water Capacity and Connection Fee
Page 16 of 16
Wastewater Capacity and Connection Fee
1 City of San Luis Obispo - Wastewater
2 Exhibit S-1
3 Development of Capacity and Connection Fee
4
5 Plant Description
Estimated
Replacement Cost
Eligible
Replacement Cost
New (RCN)
Eligible
Replacement Cost
New Less
Depreciation
(RCNLD) EDUs Total Fee
6 Existing Plant [1]
7 Treatment $83,819,927 $79,117,927 $42,138,027 36,791 $1,145
8 Collection 259,391,205 197,461,122 106,909,803 36,791 2,906
9
10 Total Existing Plant $343,211,132 $276,579,049 $149,047,830 36,791 $4,051
11
12 Less: Outstanding Debt Principal (2)($17,096,754) 36,791 ($465)
13
14 Plus: Capital Fund Reserves [3]$28,271,258 36,791 $768
15
16 Total Net Existing Plant $343,211,132 $276,579,049 $160,222,334 36,791 $4,354
17
18 Future Plant [4]
19 Treatment $154,876,753 $24,717,624 5,821 $4,246
20 Collection 23,292,507 23,292,507 5,821 4,002
21
22 Total Future Plant $178,169,260 $0 $48,010,131 5,821 $8,248
23
24
25
26 Total Existing and Future Plant [5]$521,380,391 $276,579,049 $208,232,465 $12,602
27
28 Existing EDUs (Includes Vested/Pending Projects)30,970
29 Future EDUs 5,821
30 Total Existing and Future EDUs 36,791
31
32
33 Notes:
34 [1] Existing plant based on replacement cost less depreciation.
35 [2] Remaining principal as of June 2016. See Exhibit S-5.
36 [3] Cash reserves as of June 2016 which are fee eligible. See Exhibit S-6.
37 [4] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit S-7.
38 [5] Based on "combined" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 273.Page 1 of 18
1 City of San Luis Obispo - Wastewater
2 Exhibit S-2
3 Development of EDUs
4
5 EDU = Equivalent Dwelling Unit
6
7
8 5,400,000 Future Average Dry Weather Flow/WRRF Design Capacity
9 470,000 Cal Poly Average Dry Weather Flow/Capacity share of WRRF
10 4,930,000 City owned WRRF Capacity
11 134 EDU gpd Rate [1]
12 36,791 Total City Existing and Future EDU
13 4,150,000 Existing Average Dry Weather Flow, plus pending increment
14 30,970 Existing EDU (Includes Vested/Pending Projects)
15 5,821 Future EDU
16
17
18
19 Notes:
20 [1] City provided gallons per day (gpd) based on a a three-year average from 2012-13 to 2014-15.
21 [2] Future growth is 16% of total EDU, 5,821/36,791 = 16%
Future EDU Calc (derived by using 5.4 mgd design capacity for WRRF)
Page 2 of 18
1 City of San Luis Obispo - Wastewater Page 1 of 3
2 Exhibit S-3
3 Development of Treatment Capacity and Connection Fee
4
5 System Type Function Description
Install
Date
Average
Age (Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
6 EXISTING PLANT [1]
7 Land 83199 LAND 100 6/30/1952 $4,600 0.0% 100% $4,600 $4,600
8 Land 83200 LAND 100 6/30/1963 959,700 0.0% 100% 959,700 959,700
9 Land 83201 LAND 100 6/30/1969 474,175 0.0% 100% 474,175 474,175
10 Land 10069001 LANDí18.8 ACRES 6/30/1969 587,450 0.0% 100% 587,450 587,450
11 Treatment Digester DIGESTER No. 3 1923 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
12 Treatment Clarifier PRIMARY CLARIFIER No. 1 1945 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
13 Treatment Clarifier PRIMARY CLARIFIER No. 2 1945 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
14 Treatment Digester DIGESTER No. 2 1946 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
15 Treatment Digester DIGESTER No. 1 1952 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
16 Treatment Drying Beds DRYING BEDS 1-8 1950 69 92% 75 472,000 92.0% 0%0 0
17 Treatment Biofilter BIOFILTER No. 3 1964 69 138% 50 0 100.0% 0%0 0
18 Treatment Clarifier SECONDARY CLARIFIER No. 3 1964 52 69% 75 2,000,000 69.3% 100% 2,000,000 613,333
19 Treatment Building OPERATIONS BUILDING 1964 52 0% 0 0 0.0% 0%0 0
20 Treatment Building MAINTENANCE SHOP/TOOL SHED 1964 52 0% 0 280,000 0.0% 0%0 0
21 Treatment Drying Beds UPPER DRYING BEDS 1984 32 0% 0 0 0.0% 0%0 0
22 Treatment Equalization EQUALIZATION BASIN 1984 44 88% 50 1,000,000 88.0% 100% 1,000,000 120,000
23 Treatment Equalization EQUALIZATION BASIN 1984 24 80% 30 10,000,000 80.0% 100% 10,000,000 2,000,000
24 Treatment Lagoon SUPERNATANT LAGOON 1984 32 80% 40 550,000 80.0% 0%0 0
25 Treatment Effluent OLD EFFLUENT STRUCTURE AT SOUTH END OF PROPERTY 1984 32 32% 100 1,500,000 32.0% 100% 1,500,000 1,020,000
26 Treatment Headworks HEADWORKS 1994 2 10% 20 4,179,000 10.0% 100% 4,179,000 3,761,100
27 Treatment Clarifier SECONDARY CLARIFIER No. 4 1994 22 29% 75 2,000,000 29.3% 100% 2,000,000 1,413,333
28 Treatment Clarifier SECONDARY CLARIFIER No. 5 1994 22 29% 75 2,000,000 29.3% 100% 2,000,000 1,413,333
29 Treatment Clarifier CLARIFIER No. 4 RAS PUMPS 2014 2 10% 20 250,000 10.0% 100% 250,000 225,000
30 Treatment Clarifier CLARIFIER No. 5 RAS PUMPS 2014 2 10% 20 250,000 10.0% 100% 250,000 225,000
31 Treatment Chemical pH CONTROL CHEMICAL STATION 1994 22 88% 25 800,000 88.0% 100% 800,000 96,000
32 Treatment Pumps RECIRCULATION ISLAND PUMPS 1994 22 88% 25 0 88.0% 0%0 0
33 Treatment Aeration AERATION TANKS No. 1 & 2 1994 22 29% 75 8,000,000 29.3% 100% 8,000,000 5,653,333
34 Treatment Blowers BLOWERS 1,2 &3 1994 22 110% 20 1,350,000 100.0% 100% 1,350,000 0
35 Treatment Building MAIN SWITCHGEAR BUILDING 1994 22 29% 75 5,000,000 29.3% 100% 5,000,000 3,533,333
36 Treatment Building MCC BUILDINGS B & G 2015 1 1% 75 800,000 1.3% 100% 800,000 789,333
37 Treatment Building MCC BUILDINGS A & J 2010 6 8% 75 800,000 8.0% 100% 800,000 736,000
38 Treatment Other PROPANE POWERED EMERGENCY GENERATOR 1994 26 87% 30 1,500,000 86.7% 100% 1,500,000 200,000
39 Treatment Daft DAFT (DISSOLVED AIR FLOTATION THICKENER)1994 22 29% 75 1,500,000 29.3% 100% 1,500,000 1,060,000
40 Treatment Chemical CHLORINE CONTACT CHANNELS 1/2 1994 22 29% 75 2,200,000 29.3% 0%0 0
41 Treatment Building BELT PRESS BUILDING 1994 22 44% 50 500,000 44.0% 100% 500,000 280,000
42 Treatment Building ADMINISTRATION BUILDING 1994 22 220% 10 250,000 100.0% 100% 250,000 0
43 Treatment Tertiary TERTIARY MEDIA FILTERS 4 filters 1994 22 29% 75 10,000,000 29.3% 100% 10,000,000 7,066,667
44 Treatment Cooling Towers COOLING TOWERS 3 units 1994 22 73% 30 3,000,000 73.3% 100% 3,000,000 800,000
45 Treatment Equalization EQALIZATION TANKS (NORTH & SOUTH) 2 units 1994 22 29% 75 2,000,000 29.3% 100% 2,000,000 1,413,333
46 Treatment Chemical DISINFECTION CHEMICAL STORAGE AREA 1994 36 90% 40 2,200,000 90.0% 50% 1,100,000 110,000
47 Treatment Digester DIGESTER GAS FLARE SYSTEM 2006 10 50% 20 100,000 50.0% 100% 100,000 50,000
48 Treatment Other SLURRY SEALED ALL ASPHALT 2010 6 120% 5 100,000 100.0% 0%0 0
49 Treatment Other PERIMETER FENCING 2012 4 20% 20 500,000 20.0% 100% 500,000 400,000
50 Treatment Other WRRF SERVER IN ADMIN 2015 1 10% 10 2,500,000 10.0% 100% 2,500,000 2,250,000
51 Treatment Other FIBER OPTICS 2015 1 5% 20 100,000 5.0% 100% 100,000 95,000
52 Treatment Cogeneration COGENERATION SYSTEM 2015 1 5% 20 2,500,000 5.0% 100% 2,500,000 2,375,000
53 Treatment Other PLANT ENTRANCE GATE 2016 0 0% 20 25,000 0.0% 100% 25,000 25,000
54 Treatment Other LIGHTING 2016 0 0% 20 50,000 0.0% 100% 50,000 50,000
55 TOTAL EXISTING PLANT $82,281,925 $77,579,925 $40,600,025
Page 3 of 18
1 City of San Luis Obispo - Wastewater Page 2 of 3
2 Exhibit S-3
3 Development of Treatment Capacity and Connection Fee
4
5 System Type Function Description
Install
Date
Average
Age (Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
56
57 PLUS: Interest on Debt Water Efficiency Project 5/05/15 $1,538,002 1.00 $1,538,002 100%1,538,002 1,538,002
58
59 TOTAL EXISTING PLANT $83,819,927 $79,117,927 $42,138,027
60
61 Buildout EDUs [2] 36,791
62
63 TOTAL EXISTING TREATMENT AND COLLECTION PLANT $/EDU $1,145
64
65 UPGRADE PLANT [3]Cost in 2016 $
% Fee
Eligible Cost in 2016 $
66 Water Resource Recovery Facility
67 Major Maintenance $3,762,884 16%$602,061
68 Influent Pump Replacement 155,705 16%24,913
69 WRRF Energy Efficiency 0 16%0
70 Design 1,325 16%212
71 Construction 3,861 16%618
72 WRRF Upgrade 0 16%0
73 Study/Environmental 382,151 16%61,144
74 Program Management 2,805,544 16%448,887
75 Design 6,063,682 16%970,189
76 amendment to CH2M 1,000,000 16%160,000
77 Construction 0 16%0
78 Infrastructure 140,000,000 16%22,400,000
79 Disinfection 0 16%0
80 Nutrient Removal 0 16%0
81 Contingency 0 16%0
82 Flood Control 0 16%0
83 Construction Management 0 16%0
84 WRRF Fiber Optic Impr 0 16%0
85 Digester 2 Cleaning 0 16%0
86 WRF Sludge Bed 0 16%0
87 WRRF Cooling Towers 0 16%0
88 IT - iFix Replacement 250,000 16%40,000
89 IT - HachWims 30,000 16%4,800
90 IT - MP2 Replacement 30,000 16%4,800
91 Fleet Replacement: Utility Trucks (3)57,600 0%0
92 Fleet Replacement: Sedan 33,000 0%0
93 Fleet Replacement: 4-Wheel Drive Loader 0 0%0
94 Fleet Replacement: Pickup Truck w/Flat Bed & Crane 0 0%0
95 Fleet Replacement: Compact Pickup Truck 36,000 0%0
96 Fleet Replacement: Decanter Trailer 0 0%0
97 Fleet Replacement: Club Cars - Electric 60,000 0%0
98 Fleet Replacement: Dump Truck 150,000 0%0
99 Fleet Replacement: Forklift 55,000 0%0
100 TOTAL UPGRADE PLANT $154,876,753 $0 $24,717,624
101
102 Total Future EDUs [4] 5,821
103
104 TOTAL FUTURE TREATMENT PLANT $/EDU $4,246
105
106 TOTAL EXISTING AND FUTURE TREATMENT PLANT $/EDU $5,391
Page 4 of 18
1 City of San Luis Obispo - Wastewater Page 3 of 3
2 Exhibit S-3
3 Development of Treatment Capacity and Connection Fee
4
5 System Type Function Description
Install
Date
Average
Age (Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
107
108
109
110 Notes:
111 [1] Existing plant based on replacement cost less deprecation. Land based on original cost and July 2017 ENR.
112 [2] See Exhibit S-2 for total EDUs.
113 [3] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit S-7.
114 [4] See Exhibit S-2 for future EDUs.
Page 5 of 18
1 City of San Luis Obispo - Wastewater Page 1 of 2
2 Exhibit S-4A
3 Development of Collection Capacity and Connection Fee
4
5
6 System Type Function Description Install Date
Average
Age
(Years)
Life
Cycle
%
Pipe Length
(feet)
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
EXISTING PLANT [1]
7 Collection Sewer Mains Gravity Main 1910 to 1919 106 106%27,966 100 $8,389,677 100.0%80%$6,711,742 $0
8 Collection Sewer Mains Gravity Main 1920 to 1929 96 96%62,068 100 18,620,358 96.0%80%14,896,286 595,851
9 Collection Sewer Mains Gravity Main 1930 to 1939 86 86%1,863 100 559,017 86.0%80%447,214 62,610
10 Collection Sewer Mains Gravity Main 1940 to 1949 76 76%62,018 100 18,605,544 76.0%80%14,884,435 3,572,264
11 Collection Sewer Mains Gravity Main 1950 to 1959 66 66%118,881 100 35,664,195 66.0%80%28,531,356 9,700,661
12 Collection Sewer Mains Gravity Main 1960 to 1969 56 56%109,485 100 32,845,503 56.0%80%26,276,402 11,561,617
13 Collection Sewer Mains Gravity Main 1970 to 1979 46 46%86,723 100 26,016,912 46.0%80%20,813,530 11,239,306
14 Collection Sewer Mains Gravity Main 1980 to 1989 36 36%71,333 100 21,399,804 36.0%80%17,119,843 10,956,700
15 Collection Sewer Mains Gravity Main 1990 to 1999 26 26%76,462 100 22,938,525 26.0%80%18,350,820 13,579,607
16 Collection Sewer Mains Gravity Main 2000 to 2009 16 16%72,569 100 21,770,619 16.0%80%17,416,495 14,629,856
17 Collection Sewer Mains Gravity Main 2009 to Present 3 3%42,861 100 12,858,381 3.0%80%10,286,705 9,978,104
18 Collection Lift Stations [2]Prefumo Lift Station 7/1/2002 14 28%0 50 750,000 0.0%0%0 0
19 Collection Lift Stations [2]Calle Joaquin Lift Station 1/1/1973 43 86%0 50 4,000,000 0.0%56%2,221,850 2,221,850
20 Collection Lift Stations [2]Foothill Lift Station 1/1/1986 (Old Rockview) 30 60%0 50 2,098,000 0.0%77%1,606,979 1,606,979
21 Collection Lift Stations [2]Silver City Lift Station 1/1/1967 49 98%0 50 2,150,000 0.0%85%1,830,521 1,830,521
22 Collection Lift Stations [2]Airport Lift Station 1/1/1980 36 72%0 50 2,130,000 0.0%30%646,182 646,182
23 Collection Lift Stations [2]Margarita Lift Station 1/1/1967 49 98%0 50 1,500,000 0.0%51%758,275 758,275
24 Collection Lift Stations [2]Tank Farm Lift Station 7/1/2009 7 14%0 50 18,325,682 0.0%53%9,793,361 9,793,361
25 Collection Lift Stations [2]Laguna Lift Station 7/1/2015 1 2%0 50 3,121,300 0.0%76%2,378,019 2,378,019
26 Collection Force Mains Foothill (51 Foothill)1953 63 0% 440 75 110,023 0.1%0%0 0
27 Collection Force Mains 1055 Isabella 2002 14 0% 595 75 148,810 0.0%0%0 0
28 Collection Force Mains 206 Margarita 1967 49 0% 231 75 57,853 0.1%0%0 0
29 Collection Force Mains Silver City (Trailer Park)1966 50 0% 765 75 191,190 0.0%0%0 0
30 Collection Force Mains 850 Fiero 1980 36 0% 839 75 209,705 0.0%0%0 0
31 Collection Force Mains 1625 Calle Joaquin 2015 1 0%3,656 75 914,000 0.0%0%0 0
32 Collection Force Mains Tank Farm (264 Tank Farm)2009 7 0%3,772 75 943,108 0.0%100%943,108 943,101
33 Collection Force Mains Laguna (35 Prado)2015 1 0%2,232 75 558,000 0.0%100%558,000 557,999
34 Collection SCADA Prefumo Lift Station 7/1/2002 14 70%0 20 25,000 70.0%0%0 0
35 Collection SCADA Calle Joaquin Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
36 Collection SCADA Foothill Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
37 Collection SCADA Silver City Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
38 Collection SCADA Airport Lift Station 1/1/2000 16 80%0 20 25,000 80.0%0%0 0
39 Collection SCADA Margarita Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
40 Collection SCADA Tank Farm Lift Station 7/1/2009 7 35%0 20 25,000 35.0%100%25,000 16,250
41 Collection SCADA Laguna Lift Station 7/1/2015 1 5%0 20 25,000 5.0%100%25,000 23,750
42 Collection SCADA Mustang Village (Cal-Poly Flow)7/1/1997 19 76%0 25 25,000 76.0%0%0 0
43 Collection SCADA Computer 1/0/1900 0 0%0 5 25,000 0.0%0%0 0
44 Collection Vehicles Vac-Con Hydro-cleaner 2014 2 17%0 12 350,000 16.7%0%0 0
45 Collection Vehicles Vac-Con Hydro-cleaner 2007 9 75%0 12 350,000 75.0%0%0 0
46 Collection Vehicles Dump Truck / 5 Yard 2008 8 47%0 17 100,000 47.1%0%0 0
47 Collection Vehicles Service Truck/ Utility Bed & Crane 2004 12 100%0 12 75,000 100.0%100%75,000 0
48 Collection Vehicles Service Truck, /Utility Bed 2004 12 100%0 12 70,000 100.0%100%70,000 0
49 Collection Vehicles Van, 1 Ton w/Camera Equipment 2016 0 0%0 10 170,000 0.0%0%0 0
50 Collection Vehicles Pickup Truck, 1/2 Ton 2015 1 8%0 12 20,000 8.3%0%0 0
51 Collection Vehicles Excavator, Mini 2006 10 67%0 15 750,000 66.7%100%750,000 250,000
52 Collection Vehicles Trailer, Tilt 2006 10 67%0 15 6,000 66.7%100%6,000 2,000
53 Collection Vehicles Trailer, Portable Concrete Mixer 2002 14 82%0 17 6,000 82.4%100%6,000 1,059
54 Collection Equipment Pump, Portable (4 inch)2001 15 88%0 17 33,000 88.2%100%33,000 3,882
55 Collection Equipment Pump, Portable (6 inch)2007 9 53%0 17 45,000 52.9%0%0 0
56 Collection Equipment Generator, 240kw Portable 2012 4 27%0 15 121,000 26.7%0%0 0
57 Collection Equipment Generator, 110kW Portable 2015 1 7%0 15 67,000 6.7%0%0 0
58 Collection Equipment Generator, 200kW Portable 2015 1 7%0 15 102,000 6.7%0%0 0
Page 6 of 18
1 City of San Luis Obispo - Wastewater Page 2 of 2
2 Exhibit S-4A
3 Development of Collection Capacity and Connection Fee
4
5
6 System Type Function Description Install Date
Average
Age
(Years)
Life
Cycle
%
Pipe Length
(feet)
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
59
60 TOTAL EXISTING PLANT $259,391,205 $197,461,122 $106,909,803
61
62 Buildout EDUs [3] 36,791
63
64 TOTAL EXISTING COLLECTION PLANT $/EDU $2,906
65
66 FUTURE PLANT [4]Cost in 2016 $
67 Total Collection System Improvements $56,585,280 16.0%$21,847,448
68 Total Pretreatment Improvements 35,000 16.0% 5,600
69 Total Distribution Improvements 577,028 16.0%0
70 Total Water Quality Laboratory Improvements 0 16.0%0
71 Total Administration and Engineering Improvements 82,635 16.0%6,414
72 Total Wastewater Services CIP Requests 8,750,000 16.0%1,400,000
73 Total Shared Information Technology Improvements 230,374 16.0%33,045
74 $66,260,317 23,292,507
75
76 TOTAL FUTURE PLANT $66,260,317 $23,292,507
77
78 Total Future EDUs [5] 5,821
79
80 TOTAL FUTURE COLLECTION PLANT $/EDU $4,002
81
82 TOTAL EXISTING AND FUTURE COLLECTION PLANT $/EDU $6,908
83
84
85
86 Notes:
87 [1] Existing plant based on replacement cost less deprecation.
88 [2] Lift station catchment areas based on City specific analysis based on cost and flow for existing and future plant. See exhibit S-9.
89 [3] See Exhibit S-2 for total EDUs.
90 [4] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit S-7.
91 [5] See Exhibit S-2 for future EDUs.
Page 7 of 18
A B C D F G H I J M N O P
1 City of San Luis Obispo - Wastewater
2 Exhibit S-4B
3 Summary of Existing Catchment Assets
4
5
6 System Type Function Description Install Date
Average
Age
(Years)
Life
Cycle
%
Pipe
Length
(feet)
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost
%
Depr.
% Fee
Eligible
Replacement Cost
New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
7 Existing Plant
8 Collection Lift Stations [2]Calle Joaquin Lift Station 1/1/1973 43 86% 0 50 $4,000,000 0.0% 56% $2,221,850 $2,221,850
9 Collection Lift Stations [2]Foothill Lift Station 1/1/1986 (Old Rockview) 30 60% 0 50 2,098,000 0.0% 77%1,606,979 1,606,979
10 Collection Lift Stations [2]Silver City Lift Station 1/1/1967 49 98% 0 50 2,150,000 0.0% 85%1,830,521 1,830,521
11 Collection Lift Stations [2]Airport Lift Station 1/1/1980 36 72% 0 50 2,130,000 0.0% 30%646,182 646,182
12 Collection Lift Stations [2]Margarita Lift Station 1/1/1967 49 98% 0 50 1,500,000 0.0% 51%758,275 758,275
13 Collection Lift Stations [2]Tank Farm Lift Station 7/1/2009 7 14% 0 50 18,325,682 0.0% 53%9,793,361 9,793,361
14 Collection Lift Stations [2]Laguna Lift Station 7/1/2015 1 2% 0 50 3,121,300 0.0% 76%2,378,019 2,378,019
15
16 Total Existing Catchment Assets $33,324,982 $19,235,186 $19,235,186
17 Total Existing and Future EDUs [1] 36,791
18 TOTAL EXISTING CATCHMENT PLANT $/EDU $523
19
20 Future Plant
21 Collection Lift Stations [2]Margarita $741,725 $741,725
22 Collection Lift Stations [2]Tank Farm 8,532,321 8,532,321
23 Collection Lift Stations [2]Silver City 319,479 319,479
24 Collection Lift Stations [2]Calle Joaquin 1,778,150 1,778,150
25 Collection Lift Stations [2]Laguna 743,281 743,281
26 Collection Lift Stations [2]Airport 1,483,818 1,483,818
27 Collection Lift Stations [2]Foothill 491,021 491,021
28 Collection Lift Stations [2]Buckley 793,118 793,118
29
30 Total Future Catchment Assets $14,882,914 $14,882,914
31 Total Future EDUs [2]5,821
32 TOTAL FUTURE CATCHMENT PLANT $/EDU $2,557
33
34 TOTAL EXISTING AND FUTURE PLANT $34,118,100 $3,080
35
36
37 [1] See Exhibit S-2 for future EDUs.
38 [2] Buckley not built yet.
Page 8 of 18
1 City of San Luis Obispo - Wastewater
2 Exhibit S-5
3 Development of Debt Service Credit [1]
4
5
6 WRRF Energy Efficiency Project Tank Farm Lift Station Financing Tank Farm Lift Station Financing Total
7 Principal Interest Total Principal Interest Total Principal Interest Total Principal
8 I. Debt Status:
9 Interest Rate 2.90%10,000,000$ 2,050,000$
10 Principal $7,479,000 3.25%4.25%
11 Financing Term 15 years 30 15
12
13
II. Outstanding Principal
Payments:
14 2015-16 $418,716 $200,004 $618,720 $257,658 $301,671 $559,328 $130,000 $55,020 $185,020 $806,374
15 2016-17 430,859 187,685 618,544 266,031 292,388 558,419 135,000 49,455 184,455 831,891
16 2017-18 443,354 175,009 618,363 274,678 282,803 557,481 140,000 43,680 183,680 858,032
17 2018-19 456,211 161,965 618,177 283,605 272,907 556,512 145,000 37,695 182,695 884,816
18 2019-20 469,441 148,543 617,985 292,822 262,689 555,511 150,000 31,500 181,500 912,263
19 2020-21 483,055 134,732 617,787 302,338 252,140 554,478 160,000 24,990 184,990 945,394
20 2021-22 497,064 120,520 617,584 312,164 241,247 553,411 165,000 18,165 183,165 974,228
21 2022-23 511,479 105,896 617,375 322,310 230,000 552,310 170,000 11,130 181,130 1,003,788
22 2023-24 526,312 90,849 617,160 332,785 218,388 551,173 180,000 3,780 183,780 1,039,096
23 2024-25 541,575 75,364 616,939 343,600 206,398 549,999 0 0 0 885,175
24 2025-26 557,280 59,431 616,711 354,767 194,019 548,786 0 0 0 912,048
25 2026-27 573,441 43,035 616,477 366,297 181,238 547,535 0 0 0 939,739
26 2027-28 590,071 26,164 616,236 378,202 168,041 546,242 0 0 0 968,273
27 2028-29 607,183 8,804 615,987 390,493 154,415 544,908 0 0 0 997,677
28 2029-30 0 0 0 403,185 140,346 543,530 0 0 0 403,185
29 2030-31 0 0 0 416,288 125,820 542,108 0 0 0 416,288
30 2031-32 0 0 0 429,817 110,822 540,639 0 0 0 429,817
31 2032-33 0 0 0 443,786 95,336 539,123 0 0 0 443,786
32 2033-34 0 0 0 458,209 79,347 537,557 0 0 0 458,209
33 2034-35 0 0 0 473,101 62,839 535,940 0 0 0 473,101
34 2035-36 0 0 0 488,477 45,794 534,271 0 0 0 488,477
35 2036-37 0 0 0 504,353 28,195 532,548 0 0 0 504,353
36 2037-38 0 0 0 520,744 10,024 530,768 0 0 0 520,744
37
38 Total $7,106,043 $1,538,002 $8,644,045 $8,615,711 $3,956,867 $12,572,579 $1,375,000 $275,415 $1,650,415 $17,096,754
39
40 Total EDUs [2]36,791 36,791 36,791 36,791
41
42 Total Debt Service $/EDU $193 $234 $37 $465
43
44
45
46 Notes:
47 [1] Debt service schedules from the City "Sewer Fund Analysis-working copy.xlsx".
48 [2] See Exhibit S-2 for total EDUs.
Page 9 of 18
City of San Luis Obispo - Wastewater
Exhibit S-6
Summary of Reserve Funds
For the Year Ended June 30, 2016
Type Total
% Fee
Eligible [1] $ Fee Eligible
Cash $282,288 100%$282,288
Cash & Equivalents 27,988,970 100%27,988,970
Total $28,271,258 $28,271,258
Less:
Restricted
Debt Service $60,261 0%$0
Subsequent year expenditures 6,505,683 0%0
Committed
Rate Stabilization fund $697,600 0%0
Contingency fund 1,635,400 0%0
Total $8,898,944 $0
Net Available Cash Reserves $19,372,314 $28,271,258
Total EDUs [2]36,791
Total Cash Reserves $/EDU $768
Notes:
[1] Balance as of CAFR June 2016.
[2] See Exhibit S-2 for total EDUs.
Page 10 of 18
1 City of San Luis Obispo - Wastewater Page 1 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
8 Wastewater Collection
9 Collection System Improvements
10 Sewer Lining Project - Design $32,610 $0 $0 $0 $0 $0 $0 $0 $0 $32,610 16.0%$5,218
11 Sewer Lining Project -Construction 425,000 0 0 0 0 0 0 0 0 425,000 16.0%68,000
12 Sewer Lining Project - Construction Management 35,000 0 0 0 0 0 0 0 0 35,000 16.0%5,600
13 RR Crossing @ Jennifer 2,735 0 0 0 0 0 0 0 0 2,735 16.0%438
14 RR Crossing @ Rachel 75,800 0 0 0 0 0 0 0 0 75,800 16.0%12,128
15 Stafford Taft Kentucky 633,527 0 0 0 0 0 0 0 0 633,527 16.0%101,364
16 Telemetry Upgrades 34,203 0 0 0 0 0 0 0 0 34,203 16.0%5,473
17 Radios 50,000 0 0 0 0 0 0 0 0 50,000 16.0%8,000
18 DN-Santa Barbara, Osos, Church, Leff, trench & pipe bursting 60,000 0 0 0 0 0 0 0 0 60,000 16.0%9,600
19 CN-Santa Barbara, Osos, Church, Leff, trench & pipe bursting 0 630,000 0 0 0 0 0 0 0 630,000 16.0%100,800
20 CM-Santa Barbara, Osos, Church, Leff, trench & pipe bursting 0 60,000 0 0 0 0 0 0 0 60,000 16.0%9,600
21 DN-Walnut, Morro, etc cured in place 0 17,000 0 0 0 0 0 0 0 17,000 16.0%2,720
22 CN-Walnut, Morro, etc cured in place 0 0 170,000 0 0 0 0 0 0 170,000 16.0%27,200
23 CM-Walnut, Morro, etc cured in place 0 0 17,000 0 0 0 0 0 0 17,000 16.0%2,720
24 DN-Albert, Slack, etc cured in place 0 17,000 0 0 0 0 0 0 0 17,000 16.0%2,720
25 CN-Albert, Slack, etc cured in place 0 0 170,000 0 0 0 0 0 0 170,000 16.0%27,200
26 CM-Albert, Slack, etc cured in place 0 0 17,000 0 0 0 0 0 0 17,000 16.0%2,720
27 DN-Foothill, etc trench & pipe bursting 0 5,000 0 0 0 0 0 0 0 5,000 16.0%800
28 CN-Foothill, etc trench & pipe bursting 0 0 50,000 0 0 0 0 0 0 50,000 16.0%8,000
29 CM-Foothill, etc trench & pipe bursting 0 0 5,000 0 0 0 0 0 0 5,000 16.0%800
30 DN-Murray, Chorro, Meinecke, etc trench & sewer replacement 0 33,000 0 0 0 0 0 0 0 33,000 16.0%5,280
31 CN-Murray, Chorro, Meinecke, etc trench & sewer replacement 0 0 330,000 0 0 0 0 0 0 330,000 16.0%52,800
32 CM-Murray, Chorro, Meinecke, etc trench & sewer replacement 0 0 33,000 0 0 0 0 0 0 33,000 16.0%5,280
33 DN-Walnut, Morro, etc trench & sewer replacement 0 40,000 0 0 0 0 0 0 0 40,000 16.0%6,400
34 CN-Walnut, Morro, etc trench & sewer replacement 0 0 400,000 0 0 0 0 0 0 400,000 16.0%64,000
35 CM-Walnut, Morro, etc trench & sewer replacement 0 0 40,000 0 0 0 0 0 0 40,000 16.0%6,400
36 DN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 110,000 0 0 0 0 0 0 110,000 16.0%17,600
37 CN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 1,100,000 0 0 0 0 0 1,100,000 16.0%176,000
38 CM-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 110,000 0 0 0 0 0 110,000 16.0%17,600
39 DN-Verde, Luneta, Serrano, Penman, Palomar, etc trench & pipe bursting 0 0 0 120,000 0 0 0 0 0 120,000 16.0%19,200
40 CN-Verde, Luneta, Serrano, Penman, Palomar, etc trench & pipe bursting 0 0 0 0 1,200,000 0 0 0 0 1,200,000 16.0%192,000
41 CM-Verde, Luneta, Serrano, Penman, Palomar, etc trench & pipe bursting 0 0 0 0 120,000 0 0 0 0 120,000 16.0%19,200
42 DN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 0 120,000 0 0 0 0 120,000 16.0%19,200
43 CN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 0 0 1,200,000 0 0 0 1,200,000 16.0%192,000
44 CM-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 0 0 120,000 0 0 0 120,000 16.0%19,200
45 DN-Serrano, Bressi, Palomar, etc trench & pipe bursting 0 0 0 0 0 0 0 75,000 75,000 16.0%12,000
46 CN-Serrano, Bressi, Palomar, etc trench & pipe bursting 0 0 0 0 0 0 0 0 750,000 750,000 16.0%120,000
47 CM-Serrano, Bressi, Palomar, etc trench & pipe bursting 0 0 0 0 0 0 0 0 75,000 75,000 16.0%12,000
48 DN-Johnson, Buchon, etc trench & pipe bursting 0 0 0 0 0 0 0 0 100,000 100,000 16.0%16,000
49 CN-Johnson, Buchon, etc trench & pipe bursting 0 0 0 0 0 0 0 0 0 0 16.0%0
50 CM-Johnson, Buchon, etc trench & pipe bursting 0 0 0 0 0 0 0 0 0 0 16.0%0
51 Study-Foothill Chorro Project 0 60,000 0 0 0 0 0 0 0 60,000 50.0%30,000
52 DN-Foothill Chorro Project 0 0 0 0 0 0 0 450,000 450,000 50.0%225,000
53 CN-Foothill Chorro Project 0 0 0 0 0 0 0 0 7,000,000 7,000,000 50.0%3,500,000
54 CM-Foothill Chorro Project 0 0 0 0 0 0 0 0 700,000 700,000 50.0%350,000
55 Inflow/Infiltration Reduction 100,000 200,000 200,000 200,000 200,000 200,000 250,000 250,000 250,000 1,850,000 50.0%925,000
56 Lateral Replacement Program 0 0 0 0 0 0 0 0 0 0 16.0%0
57 Trench Repair 0 25,000 25,000 25,000 25,000 25,000 0 0 0 125,000 16.0%20,000
58 Raise Manholes 25,000 25,000 25,000 25,000 25,000 25,000 0 0 0 150,000 16.0%24,000
Proposed
Page 11 of 18
1 City of San Luis Obispo - Wastewater Page 2 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
Proposed
59 Telemetry System Improvements 94,807 100,000 0 0 0 0 0 0 0 194,807 16.0%31,169
60 CN-Sewerline Improvement 09-10 0 0 0 0 0 0 0 0 0 0 16.0%0
61 CM-Sewerline Improvement 09-10 0 0 0 0 0 0 0 0 0 0 16.0%0
62 Collection System Infrastructure Replacement Strategy 0 0 0 0 0 0 0 0 0 0 16.0%0
63 Santa Rosa Siphon 520,000 0 0 0 0 0 0 0 0 520,000 16.0%83,200
64 Jennifer St RR Crossing Design 0 0 0 0 0 0 0 0 0 0 16.0%0
65 California Sewerline Rerouting-Study 0 0 0 0 0 0 0 0 0 0 0%0
66 Sewerline Repl Rachel 941 0 0 0 0 0 0 0 0 941 0%0
67 Sewerline Repl Stafford 5,510 0 0 0 0 0 0 0 0 5,510 16.0%882
68 Marsh St Siphon (PW project)271,618 0 0 0 0 0 0 0 0 271,618 16.0%43,459
69 SY-JENNIFER RR/HIG-MARSH 19,222 0 0 0 0 0 0 0 0 19,222 16.0%3,076
70 CN-JENNIFER RR/HIG-MARSH 1,400,000 0 0 0 0 0 0 0 0 1,400,000 16.0%224,000
71 DN-SANTA ROSA SWRLINE REPL 0 0 0 0 0 0 0 0 0 0 16.0%0
72 CN-SANTA ROSA SWRLINE REPL 0 0 0 0 0 0 0 0 0 0 16.0%0
73 CM-Santa Rosa Sewerline Repl 0 0 0 0 0 0 0 0 0 0 16.0%0
74 RR Safety Trail Hath/Taft 0 0 0 0 0 0 0 0 0 0 16.0%0
75 SCADA Upgrade Integration 15,993 0 0 0 0 0 0 0 0 15,993 0%0
76 Recycled Water System-Reservoir Study 0 25,000 0 0 0 0 0 0 0 25,000 0%0
77 RW SCADA Study 0 0 9,000 0 0 0 0 0 0 9,000 0%0
78 Automatic Meter Pilot Study 0 0 4,000 0 0 0 0 0 0 4,000 0%0
79 IT - CityWorks 11,412 0 0 0 0 0 250,000 0 0 261,412 0%0
80 Fleet Replacement: 1/2 Ton Pickup 0 0 0 0 0 0 0 0 0 0 0%0
81 Fleet Replacement: Hydro-Cleaner 0 0 0 410,000 0 0 0 0 0 410,000 16.0%65,600
82 Fleet Replacement: Portable Generators (50% share)0 0 0 0 0 0 0 0 0 0 0%0
83 Fleet Replacement: CCTV Van 135,902 0 0 0 0 0 0 0 0 135,902 16.0%21,744
84 Fleet Replacement: 1 1/2 Ton Service Trucks 144,000 0 0 0 0 0 0 0 0 144,000 16.0%23,040
85 Fleet Replacement: Portable Sewage Pump 36,900 0 0 0 0 0 0 0 0 36,900 16.0%5,904
86 Fleet Replacement: Trailer, Portable Concrete Mixer 0 25,000 0 0 0 0 0 0 0 25,000 16.0%4,000
87 Fleet Replacement: Caterpillar Mini Excavator (pooled)0 0 0 0 0 70,000 0 0 0 70,000 16.0%11,200
88 Catchment [3]
89 Margarita 1,500,000 0 0 0 0 0 0 0 0 1,500,000 49.4%741,725
90 Tank Farm 18,325,682 0 0 0 0 0 0 0 0 18,325,682 46.6%8,532,321
91 Silver City 2,150,000 0 0 0 0 0 0 0 0 2,150,000 14.9%319,479
92 Calle Joaquin 4,000,000 0 0 0 0 0 0 0 0 4,000,000 44.5%1,778,150
93 Laguna 3,121,300 0 0 0 0 0 0 0 0 3,121,300 23.8%743,281
94 Airport 2,130,000 0 0 0 0 0 0 0 0 2,130,000 69.7%1,483,818
95 Foothill 2,098,000 0 0 0 0 0 0 0 0 2,098,000 23.4%491,021
96 Buckley 793,118 0 0 0 0 0 0 0 0 793,118 100.0%793,118
97 Total Collection $38,248,280 $1,262,000 $1,605,000 $1,990,000 $1,690,000 $1,640,000 $500,000 $775,000 $8,875,000 $56,585,280 $21,847,448
98
99 Water Resource Recovery Facility
100 Major Maintenance $1,137,884 $0 $0 $0 $0 $0 $875,000 $875,000 $875,000 $3,762,884 16.0%$602,061
101 Influent Pump Replacement 155,705 0 0 0 0 0 0 0 0 155,705 16.0%24,913
102 WRRF Energy Efficiency 0 0 0 0 0 0 0 0 0 16.0%0
103 Design 1,325 0 0 0 0 0 0 0 0 1,325 16.0%212
104 Construction 3,861 0 0 0 0 0 0 0 0 3,861 16.0%618
105 WRRF Upgrade 0 0 0 0 0 0 0 0 0 16.0%0
106 Study/Environmental 382,151 0 0 0 0 0 0 0 0 382,151 16.0%61,144
107 Program Management 1,305,544 1,500,000 0 0 0 0 0 0 0 2,805,544 16.0%448,887
108 Design 6,063,682 0 0 0 0 0 0 0 6,063,682 16.0%970,189
109 amendment to CH2M 1,000,000 0 0 0 0 0 0 0 1,000,000 16.0%160,000
Page 12 of 18
1 City of San Luis Obispo - Wastewater Page 3 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
Proposed
110 Construction 0 0 0 0 0 0 0 0 0 16.0%0
111 Infrastructure 0 80,000,000 35,000,000 25,000,000 0 0 0 0 0 140,000,000 16.0%22,400,000
112 Disinfection 0 0 0 0 0 0 0 0 0 0 16.0%0
113 Nutrient Removal 0 0 0 0 0 0 0 0 0 0 16.0%0
114 Contingency 0 0 0 0 0 0 0 0 0 0 16.0%0
115 Flood Control 0 0 0 0 0 0 0 0 0 0 16.0%0
116 Construction Management 0 0 0 0 0 0 0 0 0 0 16.0%0
117 WRRF Fiber Optic Impr 0 0 0 0 0 0 0 0 0 0 16.0%0
118 Digester 2 Cleaning 0 0 0 0 0 0 0 0 0 0 16.0%0
119 WRF Sludge Bed 0 0 0 0 0 0 0 0 0 0 16.0%0
120 WRRF Cooling Towers 0 0 0 0 0 0 0 0 0 0 16.0%0
121 IT - iFix Replacement 0 0 0 250,000 0 0 0 0 0 250,000 16.0%40,000
122 IT - HachWims 0 0 0 30,000 0 0 0 0 0 30,000 16.0%4,800
123 IT - MP2 Replacement 0 0 0 30,000 0 0 0 0 0 30,000 16.0%4,800
124 Fleet Replacement: Utility Trucks (3)0 57,600 0 0 0 0 0 0 0 57,600 0%0
125 Fleet Replacement: Sedan 33,000 0 0 0 0 0 0 0 0 33,000 0%0
126 Fleet Replacement: 4-Wheel Drive Loader 0 0 0 0 0 0 0 0 0 0 0%0
127 Fleet Replacement: Pickup Truck w/Flat Bed & Crane 0 0 0 0 0 0 0 0 0 0 0%0
128 Fleet Replacement: Compact Pickup Truck 0 0 0 0 36,000 0 0 0 0 36,000 0%0
129 Fleet Replacement: Decanter Trailer 0 0 0 0 0 0 0 0 0 0 0%0
130 Fleet Replacement: Club Cars - Electric 0 0 60,000 0 0 0 0 0 0 60,000 0%0
131 Fleet Replacement: Dump Truck 0 0 0 0 150,000 0 0 0 0 150,000 0%0
132 Fleet Replacement: Forklift 0 0 0 0 0 55,000 0 0 0 55,000 0%0
133 Total WRRF $10,083,153 $81,557,600 $35,060,000 $25,310,000 $186,000 $55,000 $875,000 $875,000 $875,000 $154,876,753 $24,717,624
134
135 Pretreatment
136 Fleet Replacement: Prius $0 $0 $0 $35,000 $0 $0 $0 $0 $0 $35,000 16.0%$5,600
137 Fleet Replacement: Pickup Truck $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0%0
138
139 Distribution
140 Water Meters and boxes $134,528 $82,500 $90,000 $90,000 $90,000 $90,000 $0 $0 $0 $577,028 0%$0
141
142 Water Quality Laboratory
143 Fleet Replacement: Pickup Truck $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0%$0
144
145 Administration and Engineering
146 From Creek Decom $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0%$0
147 Street Reconstruction 2013 0 0 0 0 0 0 0 0 0 0 0%0
148 EA-UB SYSTEM UPGRADE 0 0 0 0 0 0 0 0 0 0 0%0
149 Fleet Replacement: Prius 0 0 0 35,000 0 0 0 0 0 35,000 0%0
150 Control System Trucks 40,090 0 0 0 0 0 0 0 0 40,090 16.0%6,414
151 879 Morro Refurb 7,545 0 0 0 0 0 0 0 0 7,545 0%0
152 Shared - Mobile Equipment Lifts & Safety Stands 0 0 0 0 0 0 0 0 0 0 0%0
153 Total Admin $47,635 $0 $0 $35,000 $0 $0 $0 $0 $0 $82,635 $6,414
154
155 Total Wastewater Services CIP Requests $0 $0 $0 $0 $1,250,000 $1,500,000 $1,750,000 $2,000,000 $2,250,000 $8,750,000 16.0%$1,400,000
156
157 Shared Information Technology
158 Server Operating System $4,260 $0 $0 $0 $0 $0 $0 $0 $0 $4,260 0.0%$0
159 VOIP 0 15,789 0 0 0 0 0 0 0 15,789 16.0%2,526
160 City Website Upgrade (4% share)0 0 0 0 0 0 0 0 0 0 0.0%0
Page 13 of 18
1 City of San Luis Obispo - Wastewater Page 4 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
Proposed
161 UB System Upgrade 1,667 0 0 0 0 0 0 0 0 1,667 0.0%0
162 Network Firewalls 0 0 0 8,918 0 0 0 0 0 8,918 0.0%0
163 Virtual Private Network (VPN) Replacement 0 0 0 18,958 0 0 0 0 0 18,958 16.0%3,033
164 Network Switching Infrastructure Replacement 0 0 0 27,252 0 0 0 0 0 27,252 16.0%4,360
165 Radio Handhelds and Mobile Replacements 0 42,960 0 0 0 0 0 0 0 42,960 16.0%6,874
166 Tait Radio System 0 0 42,960 0 0 0 0 0 0 42,960 16.0%6,874
167 Document Management System 0 0 0 0 0 0 0 0 0 0 0.0%0
168 Office Application Software Replacement 9,000 0 0 0 0 0 0 0 0 9,000 0.0%0
169 VM Infrastructure 20,615 0 0 20,615 0 0 0 0 0 41,230 16.0%6,597
170 Enterprise Storage Growth 0 0 0 0 0 0 0 0 0 0 0.0%0
171 CA-FOX PRO REPLACE 0 0 0 0 0 0 0 0 0 0 0.0%0
172 CA-LASERFICHE 0 0 0 0 0 0 0 0 0 0 0.0%0
173 GPS System replacement 0 0 0 0 0 0 0 0 0 0 0.0%0
174 UPS Battery Replacement 4,345 8,690 4,345 0 0 0 0 0 0 17,380 16.0%2,781
175 Total Share of Information Technology CIP $39,887 $67,439 $47,305 $75,743 $0 $0 $0 $0 $0 $230,374 $33,045
176
177
178 TOTAL WASTEWATER FUND CAPITAL PLAN $48,553,482 $82,969,539 $36,802,305 $27,535,743 $3,216,000 $3,285,000 $3,125,000 $3,650,000 $12,000,000 $221,137,069 $48,010,131
179
180 Notes:
181 [1] From the City "Sewer Fund Analysis-working copy.xlsx" and additional projects from City.Treatment $24,717,624
182 [2] Based on growth EDUs, growth is 16% of total EDUs, 5,821/36,791 = 16%. See Exhibit S-2. Catchment % fee eligible based on City specific analysis based on wastewater flow of 134 gpd.Collection 23,292,507
Total $48,010,131
OK
Page 14 of 18
City of San Luis Obispo - Wastewater
Exhibit S-8
Allowable Wastewater Capacity and Connection Fees
Component Buy-in +
Upgrade Future Debt
Service
Total
($/EDU)
Full Cost [1]
Treatment $1,145 $4,246 $0 $5,391
Collection 2,906 4,002 0 6,908
Debt Service 0 0 (465) (465)
Cash Reserves 768 0 0 768
------------ ------------ ------------ ------------
Net Allowable Capacity and Connection Fee $4,819 $8,248 ($465)$12,602
Fee without Catchment [2]
Treatment $1,145 $4,246 $0 $5,391
Collection 2,906 4,002 0 6,908
Less: Catchment (523)(2,557) 0 (3,080)
Debt Service 0 0 (465) (465)
Cash Reserves 768 0 0 768
------------ ------------ ------------ ------------
Net Allowable Capacity and Connection Fee $4,296 $5,691 ($465)$9,522
Difference of Full Cost and Without Catchment $523 $2,557 $0 $3,080
Notes:
[1] Catchment infrastructure cost included.
[2] Catchment infrastructure not included. See Exhibit S-4B.
Area
Full Cost
Capacity and
Connection Fee
Fee Cost
without
Catchment
Total
Catchment
Total Fee w/
Catchment
Area Area
City Wide
Fee
Total
Catchment
Total Impact
Fee
Margarita $12,602 $9,522 $3,830 = $3,830 $13,352 Margarita $3,755 $2,764 $2,764 $6,519
Tank Farm 12,602 9,522 3,192 = 3,192 12,714 Tank Farm 3,755 3,655 3,655 7,410
Silver City 12,602 9,522 1,995 434 =2,429 11,951 Silver City 3,755 872 493 =1,365 4,627
Calle Joaquin 12,602 9,522 2,464 434 =2,898 12,421 Calle Joaquin 3,755 1,349 493 =1,842 5,104
Laguna 12,602 9,522 434 = 434 9,957 Laguna 3,755 493 493 4,248
Airport 12,602 9,522 3,180 3,192 =6,372 15,894
Foothill 12,602 9,522 22,319 = 22,319 31,841
Buckley 12,602 9,522 643 = 643 10,165
Current Wastewater Development Impact Fee
Plus: Catchment
Calculated Wastewater Capacity and Connection Fee
Plus: Catchment
Page 15 of 18
City of San Luis Obispo - Wastewater
Exhibit S-9
Summary of Catchment Calculation
Area Wastewater Flow
(Gallons Per Day)% Improvement Cost
Apportionment
Existing Flow 26,529 51%$758,275
Future Flow 25,950 49%741,725 $3,830
Total 52,479 $1,500,000
Existing Flow 411,145 53%$9,793,361
Future Flow 358,204 47%8,532,321 $3,192
Total 769,349 Total Cost $18,325,682
Plus Lag.Total
Existing Flow 122,971 85%$1,830,521
Future Flow 21,462 15%319,479 $1,995 $434 $2,429
Total 144,433 $2,150,000
Plus Lag.Total
Existing Flow 120,827 56%$2,221,850
Future Flow 96,698 44%1,778,150 $2,464 $434 $2,898
Total 217,525 $4,000,000
Existing Flow 733,688 76%$2,378,019
Future Flow 229,324 24%743,281 $434
Total Flow 963,012 $3,121,300
Airport Catchment Area Plus TF.Total
Existing Flow 27,227 30%$646,182
Future Flow 62,521 70%1,483,818 $3,180 $3,192 $6,372
Total Flow 89,748 $2,130,000NOTE: Costs
for the Airport
Existing Flow 9,648 77%$1,606,979
Future Flow 2,948 23%491,021 $22,319
Total Flow 12,596 $2,098,000
Plus TF Total
Existing Flow 0 0%NA
Future Flow 165,233 100%NA $793,118 $643 $643
Total 165,233 NA
Cost attributed Cost attributed
Area to Existing to Future Dev TOTAL
Margarita $758,275 $741,725 $1,500,000
Tank Farm 9,793,361 8,532,321 18,325,682
Silver City 1,830,521 319,479 2,150,000
Calle Joaquin 2,221,850 1,778,150 4,000,000
Laguna 2,378,019 743,281 3,121,300
Airport 646,182 1,483,818 2,130,000
Foothill 1,606,979 491,021 2,098,000
Buckley 0 793,118 793,118
Total $19,235,186 $14,882,914 $34,118,100
Foothill Catchment Area
Laguna Catchment Area
Cost per EDU (134 gallons = 1 EDU)
Buckley Catchment Area
Tank Farm Catchment Area
Margarita Catchment Area
Calle Joaquin Catchment Area
Silver City Catchment Area
Page 16 of 18
City of San Luis Obispo - Wastewater
Exhibit S-10
Summary of Wastewater Capcity and Connection Fee Schedule
CURRENT WASTEWATER DEVELOPMENT IMPACT FEES AS OF 7/1/2017
Land Use Type EDU*Citywide Margarita Tank Farm Silver City Calle Joaquin Laguna
RESIDENTIAL (per unit)
Single Family Residential 1.0 $3,830.21 $2,819.50 $3,728,52 $1,392.80 $1,878.64 $503.30
Multi-Family Residential 0.7 2,681.14 1,973.65 2,609.96 974.96 1,315.05 352.31
Mobile Home 0.6 2,298.12 1,691.70 2,237.11 835.68 1,127.18 301.98
Studio Unit (450 s.f. or less)0.3 1,149.06 845.85 1,118.56 417.84 563.59 150.99
NON-RESIDENTIAL
Meter Size
5/8" to 3/4"-inch 1.0 $3,830.21 $2,819.50 $3,728.52 $1,392.80 $1,878.64 $503.30
1-inch 1.7 6,511.35 4,793.15 6,338.48 2,367.76 3,193.69 855.61
1-1/2 inch 3.4 13,022.70 9,586.30 12,676.96 4,735.53 6,387.37 1,711.22
2-inch 5.4 20,683.11 15,225.30 20,134.00 7,521.13 10,144.65 2,717.81
3-inch 10.7 40,983.19 30,168.64 39,895.14 14,902.98 20,101.44 5,385.30
4-inch 16.7 63,964.42 47,085.64 62,266.25 23,259.79 31,373.27 8,405.09
6-inch 33.4 127,928.85 94,171.28 124,532.51 46,519.58 62,746.54 16,810.17
* Equivalent dwelling unit
CALCULATED CAPACITY AND CONNECTION FEE WITH CATCHMENT AREAS
Land Use Type EDU*Citywide Margarita Tank Farm Silver City Calle Joaquin Laguna Airport Foothill Buckley
RESIDENTIAL (per unit)
Residential (greater than 800 s.f.)1.0 $9,522 $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
Residential (451 s.f. to 800 s.f.)0.7 6,666 2,681 2,234 1,700 2,029 304 4,460 15,623 450
Mobile Home 0.6 5,713 2,298 1,915 1,457 1,739 261 3,823 13,391 386
Studio Unit (450 sf or less)0.3 2,857 1,149 958 729 870 130 1,912 6,696 193
NON-RESIDENTIAL
Meter Size
5/8" to 3/4"-inch 1.0 $9,522 $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
1-inch 1.7 16,188 6,511 5,426 4,129 4,927 738 10,833 37,943 1,093
1-1/2 inch 3.4 32,375 13,022 10,852 8,259 9,855 1,477 21,665 75,885 2,187
2-inch 5.4 51,420 20,683 17,236 13,117 15,651 2,345 34,409 120,523 3,473
3-inch 10.7 101,887 40,982 34,153 25,990 31,013 4,647 68,181 238,815 6,882
4-inch 16.7 159,021 63,963 53,304 40,565 48,403 7,253 106,414 372,730 10,741
6-inch 33.4 318,041 127,925 106,608 81,129 96,807 14,506 212,828 745,460 21,483
CALCULATED CAPACITY AND CONNECTION FEE WITHOUT CATCHMENT AREAS
Full Cost
Land Use Type EDU*
Capacity and
Connection Fee
RESIDENTIAL (per unit)
Residential (greater than 800 s.f.)1.0 $12,602
Residential (451 s.f. to 800 s.f.)0.7 8,821
Mobile Home 0.6 7,561
Studio Unit (450 sf or less)0.3 3,781
NON-RESIDENTIAL
Meter Size
5/8" to 3/4"-inch 1.0 $12,602
1-inch 1.7 21,423
1-1/2 inch 3.4 42,847
2-inch 5.4 68,051
3-inch 10.7 134,841
4-inch 16.7 210,453
6-inch 33.4 420,907
Additional Catchment Area Charges
Capacity and Connection Fee
Impact Fee
Additional Catchment Area Charges
Page 17 of 18
Current Fee Option #3 Option #4
Future Portion of
Treatment Project
plus Financing
Cost
Current Fee plus
Future Portion of
Project plus
Financing Cost
Existing
(Replacement Cost
Less Depreciation)
plus Future plus
Financing Cost
Difference between Option
#1 and Option #2
Existing Fee - Future Capacity Projects
Studies $43,065 $43,065
Design 1,004,844 1,004,844
Construction Infrastructure 4,475,863 4,475,863
Construction Nutrient Removal 11,328,900 11,328,900
Construction management 1,291,942 1,291,942
Unit #3 4,324,359 4,324,359
Unit #4 3,358,717 3,358,717
Total Existing Fee Future Plant $25,827,691 $25,827,691
Existing Fee Future EDUs 6,927 6,927
Existing Fee $/EDU $3,729 $3,729 ($3,729)
New Future Plant
Treatment [1]$25,821,264 $24,717,624 (190)
Collection 0 23,292,507 4,002
Total New Future Plant $25,821,264 $48,010,131
Total New Future EDUs 5,821 5,821
New Future Plant $/EDU $4,436 $8,248
Future Plant $/EDU $3,729 $8,165 $8,248 $83
Existing Plant
Treatment $42,138,027 1,145
Collection 106,909,803 2,906
Plus: Cash balances 28,271,258 768
Total Existing Plant $177,319,088
Total EDUs 36,791
Existing Plant $/EDU $4,819 $4,820
Debt Credit ($465)($465)
Catchment [3]$19,118,800 $14,882,914
Total Future EDUs 6,927 5,821
Catchment Cost per EDU $2,760 $2,557 ($2,557)
Total Future and Existing $/EDU $6,489 $10,721 $12,602 $1,881
Current Fee (ENR
7/1/2017)
Option #1 with
separate
Catchment
Option #2 with
Separate
Catchment
Citywide $3,830.21 $8,165 $9,522 See Exhibit S-8 and S-10
Additional Catchment Area Charges
Margarita $2,819.50 $3,830 $3,830 See Exhibit S-9 and S-10
Tank Farm 3,728.52 3,192 3,192 See Exhibit S-9 and S-10
Silver City 1,392.80 2,429 2,429 See Exhibit S-9 and S-10
Calle Joaquin 1,878.64 2,898 2,898 See Exhibit S-9 and S-10
Laguna 503.30 434 434 See Exhibit S-9 and S-10
Airport 6,372 6,372 See Exhibit S-9 and S-10
Foothill 22,319 22,319 See Exhibit S-9 and S-10
Buckley 643 643 See Exhibit S-9 and S-10
[1] Option #1 is WRRF 20% of growth related equals $30 million project, plus interest at 2%
[2] Future EDUs are net of Vested/ Pending projects
[3] Catchment fee currently is in addition to capacity fee and based on usage in specific area.
Wastewater Capacity Fee and Connection Fee
Page 18 of 18