HDR Engineering Inc. 10/6/2022 (2)

F Project Manager and Task Lead. • A summary and overview of the data needs, key inputs, and study goals and objectives. Task 4—Connection charge Update—This task calculates the connection charges for the water, sewer, and surface water utilities. The City's past methodology for calculating the connection charges considers both existing facilities and future facilities to meet the additional capacity necessary to service new customers. The method for calculating the charge is to take the existing value of the individual utility and divide it by the number of current and future equivalent capacity units plus the value of future facilities divided by the number of future equivalent capacity units. Washington State statute for the calculation of connection fees also allows the inclusion of up to 10 years of interest on existing infrastructure. • Water Utility - The water connection charge will consider the existing value of plant components including filtration, transmission, and distribution. The methodology develops a cost per equivalent meter for each of these plant components. The City's planning documents will be used to establish the available equivalent meters and the future equivalent meters added by future expansion related capital infrastructure projects. For the buy-in component, the value of existing plant in service for backbone infrastructure assets includes up to 10 years of interest costs. Outstanding debt principal and contributions in aid of construction (CIAC) are then subtracted from the plant value to arrive at the allowable existing system value for the buy-in component of the connection charge calculation. This value is then divided by the existing and future equivalent meters to produce a by component buy-in connection charge. The future capacity component is calculated by examining the City's water capital improvement plan and determining which, and to what degree, projects are related to capacity. The value of the projects deemed to be capacity are summed and divided by the estimated future equivalent meters to arrive at the future capacity connection charge. The sum of the buy-in and future capacity components provides the cost basis for an equivalent meter for filtration, transmission, and distribution plant components. The existing methodology also apportions these costs to Mukilteo and Silver Lake customers who pay only a portion of the total connection charge per equivalent meter. • Sewer Utility-The sewer connection charge will be developed in a manner like the water connection charge methodology described above. In the case of the sewer connection charge, the plant components are segregated between treatment and collection assets. The result of this portion of the analysis will be a sewer connection charge per equivalent meter like the water connection charge. • Surface Water Utility—the surface water connection charge is also calculated in a similar fashion as both water and sewer. There are only distribution and retention assets for the surface water utility. The main difference is that "capacity" or "equivalent units" will be measured and defined as impervious surface units (ISU). At the conclusion of the study, hdrinc.com 929 108th Avenue NE Suite 1300 Bellevue,WA 98004-4361 (425)450-6200