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METHODOLOGY: <br />City of Eugene Systems Development Charges <br />. Appendix C <br />Wastewater System Charge Detail <br />1.0 Local (City) Wastewater System <br />1.1 Local Wastewater SDC Formula <br />The general methodology used to develop SDCs includes the following four steps: <br />• Determine value of growth-related capacity <br />• Define system capacity <br />• Calculate unit cost of growth-related capacity <br />• Develop SDC rate schedule <br />Each step is discussed below and related information is displayed in Table 4, page C-4. <br />1.1.1 Step 1 -Determine Value of Growth-Related Capacity <br />` (in 1998 dollars -- see current values in Table 4, page C-4) <br />In Eugene, as in most communities, a portion of the capacity needed to serve new <br />development will be met through a combination of existing available system <br />capacity, and additional capacity added by planned system improvements. The <br />reimbursement fee is intended to recover the costs associated with the growth- <br />related (or available) capacity. in the existing system, and the improvement fee is <br />based on the costs of capacity-increasing future improvements needed to meet the <br />demands of growth. <br />Reimbursement Fee <br />Calculation of the reimbursement fee begins with a review of utility fixed asset <br />records to determine the value of the existing local wastewater system. The <br />system value is based on Replacement Cost New which is a method that involves <br />assigning asset values on the basis of what it would cost in current dollars to <br />construct an equivalent set of infrastructure assets subject to current market <br />conditions, regulatory requirements, and technological advances. The total value <br />of the existing local wastewater system, including gravity lines (net of <br />assessments), force mains (or pressure lines), and pump stations was estimated <br />to be $96.1 million. Approximately. $8.9 million of assets were funded from grants. <br />Like assessments, grant funds are deducted from the system value in the SDC <br />analysis because general system users. did not fund these assets... Net of grants, <br />the total value of the existing system is approximately $87.2 million. <br />Because reimbursement fees are intended to recover the value of the system's <br />unused or available capacity, the total equity in the system is split between existing <br />..customers and new development based on the estimated proportionate use of <br />'.:capacity. The reimbursement cost basis is equal to the system equity associated <br />.with the capacity available to serve new customers.. Approximately 52% of the <br />existing system is available to meet the demands of new customers. Therefore, <br />the value of available (orgrowth-related) capacity in the existing system is $45.3 <br />million (net of grants). <br />City of Eugene SDC Methodology Wastewater,. Page. C-1 <br />_ _ _ _. <br />