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Home My WebLink About09/30/2014 05 Drinking Water Connection Fee UpdateITEM TITLE: SUBMITTED BY: SUMMARY EXPLANATION: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 5. For Meeting of: September 30, 2014 Drinking Water Connection Fee Update David Brown, Water/Irrigation Manager Debbie Cook, Utilities and Engineering Director Connection charges are a unit cost of the City's investment in the fixed plant needed to serve its customers with drinking water and to provide fire suppression. The water connection charge study is attached. The City has three components to the drinking water connection charges: Domestic water connection charge – Recovers a proportionate share of the cost of general facilities— those that provide water treatment, transmission, storage, and pumping capacity. Applies to all new connections to the domestic water system. Distribution plant connection charge – Recovers a proportionate share of the cost of local facilities— distribution lines, hydrants, services, and meters—that have not been already paid for through LIDs or developer extensions. Base irrigation charge – Recovers a proportionate share of treatment, transmission, storage, and pumping capacity costs as they apply to customers who use domestic water for irrigation purposes. These charges were first established using the same method as this study used. However in the 17 years since the connection charges were first implemented the costs have increased due to inflation and the numerous capital improvements that have completed in the system, which results in the need to increase fees. The capital improvement program was adopted by Council through the six-year Water System Plan and was incorporated in this study. The method used to calculate the fees is based on the customer's impact to the water system. The larger the service the more demand or the more impact the customer has on the system which results in the customer using more of the system capacity. The study uses three basic components to calculate the fee: Cost Basis for Existing Facilities including supply, treatment, transmission and distribution which includes metering. Cost Basis for Future Facilities including supply, treatment, transmission and distribution which includes metering. This study was completed in November 2012 so two major projects were included in this section, Recycle Lagoons at the Water Treatment Plant and the Automated Meter Reading System (both complete). This study included the projected cost of the Automated Meter Reading as $8,000,000 the project was completed for just over $5,000,000. This component of the fee has been recalculated to reflect the reduction in cost from $1,329 to $1,269 per equivalent residential unit, reflected in a reduced distribution connection charge. Capacity which includes the total capacity of the system to meet demand in million gallons per day, both existing and future. This factor divides into the cost for facilities resulting in the connection fee per equivalent residential unit. Resolution: Ordinance: Other (Specify): Study Contract: Contract Term: Start Date: End Date: Item Budgeted: Yes Amount: Funding Source/Fiscal Impact: Schedule of Charges Strategic Priority: Insurance Required? No Mail to: Phone: 509-575-6204 APPROVED FOR SUBMITTAL: RECOMMENDATION: Improve the Built Environment City Manager Accept study and direct preparation of ordinance ATTACHMENTS: Description Strategic Initiative Connection Charge Study Upload Date 9/26/2014 9/25/2014 Type fi::x htiiibliit Backup IMlateiriiall STRATEGIC INITIATIVE (POLICY ISSUE) CONNECTION CHARGE UPDATE BUDGETED PROPOSAL Connection charges are a unit cost of the City's investment in the fixed plant needed to serve its customers with drinking water and to provide fire suppression. The water connection charge study is attached. The City has three components to the drinking water connection charges: • Domestic water connection charge – Recovers a proportionate share of the cost of general facilities—those that provide water treatment, transmission, storage, and pumping capacity. Applies to all new connections to the domestic water system. • Distribution plant connection charge – Recovers a proportionate share of the cost of local facilities—distribution lines, hydrants, services, and meters—that have not been already paid for through LIDS or developer extensions. • Base irrigation charge – Recovers a proportionate share of treatment, transmission, storage, and pumping capacity costs as they apply to customers who use domestic water for irrigation purposes. These charges were first established using the same method as this study used. However in the 17 years since the connection charges were first implemented the costs have increased due to inflation and the numerous capital improvements that have completed in the system, which results in the need to increase fees. The capital improvement program was adopted by Council through the six-year Water System Plan and was incorporated in this study. The method used to calculate the fees is based on the customer's impact to the water system. The larger the service the more demand or the more impact the customer has on the system which results in the customer using more of the system capacity. The study uses three basic components to calculate the fee: • Cost Basis for Existing Facilities including supply, treatment, transmission and distribution which includes metering. • Cost Basis for Future Facilities including supply, treatment, transmission and distribution which includes metering. This study was completed in November 2012 so two major projects were included in this section, Recycle Lagoons at the Water Treatment Plant and the Automated Meter Reading System (both complete). This study included the projected cost of the Automated Meter Reading as $8,000,000 the project was completed for just over $5,000,000. This component of the fee has been recalculated to reflect the reduction in cost from $1,329 to $1,269 per equivalent residential unit, reflected in a reduced distribution connection charge. • Capacity which includes the total capacity of the system to meet demand in million gallons per day, both existing and future. This factor divides into the cost for facilities resulting in the connection fee per equivalent residential unit. IMPACTS 1. Fiscal Impact — Schedule of Charges Meter Domestic Charge Distribution Charge Meter Size Equivalence Factors Existing New Fee Existing New Fee 3/4 -inch 1.00 $ 474 $ 683 $ 120 $ 585 1 -inch 1.67 $ 790 $ 1,139 $ 199 $ 976 1 1/2 -inch 3.33 $ 1,580 $ 2,278 $ 398 $1,951 2 -inch 5.33 $ 2,528 $ 3,644 $ 638 $3,122 3 -inch 10.67 $ 4,740 $ 7,289 $1,195 $6,244 4 -inch 16.67 $ 7,900 $11,388 $1,992 $9,756 Services over 4 inches are to be calculated using the equivalent residential units the new service will use. Base Irrigation Fee. This fee is calculated separately as many customers have an alternate source of irrigation water and will not be using drinking water to irrigate. The new fee for single family or duplexes in $0.073 per total square foot of lot (this assumes only 60% of the lot is permeable surface). For multiple family, commercial and industrial the fee is $0.1220 per square foot of permeable surface. Please note there is a reduction in the fee from the current fee some $0.017 and $.028 respectively. 2. Proposed Funding Source — Fee increase New water customers 3. Public Impact — Increased cost of new water service 4. Personnel Impact — None 5. Required Changes in City Regulations or Policies — will require an ordinance and public hearing to change rates 6. Legal Constraints, if applicable — 7. Viable Alternatives — Leave fees at current level, rates will continue to subsidize new customers. Raise fees to something less than the calculated need, Redmond Town Center 7525 166's Ave NE, Suite D-215 Redmond, Washington 98052 T: 425.867.1802 F: 425.867.1937 v 225 Bush St. Suite 1825 San Francisco, CA 94104 T: 415.445.8947 F: 415.398.1601 4380 SW Macadam Avenue Suite 220 Portland, OR 97239 T: 503.841.6543 F: 503.841.6573 Technical Memorandum Date: November 6, 2012 To: Dave Brown, Water/Irrigation Division Manager From: Karyn Johnson, Principal Subject: City of Yakima Connection Charges At the City's request, we reviewed the connection charges used by the City of Yakima water system and updated them to reflect current costs and system capacity. Pt I IIY""I11 The City's water system has three types of connection charges: • Domestic water connection charge — Recovers a proportionate share of the cost of general facilities—those that provide water treatment, transmission, storage, and pumping capacity. Applies to all new connections to the domestic water system. • Distribution plant connection charge — Recovers a proportionate share of the cost of local facilities—distribution lines, hydrants, services, and meters—that have not been already paid for through LIDs or developer extensions. • Base irrigation charge — Recovers a proportionate share of treatment, transmission, storage, and pumping capacity costs as they apply to customers who use domestic water for irrigation purposes. Calculating the first two types of charges requires that water system capacity costs, net of contributed capital, be allocated between general facilities and local facilities. Calculating the base irrigation charge requires that the domestic water connection charge be converted from a "per ERU" basis to a "per square foot" basis. Any connection charge is the unit cost of the City's investment in the fixed plant needed to serve its customers. The numerator is the applicable cost of the system's fixed plant, minus contributed capital, plus accrued interest. The denominator is either the number of units served by that plant (demand) or able to be served by that plant (capacity). In this study we continue the City's past practice of using capacity as the denominator rather than demand. ��Y dPm19P III �C , � ✓�.�P 1Pl � (:) oIP°Ilii ° IV is 11(:)1. ort e c:tlII m ), Ir1 , ,M We will explain first the basic components of the connection charge calculation: existing costs, future costs, and existing and future capacity. Except for the allocation between general and local facilities, these components are the same for all three types of connection charges, so we will discuss them together. Technical Memorandum City of Yakima Connection Charges °.�Pvt Basis Ili,sI' 4.'.N II'vV�III II ;� N�..nll Hies IVU"'s The cost basis is the starting point in calculating a connection charge, and it has two components: the cost of existing facilities and the cost of future facilities. The cost basis for existing facilities is discussed first. The following page contains three exhibits that together show different elements of the cost basis for existing facilities. Exhibit 1 summarizes the cost of existing facilities by the year the assets were placed in service. The age of existing assets is important because state law allows the connection charge to include in its cost basis up to ten years of accrued interest, using for each asset the interest rate prevailing at the date it was placed in service. The total asset cost for the Yakima water system is $54.1 million. Exhibit 2 allocates the $54.1 million cost between general and local facilities, then subtracts contributed capital and adds the accrued interest. Contributed capital totals $22.1 million; it is assumed to apply 100% to the distribution system, or local facilities, because most contributed capital results from the extension of local distribution lines by either developers or Local Improvement District projects. (Contributed capital is also referred to as "Contributions in Aid of Construction," abbreviated as "CIAC.") Exhibit 3 adds construction work in progress (CWIP) as of the end of 2011, allocating it between general and local facilities in proportion to the total original cost net of CIAC. FCS GROUP 425-867-1802 Page 2 November 6, 2012 Technical Memorandum City of Yakima Connection Charges Exhibit 1: Summary of Existing Plant in Service by Year Account Asset Description 2003 and Prior 2004 2005 2006 2007 2008 2009 2010 2011 Total 900 Intangible Plant -Water $ 221,830 $ $ - $ 901 Source of Supply - Water 2,242,541 - - 902 Storage 1,899,066 - - 903 Pumping Plant -Water 1,280,515 - - 904 Water Treatment Plant 2,931,970 1,838,431 39,054 4,768,805 905 Transmission Plant -Water 2,804,147 - - - 906 Distribution Plant -Water 25,238,726 1,240,137 540,272 831,099 907 General Water Plant 2,528,630 14,526 5,323 $ $ - $ - $ $ - $ 221,830 - - - - 2,242,541 - - 1,464,474 - - 3,363,540 - - - - 1,280,515 37,511 33,058 - 5,170 9,653,999 - - - - 2,804,147 1,010,954 764,044 667,721 705,855 950,770 31, 949, 579 6,070 - 14,950 - 11,703 2,581,202 $39,147,424 $ 3,093,095 $ 584,649 $ 5,599,904 $ 1,054,535 $ 797,103 $ 2,147,144 $ 705,855 $ 967,643 $54,097,352 Note: Reservoirs and standpipes reclassified from 906 -Distribution Plant to 902 -Storage. Exhibit 2: Existing Plant in Service minus Contributions plus Interest, Allocated between General and Local Facilities Exhibit 3: 2011 Construction Work in Progress — Allocation between General and Local Facilities Construction Work in Progress 2011 Total Balance General Facilities Local Facilities Water Construction Work In Progress $ 3,346,876 $ 1,941,495 $ 1,405,381 Allocate to Local Facilities in proportion to Original Cost net of Contributed Capital. FCS GROUP 425-867-1802 Page 3 November 6, 2012 Total General Facilities Local Facilities Account Asset Description Original Cost Contributed Capital Allocable Interest Cost Original Cost Contributed Capital Allocable Interest Cost Original Cost Contributed Capital Allocable Interest Cost 900 Intangible Plant -Water $ 221,830 $ - $ 137,091 $ 221,830 $ - $ 137,091 $ - $ - $ - 901 Source of Supply - Water 2,242,541 - 1,332,779 2,242,541 - 1,332,779 - - - 902 Storage 3,363,540 - 1,373,889 3,363,540 - 1,373,889 - - - 903 Pumping Plant -Water 1,280,515 - 720,233 1,280,515 - 720,233 - - - 904 Water Treatment Plant 9,653,999 - 3,724,432 9,653,999 - 3,724,432 - - - 905 Transmission Plant -Water 2,804,147 - 1,732,813 2,804,147 - 1,732,813 - - - 906 Distribution Plant -Water 31,949,579 15,917,567 9,934,403 - - - 31,949,579 15,917,567 9,934,403 907 General Water Plant 2,581,202 - 1,598,670 2,581,202 - 1,598,670 - - - Total Fixed Assets $54,097,352 $15,917,567 $20,554,311 $22,147,773 $ - $10,619,908 $31,949,579 $15,917,567 $ 9,934,403 Original Cost less Contributed Capital $38,179,785 $22,147,773 $16,032,012 100.0% 58.0% 42.0% Exhibit 3: 2011 Construction Work in Progress — Allocation between General and Local Facilities Construction Work in Progress 2011 Total Balance General Facilities Local Facilities Water Construction Work In Progress $ 3,346,876 $ 1,941,495 $ 1,405,381 Allocate to Local Facilities in proportion to Original Cost net of Contributed Capital. FCS GROUP 425-867-1802 Page 3 November 6, 2012 Technical Memorandum City of Yakima Connection Charges Exhibit 4 shows the final component of the existing cost basis: the Water Fund cash and debt. Outstanding debt principal is subtracted from the cost basis because when there is outstanding debt that was used for pay for certain assets, today's ratepayers haven't paid for those assets yet, even though the assets are in service. A newly connecting customer becomes a ratepayer and therefore will help pay for those assets through future rates. However, today's ratepayers have helped accumulate cash in the Water Fund. This cash offsets the amount that future ratepayers will have to pay to retire outstanding debt. For that reason, the calculation of the existing cost basis subtracts "net debt principal," which is the outstanding debt principal minus fund cash. (If cash is greater than outstanding debt, net debt principal is zero.) EXHIBIT 4: 2011 Cash and Debt Summaries 2011 Year-end Outstanding Debt Revenue Bonds PWTF Loans SIED Loans Total Outstanding Debt Total Water General Local Allocation Basis Facilities Facilities 58.0% 42.0% $ 1,385,000 $ 4,212,816 $ 10,400 $ 5,608,216 Source: Debt -to -Maturity schedule as of 12/31/11 2011 Year-end Cash Balances Operating Fund Cash Revenue Bond Reserve Account Cash Revenue Bond Redemption Account Cash Total $ 3,253,279 $ 2,354,937 In proportion to Assets net of CIAC 58.0% 42.0% $ 1,214,008 $ 704,236 $ 509, 772 $ 347,968 $ 201,853 $ 146,115 $ 14,281 $ 8,284 $ 5,997 $ 1,576,257 $ 914,373 $ 661,884 Source: 2011 Financial Statements - Comparative Statements of Cash Flows In proportion to Assets net of CIAC In proportion to outstanding debt In proportion to outstanding debt Exhibit 5 shows how the existing cost basis is calculated, using all the above components. For general facilities, the total is $32.4 million; for local facilities, the total is $25.7 million. Exhibit 5: Calculation of Cost Basis for Existing Facilities Existing Cost Basis Total General Facilities Local Facilities PLANT -IN-SERVICE Utility Capital Assets plus: Construction Work in Progress less: Contributed Capital plus: Interest on Non -Contributed Plant Existing Cash Balances $ 1,576,257 less: Debt Principal Outstanding (5,608,216) less: Net Debt Principal Outstanding $ (4,031,959) $ 54,097,352 $ 22,147,773 3,346,876 (15, 917, 567) 20, 554, 311 1,941,495 10, 619, 908 914,373 (3,253,279) $ (2,338,906) $ 31,949,579 1,405,381 (15, 917, 567) 9,934,403 661,884 (2,354,937) $ (1,693,053) TOTAL EXISTING COST BASIS $ 58,049,013 $ 32,370,270 $ 25,678,743 yg PglJ i 11 s for HAAT V' 9 t l T ga 11 II V' IVn Exhibit 6 on the following page shows the water utility's 2012-16 Capital Improvement Plan (CIP), which is the source for the future cost basis. FCS GROUP 425-867-1802 Page 4 November 6, 2012 Technical Memorandum City of Yakima Connection Charges Exhibit 6: Capital Improvement Plan 2012-2016 FCS GROUP 425-867-1802 Page 5 2012 Dollars (including Inflation) R&R Upgrade Expansion 2010 Dollars Description 2012 2013 2014 2015 2016 Total Costs 2012-2016 General Facilities Local Facilities Source of Supply 3,719,797 1,058,324 -- 1,058,324 - - - Leak Detection 132,290 20,000 20,000 132,290 20,000 60,000 60,000 - Water Treatment Plant -- 6,349,943 20,981,058 - - - WTP PLC Replacement 250,000 250,000 250,000 - WTP Lagoons / electrical service 400,000 3,114,800 3,514,800 3,514,800 - Intake Flood Repair 1,000,000 1,000,000 1,000,000 - Distribution - - - Automated Metering Infrastructure 1,500,000 6,500,000 8,000,000 - 8,000,000 Open Gear Vale Replacement 25,000 25,000 25,000 25,000 25,000 125,000 - 125,000 Private Water Main Replacement 175,000 175,000 175,000 175,000 175,000 875,000 - 875,000 Lead -Oakum Joint Line Replacement 2,000,000 2,000,000 2,000,000 6,000,000 - 6,000,000 Total Capital Projects in 2010 Dollars 2,100,000 11,084,800 2,220,000 2,200,000 2,220,000 19,824,800 4,824,800 15,000,000 Total Projects in 2012 Dollars 2,222,480 11,731,308 2,349,479 2,328,312 2,349,479 20,981,058 5,106,201 15,874,858 Repair & Replacement Project Costs 211,665 1,534,570 2,328,312 2,328,312 2,328,312 8,731,172 1,322,905 7,408,267 Upgrade Project Costs 2,010,815 10,196,739 21,166- 21,166 12,249,887 3,783,296 8,466,591 Expansion Project Costs - - - - - - - - FCS GROUP 425-867-1802 Page 5 2012 Dollars (including Inflation) R&R Upgrade Expansion Total Costs 2012-2016 63,499 - 63,499 264,581 -- 264,581 - 3,719,797- 3,719,797 1,058,324 -- 1,058,324 - 8,466,591- 8,466,591 132,290 -- 132,290 926,033 -- 926,033 6,349,943 -- 6,349,943 20,981,058 8,731,172 8,731,172 12, 249, 887 12, 249, 887 November 6, 2012 Technical Memorandum City of Yakima Connection Charges The 2011 Water Master Plan expressed its project cost estimates in 2010 dollars, so Exhibit 6 uses the ENR Construction Cost Index to convert the estimates into 2012 dollars. It also separates the projects between those that improve general facilities versus those that improve local facilities. Finally, Exhibit 6 classifies the projects into one of three categories: repair & replacement (R&R) projects, upgrade projects, and expansion projects. This classification determines whether a particular project can be included in the future cost basis for the connection charge. Expansion projects are always eligible to be included; R&R projects are generally ineligible. For upgrade projects, it depends on the particular methodology used for the connection charge. Exhibit 7 summarizes the future cost basis for the connection charges, assuming the "integrated methodology" that we are recommending for the connection charges. With this methodology, upgrade projects can be included in the future cost basis. Exhibit 7: Summary of Cost Basis for Future Facilities Future Cost Basis Total General Facilities Local Facilities CAPITAL IMPROVEMENT PLAN Total Future Projects (2012 CIP net of CIAC) less: Repair & Replacement Portion of Projects $ 20,981,058 $ 5,106,201 (8,731,172) (1,322,905) $ 15,874,858 (7,408,267) TOTAL FUTURE COST BASIS $ 12,249,887 $ 3,783,296 $ 8,466,591 may 4 II / After the existing and future costs are determined, the final component of the connection charge calculation is the denominator—the system capacity, expressed in equivalent residential units (ERUs). Exhibit 8 shows the 2010 and projected 2020 total water system capacity in million gallons per day (mgd), according to the 2011 Water Master Plan. Because the CIP goes out only to 2016, we interpolated on a straight-line basis to estimate 2016 figures. Exhibit 8 shows that in 2010, maximum day demand (MDD) was at 90% of total system capacity. Exhibit 8: Capacity and 2010-2016 Projected Demand (million gallons per day) Capacity and Projected Demand (mgd) Source: 2011 Water Master Plan, Table 3-22. Total System Capacity - Non -Drought Year (mgd) Maximum Daily Demand (MDD) (mgd) Unused Capacity (mgd) % Unused Capacity Interpolation 2010 2020 2016 25.00 22.40 2.60 10% 25.00 24.70 0.30 1% 25.00 23.78 1.22 5% Exhibit 9 shows the conversion of the system capacity figure from mgd to ERUs. According to City staff, the average water consumption per ERU is 270 gallons per day. Assuming a peaking factor of 1.75 (from Table 2-33 of the 2011 Water Master Plan), the maximum -day water consumption per ERU is 473 gpd, which implies a total capacity of 52,910 ERUs. Since the CIP does not contain any capacity -enhancing projects through 2016, this capacity figure applies to 2016 as well as the present. FCS GROUP 425-867-1802 Page 6 November 6, 2012 Technical Memorandum City of Yakima Connection Charges Exhibit 9: Capacity and 2010-2016 Projected Demand (ERUs) Capacity and Projected Demand iim ERUs Total System Capacity - Non -Drought. Year (i d) Interpolation 2010 2020 2015 Equivalent Residential Unit (ERU'):: Average Usage per ERU (gpd') Peaking Factor Peak Usage per ER.0 (gpd) Sources: Dave Brown & 2011 Water Master Plan,, able 2-33 Total System Capacity - Non -Drought Year (ERUs) Maximum Daily Demand (MM) (ERUs) 25.00 25.00 25.00 270 270 270 1..75 1..75 1..75 473 473 473 52,910, 52,910, 52,910, 47,.407 52,,.275 50,,328 This capacity figure is an overall system constraint, so we are treating it as applicable to both general facilities and local facilities. CU � nr lltiltuinllc: arid :Agri tintition 1G ,uirllruo c:•(wlll III �� :III III c. it a Exhibit 10 shows the calculation of both the domestic water connection charge and the distribution plant connection charge, assuming an "integrated" methodology, in which the total existing plus future cost basis is divided by the total projected capacity. This approach provides a simple, easily replicated methodology that takes into account a broad range of existing and future costs and still tends to be stable over time. It yields a domestic connection charge of $683 per ERU, which is an increase over today's $474 per ERU. For the distribution plant connection charge, the increase is greater: $645 per ERU, compared with the current charge of $120 per ERU. Exhibit 10: Connection Charge Calculation Connection Charge Calculation Total Domestic Charge Distribution Charge Existing Cost Basis Future Cost Basis (including upgrade projects) Total Cost Basis Total Projected Capacity (ERUs) Total Charge per ERU $ 58,049,013 12,249,887 $ 70,298,900 52,910 $ 1,329 $ 32,370,270 3,783,296 $ 36,153,566 52,910 $ 683 $ 25,678,743 8,466,591 $ 34,145,334 52,910 $ 645 Assumes integrated methodology - total existing plus future costs divided by total projected capacity. Includes Upgrade projects from CIP. Exhibit 11 provides a schedule of charges for various meter sizes, based on the "per ERU" amounts shown in Exhibit 10. For meters larger than 4", we recommend that the connection charges be determined on a case-by-case basis, based on the projected water demand of the particular building in relation to the "per ERU" charges shown in Exhibit 10. FCS GROUP 425-867-1802 Page 7 November 6, 2012 Technical Memorandum City of Yakima Connection Charges Exhibit 11: Domestic and Distribution Plant Connection Charges by Meter Size Schedule of Charges Meter Domestic Charge Distribution Charge Meter Size Equivalence Existing Calculated Existing Calculated Factors 3/4 -inch 1.00 $ 474 $ 683 $ 120 $ 645 1 -inch 1.67 $ 790 $ 1,139 $ 199 $ 1,076 1 1/2 -inch 3.33 $ 1,580 $ 2,278 $ 398 $ 2,151 2 -inch 5.33 $ 2,528 $ 3,644 $ 638 $ 3,442 3 -inch 10.67 $ 4,740 $ 7,289 $ 1,195 $ 6,884 4 -inch 16.67 $ 7,900 $ 11,388 $ 1,992 $ 10,756 va V.;'ii:".."i iV'tion IIV"ge The base irrigation charge applies to properties that will be relying on the domestic water system for irrigation purposes, either because they are newly connecting to domestic service (but not irrigation service) or because their irrigation service has been discontinued. This charge is based on the cost of the domestic system, not the irrigation system. In effect, it is an additional increment of domestic system capacity that must be committed because a particular property uses domestic water for both purposes. In the 2008 update to the connection charges, the amount of the base irrigation charge for one ERU was equivalent to the amount of the domestic connection charge. In other words, someone connecting a property to the domestic water system for both domestic and irrigation purposes was assumed to be requiring, on average, twice as much water during the peak season as someone who connects only for domestic purposes. However, according to the 2011 Water Master Plan, the relationship between the maximum daily demand and average daily demand is 1.75, which implies that the additional requirement created by using a domestic water connection for irrigation purposes is equivalent to only .75 times the requirement for domestic purposes. Given the recommended domestic connection charge of $683 per ERU, the assumed equivalent amount for irrigation purposes alone is $683 multiplied by .75, or $512 per ERU. The base irrigation charge is expressed in "per square foot" terms rather than "per ERU" terms, reflecting the relationship between irrigation demands and lot size. For single-family and duplex lots, the charge is based on total square feet. For other lots, the charge is calculated (at the owner's option) based on either total square feet or permeable square feet, with permeable square feet assumed to average 60% of total square feet. We continued the assumption from the prior study that a typical single-family lot would be 7,000 total square feet. For a 7,000 square foot lot, $512 per ERU is equivalent to $.073 per square foot. Assuming an average of 60% coverage with permeable surface, $512 per ERU is equivalent to $.122 per permeable square foot. These results are summarized in Exhibit 12. FCS GROUP 425-867-1802 Page 8 November 6, 2012 Technical Memorandum City of Yakima Connection Charges Exhibit 12: Calculation of Irrigation Base Charges Domestic System Unit Cost ($/ERU) $ 683 Peaking factor 1.75 Incremental requirement due to irrigation service $ 512 Assumed square footage 7,000 Irrigation Connection Charge ($/square foot) $ 0.073 Assumed % permiable square feet per lot 60% Irrigation Connection Charge ($/permiable s.f.) $ 0.1220 FCS GROUP 425-867-1802 Page 9 November 6, 2012