Item # 14.
Preliminary Cost Estimate South Auburn Phase 2
Regional Drainage Improvements
PROJECT DESCRIPTION:
Limits:
Proposed Improvement (Scope):
TOTAL DRAINAGE IMPROVEMENT ITEMS $919,512
ROCK EXCAVATION 10% $91,951
TOTAL PROJECT CONSTRUCTION COSTS $1,011,463
ENVIRONMENTAL MITIGATION 10% $101,146
ENGINEERING DESIGN COSTS 15% $151,719
CONSTRUCTION MANAGEMENT 12.5% $126,433
PROJECT CONSTRUCTION COSTS $1,011,463
TOTAL BASE PROJECT COSTS $1,390,761
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along South Auburn from Berryman Street to Hwy 49 Frontage Replace the existing undersized and inadequate system with a new pipe or equivalent arch pipe (Approximately 1250 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#11 (Nodes 3 to 12)
SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-5
Item # 14.
Preliminary Cost Estimate Slide Ravine
Local Drainage Improvements
PROJECT DESCRIPTION:
Limits:
Proposed Improvement (Scope):
TOTAL DRAINAGE IMPROVEMENT ITEMS $407,515
ROCK EXCAVATION 50% $203,758
TOTAL PROJECT CONSTRUCTION COSTS $611,273
ENVIRONMENTAL MITIGATION 10% $61,127
ENGINEERING DESIGN COSTS 20% $122,255
CONSTRUCTION MANAGEMENT 15.0% $91,691
PROJECT CONSTRUCTION COSTS $611,273
TOTAL BASE PROJECT COSTS $886,345
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Slide Ravine from upstream end of Centerville Flume Phase 4 to Carol Drive Replace the existing inadequate natural channel with a new 42" pipe (Approximately 500 LF of new pipe). COGV Storm Drainage Master Plan (1986) (Nodes14 to the 500' north)
SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-11 Page 349
Item # 14.
Preliminary Cost Estimate Woodpecker Ravine
Regional Drainage Improvements
PROJECT DESCRIPTION:
Limits:
Proposed Improvement (Scope):
TOTAL DRAINAGE IMPROVEMENT ITEMS $798,363
ROCK EXCAVATION 10% $79,836
TOTAL PROJECT CONSTRUCTION COSTS $878,199
ENVIRONMENTAL MITIGATION 10% $87,820
ENGINEERING DESIGN COSTS 15% $131,730
CONSTRUCTION MANAGEMENT 12.5% $109,775
PROJECT CONSTRUCTION COSTS $878,199
TOTAL BASE PROJECT COSTS $1,207,523
ESTIMATE PREPARED February 2022
BASE YEAR 2022
From a point in Colfax Avenue (200' feet west of Henderson Street) to a point in Memorial Lane (470ft south of Colfax Avenue)
Replace the existing undersized pipe with a new 60" pipe or equivalent arch pipe (Approximately 650 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#6 (Nodes40 to 44)
SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-2 Page 350
Item # 14.
Preliminary Cost Estimate Washington-Bennett
Local Drainage Improvements
PROJECT DESCRIPTION:
Limits:
Proposed Improvement (Scope):
TOTAL DRAINAGE IMPROVEMENT ITEMS $78,672
ROCK EXCAVATION 50% $0
TOTAL PROJECT CONSTRUCTION COSTS $78,672
ENVIRONMENTAL MITIGATION 2% $1,573
ENGINEERING DESIGN COSTS 20% $15,734
CONSTRUCTION MANAGEMENT 15.0% $11,801
PROJECT CONSTRUCTION COSTS $78,672
TOTAL BASE PROJECT COSTS $107,780
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Bennett Street from Wolf Creek to East Main Street and along Richardson Street between East Main Street and Washignton Street
Replace the existing inadequate drainage system (Constructed as part of Richardson Street Extension Project) with a new 18" pipe. COGV Storm Drainage Master Plan (1986) (PN#24,Nodes1 to 7) Construction Cost based on actual cost.
SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-23 Page 351
Item # 14.
Prepared by NBS for the City of Grass Valley
APPENDIX B
Fee Comparison
Item # 14.
City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8 Residential - Single Family or >1,200 s.f.
Parks $2945.92 per d.u. $2,985.31 - $3,127.46 per d.u. $3,500 per d.u. $1.99 per s.f. Community Park Fee: $711 per $2,495 - $2,428 Fire $870.19 per d.u. $603.88 - $738.08 per d.u. $362.66 per d.u. $1.20 per s.f. $0.42 per s.f.
Police $346.82 per d.u. $606.49 - $673.88 per d.u. n/a n/a n/aGeneral Gov't. / Public Buildings $478.57 per d.u. $1,158.19 - $1,213.34 per d.u. n/a $1.55 per s.f. n/aStorm Drainage $822.51 per d.u. $ 1,722.17 per Acre $1,507 per ESU $1059.96 - $1795.3 per EDU n/a n/a n/a Residential - Multi-Family or <1,200 s.f.
Parks $2423.49 per d.u. $2,700.99 - $2,843.15 per d.u. $3,500 per d.u. $2.85 per s.f. Community Park Fee: $569 per $1,721 - $2,428 Fire $715.87 per d.u. $295.23 - $469.68 per d.u. $383.09 per d.u. $1.20 per s.f. $0.42 per s.f.
Police $289.13 per d.u. $404.44 - $505.41 per d.u. n/a n/a n/aGeneral Gov't. / Public Buildings $393.87 per d.u. $1,047.89 - $1,103.04 per d.u. n/a $1.55 per s.f. n/aStorm Drainage $241.45 per d.u. 2,583.25 $ per Acre $1,507 per ESU $1059.96 - $1795.3 per EDU n/a n/a n/a
CITY OF GRASS VALLEY
Community
Services Fee
$7,607.72 per EDU
Community
Services Fee
$7,607.72 per EDU
COMPARISON AGENCIES
Proposed Fee 3
Public Facilities
Fee: $4,187 per
d.u.
Public Facilities
Fee: $2,130 per
d.u.
NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 1 of 5
Item # 14.
City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8
CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Commercial
Parks n/a n/a $994.82 per KSF n/a n/a n/aFire
$463.38 - $772.29
per range of gross
leasable area
$ per KSF 372.31
$620 per KSF Retail;
$1,620 per KSF
Restaurant/Bar/Lou
nge
$370.82 per KSF $1.27 per s.f. $0.84 per s.f.
Police
$382.82 - $635.05
per range of gross
leasable area
$ per KSF n/a 731.15 1,419.94 $ n/a n/a
General Gov't. / Public Buildings
$154.33 - $256.96
per range of gross
leasable area
$ per KSF n/a 231.11 529.17 $ $1.57 per s.f. n/a
Storm Drainage $116.40 per KSF of impervious surface $ per Acre $1,507 per ESU 3,444.34 $518.95 - $879.26 per KSF n/a n/a n/a n/a
Public Facilities
Fee: $1.12 per s.f.
NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 2 of 5
Item # 14.
City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8
CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Hotel/Lodging
Parks n/a n/a n/a n/a n/a n/aFire $164.75 per Room $ 600.94 per Room $530 per KSF n/a $1.27 per s.f. n/a $0.84 per s.f.Police $126.88 per Room $ 465.13 per n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $54.93 per Room $ 121.37 per n/a n/a $1.57 per s.f. n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Office
Parks n/a n/a $994.82 per KSF n/a n/a n/aFire
$854.95 - $1037.95
per range of gross
leasable area
$ per KSF $290 per KSF $370.82 per KSF $1.85 per s.f. $0.79 per s.f. 102.39 Police
$174.50 - $297.36
per range of gross
leasable area
$ per KSF n/a $731.15 per KSF n/a n/a 219.69
General Gov't. / Public Buildings
$288.54 - $345.66
per range of gross
leasable area
$ per KSF n/a $231.11 per KSF $1.57 per s.f. n/a 470.91 Storm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU $518.95 - $879.26 per KSF n/a n/a n/a n/a
Public Facilities
Fee: $1.49 per s.f.
n/a
NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 3 of 5
Item # 14.
City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8
CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Medical Office
Parks n/a n/a n/a n/a n/a n/a Fire $939.51 per KSF $ 663.49 per KSF $ 1,050 n/a $1.85 per s.f. n/a $0.79 per s.f.Police $472.71 per KSF $ 1,412.88 per KSF n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $312.51 per KSF $ 451.49 per KSF n/a n/a $1.57 per s.f. n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Hospital Facilities
Parks n/a n/a n/a n/a n/a n/a Fire $782.82 per KSF $ 2,213.05 per KSF $1,050 per KSF n/a $1.82 per s.f. n/a n/a Police $229.87 per KSF $ 1,514.74 per KSF n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $260.82 per KSF $ 3,514.83 per KSF n/a n/a n/a n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Light Industrial
Parks n/a n/a $1521.13 per KSF n/a n/a n/a Fire $534.73 per KSF $ 44.20 per KSF $110 per KSF $370.82 per KSF $0.91 per s.f. $0.44 per s.f. Police $91.36 per KSF $ 120.72 per KSF n/a $731.15 per KSF n/a n/aGeneral Gov't. / Public Buildings $18.55 per KSF $ 208.75 per KSF n/a $352.96 per KSF $0.96 per s.f. n/aStorm Drainage $112.79 per KSF $ 3,444.34 per Acre $1,507 per ESU $622.95 - $1054.70 per KSF n/a n/a n/a n/a
Public Facilities
Fee: $0.74 per s.f.
n/a n/a
NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 4 of 5
Item # 14.
City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8
CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Manufacturing
Parks n/a n/a $1521.13 per KSF n/a n/a n/a Fire $391.61 per KSF $ 102.87 per KSF $110 per KSF $370.82 per KSF n/a n/a $0.44 per s.f. Police $49.95 per KSF $ 59.87 per KSF n/a $731.15 per KSF n/a n/a n/aGeneral Gov't. / Public Buildings $138.13 per KSF $ 300.99 per KSF n/a $352.96 per KSF n/a n/a n/aStorm Drainage $112.79 per KSF $ 3,444.34 per Acre $1,507 per ESU $622.95 - $1054.70 per KSF n/a n/a n/a Warehouse
Parks n/a n/a n/a n/a n/a n/a Fire $295.40 per KSF $ 41.70 per KSF n/a n/a $0.91 per s.f. n/a $0.44 per s.f. Police $64.89 per KSF $ 104.45 per KSF n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $98.75 per KSF $ 92.24 per KSF n/a n/a $0.96 per s.f. n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Notes:
1 DU = dwelling unit; KSF = 1,000 gross sq ft of building area2 Residential - >1,200 s.f. assumes Single Family rate; <1,200 s.f. assumes Multi Family rate; 3 Proposed fees are maximum fees established by the NBS Impact Fee Study4 Auburn fees effective 20225 Lincoln fees effective October 1, 20196 Truckee fees as of February 2022; 7 Rocklin Fee Schedule eff. 7/1/22; Public Facilities fees include public safety, and general government facilities8 County of Nevada Park and Recreation Facilities Mitigation Fees FY 23; Nevada County Consolidated Fire District Fees as of August 2022, n/an/a
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Item # 14.
Water & Wastewater
Capacity Fee Study
Draft Report
May 2023
OFFICE LOCATIONS:
Temecula – Corporate Headquarters
32605 Temecula Parkway, Suite 100
Temecula, CA 92592
San Francisco – Regional Office
870 Market Street, Suite 1223
San Francisco, CA 94102
California Satellite Offices
Atascadero, Davis
Huntington Beach,
Joshua Tree, Riverside
Sacramento, San Jose
www.nbsgov.com Page 358
Item # 14.
Prepared by NBS – May 2023 TOC
Water & Wastewater Capacity Fee Study Report – City of Grass Valley
TABLE OF CONTENTS
Section 1. Executive Summary ............................................................................................... 1 Background and Purpose ............................................................................................... 1 Overview of Capacity Fee Program Methodology ......................................................... 1 Section 2. Water Capacity Fee Study...................................................................................... 3 Existing Connections and Projected Future Growth...................................................... 3 Existing and Planned Assets........................................................................................... 3 Adjustments to the Cost Basis........................................................................................ 6 Calculated Capacity Fees – Water Utility ....................................................................... 6 Water Capacity Fee Findings Statements ...................................................................... 8 Section 3. Wastewater Capacity Fee Study........................................................................... 10 A. Existing Connections and Projected Future Growth.................................................... 10 B. Existing and Planned Future Assets.............................................................................. 11 C. Adjustments to the Cost Basis...................................................................................... 12 D. Calculated Capacity Fees – Wastewater Utility............................................................ 14 E. Wastewater Capacity Fee Findings Statements........................................................... 14 Section 4. Recommendations and Next Steps....................................................................... 16 Consultant Recommendations and Next Steps............................................................ 16 Principal Assumptions and Considerations.................................................................. 16 Appendix A. Water Capacity Fee Study Summary Tables...................................................... 17 Appendix B. Wastewater Capacity Fee Study Summary Tables............................................. 19
Item # 14.
Prepared by NBS – May 2023 TOF
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Table of Figures
Figure Page
Figure 1. Current Water Customers..............................................................................................................3 Figure 2. Existing and Projected Service Numbers – Water Utility...............................................................3 Figure 3. Summary of Existing Asset Values – Water Utility.........................................................................4 Figure 4. Planned Assets Allocated to Current & Future Customers – Water Utility ...................................5 Figure 5. Cash Reserves Allocated to Future Customers – Water Utility......................................................6 Figure 6: Debt Service Allocated to Future Customers – Water Utility ........................................................6 Figure 7. Summary of Cost Basis Allocated to Future Customers – Water Utility........................................7 Figure 8. Summary of New Base Capacity Fees – Water Utility ...................................................................7 Figure 9. Updated Water Capacity Fees .......................................................................................................8 Figure 10. Current Equivalent Dwelling Units.............................................................................................11 Figure 11. Existing and Projected Service Numbers – Wastewater Utility .................................................11 Figure 12. Summary of Existing Asset Values – Wastewater Utility ...........................................................12 Figure 13. Planned Assets Allocated to Current & Future Customers - Wastewater Utility ......................12 Figure 14. Cash Reserves Allocated to Future Customers – Wastewater Utility........................................13 Figure 15. Debt Service Allocated to Future Customers – Wastewater Utility...........................................13 Figure 16. Summary of Cost Basis Allocated to Future Customers – Wastewater Utility ..........................14 Figure 17. Summary of New Base Capacity Fee – Wastewater Utility .......................................................14
Item # 14.
Prepared by NBS – May 2023 1
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Section 1. Executive Summary
Background and Purpose
The City of Grass Valley retained NBS to conduct a water and wastewater capacity fee study in conjunction with the recent water and wastewater rate study for two primary reasons: (1) to ensure that the fees are updated to comply with legal requirements and industry standards, and (2) to ensure that these fees reflect the cost of capital infrastructure needed to serve new connections, or any person requesting additional capacity in the City’s water and/or wastewater utility (referred to throughout as “future customers”).
The fees updated in this study are commonly referred to as “connection fees,” “capital facility fees,” “system development charges,” or in this case, “capacity fees.” The terms are often used interchangeably, and California Government Code Section 66013 defines these types of fees (referred to as a “capacity charge”) as a one-time “charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities.”
It authorizes public agencies to impose capacity fees on customers connecting to or upsizing their connection to the water and/or wastewater systems. The fee is intended to ensure that they pay their fair share of existing utility asset costs plus the costs of new facilities needed to serve them. In its simplest form, capacity fees are the result of dividing the cost (or value) of the current system assets plus planned capital improvements, by the expected number of future customers. As a result, future customers connecting to the City’s water and/or wastewater utilities would enter as equal participants along with current customers regarding their financial commitment and obligations to the utilities.
Whereas water and sewer rate increases imposed on existing customers require a protest ballot under Proposition 218, capacity fees do not because they are considered an appropriate funding mechanism for facilities that benefit new development. These fees may be imposed by a majority vote of the governing legislative body, which in this case is the Grass Valley City Council. This report provides the documentation and findings necessary for the adoption of the proposed capacity fees.
Overview of Capacity Fee Program Methodology
Various methodologies have been and are currently used to calculate water and wastewater capacity fees. The following lists the most common methodologies from the American Water Works Association’s Principles of Water Rates, Fees and Charges1
, also referred to as Manual M1:
• The value of existing (historical) system assets, often called a “system buy-in” methodology. 1 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, Manual M1, American Water Works Association (AWWA), Seventh Edition, 2017.
Item # 14.
Prepared by NBS – May 2023 2
Water & Wastewater Capacity Fee Study Report – City of Grass Valley • The value of planned future improvements, also called the “incremental” or “system development” methodology.
• A combination of these two approaches.
This analysis uses the “Combination Approach,2” which requires new customers to pay both their fair share of existing system assets as well as their share of the planned future capital improvements needed to provide them with capacity in the City’s water and wastewater systems.
In its simplest form, capacity fees are calculated by dividing the costs allocated to future development by the anticipated number of units for new development as defined below:
• Costs of planned future facilities and improvements required to serve new development are those that can reasonably be allocated to future development. • The number of new units (i.e., growth) are those units projected to occur within the timeframe covered by the capacity fee analysis.
Capacity fees are one-time fees intended to reflect the cost of existing infrastructure and planned improvements available to new services, which place new utility customers or existing customers requesting an increase in service capacity on equal basis from a financial perspective with existing customers. Once new customers are added to the system, they then incur the obligation to pay the same service charges or water and wastewater rates that existing rate customers pay.
This capacity fee study and the recommended fees assume a given level of development activity over the course of the study period based on data available from the City’s 2016 Water System Master Plan. The development that occurs may result in both different impacts and fee revenues than those that are calculated in this study. For that reason, regular updates are recommended to adjust the fees to match the needs created by the rate of actual development.
In developing the proposed fees, NBS worked cooperatively with City staff. The fees presented in this study reflect input provided by City staff regarding financial matters, available capacity in the water and wastewater systems, existing asset values, and planned capital improvements.
Sections 2 and 3 discuss in more detail the development of the water and wastewater capacity fees and presents the updated fees recommended for new and upsized connections. 2 Method of calculating capacity fees (also known as System Development Fees, Connection Fees, Capital Facility Fees) are set forth in the American Water Works Association’s Principles of Water Rates, Fees and Charges Seventh Edition (2017) pages 311 to 347.
Item # 14.
Prepared by NBS – May 2023 3
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Section 2. Water Capacity Fee Study
Existing Connections and Projected Future Growth
The City currently has approximately 2,453 equivalent 3/4-inch water meters connected to the water system. For the purpose of this study, 5/8-inch meters are treated the same as 3/4-inch meters; which is a common industry practice when setting rates and fees for smaller meter sizes. Figure 1 shows the current number of equivalent meters connected to the system by customer class.
Figure 1. Current Water Customers
Figure 2 shows the existing and projected service numbers for the water utility. The anticipated future connections are based on the City’s projected water demand from the 2016 Water Master Plan. Using the projected water demand as a proxy to calculate the anticipated addition of water service accounts, new customers will be allocated about 13% of existing assets, planned assets, cash and debt in the capacity fee calculation, as shown in Figure 2.
Figure 2. Existing and Projected Service Numbers – Water Utility Existing and Planned Assets
The capital assets addressed in this study include existing assets and planned capital improvements (i.e. the system buy-in and incremental assets). An important aspect of this study is how the value of existing utility assets is determined. For example, the purchase price does not account for wear and tear, and current book value (i.e., purchase price less accumulated depreciation) typically underestimates the “true value” of facilities as it does not account for cost increases over time. Therefore, this study uses the replacement-cost-new-less-depreciation (RCNLD) approach summarized in Figure 3 to estimate existing asset values that reflects estimated cost inflation and depreciation.
Residential 1,510
Multi Family Residential 376
Commercial Institutional 372
Manufacturing Industrial 13
Open Space/Public 51
Office Professional 131
TOTAL 2,453
1. Existing unit estimates from the 2016 Water System Master Plan.
Source file: rpt_wmp_grass_valley_FINAL_PRINT_20160520.pdf Demographic Statistics Existing
Units
Existing
Customers
New
Customers
Projected
Demand
%
Increase
Projected Annual Water Demand 387 MG 445 MG 87.0% 13.0% 58 MG 15.0% Water Service Accounts 2,453 2,821 87.0% 13.0% 368 15.0%
1. Projected water demand estimates from the 2016 Water System Master Plan. Source file: rpt_wmp_grass_valley_FINAL_PRINT_20160520.pdf % Allocation Factors Cumulative Change Buildout
Total1 Demographic Statistics Existing
Item # 14.
Prepared by NBS – May 2023 4
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Figure 3. Summary of Existing Asset Values – Water Utility The RCNLD is calculated by escalating the book value of existing assets to current-day values using inflation factors from the Handy-Whitman Index of Public Utility Construction Costs for Water Utility Construction.
Figure 3 summarizes the System Buy-In Cost Basis by Asset Category for the water utility. For this analysis, assets that have exceeded their useful life (as defined in the City’s asset records) were considered to have no remaining value. This approach was used for all assets, except land, which does not depreciate.
The system cost basis was allocated to current customers based on the 87% allocation factor previously shown in Figure 2. Figure 3 shows the allocation of the $17.9 million system buy-in costs to current and future customers. Future customers are allocated approximately $2.33 million of the existing water utility assets, or about 13%.
The cost estimates for planned future improvements used to calculate the system development component of the capacity fees are allocated using the same allocations factors developed in Figure 2, as these projects benefit both current and future customers. Figure 4 includes a list of future capital improvement projects; where future customers are allocated about $2.2 million of the planned capital costs.
The City may have additional capital projects that are needed to serve future developments, and the costs of such projects may be recovered through a development agreement. This will be evaluated on a case by case basis as part of the development review process.
Existing
Customers
Future
Customers
Existing
Customers
Future
Customers
WATER TREATMENT PLANT $ 9,752,134 87.0% 13.0% $ 8,481,070 $ 1,271,065 TANKS 502,719 87.0% 13.0% 437,196 65,523
MAINS & HYDRANTS 7,570,596 87.0% 13.0% 6,583,866 986,729 WATER MACHINERY & EQUIPMENT 120,778 87.0% 13.0% 105,036 15,742 Total Capital Facilities & Equipment $ 17,946,227 87.0% 13.0% $15,607,168 $ 2,339,059
1. Source file for Grass Valley current water assets as of July 2021: Fixed Assets & Deprc. FY 2020-21_JT.xlsx
2. Based on proportionate allocation between existing and future users. See Table 2 in Exhibit 1 for demographic expectations.
Asset Category1
System
Buy-In
Cost Basis
Allocation Basis (%)2 Distribution of Cost Basis ($)
Item # 14.
Prepared by NBS – May 2023 5
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Figure 4. Planned Assets Allocated to Current & Future Customers – Water Utility Existing
Customers
Future
Customers
Existing
Customers
Future
Customers
Replace 4" on E. Main Street. Install 6"
pipeline, and hydrants $ 260,000 Future 0.0% 100.0% $ - $ 260,000 Replace 2" steel line $ 80,000 Current/Future 87.0% 13.0% $ 69,573 $ 10,427 Replace water main with 8" water main,
extend 2" water line and connect 2
parcels
$ 140,000 Future 0.0% 100.0% $ - $ 140,000
Upgrade to 2", no hydrant $ 80,000 Future 0.0% 100.0% $ - $ 80,000 Construct 4 new services with meters $ 30,000 Current/Future 87.0% 13.0% $ 26,090 $ 3,910 Eliminate dead end system on Kendall St. $ 210,000 Current/Future 87.0% 13.0% $ 182,629 $ 27,371 Replace 4" line and tie to 6" line $ 130,000 Current/Future 87.0% 13.0% $ 113,056 $ 16,944 Replace 2" steel like with 8" line $ 230,000 Future 0.0% 100.0% $ - $ 230,000 Replace 2" and tie in to 12" $ 230,000 Current/Future 87.0% 13.0% $ 200,022 $ 29,978 Replace with 6" pipe Maryland Dr. $ 250,000 Current/Future 87.0% 13.0% $ 217,416 $ 32,584 Upgrade to 6" North Church St. $ 250,000 Current/Future 87.0% 13.0% $ 217,416 $ 32,584 Upgrade to 6" on Temby St. $ 160,000 Current/Future 87.0% 13.0% $ 139,146 $ 20,854 Reround line from Wood St to N. Auburn $ 90,000 Current/Future 87.0% 13.0% $ 78,270 $ 11,730 Install new pipelines to increase Fire flow $ 1,100,000 Current/Future 87.0% 13.0% $ 956,629 $ 143,371 Install new 6" pipeline at Cornwall $ 100,000 Current/Future 87.0% 13.0% $ 86,966 $ 13,034 Upgrade to 8" at Stacy Ln. $ 300,000 Current/Future 87.0% 13.0% $ 260,899 $ 39,101 Install new booster pump and check
valves $ 260,000 Current/Future 87.0% 13.0% $ 226,112 $ 33,888 Rehab Empire Tank coating systems $ - Current/Future 87.0% 13.0% $ - $ - Remove and waste existing booster
pumps
$ 10,000 Current/Future 87.0% 13.0% $ 8,697 $ 1,303
Piping upgrades for new pumps $ 40,000 Current/Future 87.0% 13.0% $ 34,787 $ 5,213 Install flow control valve on new pump
discharge $ 20,000 Current/Future 87.0% 13.0% $ 17,393 $ 2,607 Install new booster pumps $ 260,000 Current/Future 87.0% 13.0% $ 226,112 $ 33,888 Upsize downstream main $ 270,000 Current/Future 87.0% 13.0% $ 234,809 $ 35,191 Install new booster pump for Empire Ct. $ 260,000 Current/Future 87.0% 13.0% $ 226,112 $ 33,888 Booster pump check valves $ 110,000 Current/Future 87.0% 13.0% $ 95,663 $ 14,337 Install streaming current monitor in
influent channel $ 60,000 Current/Future 87.0% 13.0% $ 52,180 $ 7,820 Install flow control valve on raw water
influent line $ 140,000 Current/Future 87.0% 13.0% $ 121,753 $ 18,247 Replace Flocculator Paddles $ 550,000 Current/Future 87.0% 13.0% $ 478,315 $ 71,685 Replace catwalks between flocculation
and sedimentation basins $ 480,000 Current/Future 87.0% 13.0% $ 417,438 $ 62,562 Repair cracks in sedimentation basin $ 200,000 Current/Future 87.0% 13.0% $ 173,933 $ 26,067 Replace filter media and repair filter basin
walls $ 230,000 Current/Future 87.0% 13.0% $ 200,022 $ 29,978 Replace filter underdrain and overflow
troughs (requires inspection of existing
facilities)
$ 350,000 Current/Future 87.0% 13.0% $ 304,382 $ 45,618 Upgrade plant water system - pumps
hydropneumatics, etc. ( requires
inspection of existing facilities)
$ 590,000 Current/Future 87.0% 13.0% $ 513,101 $ 76,899 Replace sodium hypochlorite tank $ 100,000 Current/Future 87.0% 13.0% $ 86,966 $ 13,034 Install sunshade structure over chemical
storage tanks $ 200,000 Current/Future 87.0% 13.0% $ 173,933 $ 26,067 Stormwater sump improvements at
treated water storage tanks $ 200,000 Current/Future 87.0% 13.0% $ 173,933 $ 26,067 Water recycle pumps in storage basin $ 280,000 Current/Future 87.0% 13.0% $ 243,506 $ 36,494 Ongoing generator maintenance program $ 40,000 Current/Future 87.0% 13.0% $ 34,787 $ 5,213 Install paperless recorders to replace
chart recorders $ 130,000 Current/Future 87.0% 13.0% $ 113,056 $ 16,944 Upgrade plant SCADA system $ 240,000 Current/Future 87.0% 13.0% $ 208,719 $ 31,281 Future Projects 3 $ 2,465,833 Current/Future 87.0% 13.0% $ 2,144,444 $ 321,390 Total $ 11,125,833 81.4% 18.6% $ 9,058,264 $ 2,067,569
1. Estimated capital improvement project costs found in source files: rpt_wmp_grass_valley_FINAL_PRINT_20160520.pdf, Appendix
2. Costs allocated to current and future determined in City CIP file.
3. Future projects estimated at $750,000 annually starting in FY 32, and future customers are estimated to be responsible for 25% of total costs through FY 2042.
Capital Project Description1
Future Cost
Estimate
(thru 2042)1
Funding Source1
% Allocation Distribution of Cost Basis ($) 2
Item # 14.
Prepared by NBS – May 2023 6
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Adjustments to the Cost Basis
Before the capacity fees are developed, an adjustment is applied to the cost basis to account for existing cash reserves and outstanding debt. Existing cash reserves are treated as an asset because they were funded by current customers and are available to pay for capital and/or operating costs of the water utility that future customers will benefit from, once connected. The cash reserves are, in a sense, no different than any other water utility asset. The existing cash reserves allocated to current and future customers are summarized in Figure 5 using the same percent allocation factors from Figure 2. Future customers are credited about $442,000 of cash reserves.
Figure 5. Cash Reserves Allocated to Future Customers – Water Utility Since new connections pay their share of existing asset values, including the debt payments on those same assets would double count the asset values included in the capacity fees. Therefore, future customers are credited approximately $408,000 is credited towards future customers as shown in Figure 6.
Figure 6: Debt Service Allocated to Future Customers – Water Utility Calculated Capacity Fees – Water Utility
The sum of the existing and future planned asset values (i.e., the system buy-in and system development costs), along with the adjustment for cash reserves, defines the total cost basis allocated to future customers. Figure 7 summarizes this calculation.
Existing
Customers
Future
Customers
Existing
Customers
Future
Customers
Un-restricted Reserves
Water Operating Reserve Fund $ 2,054,755 87.0% 13.0% $ 1,786,944 $ 267,811 Working Capital Reserve Fund $ 325,000 87.0% 13.0% $ 282,640 $ 42,360 System Reinvestment Reserve Fund $ 360,663 87.0% 13.0% $ 313,655 $ 47,008 Emergency Reserve Fund $ 300,000 87.0% 13.0% $ 260,899 $ 39,101 Restricted Reserves
Debt Service Reserve Fund2 $ 350,761 87.0% 13.0% $ 305,044 $ 45,717 Connection Fee Reserve Fund3 $ - 87.0% 13.0% $ - $ -
Total Beginning Cash $ 3,391,179 87.0% 13.0% $ 2,949,183 $ 441,996
1. Beginning cash balance for the Water Fund is found in trial balance. Source File: Trial Balance - Water_Sewer as of 092021.pdf Cash Balances for individual funds from City staff: Email from Dec. 9, 2021
2. Beginning cash balance for two debt reserves from City staff: Email from Dec. 9, 2021
3. Connection fees are used for applicable items each year as they are collected.
Connection Fee revenue from current budget: Water_Sewer Budget Report FY2021-22.pdf $ - Allocation Beginning
Cash1
% Allocation
Cash Reserves
Existing
Customers
Future
Customers
Existing
Customers
Future
Customers
2020 Pension Bonds - Capital One $ 842,306 87.0% 13.0% $ 732,522 $ 109,784 Municipal Finance Corporation - Solar Equipment Lease $ 368,336 87.0% 13.0% $ 320,328 $ 48,008 Bank of America Leasing - Automated Meter Reading $ 834,880 87.0% 13.0% $ 726,065 $ 108,816 State of California Safe Drinking Water Loan $ 1,090,791 87.0% 13.0% $ 948,620 $ 142,170 Grand Total $ 3,136,313 87.0% 13.0% $ 2,727,535 $ 408,778
1. Grass Valley debt schedules for water funds in source file: Water & Sewer Debt Schedules - June 30, 2020.xlsx $ - Allocation
Bond Issue Outstanding
Principal
% Allocation
Item # 14.
Prepared by NBS – May 2023 7
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Figure 7. Summary of Cost Basis Allocated to Future Customers – Water Utility The total adjusted cost basis is then divided by the number of future customers, measured in 3/4-inch meter equivalents, expected to connect to the water utility (that is, the 368 meter equivalents) in order to determine the base capacity charge for a 3/4-inch water meter. This calculation is shown in Figure 8.
Figure 8. Summary of New Base Capacity Fees – Water Utility Based on the combined system buy-in and incremental capacity fee methodology, and the assumptions used in this analysis, NBS has calculated the new water capacity fees by meter size, as shown in Figure 9.
The updated fees represent the maximum that the City can charge for new connections.
Larger meters have the potential to use more of the system’s capacity, compared to smaller meters. The potential capacity demanded by each meter is proportional to the maximum hydraulic flow through each meter size as established by AWWA’s hydraulic capacity ratios. The hydraulic capacity ratios (also known as flow factors, or meter equivalencies) used in this study are shown in the second column of Figure 9.
The maximum flow rate, in gallons per minute (gpm) for each size meter is used to determine the number of equivalent 1-inch meter units currently connected to the water system.
For example, a 2-inch meter has a greater capacity, or potential peak demand than a 3/4-inch meter. The “equivalency to a 3/4-inch meter” is calculated by dividing the maximum capacity or flow of larger meters by the capacity of the base (3/4-inch) meter size. The meter capacity factors shown in Figure 9 are the ratio of potential flow through each meter size compared to the flow through a 3/4-inch meter. For instance, column three in Figure 9 shows that the equivalency of a 2-inch meter is 3.20 times greater compared to a 3/4-inch meter.
The actual number of meters by size is multiplied by the corresponding meter equivalency to calculate the total number of equivalent meters. The number of equivalent meters is used as a proxy for the potential demand that each customer can place on the water system. A significant portion of a water system’s peak capacity, and in turn the utility’s fixed capital costs, is related to meeting system capacity requirements. Therefore, the capacity fee for a new connection will be proportional to the service’s meter equivalence.
System Asset Values Allocated to Future Development
Costs Included in Existing System Buy-In:
Existing Assets1 $ 2,339,059
Planned, Future Capital Projects2 2,067,569
Total: Existing & Future System Costs $ 4,406,628
Adjustments to Cost Basis:
Cash Reserves3 $ 441,996
Outstanding Long-Term Debt (Principal)3 (408,778)
Total: Adjustments to Cost Basis $ 33,218
Total Cost Basis for New Development $ 4,439,847
Summary of Capacity Fee
Calculation
Adjusted
System
Cost Basis
Build-Out Total
(Units)
Base Capacity
Fee
Proposed Capacity Fee $ 4,439,847 368 $12,077
Item # 14.
Prepared by NBS – May 2023 8
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Figure 9. Updated Water Capacity Fees
Water Capacity Fee Findings Statements
The new water capacity fees calculated in this report are based on regulatory requirements and generally accepted industry standards, and further detailed in Appendix A. This study concludes the following findings:
• The purpose of the City’s water capacity fee is to ensure that new and upsized connections reimburse and/or mitigate a reasonable portion of the City’s planned capital investment projects.
These investments benefit and/or are necessary to accommodate the increased demand for water service.
• The City uses capacity fee proceeds to fund capital investments in the water system, which include the future design and construction of planned facilities. • Capacity fees for new water customers vary depending on the size of the water meter serving the connection. Meter size is generally proportionate to the demands that a parcel places on the water utility system, specifically the peaking requirements related to the meter size. • The City has made investments in water infrastructure and plans to invest further in expanded and upgraded facilities. These investments make possible the availability and continued reliable provision of utility service of high-quality water sufficient to meet the demands of growth within the City’s service area.
• Without capital investment in existing facilities, the water system capacity available to serve the needs of future connections would be uncertain. Without planned investments in future facilities, water service would not be sustainable at the level of service received by current users.
The total value of planned water system assets that are attributable to serving future connections is identified in Appendix A.
• Upon payment of a capacity fee, a new customer incurs the obligation to pay the same ongoing service rates as existing customers, regardless of the date of connection to the system or the Meter Capacity
(gpm)
Equivalency to
3/4-inch meter
Current Fee $11,681
5/8 inch 30 1.00 $12,077
3/4 inch 30 1.00 $12,077
1 inch 50 1.67 $20,128
1.5 inch 100 3.33 $40,256
2 inch 160 5.33 $64,410
3 inch 320 10.67 $128,820
4 inch 500 16.67 $201,281
6 inch 1,000 33.33 $402,561
8 inch 1,600 53.33 $644,098
1. Meter flow rates are from AWWA M-1 Table B-1.
Meter Size
Standard Meters1
Displacement Meters
Compound Class I Meters
Capacity Fee by
Meter Size
Item # 14.
Prepared by NBS – May 2023 9
Water & Wastewater Capacity Fee Study Report – City of Grass Valley actual start of service. These fees ensure that, over time, ongoing service rates are not disproportionately burdened by the accommodation of system growth.
Item # 14.
Prepared by NBS – May 2023 10
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Section 3. Wastewater Capacity Fee Study
The same methodology used to calculate the City’s capacity fees for the water utility was used for the wastewater utility (i.e., a combination of the system buy-in and incremental cost methods). This combination approach requires new customers to pay both their fair share of existing system assets as well as their share of the planned future capital improvements needed to provide them with capacity in the City’s wastewater system. As a result, new customers connecting to the City’s wastewater system would enter as equal participants to the existing customers regarding their financial commitment and obligations to the utility.
The wastewater capacity fees also used the replacement-cost-new-less-depreciation (RCNLD) value of existing system assets to calculate the system buy-in component of the capacity fee. Inflation values from the Handy Whitman Index of Public Utility Construction Costs for Water Utility Construction were used to estimate the replacement value of the existing system assets. NBS believes this is an accurate inflation index and can be used for wastewater utilities.
A detailed summary of the wastewater utility’s capacity fee calculations is included in Appendix B.
A. Existing Connections and Projected Future Growth
Different types of customers have the potential to use more of the wastewater system’s capacity depending on the flow and the strength of wastewater effluent. The potential capacity demanded is therefore proportional to the type of customer (i.e., single-family residential, multi-family residential, Class-A, Class-B, Class-C, or Class-D commercial, etc.).
The number of equivalent dwelling units (EDUs) is used as a variable for the potential demand that each customer can place on the wastewater system. A significant portion of a wastewater system’s capacity and, in turn, the utility’s fixed capital costs, are related to meeting system capacity requirements.
Therefore, the capacity fee for a new service will be proportional to the number of EDUs assigned to each connecting customer.
The result of the analysis on projected future growth summarized in Figure 10 shows that there are currently 4,425 connections to the City’s wastewater system, there are 7,602 EDUs.
Item # 14.
Prepared by NBS – May 2023 11
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Figure 10. Current Equivalent Dwelling Units
The wastewater capacity fee analysis assumes the EDU growth is proportional to the growth of vacant parcels per the 2016 Wastewater Master Plan. The result, as shown in Figure 11, is the expected 1,726 new EDUs which is approximately a 18.5% allocation of costs to these future customers.
Figure 11. Existing and Projected Service Numbers – Wastewater Utility B. Existing and Planned Future Assets
The wastewater utility’s capital assets include existing assets and planned capital improvements (i.e., the system buy-in and incremental assets). As with the water capacity fee, the estimated replacement costs (RCNLD value) were developed as the cost basis for the new wastewater capacity fees.
After adjustments to account for assets that were considered to have no remaining value, the resulting RCNLD value of existing assets are summarized in Figure 12 as the System Buy-In Cost Basis. The RCNLD costs were allocated to existing users based on the 81.5% allocation factor shown in Figure 11 and 18.5% allocation factor for future users). The resulting allocation of existing system assets to existing and future users is shown in Figure 12 where future users are allocated about $11.9 million of existing wastewater assets.
Existing
Number of
Accounts1
Existing
Equivalent
Units (EDUs)1
Single Family/Duplex 3,406 3,542
Multi Family 207 2,465
Mobile Home 2 2
Commercial Base
Class A Usage 562 1,015
Class B Usage 14 223
Class C Usage 59 98
Class D Usage 33 35
GV FLAT 37 59
NID FLAT 51 109
Compound Meter 5 5
NO-CHARGE NID METERS 49 49
Total 4,425 7,602
1. Number of meters and EDUs from November 2021.
Meter Size
Existing
Customers
New
Customers
Population
increase
%
Increase
Vacant Parcel growth 14,910 18,296 81.5% 18.5% 3,386 22.7% Estimated EDU growth 7,602 9,329 81.5% 18.5% 1,726 22.7%
1. Vacant parcel growth estimate for long term estimated in 2016 Wastewater Master Plan.
Estimated EDU growth calculated from the percent allocated to new customers from population growth estimates.
Source file: wastewater_master_plan.pdf, page 3.10
Long Term
Estimated
Growth1
Existing
Total Demographic Statistics
% Allocation Factors Cumulative Change
Item # 14.
Prepared by NBS – May 2023 12
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Figure 12. Summary of Existing Asset Values – Wastewater Utility The estimated cost of planned future improvements is used to calculate the system development component of the capacity fee through FY 2041/42. The City’s current plan is updated annually with the City Budget, so an assumption of $1.5 million in annual CIP is used in future years. Based on the 18.5% allocation factor for a few of the projects, future customers were allocated about $3.2 million of these future capital project costs, as shown in Figure 13.
Figure 13. Planned Assets Allocated to Current & Future Customers - Wastewater Utility C. Adjustments to the Cost Basis
Two adjustments were made to the cost basis to account for existing wastewater cash reserves and outstanding debt. Existing cash reserves are treated as an asset since they are no different than other wastewater assets. The existing cash reserves allocated to future customers is about $985,000, as summarized in Figure 14.
Existing
Customers
Future
Customers
Existing
Customers
Future
Customers
Sewer Fund
Sewer Treatment Plant & Buildings $ 386,879 81.5% 18.5% $ 315,280 $ 71,599 Sewer Treatment Plant Improvements $ 49,223,284 81.5% 18.5% 40,113,641 9,109,644 Sewer Mains $ 13,856,926 81.5% 18.5% 11,292,455 2,564,470 Sewer Machinery & Equipment $ 864,673 81.5% 18.5% 704,650 160,023 Total Capital Facilities & Equipment $ 64,331,762 81.5% 18.5% $ 52,426,026 $ 11,905,736
1. Source file for Grass Valley current sewer assets as of July 2022: Fixed Assets & Deprc. FY 2020-21.xlsx
2. Based on proportionate allocation between existing and future users. See Table 2 in Exhibit 1 for demographic expectations.
Asset Category1
System
Buy-In
Cost Basis1
Allocation Basis (%)2 Distribution of Cost Basis ($)
Exclude
from
Analysis
Existing
Customers
Future
Customers
Exclude from
Analysis
Existing
Customers
Future
Customers
NPDES 2008-13 $ 60,000 100.0% 0.0% 0.0% $ 60,000 $ - $ - Annual Sewer Maintenance 200,000 100.0% 0.0% 0.0% 200,000 - - Annual WWTP Project 1,300,000 100.0% 0.0% 0.0% 1,300,000 - - Slate Creek Life Station 450,000 0.0% 81.5% 18.5% - 366,720 83,280 2018 WWTP Improvements 50,000 0.0% 81.5% 18.5% - 40,747 9,253 Sewer Rate Study 100,000 100.0% 0.0% 0.0% 100,000 - -
Pipeline Improvements 2,780,000 0.0% 81.5% 18.5% - 2,265,512 514,488 Lift Station Improvements 70,000 0.0% 81.5% 18.5% - 57,045 12,955 WWTP Improvements 6,800,000 0.0% 81.5% 18.5% - 5,541,539 1,258,461 Future Projects2 7,125,000 0.0% 81.5% 18.5% - 5,806,392 1,318,608 Total $ 18,935,000 6.7% 57.1% 13.0% $ 1,660,000 $ 14,077,954 $ 3,197,046
1. FY2021/22 capital improvement project costs from budget found in source file: Water_Sewer Budget Report FY 2021-22.pdf, Some assets are excluded because they do not contribute to system growth.
2. Future projects estimated at $1.5 million annually, and future customers are estimated to be responsible for 25% of total through FY 2042.
Capital Project Description1
Future Cost
Estimate
(thru FY41/42)1
% Allocation Distribution of Cost Basis ($)
Item # 14.
Prepared by NBS – May 2023 13
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Figure 14. Cash Reserves Allocated to Future Customers – Wastewater Utility The credit to the cost basis related to outstanding bonds was included because some existing assets were at least partially funded with revenue bonds that will be paid in future years by the existing customers.
Since new connections pay their share of existing asset values, including the remaining outstanding debt principal on those same assets would double count the asset values included in the capacity fees. For this reason, a credit is given for the value of future principal debt payments to avoid this double charging of new customers. Figure 15 shows that the credit provided to future users is about $1.5 million, or about
18.5% of the total outstanding principal costs.
Figure 15. Debt Service Allocated to Future Customers – Wastewater Utility Existing
Customers
Future
Customers
Existing
Customers
Future
Customers
Un-restricted Reserves
Sewer Operating Reserve $ 1,808,699 81.5% 18.5% $ 1,473,967 $ 334,732 Working Capital Reserve $ 850,000 81.5% 18.5% $ 692,692 $ 157,308 System Reinvestment Reserve $ 1,735,887 81.5% 18.5% $ 1,414,630 $ 321,257 Emergency Reserve $ 750,000 81.5% 18.5% $ 611,199 $ 138,801 Glenbrook Sewer Reserve 81.5% 18.5% $ - $ -
Restricted Reserves
Debt Service Reserve2 $ 178,874 81.5% 18.5% $ 145,770 $ 33,104 Wastewater Connection Fee Reserve $ - 81.5% 18.5% $ - $ - Total Beginning Cash $ 5,323,460 81.5% 18.5% $ 4,338,259 $ 985,201
1. Beginning cash balance for the Sewer Fund is found in trial balance. Source File: Trial Balance - Water_Sewer as of 092021.pdf Cash Balances for individual funds from City staff: Email from Dec. 9, 2021
2. Beginning cash balance for two debt reserves from City staff: Email from Dec. 9, 2021
3. Connection fees are used for applicable items each year as they are collected.
Connection Fee revenue from current budget: Water_Sewer Budget Report FY2021-22.pdf $ - Allocation
Beginning
Cash
Cash Reserves 1
% Allocation
Existing
Customers
Future
Customers
Existing
Customers
Future
Customers
$ 16,318 81.5% 18.5% $ 13,298 $ 3,020
$ 2,555,000 81.5% 18.5% $ 2,082,152 $ 472,848
$ 1,058,677 81.5% 18.5% $ 862,750 $ 195,927
$ 230,820 81.5% 18.5% $ 188,103 $ 42,717
$ 2,285,660 81.5% 18.5% $ 1,862,658 $ 423,002
$ 2,257,632 81.5% 18.5% $ 1,839,817 $ 417,815
Grand Total $ 8,404,108 81.5% 18.5% $ 6,848,778 $ 1,555,330
1. Sewer debt found in source files: Water & Sewer Debt Schedules - June 30, 2020.xlsx Bond Issue Outstanding
Principal1
% Allocation $ - Allocation
2020 Pension Bonds, Capital One - Sewer
13.4%
Enterprise Vehicle Leases
Wastewater Revenue Refunding Bond
SRF - Sewer Plant Expansion
BofA Leasing - Automated Meter Reading
Equipment
Municipal Finance Corporation - Solar
Equipment Lease
Item # 14.
Prepared by NBS – May 2023 14
Water & Wastewater Capacity Fee Study Report – City of Grass Valley D. Calculated Capacity Fees – Wastewater Utility
The sum of the existing and planned asset values (that is, the system buy-in and system development costs), along with the adjustments for existing cash reserves and outstanding principal payments, defines the total cost basis allocated to future customers. Figure 16 summarizes how this cost basis is developed.
Figure 16. Summary of Cost Basis Allocated to Future Customers – Wastewater Utility The total adjusted cost basis is then divided by the number of future customers, measured in EDUs, expected to connect to the system (1,726 EDUs shown in Figure 11). The calculation for the base wastewater capacity fee is shown in Figure 17.
Figure 17. Summary of New Base Capacity Fee – Wastewater Utility E. Wastewater Capacity Fee Findings Statements
The new wastewater capacity fees calculated in this study are based on regulatory requirements and generally accepted industry standards, and are further detailed in Appendix B. This study concludes the following findings:
• The purpose of the City’s wastewater capacity fee is to ensure that new connections reimburse and/or mitigate a reasonable portion of the City’s planned capital investments. These investments benefit and/or are necessary to accommodate increased demand for wastewater service.
• The City uses capacity fee proceeds to fund capital investments in the wastewater system, which include the future design and construction of planned facilities. • All parcels seeking permission to connect to the City’s wastewater system are subject to the wastewater capacity fee, payment of which is a condition of connection approval. • Capacity fees for new wastewater customers vary depending on the estimated number of EDUs the connection will serve, which is generally proportionate to the demands a parcel places on the wastewater utility system.
System Asset Values Allocated to Future
Development
Replacement
Cost
Costs Included in Existing System Buy-In:
Existing Assets $ 11,905,736
Planned, Future Capital Projects 3,197,046
Total: Existing & Future System Costs $ 15,102,782
Adjustments to Cost Basis:
Cash Reserves $ 1,555,330
Outstanding Long-Term Debt (Principal) (985,201)
Total: Adjustments to Cost Basis $ 570,129
Total System Cost Basis for New Development $ 15,672,910 Summary of Capacity Fee Calculation System
Cost Basis
Estimated EDU
Increase
Base Capacity
Fee per EDU
Current Capacity Fee $12,370
Proposed Sewer Capacity Fee $ 15,672,910 1,726 $9,078
Item # 14.
Prepared by NBS – May 2023 15
Water & Wastewater Capacity Fee Study Report – City of Grass Valley • The City has made investments in wastewater infrastructure and plans to invest further in expanded and upgraded facilities. These investments make possible the availability and continued reliable provision of utility service sufficient to meet demands of growth within the City’s service area.
• Without capital investment in existing facilities, the wastewater system capacity available to serve the needs of future connections would be uncertain. Without planned investments in future facilities, wastewater service would not be sustainable at the level of service enjoyed by current users.
• Upon payment of a capacity fee, a new customer incurs the obligation to pay the same ongoing service rates as existing customers regardless of the date of connection to the systems or the actual start of service.
Item # 14.
Prepared by NBS – May 2023 16
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Section 4. Recommendations and Next Steps
Consultant Recommendations and Next Steps
NBS recommends the City take the following actions:
• Approve and Accept this Study Report: NBS recommends the City Council formally approve and adopt this Study and its recommendations and proceed with the steps outlined below to implement the new capacity fees. This will provide documentation of the study and the basis for adopting the new capacity fees.
• Implement New Water and Wastewater Capacity Fees: Based on the analysis presented in this report, the City Councilshould implement the new water capacity fee and new wastewater capacity fee as described in this study.
• Periodically Review Capacity Fees: Any time an Agency adopts new fees, they should be periodically reviewed to incorporate new capacity plans, significant repair and replacement projects, or new planning data (i.e. customer growth estimates). This will help ensure the fees generate sufficient revenue to cover the cost of capital projects, support the fiscal health of the City, and future customers bear their fair share of infrastructure costs. NBS also recommends applying an inflation factor to the capacity fees on an annual basis. Annually, the City should review the Engineering News Record’s Construction Cost Indices and calculate the percentage change in construction costs and apply that change to the capacity fees to ensure they keep pace with cost inflation.
Principal Assumptions and Considerations
In preparing this study and the recommendations included herein, NBS has relied on a number of principal assumptions and considerations with regard to financial matters, number of customer accounts, asset records, planned capital improvements, and other conditions and events that may occur in the future.
This information and assumptions were provided by sources we believe to be reliable, although NBS has not independently verified this data.
While we believe NBS’ use of such information and assumptions is reasonable for the purpose of this Study and its recommendations, some assumptions will invariably not materialize as stated herein or may vary significantly due to unanticipated events and circumstances. Therefore, the actual results can be expected to vary from those projected to the extent that actual future conditions differ from those assumed by us or provided to us by others.
Item # 14.
Prepared by NBS – May 2023 17
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Appendix A. Water Capacity Fee Study Summary Tables
Item # 14.
Prepared by NBS – May 2023 18
Water & Wastewater Capacity Fee Study Report – City of Grass Valley (This page intentionally left blank.)
Item # 14.
Prepared by NBS – May 2023 19
Water & Wastewater Capacity Fee Study Report – City of Grass Valley Appendix B. Wastewater Capacity Fee Study Summary Tables
Item # 14.