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H3. Resolution 5968 - Water-Wastewater Impact Fee Report and Fee AdoptionCITY OF KALISPELL MEMORANDUM To: Doug Russell, City Manager From: Susie Turner, Public Works Director Subject: Resolution 5968 - Resolution to Adopt the Final 2019 Water and Wastewater Impact Fee Report and Adjust Water and Wastewater Impact Fees Meeting Date: March 16, 2020 A Resolution to adopt the Final 2019 Water and Wastewater Impact Fee Report and amend the water and wastewater impact fees has been placed on the Council Agenda for the March 16, 2020 regular meeting. The City of Kalispell currently imposes water and wastewater impact fees on improvements to properties that increase the demand on the City's water and wastewater utility facilities. The present fees are based on the adopted 2013 Water and 2014 Wastewater Impact Fee Reports. In 2019 the water and wastewater impact fees calculations were updated and are presented in the October 2019 Water and Wastewater Impact Fee Report. This matter came before the City Council over four work sessions following a recommendation by the Kalispell Impact Fee Committee to approve, as findings of fact, the HDR Engineering Water and Wastewater Impact Fee Report. The October 2019 Water and Wastewater Impact Fee Report includes the calculations, methods, assumptions, and the calculated cost -based fees. The City can adopt water and wastewater impact fees which are no greater than the net allowable water and wastewater impact fees set forth in the final report. The proposed water and wastewater impact fees presented in the Resolution and shown in Exhibit A are 50 % of the present fees, include a 3% annual interest and inflation factor, and are below the net allowable fee amounts calculated in the final report. Alternative considerations for imposing water and wastewater impact fees which would not require additional public advertisements are provided in Exhibit B and C. Exhibit B provides the water and wastewater impact fees at present fee values. Exhibit C provides the water impact fees at present value and the wastewater impact fees at values equivalent to the calculation method for removing the fully depreciated sewer infrastructure as a component of the calculation. ACTION REQUESTED: A motion to approve Resolution 5968, a resolution to adopt the October 2019 Water and Wastewater Impact Fee Report as findings of fact and impose impact fees as provided in the resolution. ALTERNATIVES: Council can elect to amend or reject the resolution. ATTACHMENTS: Exhibit A Exhibit B Exhibit C Resolution 5968 with Exhibit A October 2019 Water and Wastewater Impact Fee Report Page 2 of 4 Exhibit A Exhibit A provides water and wastewater impact fee at 50 % of the present fees, and include a 3% annual interest and inflation factor. Table 1: Proposed Water Impact Fees Proposed FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Meter Ratio Residential 1.00 $1,900 $1,957 $2,016 $2,076 $2,138 All Meter Size 3/4" 1.00 $1,900 $1,957 $2,016 $2,076 $2,138 1" 1.67 3,173 3,268 3,366 3,467 3,571 11/2" 3.33 6,327 6,517 6,712 6,914 7,121 2" 5.33 10,127 10,431 10,744 11,066 11,398 3" 10.66 20,254 20,862 21,487 22,132 22,796 [1] The fees presented include the 5% administration charge allowed by Montana code. [2] The AWWA meter ratio for 3/4-inch meter. [3] Residential - Single Family & Townhouse (1 ERU per unit), Duplex (2 living units combined) 0.80 ERU/unit (up to 1-inch meter). [4] Residential - Tiny home, or detached living unit less than 400 sq. ft. are 0.80 ERU/unit. (up to 1-inch meter) [5] Meters 4-inch and larger are calculated individually. Table 2: Proposed Sewer Impact Fees Proposed ERUs FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Treatment 1.00 $1,004 $1,034 $1,065 $1,097 $1,130 Collection 1.00 $1,875 $1,931 $1,989 $2,049 $2,110 Total 1.00 $2,879 $2,965 $3,054 $3,146 $3,240 [1] The fees presented include the 5% administration charge allowed by Montana code. 201 lst Avenue E Phone (406)758-7720 Po Box 1997 Public Works Department Fax (406)758-7831 Kalispell, MT 59903 1 1 www.kalispell.com Page 3 of 4 Exhibit B Exhibit B provides the water and wastewater impact fees at present fee values. Table 1: Present Water Impact Fees Present Residential 1 ERU $2,567 All Meter Size 3/4" $2,567 1" 6,418 1 1/2" 12,835 2" 20,536 3" 41,072 [1] The fees presented include the 5% administration charge allowed by Montana code. [2] Residential - Single Family & Townhouse (1 ERU per unit), Duplex (2 living units combined) 0.80 ERU/unit (up to 1-inch meter). [3] Residential - Tiny home, or detached living unit less than 400 sq. ft. are 0.80 ERU/unit. (up to 1-inch meter) [4] Meters 4-inch and larger are calculated individually. Table 2: Present Wastewater Impact Fees Present ERUs Treatment 1.00 $2,008 Collection 1.00 $3,749 Total 1.00 $5,757 [1] The fees presented include the 5% administration charge allowed by Montana code. 201 lst Avenue E Phone (406)758-7720 Po Box 1997 Public Works Department Fax (406)758-7831 Kalispell, MT 59903 1 1 www.kalispell.com Page 4 of 4 Exhibit C Exhibit C provides the water impact fees at present value and the wastewater impact fees at values equivalent to the calculation method for removing the fully depreciated sewer infrastructure as a component of the calculation. Table 1: Present Water Impact Fees Present Residential 1 ERU $2,567 All Meter Size 3/4" $2,567 1" 6,418 1 1/2" 12,835 2" 20,536 3" 41,072 [1] The fees presented include the 5% administration charge allowed by Montana code. [2] Residential - Single Family & Townhouse (1 ERU per unit), Duplex (2 living units combined) 0.80 ERU/unit (up to 1-inch meter). [3] Residential - Tiny home, or detached living unit less than 400 sq. ft. are 0.80 ERU/unit. (up to 1-inch meter) [4] Meters 4-inch and larger are calculated individually. Table 2: Calculated Less Depreciation Wastewater Impact Fees Calculated Less Depreciation Option ERUs Treatment 1.00 $2,160 Collection 1.00 $2,537 Total 1.00 $4,697 [1] The fees presented include the 5% administration charge allowed by Montana code. 201 lst Avenue E Po Box 1997 Public Works Department Kalispell, MT 59903 Phone(406)758-7720 Fax(406)758-7831 www.kalispell.com RESOLUTION NO. 5968 A RESOLUTION TO AMEND THE CITY OF KALISPELL WATER AND WASTEWATER UTILITIES IMPACT FEES PURSUANT TO MCA 7-6-1601 THROUGH 7-6-1604 AND TO SET AN EFFECTIVE DATE. WHEREAS, pursuant to the statutory authority of 7-6-1601 to 7-6-1604, MCA granted to municipalities to charge impact fees to fund certain capital improvements and the statutory requirements to regularly update the analysis of impact fees charged, the City of Kalispell considers it necessary and proper from time to time to amend the impact fees imposed for new demand on its Water and Wastewater Utilities; and WHEREAS, for this purpose the City of Kalispell contracted the services of HDR Engineering, Inc. to conduct an impact fee study and to provide a report with recommendations to the Kalispell City Council to consider in setting the impact fees it charges for new demand water and wastewater utility services; and WHEREAS, the Kalispell Impact Fee Committee met in noticed public meetings and reviewed the report and recommendations of the Kalispell Public Works Department and its consultant, HDR Engineering, Inc., on the water and wastewater utility facilities. It further examined the methodology utilized and issued its recommendations for the adoption of an amended impact fee schedule along with the data sources and methodology supporting adoption and calculation of the impact fees to City Council with the report dated October, 2019; and WHEREAS, on February 3, 2020 the City Council announced by resolution, its intent to consider amending the impact fees for water and wastewater impact fees and set a public hearing to be held on March 2, 2020 on said proposed amendments to the impact fees for all new demand on its Water and Wastewater Utility services of the City of Kalispell and gave the necessary Notice thereof as required by Section 69-7-111, MCA; and WHEREAS, said public hearing was duly held by the City Council at a public meeting thereof in the Kalispell City Hall beginning at 7:00 o'clock P.M. on March 2, 2020, and all persons appearing at said hearing and expressing a desire to be heard were heard, and all written comments thereon furnished to the City Clerk at said meeting prior thereto were given consideration by the Council; and WHEREAS, based upon the report and recommendations of the Kalispell Impact Fee Committee, the evidence provided by the public, in writing and at the public hearing, the City Council finds the recommendation of the Impact Fee Committee to adopt the report to be reasonable and just and therefore adopts as its findings the report of the City's Department of Public Works and its consultant, along with the data sources and methodology used supporting adoption and calculation of the impact fee; and WHEREAS, the City Council finds that it is just and prudent to apply the impact fees for all new demand on the City of Kalispell Water and Wastewater Utility services at the adjusted rate as set forth in Exhibit "A", attached hereto and by this reference made a part hereof, taking into consideration the economic effects such fees have on the rate of growth and development within the City and the desire that the payers of rates and impact fees shall equitably share in the costs of the City's Water and Wastewater Utility services. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION 1. That the impact fees applicable for all new demand for the City of Kalispell Water and Wastewater Utilities and other services performed by said utility as set forth in Exhibit "A", attached hereto and by this reference made a part hereof, are found to be just and are hereby established and adopted to be imposed for the water and wastewater utility services to the inhabitants of the City of Kalispell and those other persons served by its water and sewer utility service and such fees becoming effective July 1, 2020. SECTION 2. This decision is final ten (10) days after filing of this Resolution with the City Clerk. The City Clerk shall file a copy hereof with the Public Service Commission of Montana at that time. SECTION 3. That the impact fees applicable to the use of the City of Kalispell Water and Wastewater Utilities and other services performed by said utilities shall be reviewed by the City beginning no later than five years after the effective date of this resolution. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS 16TH DAY OF MARCH, 2020. Mark Johnson Mayor ATTEST: Aimee Brunckhorst, CMC City Clerk Exhibit A Exhibit A provides water and wastewater impact fee at 50 % of the present fees, and include a 3% annual interest and inflation factor. Table 1: Proposed Water Impact Fees Proposed FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Meter Ratio Residential 1.00 $1,900 $1,957 $2,016 $2,076 $2,138 All Meter Size 3/4" 1.00 $1,900 $1,957 $2,016 $2,076 $2,138 1" 1.67 3,173 3,268 3,366 3,467 3,571 11/2" 3.33 6,327 6,517 6,712 6,914 7,121 2" 5.33 10,127 10,431 10,744 11,066 11,398 3„ 10.66 20,254 20,862 21,487 22,132 22,796 [1 ] The fees presented include the 5% administration charge allowed by Montana code. [2] The AWWA meter ratio for 3/4-inch meter. [3] Residential - Single Family & Townhouse (1 ERU per unit), Duplex (2 living units combined) 0.80 ERU/unit (up to 1-inch meter). [4] Residential - Tiny home, or detached living unit less than 400 sq. ft. are 0.80 ERU/unit. (up to 1-inch meter) [5] Meters 4-inch and larger are calculated individually. Table 2: Proposed Sewer Impact Fees Proposed ERUs FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Treatment 1.00 $1,004 $1,034 $1,065 $1,097 $1,130 Collection 1.00 $1,875 $1,931 $1,989 $2,049 $2,110 Total 1.00 $2,879 $2,965 $3,054 $3,146 $3,240 [1] The fees presented include the 5% administration charge allowed by Montana code. Final Report �1 Impact Fees for Water and Wastewater October 2019 October 14, 2019 Ms. Susie Turner Public Works Director City of Kalispell 201 1st Avenue East Kalispell, MT 59901 Subject: City of Kalispell Water —and Wastewater Impact Fee Final Report Dear Ms. Turner: Enclosed please find HDR's final report regarding the water and wastewater impact fees for the City of Kalispell (City). The City last updated these fees in 2013. The development of this report is intended to provide to the City the basis to establish cost -based impact fees. The adoption of final impact fees is a policy decision of the City Council. This study reflects the City's current City Council policy positions on growth and annexation, the current water and wastewater capital improvements plans, along with the June 2018 Water Facility Plan Update (WFPU), and recent 2019 Wastewater Facility Plan Update (WWFPU). This study follows the general methodology and approach used in the prior study, updated to the City's current data, information, and growth policies. This report has been prepared using generally accepted financial and engineering principles. The City's financial, budgeting, planning, and engineering data were the primary sources for much of the information contained in this report. HDR would recommend that prior to implementing the fees, the fees be reviewed by the City legal counsel for compliance with Montana State law. HDR appreciates the opportunity to assist the City in this matter. We also would like to thank you and your staff for the assistance provided to us. We look forward to future opportunities to work with the City. Sincerely yours, HDR Engineering, Inc. e- 3,�� Lk/ Shawn Koorn Associate Vice President 900 1081h Ave NE, Suite 1300 Bellevue, WA 98004 InTable of Contents Executive Summary Introduction.................................................................................................................. 1 Summary and Conclusions............................................................................................. 1 Consultant's Recommendations.................................................................................... 2 Advisory Committee Review.......................................................................................... 3 Summary....................................................................................................................... 3 1 Introduction and Overview 1.1 Introduction........................................................................................................ 4 1.2 Defining Water and Wastewater Impact Fees ...................................................... 4 1.3 Economic Theory and Water and Wastewater Impact Fees ................................. 4 1.4 Water and Wastewater Impact Fee Criteria......................................................... 5 1.5 Overview of the Impact Fee Methodology........................................................... 6 1.6 Disclaimer............................................................................................................7 1.7 Summary........................................................................................................................7 2 Legal Considerations in Establishing Impact Fees 2.1 Introduction........................................................................................................ 8 2.2 Requirements Under Montana State Law............................................................ 8 2.3 Summary...........................................................................................................10 3 Development of the Water Impact Fee 3.1 Introduction...................................................................................................... 11 3.2 Overview of the City's Water System................................................................. 11 3.3 Present Water Impact Fees................................................................................ 11 3.4 Calculation of the City's Water Impact Fee ........................................................ 12 3.4.1 System Planning Criteria....................................................................... 12 3.4.2 Equivalent Residential Units................................................................. 13 3.4.3 Calculation of the Water Impact Fee .................................................... 14 3.5 Net Allowable Water Impact Fee....................................................................... 16 3.6 Implementation of the Water Impact Fee .......................................................... 17 3.7 Key Assumptions............................................................................................... 18 3.8 Advisory Committee Review.............................................................................. 19 3.9 Consultant's Recommendations........................................................................ 19 3.10 Summary...........................................................................................................19 011 Table of Contents City of Kalispell — Water, and Wastewater Impact Fee Study 4 Development of the Wastewater Impact Fee 4.1 Introduction...................................................................................................... 20 4.2 Overview of the City's Wastewater System ....................................................... 20 4.3 Present Wastewater Impact Fees...................................................................... 20 4.4 Calculation of the City's Wastewater Impact Fee ............................................... 21 4.4.1 System Planning Criteria....................................................................... 21 4.4.2 Equivalent Residential Units................................................................. 21 4.4.3 Calculation of the Wastewater Impact Fee ........................................... 22 4.5 Net Allowable Wastewater Impact Fee.............................................................. 25 4.6 Implementation of the Wastewater Impact Fee ................................................ 26 4.7 Key Assumptions............................................................................................... 26 4.8 Advisory Committee Review.............................................................................. 26 4.9 Consultant's Recommendations........................................................................ 26 4.10 Summary...........................................................................................................27 Technical Appendix A —Water Impact Fee Technical Appendix B —Wastewater Impact Fee Technical Appendix C—Type of Building and Sewer Use by ERU Technical Appendix D — Montana State Code for Impact Fees 01 l Table of Contents City of Kalispell — Water, and Wastewater Impact Fee Study Abbreviations and Acronyms AWWA American Water Works Association CCI Construction Cost Index CIP Capital Improvement Plan City City of Kalispell ENR Engineering News Record ERU Equivalent Residential Unit for Water Fee Impact Fee GPD Gallons Per Day mg Million gallons mgd Million gallons per day OC Original Cost SDC System Development Charge WFPU Water Facility Plan Update WWFPU Wastewater Facility Plan Update WTP Water Treatment Plant WWTP Wastewater Treatment Plant 01 l Table of Contents City of Kalispell — Water, and Wastewater Impact Fee Study . Executive Summary Introduction The purpose of impact fees is to create equity between existing customers and new customers connecting to the City's water and sewer utility systems. The objective of an impact fee study is to calculate cost -based fees for new customers connecting to, or requesting additional capacity to, the City's water and sewer systems. By establishing cost -based water and wastewater impact fees, the City attempts to have growth pay for growth by having new customers pay their share of the infrastructure in place which will serve them, while also paying back the existing utility customers for paying for the financial impacts of growth. HDR was retained by the City to review and update the City's water and wastewater impact fees. The water and wastewater impact fees were last updated in March 2013 for water, and December 2013 for wastewater. The City's impact fees need to be reviewed and updated every five years as required under Montana Code 7-6-1601 to 7-6-1604, the Montana impact fee legislation. The Water Facility Plan Update (WFPU) was updated in June 2018, the Wastewater Facility Plan Update (WWFPU) was completed in 2019, and the Advanced Wastewater Treatment Plant Facility Plan Update (AWWTPFPU) was completed in 2019. In addition to this, the City has updated their land use planning forecast for both water and sewer based on water and wastewater use characterizations. Given these changes, it is prudent for the City to review and update their impact fees to determine parity between existing and new utility customers. Summary and Conclusions The impact fees are calculated in conformance with generally accepted practices and are based on the City's planning and design criteria. A component -by -component approach is taken in developing the fees because each component can have different planning and design criteria. Based on the sum of the component costs, the net allowable impact fee is determined. Net, refers to the gross impact fee, net of any credits for future debt service principal to be paid within a customer's rates. Allowable, refers to the concept that the calculated impact fee is the City's cost -based (i.e., maximum) charge. The calculations take into account the financing mechanisms of capital improvements. These fees must be implemented according to the capacity requirement (i.e., the impact) each new connection places on the water and sewer systems. This way, the fees are related to the costs the new customer places on the systems and the benefit they derive from infrastructure in place to serve them. The City, as a matter of policy, may charge any amount up to the cost -based (allowable) impact fee, but not over that amount. Charging an amount greater than the allowable impact fee would not meet the practical basis of charging cost -based impact fees which are proportionally related to the benefit derived by the customer. Executive Summary City of Kalispell — Water, and Wastewater Impact Fee Study 1 The City currently implements and assesses the water impact fee based on the size of the customer meter providing service. A 3/4-inch water meter is a typical meter size fora residential customer and is the meter size used to develop an equivalent residential unit (ERU). Equivalent meter weighting factors are applied to larger size meters to recognize the capacity of the larger sized meter in relation to the 3/4-inch meter. The results of the analysis show that the impact fee for one ERU can increase from $2,567, the present charge, to $6,741, the calculated charge, for an increase of $4,174. Section 3 of this report details the water impact fee analysis along with further details in Technical Appendix A. The wastewater impact fee is based on one residential customer equivalent established byfixture units. Based on this study, the wastewater impact fee for one ERU can be increased by $589 from $5,757 to $6,346. A more detailed summary of the wastewater impact fee is presented in Section 4 of this report and the detailed analyses is included in Technical Appendix B Impact Fee Impact Fee Change Water, per ERU121 $2,567 $6,741 $4,174 Wastewater, per ERU131 5,757 6,346 589 Total $8,324 $13,087 $4,763 [1] The fees presented in this table include the 5% administration charge allowed by Montana code. [2] 1 ERU = Water equivalent unit based on 3/4-inch meter. [3] 1 ERU = Wastewater based on residential customer equivalent. Table ES - 1 shows the overall total fees — to develop one unit - will increase by $4,763. Section 3 of the report, describes the water impact fee calculations in more detail. Consultant's Recommendation Based on our review and analysis of the City's water and wastewater impact fees, HDR makes the following recommendations: ✓ The City should adopt water and wastewater impact fees for new connections to these respective systems which are no greater than the net allowable water and wastewater impact fees as set forth in this report. ✓ The City should adjust the impact fee each year by an escalation factor to reflect the cost of interest and inflation (e.g., ENR CCI). This method of escalating the City's impact fee should be used for no more than a four-year period. After this time period, as required by Montana law, the City should update the fees based on the actual cost of infrastructure and any new planned facilities contained in an updated master plan, capital improvement plan or rate study. Executive Summary 2 City of Kalispell — Water, and Wastewater Impact Fee Study ✓ The City should update the actual calculations for the water and wastewater impact fees at such time when a new capital improvement plan, public facilities plan, comprehensive system plan, or a comparable plan is approved or updated by the City, or every five years. Advisory Committee Review Under Montana law (7-6-1604), the calculated impact fees must be reviewed by an impact fee advisory committee. The City has convened an impact fee advisory committee for this specific purpose. The role of the advisory committee is to serve in an advisory capacity to the City Council. The advisory committee reviews and monitors the process of calculating, assessing, and spending impact fees. Ultimately, the City Council is the governing body responsible for determination of and adoption of the final water and wastewater impact fees. Summary The impact fees developed and presented in this report are based on the planning and engineering design criteria of the City's water and sewer systems, the value of the existing assets, past financing of the system, and generally accepted principles. The impact fees will continue the City's practice of establishing equitable and cost -based impact fees for new customers connecting to the City's water and sewer systems. Executive Summary 3 City of Kalispell - Water, and Wastewater Impact Fee Study 4 1.0 Introduction and Overview Introduction An important starting point in establishing water and wastewater impact fees is to have a basic understanding of the purpose of these fees, along with the criteria and general methodology used to establish cost -based water and wastewater impact fees. This section of the report presents an overview of water and wastewater impact fees methodologies that were used to develop cost -based fees for the City. The City has used these same generally accepted methodologies to establish their past, and present, water and wastewater impact fees. Defining Water and Wastewater Impact Fees The first step in establishing cost -based impact fees, or sometimes referred to as system development charges (SDC) is to gain a better understanding of the definition of an impact fee. For the purposes of this report, an impact fee (or SDC) is defined as follows: "System development charges are one-time charges paid by new development to finance construction of public facilities needed to serve them. "I Simply stated, impact fees are a contribution of capital to reimburse existing customers for the available capacity in the existing system, and help finance future growth -related capacity improvements needed to serve them. At some utilities, impact fees may be referred to as system development charges, capacity reserve charges, hookup fees, infrastructure investment fees, etc. Regardless of the label used to identify them, their objective is the same. That is, these fees are intended to provide funds to the utility to finance all or a part of the capital improvements needed to serve and accommodate new customer growth. Absent those fees, many utilities would likely be unwilling to build growth -related facilities (i.e., burden existing ratepayers with the entire cost of growth -related capacity expansion). Economic Theory and Water and Wastewater Impact Fees Water and wastewater impact fees are generally imposed as a condition of service. The objective of the impact fees are not to generate money for a utility, but to create a fiscal balance between existing customers and new customers so that all customers seeking to connect to the utility's water and sewer systems bear an equitable share of the cost of capacity that is invested in both the existing and any future growth -related expansions. Through the implementation of equitable water and wastewater impact fees, existing customers are not unduly burdened with the cost of new development. By updating the water and wastewater impact fees, the City continues an important step in assuring adequate infrastructure to meet growth -related needs while providing this infrastructure to new customers in a cost -based, fair, and equitable manner. 1 Arthur C. Nelson, System Development Charges for Water, Sewer, and Stormwater Facilities, Lewis Publishers, New York, 1995, p. 1, FNI Introduction and Overview City of Kalispell — Water, and Wastewater Impact Fee Study 4 1.4 Water and Wastewater Impact Fee Criteria In determining water and wastewater impact fees, a number of different criteria are utilized. Criteria most often used by utilities to establish water and wastewater impact fees include the following: • State / loca I laws • System planning criteria • Financing criteria • Customer understanding Many states and local communities have enacted laws that govern the calculation and imposition of water and wastewater impact fees. These laws must be followed in the development of water and wastewater impact fees. Most states require a reasonable relationship between the charge and the cost associated with providing service (capacity) to the customer. The fees do not need to be mathematically exact, only a practical basis for the charge is required. The utilization of the planning criteria, the actual costs of construction, and the planned costs of construction provide the practical basis necessary to establish the reasonable relationship requirement. For utilities in Montana, impact fees are intended to provide an equitable and cost -based method to maintain equity between customers while complying with the legal requirements of Montana Code 7-6- 1601 through 7-6-1604. This will be further discussed in the next chapter. The use of system planning criteria is one of the more important aspects in the determination of the impact fees. System planning criteria provide the practical basis between the amount of infrastructure necessary to provide service and the charge to the customer. The practical basis test requires: (a) establishing a practical basis between new development and the existing or expanded facilities required to accommodate new development, and (b) apportioning appropriate cost to the new development in relation to benefits reasonably received. An example forwater, using system planning criteria is the determination that a single dwelling unit, or equivalent residential unit (ERU), generates an average daily water flow of so many gallons per day, per ERU. The water impact fee methodology then charges the customer per ERU for the cost of the system which relates the charge back to a practical basis. Water and wastewater impact fees are typically established as a means of having new customers pay an equitable share of the cost of their required capacity (infrastructure). The financing criteria for establishing water and wastewater impact fees relates to the method used to finance infrastructure on the system and assures that customers are not paying twice for infrastructure —once through the impact fee and again through rates. The double payment can come in through the imposition of a water and wastewater impact fees and then the requirement to pay debt service within a customer's rates. The financing criteria also reviews the basis under which main line, or collection line extensions, were provided such that the customer is not charged for infrastructure that was provided (contributed) by developers. The component of customer understanding implies that the charge is easy to understand. This criterion has implications for the way that the charge is implemented and assessed to the customer. The charge is generally based on the projection of flow of water and wastewater for FYZ l Introduction and Overview 5 City of Kalispell — Water, and Wastewater Impact Fee Study an equivalent unit. This makes it easy fort he customer to understand that the level of charge is based on the projection of demand (flow) required to provide service. Use of an equivalent residential unit (ERU) for water and wastewater is a method to bring water consumption and sewer flow from nonresidential customers into an equivalent measure with residential customers. The other implication of this criterion is that the methodology is clear and concise in its calculation of the amount of infrastructure necessary to provide service. 1.5 Overview of the Impact Fee Methodology There are generally accepted methodologies used to establish water and wastewater impact fees. Within the generally accepted water and wastewater impact fees methodologies, there are a number of different steps undertaken. These steps are as follows: 1. Determination of system planning criteria 2. Determination of equivalent residential units (ERUs) 3. Calculation of system component costs 4. Determination of any credits The first step in establishing impact fees is the determination of the system planning criteria. This implies calculating the amount of water or wastewater capacity required by a single-family residential customer to establish an ERU. Generally for a water system, the planning criterion is the peak day water usage per ERU. This planning criteria is developed since a majority of the water system infrastructure is sized to meet the peak day demand. For wastewater systems, average daily demand (wastewater contribution) per equivalent residential unit (ERU) is most often used, since this total flow represents the flow, imposed by the customer. Average inflow and infiltration is added to the customer's flow since this represents the total volumetric flow and hence capacity requirement at the treatment plant. Once the number of equivalent units has been determined, a component -by -component (e.g., source of supply, treatment, storage) analysis is undertaken to determine the component impact fee in cost ($) per equivalent unit. Individual plant components are analyzed separately for the water, and sewer systems given that the planning criteria differ for the development of the various system components. The calculation of the component impact fee includes both historical assets and planned future assets. Historical assets can be valued in a number of different ways. For the City's study the existing asset cost is brought to current cost (today's cost) by adding the Engineering News Record Construction Cost Index (ENR-CCI) to the original asset cost from the installment date to the current time period. Current cost is done to reflect the fact that existing customers have provided for excess capacity in the system and hence need to be reimbursed for not only their initial investment, but also the carrying cost on that investment. The reimbursement to existing customers is accomplished by the fact that without impact fees, rates would otherwise be higher than they would be with impact fees. Once the total cost of the capital infrastructure is determined, it is then divided by the appropriate number of equivalent units for each utility the infrastructure will serve to develop the cost per equivalent unit for the specific plant component. OR l Introduction and Overview 6 City of Kalispell — Water, and Wastewater Impact Fee Study After each plant component is analyzed and a cost per equivalent unit is determined, the cost per equivalent unit for each of the plant components is added together to determine the gross impact fee. The gross impact fee is calculated before any credits for debt service. The final impact fee is determined by taking the gross impact fee and subtracting any credits. This results in a net impact fee stated in dollars per equivalent unit. The general basis of this calculation for a water or sewer system is the assumption that an equivalent unit is equal to a typical residential customer. 'The final impact fee is 'etermined by taking the gross impact fee and subtracting any credits. This results in a "net impact fee" stated in For the water system, larger meter sizes are then imposed fees dollars per ERU." I based on the capacity for a given meter size in relationship to the defined ERU capacity. The meter size capacity ratio is based on the industry standard safe operating capacity of the meter based on American Water Works Association (AWWA) standards. The City's wastewater is based on the equivalent residential unit (ERU) defined as the average flow per single-family residential unit. Other types of dwellings are then assigned ERUs based on building type or sewer use per ERU. Disclaimer HDR, in its calculation of the water and wastewater impact fees for the City, as presented in this report, has used generally accepted engineering and ratemaking principles. This should not be construed as a legal opinion with respect to Montana State law. HDR recommends that the City have its legal counsel review the water and wastewater impact fees as set forth in this report to ensure compliance with Montana State law. Summary This section of the report has provided an overview of water and wastewater impact fees; the basis for establishing the fees, considerations in establishing a water and wastewater impact fees, and the connection (practical basis) which must be established between new development and the new or expanded facilities required to accommodate new development, and appropriate apportionment of the cost to the new development in relation to benefits reasonably to be received. The next section of the report will provide a brief discussion of the legal considerations associated with water and wastewater impact fees. FYZ l Introduction and Overview 7 City of Kalispell — Water, and Wastewater Impact Fee Study 2.0 Legal Considerations in Establishing Impact . Fees 2.1 Introduction An important consideration in establishing water and wastewater impact fees is any legal requirements at the state or local level. The legal requirements often establish the methodology around which the water and wastewater impact fees must be calculated or how the funds must be used. Given that, it is important for the City to understand these legal requirements. This section of the report provides an overview of the legal requirements for establishing water and wastewater impact fees under Montana State law. This summary represents HDR's understanding of the relevant Montana State law as it relates to establishing water and wastewater impact fees. It in no way constitutes a legal interpretation of the state law by HDR. 2.2 Requirement Under Montana State Law The Montana law enabling legislation for impact fees was enacted in 2005 via Senate Bill 185. This was comprehensive legislation allowing public entities in the State of Montana to enact impact fees for various services. The legal basis for the enactment of impact fees is found in Title 7, Chapter 6, and Part 1601 to 1604 of the Montana Code. A summary of the Montana Code is provided below. A copy of the full code is provided in Technical Appendix D. "The legal basis for the enactment of impact fees is found in Title 7, Chapter 6, and Part 1601 to 1604 of the Montana Code." A summary of the requirements under Montana law is as follows: "7-6-1601. Definitions. As used in this part, the following definitions apply: 5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b) The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development, (ii) a connection charge, (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance, or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. F)R l Legal Considerations in Establishing Impact Fees 8 City of Kalispell — Water, and Wastewater Impact Fee Study "7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report. (2) The service area report is a written analysis that must: (a) describe existing conditions of the facility; (b) establish level -of -service standards, (c) forecast future additional needs for service for a defined period of time; (d) identify capital improvements necessary to meet future needs for service, (e) identify those capital improvements needed for continued operation and maintenance of the facility; (f) make a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits, (g) make a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits, (h) establish the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area, (i) establish the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establish the amount of the impact fee that will be imposed for each unit of increased service demand, and (k) have a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements, (iii) allocates collected impact fees for construction of the capital improvements, and (iv) covers at least a 5-year period and is reviewed and updated at least every 5 years. (3) The service area report is a written analysis that must contain documentation of sources and methodology used for the purposes of subsection (2) and must document how each impact fee meets the requirements of subsection (7). (7) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: FNI Legal Considerations in Establishing Impact Fees 9 City of Kalispell — Water, and Wastewater Impact Fee Study (i) the need for public facilities capital improvements required to serve new development, and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required... . (3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity." The basic principle followed under Montana State law requires the fee to be based on a proportionate share of the costs of the system required to provide service and adoption of fees and accounting be in compliance with the State of Montana law. The City's water and wastewater planning documents provide the planning criteria and need for any future improvements. The use of the methodology discussed in this report should meet the proportional share standard and provide final calculated impact fees in compliance with Montana law. The discussion within this portion of the report is intended to provide an overview of relevant Montana law as it relates to establishing impact fees. This summary discussion does not constitute a legal interpretation of Montana State law. 2.3 Summary This section of the report reviewed the legal basis for establishing impact fees in the State of Montana and in particular for a City. The next section of the report provides a detailed discussion of the specific calculation of the water impact fees for the City. FNI Legal Considerations in Establishing Impact Fees 10 City of Kalispell — Water, and Wastewater Impact Fee Study M. 3.0 Development of the Water Impact Fees 3.1 Introduction This section of the report presents the key assumptions and details used in calculating the City's water impact fee. The calculation of the City's water impact fee is based on City -specific accounting and planning information. Specifically, the impact fees are based on the City's fixed asset records, Capital Improvement Plan (CIP), 2018 Water Facility Plan Update (WFPU), and City and water utility planning data. The City provided other financial and accounting information that was used within this analysis such as annual debt service payments, past financing practices, etc. To the extent that the cost and timing of future capital improvements outlined in this section change, then the impact fees presented in this section of the report should be updated to reflect the changes. The present methodology used by the City is the combined approach. The combined methodology contains an existing or reimbursement cost component, and an incremental or future cost component. In other words, the City's existing assets are divided by the total ERUs for the projected time period, while the future or incremental expansion -related capital projects are divided by either the future capacity they will provide, or the additional ERUs for the projected time period. Both calculations are summed and the result is the total net allowable capacity charge. After reviewing the future capital projects it was concluded that some of the future capital projects should be divided by the total ERUs for the projected time period as the additional capacity provided benefits to all customers and not just new customers connecting to the system. Other projects would be divided by the future additional ERUs since these projects only benefited new customers. 3.2 Overview of City"s Water System The City currently provides water services for a population of approximately 23,000 with 8,280 metered residential, commercial, and industrial accounts. The existing water supply and distribution system for the City's water service area includes 11 municipal wells, four storage reservoirs (one elevated and three ground storage reservoirs), two pressure zones, one pressure regulating facility, two booster stations, 141 miles of transmission and distribution piping, and 1,473 fire hydrants. This report uses an annual population growth rate of 2.00% as projected by the 2018 Water Facility Planning Update, Chapter 3, Basis of Planning through 2030. 3.3 Present Water Impact Fees The City's present water impact fee is based on the cost for one ERU, for a 3/4-inch meter. The City's present water impact fees are shown below in Table 3-1. FNI Development of the Water Impact Fees 11 City of Kalispell — Water, and Wastewater Impact Fee Study Table 3-1 Present Water Impact Fees Meter Size Safe Operating AWWA Meter Present Capacity (gpm) Factor Ratio 21 Impact Fee 3/4-inch meter 20 1.0 $2,567 1-inch meter 50 2.5 6,418 1-1/2-inch meter 100 5.0 12,835 2-inch meter 160 8.0 20,536 3-inch meter 320 16.0 41,072 4-inch meter Calculated [1] Fee included 5% administration charge allowed by Montana Code. [2] Ratios based on a 5/8-Inch equivalent In Table 3-1, the impact fees for the larger meter sizes are determined by multiplying the impact fee for a 3/4-inch meter (i.e., one ERU) by the meter capacity weighting factors. The weighting factors are determined based on the American Water Works Association (AWWA) safe operating capacities for the type and size of meter. The 3/4-inch are set at 1.0. 3.4 Calculation of the City"s Water Impact Fee As discussed in Section 1, the process of calculating impact fees is based on a four -step process. In summary form, these steps are as follows: • Determination of system planning criteria • Determination of equivalent residential units (ERUs) • Calculation of the impact fee by system component costs • Determination of impact fee credits Each of these steps is discussed in more detail below. 3.4.1 System Planning Criteria System planning criteria typically involves calculating the amount of water required by a single- family residential customer (hence the term Equivalent Residential Unit or ERU). Water demand per ERU represents the basis for system design. The City's recent WFPU evaluated historical water use and used it to project future water demand and associated ERUs. The analysis resulted in the average day demand for a residential customer was 350 gallons day/ERU. This result is shown in Table 3-2. F)R l Development of the Water Impact Fees 12 City of Kalispell — Water, and Wastewater Impact Fee Study Table 3-2 ASummary of the System Planning Criteria 0 1 M Criteria Average Day Demand for Single Family Ill 350 Gallons/Day/ERU [1] From the City's 2018 Water Facility Plan Update and land use projections. 3.4.2 Equivalent Residential Units System planning criteria are used to establish the capacity needs of an equivalent residential unit (ERU). Based on the City's 2018 Water Facility Plan Update (WFPU), the planning criteria results in an average day flow of 350 gallons per day per ERU, a peaking factor of 3.0, results in a peak day flow per ERU of 1,050 gallons per ERU (350 X 3.0 = 1,050). Table 3-3 provides a summary of the planning criteria used to establish the City's calculated water impact fee. Planning Criteria Description Planning Criteria Average Day Flow M Peaking Factor IZi Peak Day Flow 350/gallons/ERU 3.00 1,050 gallons/ERU [1] Average day flow from City's 2018 WFPU and land use projections. [2] Peaking factor based on average day flow to peak day flow based on City's 2018 WFPU and land use projections. From the above information, the current ERUs and projected ERUs for the planning period were calculated. The ERUs were calculated based on the demand capacities and the average peak day flow calculated in Table 3-3. Table 3-4 summarizes the current ERUs and projected ERUs. FNI Development of the Water Impact Fees 13 City of Kalispell — Water, and Wastewater Impact Fee Study Planning Criteria Description Planning Criteria Total Capacity (mgd)111 Average Peak Day Flow per ERU Total Existing and Future ERUs Existing Capacity (mgd)IZi Average Peak Day Flow per ERU Total Existing ERUs Total Future ERUsl3i 15.90 1,050 gallons/ERU 15,143 12.15 1,050 gallons/ERU 11,571 3,571 [1] From the City's land use projections max day demand. [2] 2018 existing average day demand 4.05 mgd X 3.0 peaking factor = 12.15 mgd max day demand. [3] 15.90 mgd less 12.15 mgd = 3.75 mgd/1,050 peak gallons per ERU = Future ERUs 3,571. The total build -out capacity of 15.9 mgd divided by 1,050 gallons per ERU is a total City existing and future ERUs of 15,143 ERUs. The current max day demand is 12.15 mgd reflecting existing ERUs of 11,571 ERUs (12.15/1,050 gallons per day = 11,571 ERUs). The remaining capacity, the difference between 15.90 mgd max day demand and 12.15 current max day demand, results in 3,571 future ERUs (15,143 — 11,571). Detail of the development of the ERU calculation is shown in Technical Appendix A. Once the ERUs are developed the focus shifts to the calculation of the impact fee for each plant component. This aspect of the analysis is discussed below. 3.4.3 Calculation of the Water Impact Fee The next step of the analysis is to review the major functional system infrastructure to determine the impact fee for the system. In calculating the impact fees for the City, existing components, debt service for existing facilities, and future capital improvements relating to expansion were included. The methodology used to calculate each component is described below. EXISTING OR REIMBURSEMENT COMPONENT —To calculate the value of the existing assets, the City% s methodology considered the original cost of each asset. The City provided a detailed asset listing, as of June 2018, for the various existing components and their installation date. The original cost of the asset was then adjusted to a current cost value. To accomplish this, the original cost of each asset was escalated to current July 2019 dollars, based on the Engineering News Record (ENR) Construction Cost Index (CCI) for the 20-City average. This amount was reduced by the amount that was contributed by developers or grants. Those water improvements that were funded through tax increment financing (TIF), grants and special improvement districts (SID) were also excluded from the analysis. F)l l Development of the Water Impact Fees 14 City of Kalispell — Water, and Wastewater Impact Fee Study Given the value of the asset, the next step was to determine the portion of the project costs that were deemed eligible to be included in the calculation of the impact fee. The term impact fee eligible simply describes the amount of the asset to be included within the calculation of the fee. Within this study, vehicles and general plant assets were not considered capacity related, and were not included in the impact fee calculation. All remaining assets were considered to be 100% eligible. Total existing assets at current cost was $69.9 million. The value of the existing assets (net of contributions, grants, etc.) was divided by the total existing and future ERUs (15,143). A summary of the existing assets valuation can be seen on Exhibit 1 of Technical Appendix A. In addition to existing assets work in progress projects were included that were not completed and booked as an asset yet but also were not included in the capital improvement plan. The total eligible work in progress amounts to $1.4 million divided by the total existing and future ERUs (15,143) for a total of $96/ERU. As described below (see Debt Service Component discussion), the remaining principal portion of the debt associated with the assets was deducted from the total eligible asset value prior to calculating the impact fee. This inclusion of a debt service credit avoids double charging the customerfor the asset value in the existing or reimbursement component of the impact fee, and also in the debt service component of the rates. DEBT SERVICE COMPONENT - In addition to the reimbursement component, a debt service component was also developed. This component accounts for the principal on existing assets. By segregating the debt service out, the cost can be clearly identified and calculated appropriately. To avoid double -counting of the assets financed with debt, the future principal associated with those assets was deducted from the existing infrastructure value. The City has four outstanding issues for the water system, the 2004 Revenue Refunding Bond, 2012 Refunding SRF, 2012 Refunding SRF-B, and the 2017 SRF bond. In addition a new 2020 SRF loan for the 4 mile drive transmission project was estimated and included in the calculation. The City's total outstanding principal for these five issues is $5.7 million. Details of the debt service are shown in Exhibit 4, of Technical Appendix A. FUTURE COMPONENTS - An important requirement for an impact fee study is the connection between the anticipated future growth on the system and the needed facilities required to accommodate that growth. For purposes of this study, the City's most current Capital Improvement Plan was provided. City staff reviewed the existing capital improvement plan (CIP) and projects necessary to meet demand for the water system were included in the CIP. The total projects were $40.5 million, however several transmission projects were not included in the fee at this time. The total impact fee eligible future projects, included in the fee at this time, for water totaled $22.3 million. Several large projects that impact the CIP related to transmission infrastructure which are primarily related to growth and expansion on the system, however also benefit the system as a whole. These projects along with the projected ERU capacity is shown in Table 3-4. The existing and future capacity ERUs are 15,143, the future ERUs are 3,571. The total dollars FYZ l Development of the Water Impact Fees 1s City of Kalispell — Water, and Wastewater Impact Fee Study per ERU for the future component is $2,084 per ERU. Technical Appendix A contains the details of this portion of the fee. Estimated % Growth $ Growth Growth ERUs Cost Related Related $ / ERU Four Mile Trans. Phase 1 $2,689 100% $2,689 15,143 $178 West Reserve Transmission 654 100% 654 15,143 43 Southwest Transmission 2,982 56% 1,670 15,143 110 1st Ave. West Connection 146 56% 82 3,571 23 South Main St Transmission 466 56% 261 3,571 73 Buffalo Hill Transmission 2,330 100% 2,330 15,143 154 Four Mile Trans. Phase 2 1,924 100% 1,924 15,143 127 1 MG Elevated Tank 6,398 100% 6,98 15,143 423 Northwest Well #1 1,730 100% 1,730 15,143 114 Northwest Well #2 1,938 100% 1,938 15,143 128 Grossweiler Well 185 100% 185 15,143 12 New Meters 554 100% 554 3,571 155 Misc. Contract Main Upsize 1,940 100% 1,940 3,571 543 Total $23,942 $22,360 $2,084 3.5 Net Allowable Water Impact Fee The methodology used to establish the water impact fee is a combined approach. The combined approach adds the reimbursement component and the incremental or future component together, and accounts for any existing debt credit resulting in a net allowable impact fee. Based on the sum of the component costs calculated above, the net allowable water impact fee is $6,420. Under Montana statute, an impact fee may include a fee for the administration of the impact fee not to exceed 5% of the impact fee collected. In calculating the City's water impact fee, an administration component of 5% was added to the impact fee. A summary of this calculation is shown below in Table 3-6. FNI Development of the Water Impact Fees 16 City of Kalispell - Water, and Wastewater Impact Fee Study Plant Component Supply Storage T&D General Plant Debt Service Credit Work In Progress Total $/ERU Existing & Future ERUs 15,143 15,143 15,143 15,143 15,143 15,143 Existing Net Plant $23,529 $11,486 $34,935 $0 ($5,747) $1,451 Existing Fee per ERU $1,554 $759 $2,307 $0 ($380) $96 $4,336 Future Plant $3,854 $6,398 $12,107 Future Fee per ERU $255 $423 $1,407 $2,084 Total Fee per ERU $1,808 $1,182 $3,714 $0 ($380) $96 $6,420 Plus 5 % Administration Charge 321 Total Impact Fee $6,741 [1] Table 3-6 provides the calculation and reflects a blend of future and existing ERUs depending on the specific improvement. The calculated water impact fee of $6,741 compares to the City's present impact fee of $2,567 per ERU, or an increase of $4,174/ERU. Technical Appendix A, details the calculation of the net allowable impact fee. 3.6 Implementation of the Water Impact Fee The calculated impact fees for the larger meter sizes are determined by multiplying the impact fee for one ERU by the meter capacity weighting factors. The weighting factors are determined based on the American Water Works Association (AWWA) safe operating capacities for the type and size of meter. The safe operating capacity of each meter is divided by the safe operating capacity for a 3/4-inch meter to determine the weighting factor for each meter. Table 3-7 shows the present and calculated impact fees by class of service, by size of meter. FYZ l Development of the Water Impact Fees 17 City of Kalispell — Water, and Wastewater Impact Fee Study Meter Size Present Calculated Impact Fee Impact Feelz1 Residentiall3I 1'] $6,741 All Other 3/4-inch meter $2,567 $6,741 1-inch meter 6,418 11,257 1-1/2-inch meter 12,835 22,447 2-inch meter 20,536 35,929 3-inch meter 41,072 71,857 4-inch meter Calculated Calculated [1] The fees presented in this table include the 5% administration charge allowed by Montana code. [2] Calculated Impact Fee is based on a 3/4-inch equivalency. [3] Residential Single Family and Townhouse (1 ERU per unit), Duplex (2 living units combined) .80 ERU/unit (up to 1-inch meter). [4] Residential -Tiny home, or detached living unit 400 sq. ft. or less are 0.8 ERU/unit. As noted previously, the present water impact fee is $2,567/ERU. The calculated fee shown above is $6,741/ERU or an increase of $4,174/ERU. For residential customers, all single family and townhouses are assessed 1 ERU per unit, and duplexes 0.80 ERU per living unit, up to a 1- inch meter. Tiny home living unit 400 square feet or less as defined by State code, are assessed 0.80 ERU up to 1-inch meter. All other connections are assessed based on meter size. Meter sizes 4-inch and larger are individual calculated based on usage characteristics. In Table 3-7, the calculated impact fees for the larger meter sizes are determined by multiplying the impact fee for a 3/4-inch meter (i.e., one ERU) by the meter capacity weighting factors. The weighting factors are determined based on the American Water Works Association (AWWA) safe operating capacities for the type and size of meter. The 3/4-inch are set at 1.0. The safe operating capacity of each meter is divided by the safe operating capacity for a 3/4-inch meter to determine the weighting factor for each meter. Details of the analysis and key documents relied on for this study are provided within the Technical Appendix A. 3.7 Key Assumptions In developing the impact fees for the City's water system, a number of key assumptions were utilized. These are as follows: • The City provided the planning criteria based on land use planning assumption and the recent WFPU. • The methodology used is the combined methodology. The existing (reimbursement) and future (incremental) component are added together for a net allowable fee. FYZ l Development of the Water Impact Fees 18 City of Kalispell — Water, and Wastewater Impact Fee Study • The City's asset records from June 2018 were used to determine the existing plant assets, as appropriate. • The assets were brought to current costs based on the July 2019 ENR-CCI. • The City provided the CIP for future improvements from the most recent capital improvement plan through 2030. • The City determined and/or reviewed the portion of future improvements that were growth related. 3.8 Advisory Committee Review Under Montana law (7-6-1604), the calculated impact fees must be reviewed by an impact fee advisory committee. The City has convened an impact fee advisory committee for this specific purpose. The role ofthe advisory committee is to serve in an advisory capacity to the City Council. The advisory committee reviews and monitors the process of calculating, assessing and spending impact fees. Ultimately, the City Council is the governing body responsible for determination of and adoption of the final water impact fees. 3.9 Consultant's Recommendations and Adoption Considerations Based on our review and analysis of the City's water system, HDR recommends: ✓ The City should adopt water impact fees for new connections to the water system that are no greater than the net allowable impact fees as set forth in this report. ✓ The City as a matter of policy may adopt a water impact fee which is less than the calculated fees as shown in this report, but in doing so , the City will be sharing some portion of development impact costs with existing water utility rate payers. ✓ The City should adjust the impact fee each year by an escalation factor to reflect the cost of interest and inflation (e.g., ENR CCI). This method of escalating the City's impact fee should be used for no more than a four-year period. After this time period, as required by Montana law, the City should update the fees based on the actual cost of infrastructure and any new planned facilities contained in an updated master plan, capital improvement plan or rate study. ✓ The City should update the actual calculations for the water impact fees at such time when a new water capital improvement plan, facilities plan, comprehensive system plan, or a comparable plan is approved or updated by the City, when a major infrastructure project is completed, or every five years as deemed by Montana Code law. 3.10 Summary The impact fees developed and presented in this section of the report are based on the planning and engineering design criteria of the City's water system, the value of the existing assets, and generally accepted ratemaking principles. Consistently updating the charge annually based on the Engineering New Record cost index and reviewing the impact fees every five years will continue to create equitable and cost -based fees for new customers connecting to the City's water system. FNI Development of the Water Impact Fees 19 City of Kalispell — Water, and Wastewater Impact Fee Study OR 4.0 Development of the Wastewater Impact Fees Introduction This section of the report presents the key assumptions and details used in calculating the City's wastewater impact fee. The calculation of the City's wastewater impact fee is based on City - specific accounting and planning information. Specifically, the wastewater impact fees are based on the City's fixed asset records and wastewater capital improvement plan. The City also provided other financial and accounting information. The combined methodology applied to the water utility to determine the water impact fees was also applied to the wastewater impact fee calculation. The charge is based on the value of the system in place with capacity available for growth (i.e. the existing or reimbursement component), and future or incremental capacity projects. The existing or reimbursement component and the future or incremental component are added together, including a debt credit, resulting in the total net allowable impact fee under the combined methodology. 4.2 Overview of the City's Wastewater Systen The City provides sewer service to an existing population of 22,761 with 9,148 residential, commercial, and industrial connections. The City also provides service to the Evergreen Water and Sewer District through an interlocal agreement. The City of Kalispell's wastewater treatment plant (WWTP) is an advanced Biological Nutrient Removal Facility (BNRF). In 2009, the City completed a two year plant expansion project to accommodate rapid area growth; the plant capacity was increased from 3.1 to 5.4 million gallons per day. The sewer system consists of 120 miles of sewer gravity main, 25 miles of sewer force main, 2,600 sewer manholes, and 36 sewer lift stations 4.3 Present Wastewater Impact Fee The City's wastewater impact fee is based on one equivalent residential unit (ERU). The City's wastewater impact fee was last updated December of 2013. The City's present wastewater impact fee is shown in Table 4-1. Type of Use ERU Impact Fee Single Family 1.00 $5,757 In Table 4-1 the impact fees are determined by multiplying the impact fee by the appropriate ERUs for the type of building or sewer usage. FNI Development of the Wastewater Impact Fees City of Kalispell — Water, and Wastewater Impact Fee Study 20 4.4 Calculation of the City's Wastewater Impact Fee As discussed in Section 1, the process of calculating impact fees is based on a four -step process. In summary form, these steps are as follows: • Determination of system planning criteria • Determination of equivalent residential units (ERUs) • Calculation of the impact fee by system component costs • Determination of impact fee credits Each of these steps is discussed in more detail below. 4.4.1 System Planning Criteria System planning criteria for sewer is based on one equivalent residential unit flow of 200 gallon per day/ERU. This result is shown in Table 4-2. Description Criteria Average Day Demand for Single Family Ill 200 Gallons/Day/ERU [1] Based on 200 gpd/ERU, see Chapter 4, of the 2019 Wastewater Facility Plan Update. 4.4.2 Equivalent Residential Units From the above information, the current ERUs and projected ERUs for the planning period were calculated. The ERUs were calculated based on the demand capacities and the average day flow of 200 gallons per day per ERU. Table 4-3 summarizes the current ERUs and projected ERUs. The impact fee is calculated separately for the treatment and collection functions of the sewer system. The City has an interlocal agreement with Evergreen Water and Sewer District to provide treatment services only as Evergreen does not receive any collection services from the City. F)R l Development of the Wastewater Impact Fees 21 City of Kalispell — Water, and Wastewater Impact Fee Study Plan Desc Existing Plant Capacity (mgd)131 Existing ERUs Future Plant Capacity (mgd) Average Peak Day Flow per ERU Total Plant Capacity (mgd)141 Total ERUs 2.81 2.43 14,050 12,150 2.59 2.17 12,950 10,825 5.40 4.60 27,000 22,975 [1] Based on 200 gpd/ERU (Capacity / 200 gpd = ERUs) [2] Collection does not include Evergreen with a ceiling demand of 0.805 mgd. [3] 2018 existing average day demand of 2.81 mgd, less Evergreen of 0.38 mgd for collection (2.81-0.38=2.43) [4] Based on total plant capacity of 5.40 mgd, less Evergreen ceiling for collection (5.40-.0815=4.60). The total capacity of 5.4 mgd divided by 200 gallons per ERU is a total City existing and future ERUs of 27,000 ERUs. The existing average day flow is 2.81 mgd or existing ERUs of 14,050 (2.81/200 gallons per day = 14,050 ERUs). This results in 12,950 future ERUs. Detail of the development of the ERU calculation is shown in Technical Appendix B. Once the ERUs are developed the focus shifts to the calculation of the impact fee for each plant component of treatment and collection. This aspect of the analysis is discussed below. 4.4.3 Calculation of the Wastewater Impact Fees The next step of the analysis is to review each majorfunctional component of plant in service for treatment and collection and determine the wastewater impact fee for that component. In calculating the impact fee for the City a number of infrastructure and cost components were reviewed. These included the City's existing infrastructure components, annual debt service for the existing facilities, and the future expansion -related capital improvements, which were all separated for treatment or collection functions. Overall, the general methodology used to calculate each component of the wastewater impact fee was the combined method. In this calculation the existing and future assets are divided by the total ERUs for the projected time period and the result is the total net allowable impact fee. EXISTING OR REIMBURSEMENT COMPONENT —To calculate the value of the existing assets, the City% s methodology considered the original cost of each asset. The City provided a detailed asset listing, as of June 2018, for the various existing components and their installation date. The original cost of the asset was then adjusted to a current cost value. To accomplish this, the original cost of each asset was escalated to current July 2019 dollars, based on the Engineering News Record (ENR) Construction Cost Index (CCI) for the 20-City average. This amount was reduced by the amount that was contributed by developers or grants. Those wastewater improvements that F)R l Development of the Wastewater Impact Fees 22 City of Kalispell — Water, and Wastewater Impact Fee Study were funded through tax increment financing (TIF), grants and special improvement districts (SID) were also excluded from the analysis. Given the value of the asset, the next step was to determine the portion of the project costs that were deemed eligible to be included in the calculation of the impact fee. The term impact fee eligible simply describes the amount of the asset to be included within the calculation of the fee. Within this study, vehicles and general plant assets were not considered capacity related, and were not included in the impact fee calculation. All remaining assets were considered to be 100% eligible. Total existing treatment assets at current cost was $49.9 million and total existing collection assets at current cost was $21.7 million. The value of the treatment existing assets (net of contributions, grants, etc.) was divided by the total existing and future ERUs of 27,000. The value of the collection existing assets (net of contributions, grants, et.) was divided by the total existing and future ERUs of 22,975. A summary of the existing treatment and collection assets valuation can be seen on Exhibit 1 of Technical Appendix B. In addition to existing assets, work in progress projects were included that were not completed and booked as an asset, and yet also were not included in the future capital improvement plan. The total eligible treatment work in progress amounts to $3,163 dollars, divided by the total existing and future ERUs of 27,000, for a total of $0/ERU. The total eligible collection work in progress amounts to $14.1 million, divided by the total existing and future collection ERUs of 22,975, for a total of $617/ERU. As described below (see Debt Service Component discussion), the remaining principal portion of the debt associated with the assets was deducted from the total eligible asset value prior to calculating the impact fee. This inclusion of a debt service credit avoids double charging the customerfor the asset value in the existing or reimbursement component of the impact fee, and also in the debt service component of the rates. DEBT SERVICE COMPONENT - In addition to the reimbursement component, a debt service component was also developed. This component accounts for the principal on existing assets. By segregating the debt service out, the cost can be clearly identified and calculated appropriately. To avoid double -counting of the assets financed with debt, the future principal associated with those assets was deducted from the existing infrastructure value. The City has two outstanding issue for the treatment system, the Treatment Digester Lid SRF loan, and the Treatment Improvement 2012 Refunding SRF bond. The City's total outstanding principal for these two issues is $8.2 million, divided by total existing and future ERUs of 27,000, results in a $304/ERU debt credit for treatment. The collection system has three outstanding loans. The two Westside Interceptor loans of $7 million apiece, for a total of $14.0 million, and the Highway 93 S. 2012 Refunding SRF loan for $1 million. The City's total outstanding principal for these three issues is $13.1 million, divided by total existing and future ERUs of 22,975, results in a $572/ERU debt credit for collection. Details of the debt service are shown in Exhibit 4, of Technical Appendix B. FUTURE COMPONENTS - An important requirement for an impact fee study is the connection between the anticipated future growth on the system and the needed facilities required to FYZ l Development of the Wastewater Impact Fees 23 City of Kalispell — Water, and Wastewater Impact Fee Study accommodate that growth. For purposes of this study, the City's most current Capital Improvement Plan was provided. City staff reviewed the existing capital improvement plan (CIP) and updated the projects necessary to meet demand for the sewer system were included in the CIP. The total impact fee eligible future projects, included in the fee at this time, for treatment totaled $31.8 million, of which $18.9 million was included in the fee. The total impact fee eligible future projects, included in the fee at this time, for collection totaled $31.8 million, of which $22.0 million was included in the fee. The total dollars per ERU forthe future component is $1,467 per ERU for treatment, and $2,039 per ERU for collection. Estimated % Growth $ Growth Plant Component Cost Related Related Growth ERUs $ / ERU Treatment Two Clarifiers $8,108 100% $8,108 EQ Basin 2,818 100% 2,818 Primary Digester 7,188 33% 2,372 DAFT Units 1,965 45% 1,965 Composting Facility 8,487 39% 3,310 Sidestream Treatment 2,520 45% 1,134 Chemical Room Modif. 377 45% 169 Digester Chem. Feed 121 45% 54 Influent Pipe & Diversion 221 66% 145 Total Treatment $31,806 $18,997 12,950 $1,467 Collection Lift Station #4 $4,073 46% $1,873 Bluestone Upsize 187 56% 105 Westside Interceptor 3,936 100% 3,936 Lift Station #9 1,738 84% 1,460 Rose Crossing West 2,081 50% 1,040 West Reserve Drive 5,373 50% 2,686 West Spring Creek Road 3,484 50% 1,742 Lift Station #36 3,083 68% 2,096 #55 Westside Inter.Three Mile 2,934 100% 2,934 #74 Grandview 1,314 46% 604 #92 R/R Upsize WWTP 169 66% 111 Misc. Contract Upsize 3,483 100% 3,483 Total Collection $31,860 $22,076 10,825 $2,039 Development of the Wastewater Impact Fees F)R l 24 City of Kalispell - Water, and Wastewater Impact Fee Study Net Allowable Wastewater Impact Fee The methodology used to establish the wastewater impact fee is the same combined approach as the water impact fee. Under Montana statute, an impact fee may include a fee for the administration of the impact fee not to exceed 5% of the impact fee collected. In calculating the City's wastewater impact fee, an administration component of 5% was added to the impact fee. Based on the sum of the component costs calculated above, the net allowable wastewater impact fee is $6,346. The treatment impact fee portion is $3,164 and the collection impact fee portion is $3,182 per ERU. A summary of this calculation is shown below in Table 4-5. Plant Component Treatment Impact Fee Impact Fee by Component $/ ERU Existing Plant $49,964 Plus: Work in Progress 3 Less: Outstanding Debt Principal (8,203) Total Net Existing Plant $41,764 Total Existing and Future ERUs 27,000 Total Existing Plant per ERU $1,547 Total Future Plant $18,997 Future ERUs 12,950 Total Future Plant per ERU $1,467 Total Existing and Future per ERU $3,014 Plus Administration Charge at 5% 150 Total Treatment Impact Fee $3,164 Collection Impact Fee Existing Plant $21,745 Plus: Work in Progress 14,184 Less: Outstanding Debt Principal (13,135) Total Net Existing Plant $22,794 Total Existing and Future ERUs 22,975 Total Existing Plant per ERU $991 Total Future Plant $22,076 Future ERUs 10,825 Total Future Plant per ERU $2,039 Total Existing and Future per ERU $3,030 Plus Administration Charge at 5% 152 Total Collection Impact Fee $3,182 Total Combined Wastewater Impact Fee per ERU $6,346 F)R l Development of the Wastewater Impact Fees 25 City of Kalispell — Water, and Wastewater Impact Fee Study The calculated sewer impact fee of $6,346 compares to the City's present impact fee of $5,757 per ERU, or an increase of $589/ERU. Technical Appendix B, details the calculation of the net allowable impact fee. 4.6 Implementation of the Sewer Impact Fee The impact fee is determined by multiplying the number of ERUs times the amount of the impact fee per ERU. The impact fee is implemented by the type of building and sewer per ERU. For residential customers, all single family and townhouses are assessed 1 ERU per unit, and duplexes 0.80 ERU per living unit. A tiny house unit 400 square feet or less as defined by State code, are assessed 0.80 ERU. Details of the ERU, per type of building is in Technical Appendix C. 4.7 Key Assumptions In developing the impact fees for the City's sewer system, a number of key assumptions were utilized. These are as follows: • The City provided the planning criteria based on land use planning assumption and the recent WWFPU. • The methodology used is the combined methodology. The existing (reimbursement) and future (incremental) component are added together for a net allowable fee. • The City's asset records from June 2018 were used to determine the existing plant assets, as appropriate. • The assets were brought to current costs based on the July 2019 ENR-CCI. • The City provided the CIP for future improvements from their most recent capital improvement plan, through 2030. • The City determined and/or reviewed the portion of future improvements that were growth related. 4.8 Advisory Committee Review Under Montana law (7-6-1604), the calculated impact fees must be reviewed by an impact fee advisory committee. The City has convened an impact fee advisory committee for this specific purpose. The role of the advisory committee is to serve in an advisory capacity to the City Council. The advisory committee reviews and monitors the process of calculating, assessing and spending impact fees. Ultimately, the City Council is the governing body responsible for determination of and adoption of the final wastewater impact fees. 4.9 Consultant's Recommendations and Adoption Considerations Based on our review and analysis of the City's sewer system, HDR recommends: ✓ The City should adopt wastewater impact fees for new connections to the sewer system that are no greater than the net allowable impact fees as set forth in this report. ✓ The City as a matter of policy may adopt a wastewater impact fee which is less than the calculated fees as shown in this report, but in doing so , the City will be sharing some portion of development impact costs with existing wastewater utility rate payers. ✓ The City should adjust the impact fee each year by an escalation factor to reflect the cost of interest and inflation (e.g., ENR CCI). This method of escalating the City's impact fee FNI Development of the Wastewater Impact Fees 26 City of Kalispell — Water, and Wastewater Impact Fee Study should be used for no more than a four-year period. After this time period, as required by Montana law, the City should update the fees based on the actual cost of infrastructure and any new planned facilities contained in an updated master plan, capital improvement plan or rate study. ✓ The City should update the actual calculations for the wastewater impact fees at such time when a new wastewater capital improvement plan, facilities plan, comprehensive system plan, or a comparable plan is approved or updated by the City, when a major infrastructure project is completed, or every five years as deemed by Montana Code law. 4.10 Summary The City's wastewater impact fee developed and presented in this section of the report are based on the planning and engineering design criteria of the City's sewer system, the value of the existing assets, future capital improvements, and generally accepted ratemaking principles. Adoption of the calculated net allowable impact fee will create equitable and cost -based fees for new customers connecting to the City's sewer system. FNI Development of the Wastewater Impact Fees 27 City of Kalispell — Water, and Wastewater Impact Fee Study '. 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N N Q co U O iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 iJ1 lD Y lD lD lD lD lD lD lD lD lD lD O O lD lD lD lD lD n n n n 0 n n n c-I c-I c-I c-I c-I c-I c-I c-I c-I c-I N c-I c-I c-I c-I c-I c-I c-I c-I c-I c-I Qc N N N lD - } LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL m O LL LL LL LL LL LL LL LL LL LL O LL LL LL LL LL LL LL LL LL LL c LL LL LL +�+ O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 O1 U C C C C C C C C C C C C C C C C C C O O O O O O O O O O O O O O O O O O 00 U U U U U U U U U U U U U U U U U U ci O N 0 M M G1 Y C u m OO 3 OO IL LL a, O f�6 C C C C C ram+ ram+ ram+ ram+ ti C C C C C C C C C ram+ ram+ ram+ ram+ ram+ C C C C ram+ ram+ ram+ mMO m o in in x x Ji in O in x x x x D4 C cu = Q Q Q Q Q J Q Q Q Q V m N n CL Y H + Q > F O 'O v bD bD N bD N N bD x y o o o 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 cu LL OJ 1 m OD CL C W Ol Li OJ 1 m en CL W Ol OJ LL mm !Z _ 01 U N T z Z W c•I O N O M 0 0 0 0 0 0 0 0 0 0 lD O O N Ol 0 0 0 0 0 0 0 lD �f1 n n 41 ti �f1 N N n c-I O O O O O O O O O O O O O O O O O O O O - O� 00 N a � m 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O O O O O O O O O O O O O O O O O O O O O O O c-I c-I c-I n m O ci 0 lD 0 O O lD kD � ci . 00 N n N lD r, n n O N lD n W lD N rl ci u'1 N N u'1 00 O Ol 00 lD n LD LD LD mlzj N N n O O 41 ci n m N lD N O 41 ID N�t lD lD w n N m � w lD N N 01 �t n n�t m�t c-I c-I 00 �t ID m 01 c-I ID �t ci .ti lD lD lD lD lD lD lD lD lD N N N N N N N N N N N N N O O O O O O O O O O O O O O O O O O O O O O ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti 0r O �r1 O Ol N Ol 0 r, 00 O Ol n n a0 N� n ti O O O O O of W ci LD �f1 O lD O N m ci 41 ci ci LD O O � of 00 �f1 lD m n N Lf1 O m n W lD N c-I N m O N Lf1 N n W �f1 N �t lD m n 01 N �t lD � n O 01 c-I lD n �t N �t c-I c-I 00 �t N �t ID m ci 01 c-I ID �t ci c-I n n n n n n n n n W 00 00 00 00 00 00 00 00 00 00 00 00 O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ O O O ti ti ti ti O ti ti ti 0 0 0 0 0 0 0 0 0 0 0 l\D l\D l\D n n n n .\-� N m m l\D l\D l\D l\D l\D l\D l\D l\D l\D l\D l\D ti ti H Z > w D p 0 O a0 w w CJ Z n U w w C7 p wp p O = W D V w a0 of p w w w w D_ a00 O of ¢ O m O o' Z Z Z w Q Z 0of O LL> Z C7 w of O X .�.. .�.. .�.. O_ c~ Z Q W lJ"1 _ c~ N m Q O Q Q O of O Q w of p = Q w p w vl vl vl vl vl vl w w w U p p Q vUi w Q=> w w w w w H H H H � U_ U _ •� �n D_ m 00 00 00 0o ao ao 00 00 00 00 00 00 00 00 `n `l O i o i i i- i i i i i i i i of W N W W W W W W W W W W W W v v y v o o o o O o 0 0 U U U U cu cu o v v v o np E E v s v v v v v v v o_ v v v v v v v '� w w > O z = a a !Z !Z m m m In In O O N N p cz 0z 0z 0z 0z 0z w w w o o 0z 0z 0z 0z 0z cz cz cz cz cz as n m E E H OJ LL 01 1 n m_� E W � n ci 41 �f1 N lD N 41 n �f1 c-I 01 � m m o m 41 ci 41 m N .-I N O N lD Ol m N n� O 00 .--i n G1 W u'1 �f1 n 00 01 n O of �f1 m u'1 N oo m of ci 00 u'1 O .� ci N .-I .-I L11 6l �' c-i ti N N iA 4 ? 01 u'1 m 00 �t 00 O 00 01 m O �� N N 00 N 0 0 0 of N N ci O N W N u'1 o ao m ao m o LD m m 00 o N o r- o ui to to to a o o 1. Oho ' a Ln o rn 4 c-I y/} V? O u'1 ID 01 01 �t ID 00 u'1 u'1 N N N u'1 n .-I 01 �f1 N m N m n �f1 w N G1 W lD m a m l3 ti O m 00 N 00 O P� ti 41 m N � n m � 00 c-I 01 n ei c-I �n w m r, r, � �n m o �n m 00 m of ti oo Lr1 O- Ol ti n O �' 01 u'1 m 00 �t n O lD 01 m O �� G1 N 00 C ol 0 0 0 n N m c O O N t0 N to o Oo � � m Ln ao o Ln o � .� m 00 o N o I, 0o m ui to ui m N a o c LD oo n O •� o M 0 a LA 4/T y/} � N V? Y i 3 D a Y >= f6 v u 4 -a o y m 2 v `o 2 0> o- y aRi 3 0 `o o u> v m p (D M z z O D_ v`tii in > > > > > > > > > > > > a a a a a a a a a a a a CL CL CL CL CL CL CL CL CL CL CL ' O O O O O O O O O O O O N N N N N N N N N N N N O O O O O O O O O O O O O O O O O O O O O O O O O 2 O N N f6 d d LL N m D4 CL C W QI Li QI u 'en72 m CLL W C 01 QI LL mm !Z _ m {Vj N K Z 00 ci O N O M C 7 Ln n n ci N 01 to 411. to 00 0 of ih a W O N Ln to to N m oo n m m 0 to � +n +h11 O N +n 00 o m m •� a m cN.i 0 rl n a m m 0000 ti n fm N ci O rl M Lf 1 a . Appendix B - Wastewater Impact Fees k L % � 2 2 LU k u 0) m 0) k E CL kn E � � m 2 � E 0 r u CL u E % : k E � � 2 012 7 -* w e e m L a a 14, 14, m m V). V). \ \ 00 k \ � % / e e a � � f 2 m \ » } 7 \ k to { to E 2 _ _ u = - g \ \ ui \ k� 0 \ \ \ E m E E E { E E E e tko e e e 2 \ \ / 0 x ui § � � � ui k LL CL £ k E } e / e M \i / � � � \ \ \ k C � - \ � � 3 Ln -i cq $ cq m m � In � J 2 m } u 2 \ < { » \ to k _k g to LXU = o x LLI R % - \ g - / / = 2 \ Q / u to E u Z� u s u Q z I / / / \ � \ 0 � � � § � (D W W LL L V d a E W W s a c Y � O E .� U w Ln (u M ci N - l0 c, N ci l0 IZ � W to to O Ln � L^n LLnn " a) Ln NI al W t r r c to to Ln u v, v, L4 W Ln r N l0 co c-I O -i m m m W 'a Ln Z m 0 r� r` r` � m (U ci N Ol O Ln Ln ci I� d' N Lr V Y LL N v c4 N M M M Ln N m Q a E 0 0 0 �k.0 m O m Ln Z iy N N N t4 t4 t4 t4 t4 t4 v1 Sry. Ln M CO O CO N O N Z m O Ln Ln rn mI of "v t4 t4 — w "O N Y LL O 7 V N V m Q m u _ co O rA r �' v � O-1- V). O a Ln t0 in N N O r� t0 Ln � v O M O V). N N Ln 00 - � �l' R N t0 O M O^ o O o N �I 00 r to 3 iy N N e'% L/} { Ln L in {/} L1 in vi in w ci OM I-, n -* ^ -, N c-I O - � H cl Ln to Ln Ln IM O h HI t0 `� ri ri ri `� to ri N LU L4 V/ L 0 Obi O O p v :a: v LL LL E v U C co 0 u C N O u • C O tj U a a a) a) ° y o v — ° C O v o � C m o y u = °' v = Y v U a a c v E y °1 c E %x C O ar C N E -o L Q r a)E C c N O Q u v-r3 E Q E .X a) a .X a)m m a a d w 0 " O +' LU 0� O - y +. u° r F- a F- u° F a y I 00 15, c O M O O r- Ln Ln c Ln 0 0 �t Ln Ln -i N N l0 P% U N f V r-I r-I f V 00 OO Ol N N -i O u OJ Z 0 00 0 o in in O O M O O N N 00 N l; Cli C r-I 0 L OJ L J ui 00 O O O O O 00 Ln Ln Ln Ln Ln 0 N N O O N C C O �j N N r- N c-I c-I c-I c-I N O V .0 Z) cr- LL Q on 0- -i O O m O O 0 00 Ln Ln Ln Ln Ln r j O O r j l3 Ol L�1 chi rr-I rN-I rN-I +' N N OA _ OA U C W C co LU lS3 LU lS3 L ry� () 0 W N 0 7 vOi v w N �i ra ' M � L Y Q Lu Q L.L m J LU Lim C C Z - E t O N N 4J C c o 4 J m d C 4 Y t L � Z E (s CL OA � M v E c U H Z N L L) ; S N4• 4- c tB 0 t y U Q ; Q U t S on 00 - lS3 -I +J c 0 0 o s C C C 0 0 0 c lS3 lS3 lS3 co co co N M 00 15 - 0 o O O O o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 —0� O. N o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M M M N C O...... O O N C.. O C. O C l0 N C 00 l0 N r } O� O C C C M M M M C C C C C C C C C of of of of of of of of M M M N O o O a N.. 0 0 0 O O O O O O O O O O O O O O O O O O O O O O O O m v � EC n n n w In a N N N g n n n w n a m o N 3 � C N O a 0 0 0 00 0 O O O O O O V .O — O u N 01 C O .� O d N 1� 01 N a M 00 W Ol Ol Ol N N V N a) o V1 rl 'i V1 a N W W W N W O1 rl N 'i O1 W O1 rl N W N n N W N O O O O O O N N N l0 n 0 M N N l0 N n l0 W V1 W l0 W O O. 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V), ih a 411. N 00 lD t0 � O a O �11 lD ci ci to � N � tD LD cm n O � LD N O t/? n n 5 Ln ci O 00 I, 00 n M 0i m (n N n O N to O to m � LD a O ti O LD tf1 N .ti m to .-I tf1 to M I� 01 Il 00 m 00 ti ri t0 to to 411. V), m a 411. of .ti N m kDD kDD N kDD m T � kDD ti N a n m o ao o cl a m n n N tr'i O 00 � 00 � m M O 00 N O N m O 0 m m N tf1 00 00 N LD ti m 01 01 0 01 t/T ON rl a t/? N ih W u 0 Obo N M N N E 7 O_E to _c _6 .V Q N as n C ~ ~ ~ N N C C C U U C7 C7 C7 00 O 00 Appendix C — Wastewater Building Sewer Use '. E RU No. I Group" Unit I ERU I Total 1 lAssisted Living person 1 0.31 $1,904 2 113ar (no food service) seat 1 0.02 $127 3 lCamos 3.01 Day Camps (no meals served) person 1 0.06 $381 3.02 Day Camps (meals served) I person 1 0.1 $635 1 4 (Car Wash 4.01 Rollover (automated self-service) bay 16.8 $106,613 4.02 Tunnel (conveyor with attendants) bay 29.6 $187,842 4.03 Hand-held (self-service) bay 1.6 $10,154 5 Children Day Care person 0.06 $381 6 Church (Add for ancillary services) seat 0.016 $102 1 7 (Commercial Uses 7.01 Auto Dealership 1000 sf 0.312 $1,980 7.02 Bakery 1000 sf 0.6 $3,808 7.03 Banks 1000 sf 0.16 $1,015 7.04 Barber Shops 1000 sf 0.8 $5,077 7.05 Beauty Salons 1000 sf 1.4 $8,884 7.06 Carry Out (no seating) 1000 sf 0.8 $5,077 7.07 Convenience Stores 1000 sf 0.72 $4,569 7.08 Department Store w/ Lunch Counter 1000 sf 0.32 $2,031 7.09 Department Store w/o Lunch Counter 1000 sf 0.16 $1,015 7.10 Drug Stores 1000 sf 0.52 $3,300 7.11 Garage (Auto -Truck Repair) 1000 sf 0.056 $355 7.12 Hotels/Motels/Extended Stay (add for restaurant) unit 1 0.48 $3,046 7.13 Laundries and Cleaners 1000 sf 1.24 $7,869 7.14 Laundromats washer 0.74 $4,696 7.15 Medical Office Building Complex 1000 sf 0.52 $3,300 7.16 Mixed or Uncertain Under One Roof 1000 sf 0.72 $4,569 7.17 Office Buildings 1000 sf 0.36 $2,285 7.18 Real Estate Inc. 1000 sf 0.36 $2,285 7.19 Retail Stores (stand-alone pad) 1000 sf 0.2 $1,269 7.20 Service Stations 1000 sf 0.72 $4,569 7.21 Shopping Centers/Strip Malls Under One Roof 1000 sf 0.72 $4,569 7.22 Supermarkets 1000 sf 0.8 $5,077 7.23 Warehouses 1000 sf 0.06 $381 1 8 ICountry Club (Total Each Fixture Below - Add for food service) Baths bath 1.2 $7,615 Showers shower 2 $12,692 Sinks sink 0.2 $1,269 Toilets toilet 0.6 $3,808 Urinals urinal 0.4 $2,538 9 jDance Hall/Night Club (add for food service) seat 0.02 $127 10 Doctor's Office 1000 sf 1 2.48 $15,738 1 11 IDwellines 11.01 Apartments (Use for Multi -family) unit 0.8 $5,077 11.02 Single FamilyTownhomes: dwelling 1 $6,346 11.03 Single Family Separate: dwelling 1 $6,346 11.04 Tiny Homes (meeting State Definition - <_ 400 sf) dwelling 0.8 $5,077 12 Factories/Manufacturing Plant exclusive industrial wastes person/shift 0.14 $888 13 lFire House person/shift 1 0.241 $1,523 14 Fraternal Service Organizaions (includes Elks, Knights of Columbus) 1000 sf 0.561 $3,554 15 Funeral Home TBD TBD I TBD 16 Group Homes person 0.31 $1,904 17 iHealthClub 17.1 With Pools (Total Each Fixture Below) Showers I shower 1 1.82 $11,550 Sinks I sink 1 0.12 $762 Toilets toilet 0.4 $2,538 Urinals urinal 0.26 $1,650 17.2 Without Pools (Total Each Fixture Below) Showers shower 1.3 $8,250 Sinks sink 0.12 $762 Toilets toilet 0.4 $2,538 Urinals urinal 0.26 $1,650 18 Hospitals bed 1.4 $8,884 19 Library 1000 sf 1 0.4 $2,538 20 Marinas slip 0.1 $635 21 Mobile Home Parks space 0.8 $5,077 22 Nursery School child 0.016 $102 23 Nursing Homes bed 0.5 $3,173 1 24 1 Post Office 24.01 Community 1000 sf 0.256 $1,625 24.02 Bulk Mail or Package Distribution Center 1000 sf 0.06 $381 25 Prison/Jail bed 0.5 $3,173 1 26 (Public Parks (Total Each Fixture Below) Faucets faucet 0.06 $381 Flush Toilets toilet 0.14 $888 Showers El shower 0.4 $2,538 Urinals urinal 0.04 $254 1 27 (Restaurants 27.01 Conventional (includes bars where food is served) seat 0.1 $635 27.02 Fast Food 1 seat 0.07 $444 27.03 Outdoor Seating seat 0.032 $203 1 28 (Schools 28.01 Boarding student 0.4 $2,538 28.02 Colleges student 0.06 $381 28.03 Elementary School student 0.024 $152 28.04 Middle School student 0.032 $203 28.05 High School student 0.08 $508 29 ISports Arena (add for food service) I seat 1 0.02 $127 30 ISurgical Centers 1 1000 sf 1 0.721 $4,569 1 31 ISwimmine Pools 31.01 Private community/hotel only (Add each below) each 2 $12,692 Baths bath 1.2 $7,615 Showers shower 2 $12,692 Sinks sink 0.2 $1,269 Toilets toilet 0.6 $3,808 Urinals urinal 0.4 $2,538 31.02 ISwimming Pools, Public (based on pool capacity) swimmer 1 0.04 $254 1 32 ITheater 32.01 Arena (no food) seat 0.02 $127 32.02 Dinner seat 0.1 $635 32.03 Drive-in space 0.02 $127 32.04 Movie seat 0.004 $25 33 ITravel Trailer Parks (RV Parks) 33.01 w/individual water and sewer hookups space 0.4 $2,538 33.02 w/o individual water and sewer hookups toilet 0.2 $1,269 34 Veterinarian/Kennels 1000 sf 0.72 $4,569 35 Other Undefined Building and Sewer Uses TBD TBD TBD 36 Additional Loading or Change of Use TBD TBD TBD 37 Wet Industry (hieh volume and/or streneth effluent - see W.I. tab) TBD TBD TBD Notes: 1. Groups 1-34 data from EDU values given by Anne Arundel County, MD (copied in 2019). 2. Values were coverted from gpd to ERU by dividing by 250 gpd (MD value for single family home). 3. Determination of the group to be used for calculation of impact fees shall be made by City engineering staff. i 9 m O O , Gi Ln C U >. fl_ +-+ C O b4 C i c co 00 `� -0 (o t QJ 4J co Ln O >- L_0 p 4J L > u .� > t m m Q •N o 3 ° D o o o ° L -0 -C -0 L aJ ,- c ZS �J U iJ '+-+ (L6 C V C O C 'n p c (6 i 0 'n a aJ U C ,n L C co Q .'^ 0 = o 3 L aJ ci Ln CL E-o ao i 3 m L ci o c>J c �J L a U °J b4 N O b4 c c cJ , ° a L +� o c c O J O co L D Q aJ CL o O E C:CL YCL aJ D m o o aJ _O aJ L > UU fl_ N no O aJ i cL aJ a aJ° b U c O'n Ln o o aJ o aJ flr ' DL uoa Ln'L fl- O E 4J Ln O L O O L O D E U C ci � _ N pC Ln — o Ln Yco h�tpo0 X p GJ O OC Ln ° O u C:O to O C .. 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~ Z U Co `^ Co O m N N O O O L m 0 w CL x U ;,� n3 •� 4 J •� Q O N v Q LJ L 3 V7 a••' (0 C aj i O O N O L 0 Co �+ cn (Li) (n 0 CO Ln in H m O (7 0 0 O N N N Z a�-I r n n n N n N I [�- N I n N n 00 Cl O 1 LU aJ v v N 0A C i6 .5 m v Ca m v +J Ca i 9 0 +� c c n 2 c Ln c v N Ln ° ( � ~� � +� +� 0 °co CJ t o _0 m c� +� o o CL Ln E Ln u �° -0 E O *' u > L U 'Ln m m m C m Ln E 4 c-0 m L U m" m c Q L Ln m 1E t u � 0 ,m c CJ on _0 to �n f6 L °J Q 0 `� m 0 c CL L N 3 a ci D o m 3 es 0 m m c to ao °; c H 'n m L= i 'u Q L a m o ao L m° N t ^ t t ao c m L m o o D Ln o > m t ° L o 3 to E m °c° > m o Sao E aco m Fa oO *' Ln C: C O" m J — 0- L p z t •c J 0 D t U aJ .� 7 aJ •N ❑" aJ M 0 U ,� c 0 +, CL 2 +� 7 7 C ' ° _ m N � L 'n m U i GJ E to O 0 S 7 C o m �a U 00 C �n N O aJ t 0 .c _ L o .c C� f6 .0 t le C m m Q Ln ' .N o m L o ao .� m m o c *' m c v cj 0 U m C �C Cj Q 0 m C >- V 0 aJ V C GO aJ aJ N ° E L L E m C aJ C `� � aJ c aJ O E 0 U 0 Q aJ Q �, •E c m t N m L �' E— aJ 0 ON NCL C— o° `° aj o C— Q -0 °; 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C U L 0 �j m aJ --0 Q 0 C Ln aJ E N-0 °p °J aJ ++ m Q CL Q 0 C 00 0 :� m E •� i m m �° m— m s L° 'n c U L -0 c Q c 3 a Q v m ao e i m m aJ o m E U O m 3 aJ C_ _0 m m 00 c Ln C m m 0 — m= > Q— t U m ,n E C ° Q C m n V n to c E L° m u m aJ + m aJ Ln m-0 m m L i `E° C m_a o ` c ° C o o m t m E a�J m Q 'U o m U c 0 m °co D E E m m 0 C LLn — c> m-0-0 m m C m aJ ci� m m i ao w c m m E 0 t m > E Q 'G aJ °p C E Ln Ln 0 m 0 L O a ci- Z ci — m" E m E U O +-' aJ t E — `o m E O o L L L GJ L 0 Ln m t u U m Ln +� O c t E t O° E •" '� E L E E +_ Ln c m t m f6 O O 3 m m 0 3 3 O Ga N GO GO Go o aJ Ln 0 `� �- aJ 7 aJ 00 aJ O o C u j v C C C E L .E O L h0 Ln aJ aJ O t �n aJ ccaUO Q •C 0 D aJ E D 0 3 E c= 3•N ci D� .� a D o ° i 0 t U U Q-0 GJ 7 L °U L L O-0 o ° a (Na LGJ n (C a Ln a .E a (U6 a a �t N 1.0 00 00 c-I Ln W O r-I r-I O O O O cto cto CLO t t (A \ y� 4- 0 0 O C 4J aJ O 7 Q Q c-I C O N c 3 � C C a) ++ QJ U i o a1 N m CA N v ° a a o toC L O 4O w i M N t c 3 C m 4 bmA o a .m 1 N E 0 U O U "a O E E Ln 2 m CA a) 7 � •s � O i v H t rIT to0 li li Ln .� rP C a) a) = C) T -a " O41 'c Q w dA O 7 _ Y aJ Q �O 41 U VI U X 'a �1 M Y Ci 0 U- .fir Li- LL LLJ a -I N M C O O O O Z ei e-I a�-I a�-I a�-I a�-I r-I I r-I 0i'i _ \ / \ V) J / _ \ ) ± G 1-0 ± 0 E � 2 = _ \ \ / 2 \ / \ S E E e E CL - % 2 $ ±� CL » ± 2 » 2 / { } \ \ / © a ƒ 9 § \ ) / \ \ \ \ \ \ \_ _ % _ 2 \ ) E @ 2/ 2 S E= 7 o / 7 2 ® \ / 5 / % } ° = 2 5 )ƒ k k ) + [ [ » \ / z _ g 2\/ E » 2 \ . °» G ± c \ / = t / c } \ E _ { � 3 f U \ \ ( CL \ \ @ \ § / \ \ \ k CL \ \ / 0 2 % / \ n \ c \ » Z c c M G / 2 5 _ \ _ § \ % E ) ® 5 \ ( ] 5 / C 2 _ _» g = .= gg 5 \ �_ \_CL \ \ \ \ 2 2_ ) g§ 2® - B 8\ 5/ \> e e 4 /_\/ 0 2 { / k ) 2 ° Z \ o C e m§ a g e j\ e E g e $ \ \ \ \ § / \ n / % o » \ Z = m o ® e = \ 2 = 7 { = 5 \ \ { \ E » » 5 ® 3 2 ® = 3 -le \ : ( \ E S \ § \ \ n \ \ % 2 8 / 2\ 5/ 5 o< u< </ < < e q q �/1 m /% f q% f f e e e d o d e d o d w o e 2 \ _ / $ \ _ � $ _ 0 \ / k 5 \ { \ n \ / \ 2 % E 5 k § ca c x 2 = m LU 2 LU � E a CA§ E _ s ° Ln ° $ = ° $ ƒ \ / \ / c ƒ g ƒ ƒ § 4CmaA q $ 7 / \ / 7 / / § lr § 7 2 z LL _ - j-m LU N N N N 0A C i6 .5 m 4J Ca 4J +J Ca F I - O _ ci a; c ° L u '� o E N `° E Y u `° ° m a�J O o E t E to O ° 'L U L + +� aJ u, L m p -0 O L O U U — E L i f6 N 'L 3 3 N f6 O L E M N " D M w 'L M V1 O QJ f6 L U 4J L N E + (p W L uL f6 J N — f6 .� C CLn fl L fl i C N " W °o a a o Ln •� m cJ Do° 6tLc 0_0 D O 3 O E > a ° c °uto m ciu Q O ° _0 ci am°' .- > E O ci �O CJ U Q .� C to J ci O w to o� CL 'v u Q 4J 4J N C CJ C >. L > 4J c6 O C ' to to O -0 -0 � `� O `� O 4J u Q _a D � 3 N i - 7 O ci U t0 t0 ci � 'Ln CJ E CL `� Q OU u-a ci _0 Q Q -0 w O >- > A L L `� O E +�-+ H 4J L 4J to rp U 4J U 4J `� tNo -0 4J ci - C o L Q ° L 4J 3 '^ +-+ C b4 Q O C tLo O uo C= O ��., C E M OL = to •� O '+.+ — L •CA C Q L O L W u ip L ip L ci w E '^ L 'fin 7 E C O 3 cn O Ln u Ln0 Ln U L C QJ b4 O 4J .— -0 = dJ >- O O a-+ O s E vi .� C +-+ uo M Z O > cJ C C O U- uo C o .� 3 b4 D o t _ 'v a n C u 'u '+.+ Z3 'n Q 7 N O a — QJ = •� c6 c6 D Zn d u E � >'- 4J O C E 4J Q to U 0 LnL C O C L C > u �n � p U i 4J i C O •" C Q +_+ i � L L M '7 c a-+— Ln w u L � � � C +�-+ w 3 3 Q E W C 0 N b4 o C p Ln 4J 4J > O +-' Ln 4J 4J C C 7 ON z � L CL C E 'fin o L OL N n C 7 a u '� 7� 'L O > 'n ci L 4J 4J C M .Ln U �n = L M iJ O ° rp Go 4J U b4 `� L 7 O L L E Q C u t }' U }' C O ° O C 'gyp C U- N O �O L O U O O QJ } �J +' > �O ++ > O aL-+ 3 N N b4 b4 p O Gp Gp t'Jo O vi C E CJ 0 7 }' ❑" L Ln E Ln O � O L c 4J C C p O C •N C C •� ON L +, 4J 'n U O L '^ �C L ( co O 3 4J > 3 M U `� U L 7 Q > •� C Q v�i N to o a° �, u L C +-+ a o a>-0 m Q z� a s a Ln a a a° o 00 O Lq N O Ln O c I O c I O O W O O O O O O O O O O O O O n O } O U L O O -0 O M M Co O O Q U -0 L� Ln 7 Ln Ln Ln 4J a-•• N U O_ N C 0 O m N � a-•• OJ 7 L a-•• X Co N LL m ( M W =5 i _ U f0 C dA m Co +' v O O a-•• O CA N CA C i m O u O V C — i N �4-1 Ln of 2 o v� C M O L > E \ d n n O O- GJ O 0 E Y C u U - 3 7 >-0 a-•• IE 0 -0L L O 7 O O 7 7 p u m i `i cn U ii O C7 Z Z a a 0-1 1 1 1oC ai N a -I N M C O O O O O Z N rn N N N N nai nai N N N N N N W OJ OJ OJ N d0 C i6 .3 m 4J Ca 4J +J Ca 1-0 'n N U O _0 N O ici tLo p C Q c b4 u i 7 'O Q N V Q M C ci M N L L Z O _ C O .0 GO U (6 C OJ C '+-+ p C �n Ln 7 4J +�-+ O O Ln C M OJ � +-+ " L O In -0 L G L c c U > 3 L L N N O O — N 7 C N i U OJ (0 +-' O C N .L Q .N O fl" SCi' .Z ci U � C ci O -1 OJ U L f6 }' O vi 4J p,0 E 4J (0 > 4J L �O to U Vf �n E OJ O GJ U t GO C b4 L U V1 >i OJ Q OJ 'n C j OJ a-+ a-.+ .L '� OJ � > N b4 D N Ln M Ln 3 I GO GO L QJ N L L L ,ci C Q O ate-+ �, (o },. U co }.. D O > L O L GO ,n OJ co C LS w O to Q C +�-+ +L-+ OJ (6 Q 7 cJ C U Q C 7 C L C N+.+ L 00 N OJ GO Y O (6 > OJ U C L O vi -0 O u •U u.�= Q C CL N > > C N � f6 tLo+�.+ LJ O (6 L >- O O vi C p C C (6 CL E 'Z3 Ln C O a C t OJ c6 C N OJ C �n L L > O o ci O U U h0 w OtLo O 7 L C L ci OJ � U +��-+ CJ O Q p N OJ > L + c-I N 3 n LnC b4 O U O � __ 7 O � L C C GO O OJ L N O OJ >- C b4 •N C (6 C � C-0 •C co co p L C "J u 0 C ci C O a-+ � i i O E E E c'Jo � 3 �QJ O iJ '� U L V E ' N OJ O i � OJ V E +_+ O U L C O u a u 3 s O : u o . 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O �'' aJ •+.+ C 7 N %N Ccc aJ C — aJ +' C C C a-+ > C •+.+ C aJ �n aJ > a (6 o a� C aJ C L C a C N o -0° m° o° �' .� W O H H H 4� O 0 0 � O CD CD CD d tn O A i Ln = i41 0 CA d O 'a �n w m � tvD C E 7 (AC L O ai QJ �_ O IA C i 3 4] J C m C C Q 41 ba O 4J t +J QJ :a Li > C) Q i O RT Ln n Z M M M M —A N M Wastewater Building Sewer Use ERU Wet Industry Waste Impact Fee Charge The results of the treatment plant classification, or the percentages by volume, BOD, TSS, TP or TN component, was used to determine the classification of the Impact Fee treatment related component. Total Cost Volume BOD TSS TP TN Treatment Plant Classification % 23% 11% 40% 12% 14% Impact Fee Treatment Component $3,164 $ 721.39 $ 360.70 $ 1,265.60 $ 376.52 $ 439.80 Per unit cost for each component. Treatment Impact component is divided by the annual Ibs for and ERU. Base on domestic wastewater characteristics of 200 gpd and the following strengths per component. BOD TSS TP TN Kalispell Base Strengths (ppm) 250 250 7 40 Annual Ibs/year = (avg gpd*365)*8.345 * ppm 1,000,000 Impact Fee Strength Unit Costs BOD TSS TP TN Total Treatment Cost $ 360.70 $ 1,265.60 $ 376.52 $ 439.80 Annual Ibs per ERU 152 152 4 24 Unit Cost / Ibs The unit costs developed are then used to determine the fee for a customer based upon the specific flow and strength characteristics of that customer. These charges are applied, on a per pound basis for all pounds over the annual pounds of one (1) ERU. Example Current Treatment Impact Fee $3,164 per ERU Current Collection Impact Fee $3,182 per ERU Step 1- Determination of ERU and Base Impact Fee Charge Base ERU Annual Flow (365 *200 gpd) 73,000 gallons New Customer Annual Flow 200,000 gallons Total ERU's 2.7 Treatment Impact Fee Charge for new customer $8,668 Collection Impact Fee Charge for new customer $8,718 Total $17,386 Step 2- Determine Extra Ib/yr per Component BOD TSS TP TN New Customer Concentration (ppm) 270 250 12 86 New Customer lb/year 451 417 20 144 Purchased lb/year 417 417 12 67 Extra lb/year 33 0 8 77 Cost per Extra lb/component $ 2.37 $ 8.31 $ 88.30 $ 18.05 Total Extra Strength Cost/Component $ 79.06 $ - $ 736.82 $ 1,385.66 Step 3-Total Wet Industry Charge Base Treatment and Collection Charge $ 17,386.30 BOD Extra Strength Charge $ 79.06 TSS Extra Strength Charge $ - TP Extra Strength Charge $ 736.82 TN Extra Strength Charge $ 1,385.66 Total Charge $ 19,587.84 '. Appendix D —Montana Code 2015 Montana Code Annotated Title 7. LOCAL GOVERNMENT CHAPTER 6. FINANCIAL ADMINISTRATION AND TAXATION Part 16. Impact Fees to Fund Capital Improvements 7-6-1601. Definitions. As used in this part, the following definitions apply: (1) (a) "Capital improvements" means improvements, land, and equipment with a useful life of 10 years or more that increase or improve the service capacity of a public facility. (b) The term does not include consumable supplies. (2) "Connection charge" means the actual cost of connecting a property to a public utility system and is limited to the labor, materials, and overhead involved in making connections and installing meters. (3) "Development" means construction, renovation, or installation of a building or structure, a change in use of a building or structure, or a change in the use of land when the construction, installation, or other action creates additional demand for public facilities. (4) "Governmental entity" means a county, city, town, or consolidated government. (5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b) The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. (6) "Proportionate share" means that portion of the cost of capital system improvements that reasonably relates to the service demands and needs of the project. A proportionate share must take into account the limitations provided in 7-6-1602. (7) 'Public facilities" means: (a) a water supply production, treatment, storage, or distribution facility; (b) a wastewater collection, treatment, or disposal facility; (c) a transportation facility, including roads, streets, bridges, rights -of -way, traffic signals, and landscaping; (d) a storm water collection, retention, detention, treatment, or disposal facility or a flood control facility; (e) a police, emergency medical rescue, or fire protection facility; and (f) other facilities for which documentation is prepared as provided in 7-6-1602 that have been approved as part of an impact fee ordinance or resolution by: (i) a two-thirds majority of the governing body of an incorporated city, town, or consolidated local government; or (ii) a unanimous vote of the board of county commissioners of a county government. 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report. (2) The service area report is a written analysis that must: (a) describe existing conditions of the facility; (b) establish level - of -service standards; (c) forecast future additional needs for service for a defined period of time; (d) identify capital improvements necessary to meet future needs for service; (e) identify those capital improvements needed for continued operation and maintenance of the facility; (f) make a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; (g) make a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establish the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establish the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establish the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) have a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 5 years. (3) The service area report is a written analysis that must contain documentation of sources and methodology used for purposes of subsection (2) and must document how each impact fee meets the requirements of subsection (7). (4) The service area report that supports adoption and calculation of an impact fee must be available to the public upon request. (5) The amount of each impact fee imposed must be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the governmental entity as a result of new development. The calculation of each impact fee must be in accordance with generally accepted accounting principles. (6) The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (2). (7) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required. (1) The collection and expenditure of impact fees must comply with this part. The collection and expenditure of impact fees must be reasonably related to the benefits accruing to the development paying the impact fees. The ordinance or resolution adopted by the governmental entity must include the following requirements: (a) Upon collection, impact fees must be deposited in a special proprietary fund, which must be invested with all interest accruing to the fund. (b) A governmental entity may impose impact fees on behalf of local districts. (c) If the impact fees are not collected or spent in accordance with the impact fee ordinance or resolution or in accordance with 7-6-1602, any impact fees that were collected must be refunded to the person who owned the property at the time that the refund was due. (2) All impact fees imposed pursuant to the authority granted in this part must be paid no earlier than the date of issuance of a building permit if a building permit is required for the development or no earlier than the time of wastewater or water service connection or well or septic permitting. (3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity. (4) Governmental entities may accept the dedication of land or the construction of public facilities in lieu of payment of impact fees if: (a) the need for the dedication or construction is clearly documented pursuant to 7-6-1602; (b) the land proposed for dedication for the public facilities to be constructed is determined to be appropriate for the proposed use by the governmental entity; (c) formulas or procedures for determining the worth of proposed dedications or constructions are established as part of the impact fee ordinance or resolution; and (d) a means to establish credits against future impact fee revenue has been created as part of the adopting ordinance or resolution if the dedication of land or construction of public facilities is of worth in excess of the impact fee due from an individual development. (5) Impact fees may not be imposed for remodeling, rehabilitation, or other improvements to an existing structure or for rebuilding a damaged structure unless there is an increase in units that increase service demand as described in 7-6-1602(2)0). If impact fees are imposed for remodeling, rehabilitation, or other improvements to an existing structure or use, only the net increase between the old and new demand may be imposed. (6) This part does not prevent a governmental entity from granting refunds or credits: (a) that it considers appropriate and that are consistent with the provisions of 7-6-1602 and this chapter; or (b) in accordance with a voluntary agreement, consistent with the provisions of 7-6-1602 and this chapter, between the governmental entity and the individual or entity being assessed the impact fees. (7) An impact fee represents a fee for service payable by all users creating additional demand on the facility. (8) An impact fee ordinance or resolution must include a mechanism whereby a person charged an impact fee may appeal the charge if the person believes an error has been made. 7-6-1604. Impact fee advisory committee. (1) A governmental entity that intends to propose an impact fee ordinance or resolution shall establish an impact fee advisory committee. (2) An impact fee advisory committee must include at least one representative of the development community. The committee shall review and monitor the process of calculating, assessing, and spending impact fees. (3) The impact fee advisory committee shall serve in an advisory capacity to the governing body of the governmental entity.