Agenda 03-07-24; 6-a - Amendments to the Water and Sewer Management, Planning, and Boundary Agreement

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21 Impact of proposed water and sewer boundary expansion in Southern Orange County on OWASA Water Distribution and Wastewater Collection Systems November 9, 2023 Page 5 connects their property to OWASA utilities. The purpose of these fees is to recover a portion of OWASA's Primary Capital Facilities necessary for providing water, sewer, and/or reclaimed water and, in effect,to "buy in"to the utility system. The benefitting party pays for main extensions as needed to bring water, sewer, or reclaimed water to and throughout their property. The extension of service may consist of constructing water, sewer, and/or reclaimed water mains, service lines, pump stations, and other appurtenances necessary to serve a property. In addition, to support future orderly development, they are required to provide easement within their property for main extension to unserved properties. For developed but unserved areas, residents may request an assessment project, where OWASA manages and builds the desired infrastructure and recovers all costs needed to serve the benefitting properties through assessment. When the mains need to be sized larger than required for the property in order to support the needs of future development, there may be a cost differential, or excess capacity cost, between the size of pipe required by OWASA and the base size of the pipe required to serve the property. For sewer mains, this cost is borne by the developer but may be partially or fully recovered through an Excess Capacity Credit Agreement. With this agreement, OWASA recovers additional 4%of the System Development Fees from each new customer benefitting from the upsized main and returns them to the developer annually for ten years. There is therefore no direct cost of the main extension to current customers. For upsizing of water mains, OWASA pays the excess capacity cost through a betterment agreement with the developer. Because of the looped and interconnected nature of water mains, there are not distinct future beneficiaries of the upsized main to whom the cost is attributable: as the entire distribution system is strengthened,the excess capacity cost is paid by OWASA ratepayers. System Development Fees ensure that new development pays its share of OWASA's Primary Capital Facilities, for which OWASA is financially responsible. Those facilities benefit all or large portions of OWASA's service area and customer base, and include OWASA's lands, buildings, reservoirs, and treatment facilities; raw water storage and transmission; treated water pumping; ground and elevated storage tanks; interconnections with Durham, Hillsborough, and Chatham County; "backbone" water, sewer, and reclaimed water mains (generally those that are 12 inches or larger in diameter); and sewer pumping stations and force mains collecting flows from multiple interceptors or those deemed necessary and permanent by past formal action of the OWASA Board. By paying these fees, the property becomes an equal partner in the existing OWASA infrastructure and holdings, and shares equally in any excess capacity costs borne by customers. Summary The recommended adjustments to the water distribution and wastewater collection systems to serve the modeled demands under a high density buildout condition are summarized below. Type Cost Purpose Water Main Reinforcing Loop (4800 feet) 1.5 to 3 million Restore available fire flow capacity Sewer Main Extension (7700 feet) 2 to 3 million Extend from existing system Sewer Interceptor(2300 feet) 3 to 5 million Provide necessary downstream capacity