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<br />Memorandum <br />Excess Capacity Credit Policy <br />November 3, 2005 <br />Page 5 <br />expected credit that would be allowed for the oversized sewer main extensions <br />within these basins. This cost information would be used to develop a <br />proportional sewer availability fee surcharge based on the capacity needs ar <br />demands of the connecting party. <br />This sewer availability fee surcharge could be applied as follows: <br />1) to all new connections to the public sewer system regardless of where <br />those connections are located in the service area, or <br />2) only to new sewer connections made directly to or benefiting from sewer <br />mains extended within identified unsewered sewer basins. <br />The same advantages and disadvantages noted in the benefited area section of <br />this memorandum also apply to the application of the sewer availability fee <br />surcharge.. <br />Disbursement of credits: <br />Distribution of funds to developers that have approved excess capacity <br />agreements could be made in a single lump sum or on a regular schedule such <br />as yearly. In the case of a single lump sum payment the utility would be incurring <br />the expense upfront with the expectation that the expended funds would be <br />recovered as connections are made to the system, With periodic credits to the <br />party providing the excess capacity, funds would be disbursed only after fees are <br />collected from individuals connecting to the main extensions.. An administrative <br />fee based on the cost of service would be collected for tracking and processing <br />the capacity credits. <br />Water: Any credit for the portion of a water main extension where excess <br />capacity is made available would be disbursed in a lump sum payment at the <br />completion of the project and after all required as-built drawings, easements, <br />dedication letters, etc. have been submitted and approved by OWASA. OWASA <br />would recover this upfront expenditure of funds through a minimal increase in the <br />general water rates and fees (service and availability) paid by all new and <br />existing customers within the OWASA service area. <br />Sewer. On an annual basis OWASA would pass-through funds received from an <br />increase or surcharge to the sewer availability fees paid for all new sewer <br />connections (subject to the defined benefited area) over the term of the excess <br />capacity agreement. The amount to be disbursed would be based on the ratio of <br />the project's eligible credit to the total credits for all approved projects. <br />Financial considerations: <br />Staff has completed a review of the locations within the OWASA service area <br />where oversized water or sewer mains would be required. The following table <br />provides a listing of the project areas, the approximate extension length and <br />