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ES-1 DRAFT Use of contents on this sheet is subject to the limitations specified at the end of this document. Executive Summary In April 2018, the City of San Leandro (City) contracted with Municipal Financial Services to evaluate wastewater capacity charges and recommend a revised schedule of wastewater capacity charges.1 A capacity charge is a charge to pay for public agencies’ facilities in existence at the time the charge is imposed or to pay for new facilities that will be constructed in the future that are of benefit to the person or property being charged (new development or increases to existing service capacity). The charge ensures that the “growth pays for growth” by allocating the cost of new facilities and the cost of unused capacity in existing facilities to new development while allocating the cost of repairing and refurbishing facilities used by current customers to rates. Capacity charges may only be used for funding capital improvements. The City’s main source of revenue, Sewer Service Charges, are from rate payers and may be used for capital or operating expenditures. The City’s current and recommended wastewater unit costs of capacity and capacity charges are shown in the table below.2 Unit costs of capacity are used to calculate charges for any new connection or increase in capacity required for a current connection. Current charges were developed in 2010 and have been escalated over time using an index based on construction costs. Table ES-1. Current and Recommended Wastewater Unit Costs of Capacity 1 The term “connection fee”, as used by the City in the San Leandro Administrative Code, and “capacity charge”, as defined in the Government Code and used in this study, are synonymous. 2 BOD and SS are conventional (as opposed to toxic) pollutants that are removed from wastewater during the treatment process. BOD is an acronym for biochemical oxygen demand. SS is an acronym for suspended solids. BOD is measured using a laboratory test in which standardized procedures are used to determine the oxygen requirements of wastewater. The BOD test measures the oxygen required for the biochemical degradation of organic material. The test results represent the average BOD strength of wastewater discharged during a given period. SS is measured using a laboratory test in which standardized procedures are used to measures solids that either float on the surface of, or are in suspension in water, sewage or other liquids, and which are largely removable by laboratory filtration procedures. Current Recommended Item FY19 FY20 FY21 FY22 FY23 FY24 Unit Costs of Capacity Flow, $/gallons per day $20.51 $22.02 $23.14 $24.30 $25.51 $26.76 BOD, $/pounds per day $838.61 $938 $986 $1,035 $1,087 $1,140 SS, $/pounds per day $961.17 $993 $1,043 $1,096 $1,150 $1,207 Dollar Change Flow $1.51 $1.12 $1.16 $1.21 $1.25 BOD $99 $48 $49 $52 $53 SS $32 $50 $53 $54 $57 Percent Change Flow 7% 5% 5% 5% 5% BOD 12% 5% 5% 5% 5% SS 3% 5% 5% 5% 5%