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A capacity charge is a charge to pay for public agencies' facilities in existence at the time the charge is <br />imposed or to pay for new facilities that will be constructed in the future that are of benefit to the person <br />or property being charged (new development or increases to existing service capacity). The charge <br />ensures that the "growth pays for growth" by allocating the cost of new facilities and the cost of unused <br />capacity in existing facilities to new development while allocating the cost of repairing and refurbishing <br />facilities used by current customers to rates. <br />In developing capacity charges, we have endeavored to satisfy the rational nexus criteria generally <br />applied to these types of charges. A rational nexus -based facility reserve charge must: <br />• Be rationally based on public policy that demonstrates a nexus between new development and <br />the need to expand or build facilities to accommodate it. <br />• Not exceed the new development's proportional share of the cost of facilities needed to serve <br />that development, after crediting it for other contributions that it has already made or will make <br />toward that cost. <br />• Not be arbitrary or discriminatory in its application to individuals or customer classes. <br />Capacity charges are intended to recover a portion of the City's Capital Improvement Program (CIP) cost, <br />and utility rate payers' prior investment in capital facilities that support land development through utility <br />system expansion. The Wastewater capacity charges developed in this study meet the regulatory <br />requirements found in Government Code Section 66000 et sequentia regarding the establishment of <br />capacity charges. <br />Section 66013 of the State of California Government Code defines a Capacity Charge as a charge to pay <br />for public agencies' facilities in existence at the time the charge is imposed or to pay for new facilities <br />that will be constructed in the future that are of benefit to the person or property being charged (new <br />development or increases to existing service capacity). The City currently uses the term "Connection <br />Fee" to mean capacity charges collected at the time of connection. <br />Section 66013 of the State of California Government Code defines a connection fee (as opposed to a <br />capacity charge) as a fee for the physical facilities necessary to make a water connection or a sewer <br />connection, including, but not limited to, meters, meter boxes, and pipelines from the structure or project <br />to a water distribution line or sewer main, and that does not exceed the estimated reasonable cost of <br />labor and materials for installation of those facilities. <br />1-1 <br />DH�'IIVI sc c4 ;oi, bids cinthi^-Ihcet'i�b-11hI ccIto; hc III IIIGflI,il.', sp:e;Hci I fl lN ! cind c4, h'ir000lIIIIcin I. <br />