City of Lawrence
Department of Utilities
2006 Annual Report
Utility System Development Charges
Dave Wagner, Director
Michael Tubbs, Management Analyst
March 1, 2007
2006 Annual Report
Utility System Development Charges
Dave Wagner, Director
Michael Tubbs, Management Analyst
March 1, 2007
2006 Annual Report
Utility System Development Charges
Pursuant to City ordinance the Lawrence Department of Utilities is charged with preparing an annual report for the City Commission detailing the receipt and expenditure of system development charges on or about March 1 of every year. By ordinance, the report shall: detail the receipt and expenditure of system development charges, review the rates of system development charges, and report on matters concerning the administration of system development charges.
On July 2, 1996, the City Commission passed Ordinance No. 6791 establishing system development charges (SDC) for water and sanitary sewer customers to fund improvements to the City’s utility system. A 3-year phased-in approach was adopted by the City Commission for implementing the system development charges effective January 1, 1997. The third year of this approach was implemented January 1, 1999. On September 21, 1999, Ordinance No. 7138 was adopted to update the development charges for water and sanitary sewer from January 1, 2000 through January 1, 2004 which is effective through 2004. On August 24, 2004, Ordinances No. 7808 and No. 7809 were adopted to update the development charges for water and sanitary sewer from January 1, 2005 through January 1, 2009 which is effective through 2009.
Receipt and Expenditure Information
Funds generated from the system development charges are deposited into the City Utility Fund to fund improvements to the City’s water and wastewater utility system. These funds are used to pay for utility system design and construction costs, interest and debt issuance costs, and capital improvements--which expand the capacity of the water and wastewater systems. Water system development charge collections are designated to be used only for water utility capital improvements and wastewater system development charge collections are designated to be used only for wastewater utility capital improvements. Table A shows the 2006 and 2005 water and wastewater system development charges collected. Table A1 shows 2006 water and wastewater system development charges collected by month. The SDC’s collected for the water system was higher than the wastewater SDC’s in 2006 and 2005. This is attributed in the rate study as a lower unity equity value is used for the development of wastewater system development charges to lessen the immediate cost impact on new customers. The full value of the wastewater charge is to be phased-in over the five-year study period. Further detail describing the implementation of system development charges can be found in the Black and Veatch document Report on Revenue Requirements, Costs of Service, and Rates for Water and Wastewater Service, (Final Report), dated August 2004.
Table A. 2006 and 2005 water and wastewater system development charges collected.
|
Description |
2006 |
2005 |
|
Water System Development Charges |
$681,785.00 |
$702,730.00 |
|
Wastewater System Development Charges |
$512,852.00 |
$391,930.00 |
|
Total System Development Charges Collected |
$1,194,637.00 |
$1,094,660.00 |
Table A1. 2006 water and wastewater system development charges collected by month.
|
Month |
SDC-Water |
SDC-Wastewater |
Total |
|
January |
$38,550.00 |
$21,490.00 |
$60,040.00 |
|
February |
$37,680.00 |
$37,000.00 |
$74,680.00 |
|
March |
$84,965.00 |
$67,300.00 |
$152,265.00 |
|
April |
$65,630.00 |
$42,360.00 |
$107,990.00 |
|
May |
$34,450.00 |
$18,722.00 |
$53,172.00 |
|
June |
$31,200.00 |
$21,840.00 |
$53,040.00 |
|
July |
$37,050.00 |
$28,080.00 |
$65,130.00 |
|
August |
$64,350.00 |
$52,500.00 |
$116,850.00 |
|
September |
$31,180.00 |
$16,640.00 |
$47,820.00 |
|
October |
$18,180.00 |
$21,400.00 |
$39,580.00 |
|
November |
$172,900.00 |
$130,860.00 |
$303,760.00 |
|
December |
$65,650.00 |
$54,660.00 |
$120,310.00 |
|
TOTALS |
$681,785.00 |
$512,852.00 |
$1,194,637.00 |
Additional information on water and wastewater system development charge collections for 2006 can be viewed on the attached bar charts provided at the end of this report.
The Department of Utilities processed and collected system development charges on applications for service in 2006. Table B1 shows the total number of service applications received by the Department of Utilities in 2006 and 2005 for residential service. Table B2 shows the total number of service applications received by the Department of Utilities in 2006 and 2005 for non-residential service.
Table B1. 2006 and 2005 total number of residential service applications received by meter size
|
Size of Meter |
2006 Residential Applications (ct.) |
2005 Residential Applications (ct.) |
|
5/8" |
403 |
425 |
|
1" |
20 |
38 |
|
1 ½" |
0 |
0 |
|
2" |
1 |
0 |
|
>2" |
|
0 |
TOTAL |
424 |
463 |
Table B2. 2006 and 2005 total number of non-residential service applications received by meter size
|
Size of Meter |
2006 Non-Residential Applications (ct.) |
2005 Non-Residential Applications (ct.) |
|
5/8" |
6 |
17 |
|
1" |
9 |
8 |
|
1 ½" |
0 |
1 |
|
2" |
6 |
1 |
|
>2" |
|
0 |
TOTAL |
21 |
27 |
The system development charges collected helped repay loan payments from the State Revolving Loan Fund. The annual State Revolving Loan payment for the water utility is $521,252 for the Clinton Plant Expansion and the annual payment for the Lime Residuals Project is $415,948 (c). The wastewater utility has annual payments totaling $3,206,722 for the Wastewater Plant Expansion. These expenditures alone account for the system development fees collected in 2005.
Additional growth related projects in 2006 for water and wastewater facilities included: Waterline Rehabilitation and Replacement Program (c); acquired WWTP site and completed Siting & Environmental Studies (c), Wakarusa Water Reclamation facility (a), Pump Station Project- Kansas River Basin (c), Inflow/Infiltration Removal (c), General Sanitary Sewer Improvements (c), General Pumping Station Improvements (c), General WWTP Improvements (c);
[(a) Project required to meet anticipated growth related requirements.]
[(c) Project required to improve system transmission capacity or reliability - approximately 33%to 50% can be apportioned to growth depending on the project.]
The system development charges collected in 2006 will be earmarked for projects in the 2007 Capital Improvement Program; for debt and interest payments for the State Revolving Loan Fund; and bonded payments for the water and wastewater improvements. Examples of growth related projects planned for 2007 with anticipated cost: Continuation of the Phase II of the Clinton WTP expansion ( $16,700,000); Kaw Water Treatment Plant Intake Pumping Improvements (600,000); Waterline Rehabilitation and Replacement Program ($1,500,000); Pump Station 48 ($11,000,000); and Pump Station 16 Expansion ($1, 750,000).
Table C summarizes the 2006 system development charge rate schedule for both water and wastewater customers. Table C. 2006 system development charge rate schedule
|
Type of Customer |
Size of Meter |
Water System Development Charge * |
Wastewater System Development Charge ** |
|
Residential |
5/8" |
$1,300 |
$1,040 |
|
Residential |
1" |
$3,250 |
$1,040 |
|
Residential |
1 ½" |
$6,490 |
$1,040 |
|
Residential |
2" |
$10,380 |
$1,040 |
|
All-Other |
5/8" |
$1,300 |
$1,900 |
|
All-Other |
1" |
$3,250 |
$4,740 |
|
All-Other |
1/1/2" |
$6,490 |
$9,480 |
|
All-Other |
2" |
$10,380 |
$15,160 |
|
All-Other |
3" |
$19,460 |
$28,430 |
|
All-Other |
4" |
$32,440 |
$47,380 |
|
All-Other |
6" |
$64,880 |
$94,750 |
|
All-Other |
8" |
$129,750 |
$189,500 |
|
All-Other |
10" |
$194,630 |
$284,250 |
|
All-Other |
12" |
$285,450 |
$416,900 |
|
All-Other |
16" |
$713,630 |
$1,042,250 |
*Source: City of Lawrence, Ordinance #7809 Section 1. (B) Water System Development Charge; Meter Type, Size, and Charge.
** Source: City of Lawrence, Ordinance #7809, Section 2. (B) Wastewater System Development Charge; Meter Type, Size and Charge.
On August 10, 2004, Year 2005 – 2009 proposed system development charges for the water and wastewater utilities were presented to the City of Lawrence City Commission. On August 23, 2004 the City Commission adopted Ordinance No. 7809, which provided the Department of Utilities with the authority to proceed with rate increases for system development charges for the operating years of 2005 through 2009.
Table D summarizes the 2007 system development charge rate schedule for both water and wastewater customers.
Table D. 2007 system development charge rate schedule
|
Type of Customer |
Size of Meter |
Water System Development Charge * |
Wastewater System Development Charge ** |
|
Residential |
5/8" |
$1,350 |
$1,310 |
|
Residential |
1" |
$3,370 |
$1,310 |
|
Residential |
1 ½" |
$6,730 |
$1,310 |
|
Residential |
2" |
$10,760 |
$1,310 |
|
All-Other |
5/8" |
$1,350 |
$2,390 |
|
All-Other |
1" |
$3,370 |
$5,980 |
|
All-Other |
1/1/2" |
$6,730 |
$11,950 |
|
All-Other |
2" |
$10,760 |
$19,120 |
|
All-Other |
3” |
$20,180 |
$35,850 |
|
All-Other |
4” |
$33,630 |
$59,750 |
|
All-Other |
6” |
$67,250 |
$119,500 |
|
All-Other |
8” |
$134,500 |
$239,000 |
|
All-Other |
10” |
$201,750 |
$358,500 |
|
All-Other |
12” |
$295,900 |
$525,800 |
|
All-Other |
16” |
$739,750 |
$1,314,500 |
* Source: City of Lawrence, Ordinance #7809 Section 1. (C) Water System Development Charge; Meter Type, Size, and Charge.
** Source: City of Lawrence, Ordinance #7809, Section 2. (C) Wastewater System Development Charge; Meter Type, Size and Charge.
The department would like to emphasize that few issues, if any, have arisen where all parties involved did not reach an agreement within current guidelines.
