Memorandum

City of Lawrence                                                        

Utilities Department

TO:	David L. Corliss – City Manager Diane Stoddard - Assistant City Manager Cynthia Wagner - Assistant City Manager
FROM: CC:	Dave Wagner – Director of Utilities Mike Lawless – Asst. Director of Utilities
	Philip Ciesielski – Asst. Director of Utilities Beth Frailey Krishtalka – Assistant to Director
Date:	August 1, 2011
RE:	System Development Charges

The purpose of System Development Charges (SDCs) are to pay all or a portion of the costs of capacity attributed to growth. Lawrence's SDCs currently are at a rate that recovers about 75% of these costs. The remaining costs are distributed amongst existing rate payers. SDCs are collected at the time new or upsized meters are issued

The expected revenue in 2012 without increasing the SDCs would be approximately $865,000. With the proposed increase in SDCs the expected revenue would be $971,000 generating approximately an additional $106,000 in recovery of capacity costs. The actual capacity costs for 2012 would be $1,258,120 leaving $286,580 distributed amongst existing ratepayers assuming the proposed SDCs are adopted. All of the above estimates are based on meter sales equal to those of 2010.

The Utilities Department prepares an annual report on the SDCs collected during the previous year. The 2010 SDC report is attached. The City Commission received this report at the March 1, 2011 City Commission Meeting.  The table below is a historical summary of the SDCs collected since 2001 compared to the total revenue collected and a projection for 2012 based on the proposed new SDCs.

The 2011 SDCs and revenue are reported through June 2011. The 2012 SDCs are calculated using the size and number of meters sold in 2010.