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City of Pequot Lakes <br /> WAC & SAC Assistance <br /> July 20, 2012 <br /> B. What charges cover what costs? <br /> Attached is a graphic simplification of the City's wastewater system. A similar <br /> one can be prepared for the City's water system. The graphic depicts the <br /> components of a system - each of which has initial costs, operation and <br /> maintenance (O&M) costs, and eventual future replacement costs. <br /> Every City pays for these costs via different charges (some cities use other <br /> charges that are not shown on this graphic) as well as different splits between <br /> such charges. The SAC on this graphic is shown to cover the major system <br /> components (lift stations,treatment system). <br /> C. Pay for `past sins'? <br /> If SAC and WAC were not implemented from the beginning of a system, a city <br /> needs to decide if they are going to spread the costs out based on the whole <br /> system capacity and hook-ups (as if WAC and SAC fees were being collected <br /> from the beginning; i.e. using the full system capacity), or just spread the costs <br /> out based on remaining system capacity and potential hook-ups. <br /> SAC Calculations <br /> �-' An important variable is the capital cost of the wastewater system that the SAC is being <br /> applied to. <br /> Wastewater capital costs can include lift stations, stabilization ponds,pond structures, <br /> blowers and aeration system, spray irrigation/disposal, land, engineering, administrative, <br /> legal, and financing costs. We have estimated a value of the present system as follows: <br /> Lift Stations $1.0 million <br /> Wastewater Treatment System $1.5 million <br /> Land for Spray Irrigation/Disposal $1.0 million <br /> Eng.,Admin. Legal, and Financing $0.5 million <br /> Total Estimated Wastewater Capital Costs $4.0 million <br /> The first item to calculate is the equivalent residential connection (ERC)amount per year. <br /> Residential wastewater flow 8,500,000 gallons per year <br /> Wastewater residential connections "z 245 ERCs <br /> Wastewater ERC 34,700 gallons per year <br /> Page 3 of 5 <br /> J:\0130B-City of Pequot Lakes\013080048-WAC&SAC Assistance\013080048.000-WAC&SAC Assistance\Correspondence\20120720-Committee handout.doe <br />