09.03 - Exhibit 2 - WSN WAC-SAC Study

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City of Pequot Lakes WAC & SAC Assistance July 19, 2012, 8:30 a.m. Committee Meeting Pequot Lakes City Hall legal, and financing costs. We have estimated a present value of the present system roughly as follows: Lift Stations z $1.0 million Wastewater Treatment System � $1.5 million Land for Spray Irrigation / Disposal z $1.0 million Eng., Admin. Legal, and Financing $0.5 million Total Estimated Wastewater Capital Costs $4.0 million The first item to calculate is the equivalent residential connection (ERC) amount per year. Residential wastewater flow z 8,500,000 gallons per year Wastewater residential connections 245 ERCs Wastewater ERC 34,700 gallons per year One way is to calculate the SAC using the full system capacity. Permitted wastewater flow 45,000,000 gallons per year Wastewater ERC 34,700 gallons per year Wastewater capacity 1,297 ERCs Estimated wastewater capital cost $4,000,000 Wastewater cost per ERC, or SAC $3,090 Another way is to calculate the SAC using the remaining system capacity. Permitted wastewater flow 45,000,000 gallons per year Wastewater flow 23,000,000 gallons per year Remaining wastewater capacity 22,000,000 gallons per year Wastewater ERC 34,700 gallons per year Remaining wastewater capacity g:5 634 ERCs Estimated wastewater capital cost z $4,000,000 Wastewater cost per ERC, or SAC � $6,310 WAC Calculations An important variable is the capital cost of the wastewater system that the WAC is being applied to. Water capital costs can include wells, water treatment plants, water towers, maybe main line or looping watermains, land, engineering, administrative, legal, and financing costs. We have estimated a present value of the present system roughly as follows: Page 3 of 4 1:101303 -City ofPequotI eMBOB0048- \VAC &SAC AssMmce\0130B004S.000- WAC &SAC Assns ce\Cmaspondence\20120719- Committee minting hwdwtdoc