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DRAFT URBAN WATER MANAGEMENT PLAN - A - 49 Table 5.2 SFPUC Wholesale Water Cost Projection Fiscal Year SFPUC Water Cost $ /Cc Percent Change 2001/02 $0.88 - 2002/03 $0.88 0% 2003/04 $1.07 22% 2004/05 $1.24 41% 2005/06 $1.30 48% 2006/07 $1.33 51% 2007/08 $1.41 60% 2008/09 $1.76 100% 2009/10 $2.07 135% 2010/11 $2.29 160% 2011/12 $2.53 188% Source: Bay Area Water Users Association, Feb 2003. 5.4.2 Water Recycling Costs Another key rate issue facing the City concerns the proposal to build an expanded water recycling system, as discussed in Chapter 2. The financial impact of the project will depend on a number of factors, some of which are not known at this time. 5.4.3 Facilities Fee Facility fees ensure that new development pays its own way and that current ratepayers do not subsidize growth. The City is in the process of developing a new facilities fee schedule. The existing fee was developed and made effective July 1, 1994. The updated facilities fee has two components: ❑ Water Distribution System This component is much like the 1994 facilities fee, but will be updated to account for new investments in the system since 1994. It is calculated by taking the current value of the water system infrastructure, factoring in depreciation and cost inflation, and dividing by the capacity of the system. Water Supply This is a new component reflecting the fact that the City is investing in new, relatively high -cost marginal water supplies. In this case the recycling expansion is used as the basis for the water supply component. This fee will be updated annually to account for cost inflation, such as indexing the fee to the Engineering News - Record Construction Costs for the San Francisco Bay Area. This index is a widely recognized measure of construction costs and many agencies use this index to adjust connection charges on a regular basis. 0