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INDIAN RIVER COUNTY IMPACT FEE ANALYSIS 3.1.3 Wastewater Effluent Disposal System f The capital investment in the effluent disposal system is estimated to amount to $43.6 million.Only small improvements are planned for this component of the wastewater system prior to buildout.The unit investment in the effluent disposal system amounts to between$3.5 and$3.6 million per mgd of capacity during the study period(see Exhibit 3-3). 1 3.1.4 Wastewater Sludge Management System As shown in Exhibit 3-4,the County had invested approximately$5.6 million in its sludge management system prior to 1993.Since that time,the County has invested another $2.2 million in this system,for a total investment of approximately$8.0 million.Planned improvements prior to buildout will raise this investment to nearly$11.8 million.The unit investment in this system amounts to less than$0.83 million throughout the study period. 3.1.5 Combined Unit Investment The total investment per mgd of capacity in the Wastewater System grows from $10.3 million to$10.7 million during the study period.This represents the total capital investment in the wastewater treatment,transmission,effluent disposal,and sludge man- agement systems,exclusive of contributions in aid of construction.This unit capital invest- ment per mgd of capacity represents the capital cost of providing additional capacity to • serve new users.While this unit cost represents the amount of investment required to serve new customers,the new customers will pay rates,once they connect,that are being used to pay for some of this system capacity.Thus,a credit is calculated against the impact fee to compensate for the users future principal payments on this capacity.In addition,the new customer needs to compensate the utility's existing customers for the costs they have incurred to carry the cost of this capacity until utilized by a new customer.The above unit Ly costs are thus adjusted for a debt service principal credit and past interest payment charge. �. 3.2 Debt Service Principal Credit Future debt service principal payments that a new connection will pay through their waste- water rates,once they connect to the system,are credited against the unit capital investment figures calculated above.The future principal payments allocated to the wastewater system were divided by the projected committed capacity in the system each year to derive an esti- mate of the principal payment credit per unit of capacity.The present value of these future principal payments were then used to derive the principal payment credit.The calculation of the debt service principal credit was shown in Exhibit 2-3. e., 3.3 Past Interest Payments Charge The summation of the interest expense incurred by existing customers to carry the extra capacity in the wastewater facilities for future users is the basis for the past interest pay- ments charge.Interest expense incurred since 1993 allocated to the wastewater system is �, divided by the committed capacity in the system to derive the unit charge per mgd of capacity.The past interest payment charge calculation was shown in Exhibit 2-4. DFe112O74.1DOC 3.4 r�