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million gallons per day (mgd) and Phasel B will add another 1.0 mgd for a total capacity of 4.0 mgd. A decentralized satellite facility (scalping facility) is also included within the project to serve the City's largest water user the Callippe Golf Course and other large irrigation water customers on the southeast side of Pleasanton (Koll Center and Pleasanton Gateway). Approximately 132 of the City's current potable water irrigation customers will convert to recycled water customers in the near term. These customers have already paid a one- time potable water connection fee and as such will not pay an additional recycled water connection fee. The methodology used to establish the recycled water connection fee is a "combined approach ". The combined approach adds the existing or buy -in component and the future or incremental component together, and accounts for any existing contributions or debt credit resulting in a "net allowable connection fee ". Based on the sum of the component costs of $17.942 million, the available capacity for new development of 4.0 mgd, and the calculated equivalent residential unit (ERU based on a 1-1/2" meter) as further outlined in the study (Attachment 1), the net allowable recycled water connection fee is $74,447 for a 1 -1/2" meter. Based on this the recycled water connection fee can then be developed for customers based on the size of the meter. The following table presents the proposed recycled water connection fees which if approved, would take effect on August 1, 2015: Meter Meter Size Equivalent Recycled Water Connection Fee 5/8" 1.00 $14,889 3/4" 1.50 22,334 1" 2.50 37,227 1 -1/2" (Displacement Type) 5.00 74,447 1 -1/2" (OMNI C2) 16.00 238,230 1 -1/2" (OMNI T2)" 16.00 238,230 2" (Displacement Type) 8.00 119,115 2" (OMNI C2) 16.00 238,230 2" (OMNI T2) (1) 20.00 297,788 CONCLUSIONS AND RECOMMENDATIONS The recycled water connection fees developed and presented in the City of Pleasanton Recycled Water Connection Fee study (Attachment 1) prepared by HDR Engineering is based on the engineering design criteria of the City's recycled water system, the value of the existing assets, future capital improvements, any current debt service on existing assets and "generally accepted" ratemaking principles. Adoption of the proposed fees will provide multiple benefits to the City and create equitable and cost -based charges for new customers connecting to the City's recycled water system. Page 3 of 4