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in the value of the existing system. This is an industry standard valuation method for public utilities, as documented in the American Water Works Association (AWWA) M1 manuals. The Feasibility Study identified existing recycled water plant and repurposed potable water plant which would be used to incorporate the PhaselA and Phase 1B recycled water facility. The identified existing and repurposed facilities were valued at replacement cost based on costs provided in the Feasibility Study. Table 4 -2 summarizes the total existing plant in service. Note that the values reflect the elements of the system that are depreciated. This was estimated based on in service dates and an estimated average of 50 years life of the asset. Based on the analysis, the total value as of 2015 of the City's existing and repurposed system assets for connection fees purposes, prior to adjustments, is $7.9 million, using the replacement cost less depreciation methodology. Exhibit RW -6 in the Technical Appendix details the calculation of the existing plant in service and contributions. Calculated Existing Table Recycled ($000s) Plant Component Replacement Cost New Less Depreciation (RCNLD) $ /000s Existing Recycled Water Plant Repurposed Potable Water Plant Tassajara Reservoir Supply Lines Total Existing Recycled Water Plant Less: Contributed Capital $854 4,480 2,633 $7,967 (5,335) Total Existing Recycled Water Plant $2,632 Additional financial adjustments to the system costs are included to bring the current total system value to an equitable basis with existing customers who have paid into the system over the time, and have funded the capacity that is currently available to serve new customers. These items include the following categories of expense or resource: 1. Reduce the system value by contributed capital 2. Reduce the system value by outstanding principal that will be paid through recycled water rate revenues, if any debt is associated with existing facilities. By including these additional items listed above, the final adjusted value of the system can be determined in order that new customers to the system are paying an equitable share of the 5 American Water Works Association Principles of Water Rates, Fees and Charges, Manual of Water Supply Practices. Sixth Edition, 2012, Chapter VI.2, System Development Charges. Determination of the City's Recycled Water Connection Fee 14 City of Pleasanton - Recycled Water Connection Fee