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cost (value) of providing that system capacity. The City did not have any outstanding debt principal for the repurposed existing potable water plant. Contributed capital for existing assets was assumed to be a majority of the repurposed assets. This results in total existing recycled water plant value of approximately $2.6 million. Future Plant or Incremental Fee Future plant was identified in Phase 1A and Phase 16 in the report The City of Pleasanton Recycled Water Feasibility Study, dated July 2013. In addition to these phases a Scalping Facility was included as part of the system. The total for phases 1A and 16 is approximately 519.2 million. The Scalping Facility was included in the Feasibility study however the final Alternative had not been chosen. For purposes of the calculation of the recycled water connection fee the City has estimated $11 million in project costs and has been included as an estimated cost for this facility. In total, future recycled water infrastructure is approximately $30.2 million. Phase 1A and 1B will be funded by a debt issue therefore the bond principal has been subtracted from the calculation for the portion of the debt that will be funded through recycled water rates. This inclusion of a "debt service credit" avoids double charging the customer for the asset value in the debt service component of the rates. In addition, the City can include the carrying costs associated with the long -term debt which is approximately $3.2 million. The total future infrastructure improvements, less outstanding debt principle, plus carrying costs, results in a total future recycled water plant value of 515.3 million. Table 4 -3 presents the summary of the future plant. Exhibit RW -3 of the Technical Appendix further details this calculation. Component Project Cost $ /000s Phase 1A Phase 1B Total Phase 1A and 1B Scalping Facility Total Future Recycled Water Plant Less: Future Outstanding Debt Principal Plus: Carrying Cost of Debt 513,500 5,700 $19,200 11,000 530,200 (18,118) 3, 228 Total Future Recycled Water Plant $15,310 It is not unusual for a utility to finance a portion of their assets via long -term debt. In calculating the CF, the City's rates are designed to collect the debt service expenses (principle and interest payments) over time. The resulting CF was reduced by the amount of future principal on the City's anticipated debt. A more detailed discussion of the basis and need for this debt service credit is provided below. Determination of the City's Recycled Water Connection Fee City of Pleasanton - Recycled Water Connection Fee 15