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providing this required infrastructure to new customers in a cost - based, fair and equitable manner. 2.4 Connection Fee Criteria In determining connection fees, a number of different criteria are utilized. Criteria most often used by utilities to establish connection fees include the following: • State /local laws • System planning criteria o Financing criteria c Customer understanding Many states and local communities have enacted laws that govern the calculation and imposition of CFs. These laws must be followed in the development of CFs. Most states require a "reasonable relationship" between the charge and the cost associated with providing service (capacity) to the customer. The charges do not need to be mathematically exact, but must bear a reasonable relationship to the cost burden imposed. The utilization of the planning criteria, the actual costs of construction and the planned costs of construction provide the nexus for the "reasonable relationship" requirement. The use of system planning criteria is one of the more important aspects in the determination of the CFs. System planning criteria provides the "rational nexus" between the amount of infrastructure necessary to provide service and the charge to the customer. In general terms, the rational nexus test requires that there be a connection (nexus) established between new development and the new or expanded facilities required to accommodate new development, and an appropriate apportionment of the cost to the new development in relation to benefits reasonably to be received. "The use of system planning criteria is one of the more important aspects in the determination of the CFs. System planning criteria provide the "rational nexus" between the amount of infrastructure necessary to provide service and the charge to the customer." One of the driving forces behind establishing cost -based CFs is that "growth pays for growth." Therefore, CFs are typically established as a means of having new customers pay an equitable share of the cost of their required capacity (infrastructure). The financing criteria for establishing CFs relates to the method used to finance infrastructure on the system and assures that customers are not paying twice for infrastructure — once through the CF and again through rates. The double payment can come in through the imposition of a CF and then the requirement to pay debt service within a customer's rates. The financing criteria also reviews the basis under which main line and collection line extensions were provided such that the customer is not charged for infrastructure that was provided (contributed) by developers. The component of customer understanding implies that the CF is easy to understand. This criterion has implications for the way that the fee is implemented and assessed to the F Overview of Connection Fees 4 City of Pleasanton - Recycled Water Connection Fee