CMD Notice of Meeting — FINANCE COMMITTEE — 04/24/18

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Chester Metropolitan District Finance Committee Meeting

Tuesday, April 24, 2018
6:30 PM

CMD Conference Room
155 Wylie Street
Chester, South Carolina

Please note: This agenda is subject to change 24 hours before the scheduled meeting date and time.


I. Review Draft Budget for FY 2018



This meeting will not have a quorum present, and will not take action on any agenda 2027items. This meeting is for the sole purpose of reviewing draft budget documentation for recommendation at the next Regular Commission Meeting.


Notice of Board Meeting

Proposed Agenda

April 23, 2018

3261 Lancaster Hwy

Richburg, SC 29729



  • Call Meeting to Order
  • Invocation
  • Pledge of Allegiance
  • Approval of Last Meeting Minutes


  • Old Business
  1. Lando/Manetta & Rocky Creek Update              – Mr. Patrick Timms
  2. Sandy River Update                                        – Mr. Tony Young
  3. Pretreatment Update                                      – Ms. Devon Beaty
  4. Maintenance Work Update                              – Mr. David Garris
  5. Project Updates                                             – Mr. Phillip A. Thompson-King


  • New Business
  1. Rate Structure Revision                                 – Mr. Bart Kreps
  2. Capital Recovery Fee                                     – Mr. Phillip Thompson-King
  3. Audit Engagement                                         – Mr. Joel Manning
  4. Public Comment
  • Reports
  1. Financial Statement                             – Mr. Joel Manning


  • Adjourn

Capital Recovery Project

Water Capital Recovery Fees Project

Chester Metropolitan District


The Chester Metropolitan District presents for public view and comment the findings of the Water Capital Recovery Fees study. Below are the proposed fees, as well as a copy of the full report. A public hearing is scheduled for Thursday, May 31, 2018 at 6:00 PM at the Gateway Conference Center in Richburg to discuss this project. Please direct any advance comments to the included form or call our office at (803) 385-5123.

For additional information, please visit our Capital Recovery Category.


Proposed Capital Recovery Fees

Single ¾” Water Service Connection                         $ 1,045.00 (per each)

Single 1” Water Service Connection                          $ 1,740.00 (per each)

Single 2” Water Service Connection                          $ 5,575.00 (per each)


Use the formula below to calculate the capital recovery fee (CRF) for water meter sizes 3” to 10” based on daily water demands requested by the owner/developer and detailed in Chester Metropolitan District’s Willingness and Capability Letter to the owner/developer.


CRF = (Water Demand, gal/day) x 1.4 x 1.25 x $1.99

System Peaking Factor = 1.25

Water Loss Factor = 1.4


Proposed Collection of Capital Recovery Fees

Single ¾” Water Service Connection – Capital Recovery Fees will be paid at the time that the tap fees are paid.

Residential Subdivisions – 50% of the Capital Recovery Fees will be paid up front based on the number of lots on the approved plat and 50% paid at the time that the tap fees are paid.

Commercial/Industrial Water Connections – 100% of the Capital Recovery Fee will be paid at the time of the issuance of the Willingness and Capability Letter by Chester Metropolitan District.  Fees will be based on daily water demands provided by the owner/developer’s design engineer.  If, after one year, the actual daily water demands are in excess of the design engineer’s estimation which were used to determine CRF’s, the owner/developer will be assessed additional CRF’s to cover the excess water demand.

Fire Supply Line Connections – 100% of the Capital Recovery Fee will be paid at the time of the issuance of the Willingness and Capability Letter by Chester Metropolitan District.  Fees will be based on the quantity of water required over the specified period of time necessary to meet fire code requirements.

Download a copy of the full Water Capital Recovery Fees Report.



Public Comment

All fields are required for submission. Information collection is for analytical purposes only. Your information will remain confidential and will not be given, sold, or otherwise transferred to another party for any purpose.

Please note: this form is for Capital Recovery Project Comments only. The recipient will not respond to any other comments made using this form.

Thank you for participating in our project!


Water Capital Recovery Fees Explained

Funding Future Water System Expansions

Water Capital Recovery Fees Explained


What Are Capital Recovery Fees?

Chester Metropolitan District is moving forward with Capital Recovery Fee charges.  Capital Recovery Fees are charges imposed by a water utility upon new development to tie onto the water system and use existing water supply capacity that has already been paid for by the existing customer base. Capital Recovery Fees easily and fairly distribute the burden of providing additional potable water capacity from the water utility and its existing customers to new customers as a result of new development. The fees are collected from new industries, new commercial businesses, new residential construction, and new water taps, and they allow the new customer to “buy-in” to the remaining water capacity that Chester Metropolitan District (CMD) has available. The Capital Recovery Fees will also help fund large-scale water system capital improvement projects such as water treatment plant expansions, upsizing water transmission mains, and water line extensions that will be necessary to keep pace with future economic development and residential growth in Chester County.


Who Do Capital Recovery Fees Impact?

Capital Recovery Fees impact new development and new connections. For the purposes of this fee, a “development” can be a new home, apartment complex, business, industry, or other establishment which connects to the public water system. The fee itself is normally paid by the developer before the resident or business moves into the building. In some cases, established residents and businesses who were previously on private wells may be impacted, as the fee is assessed to any new connection to our system.

Capital Recovery Fees are not charged to current customers with existing connections to the system; however, current customers will be assessed the Capital Recovery Fee for new or additional water taps.


What Do Capital Recovery Fees Do?

Capital Recovery Fees are a source of capital financing used to help water systems recover the investment in capacity allocated to new customers. Capital Recovery Fees paid to the water system are earmarked specifically to offset the capacity related costs, which include expanding the water filtration plant, installing new mains, or adding booster pump stations and new water tanks to serve growth.

The Capital Recovery Fees can be used to pay construction costs or to help pay back notes, loans, and bonds that are used to fund large water system projects to increase capacity. The implementation of the fees will not eliminate normal, periodic water rate increases to account for inflation, materials cost increases, increased operations and maintenance expenses, and ongoing repair and replacement of aging infrastructure.


How are Capital Recovery Fees Calculated?

Chester Metropolitan District recently contracted with Raftelis Financial Consultants (Raftelis) in Charlotte, North Carolina to perform a Capital Recovery Fee Study. The results of this study explained, in the simplest terms, how the fees are calculated and what Fee is considered fair for CMD to charge.

RFC collected historical data from CMD, including fixed asset data, outstanding debt, a complete list of water capacity infrastructure (water plant capacity, size and length of mains), and estimated daily water loss. Using the historical data to determine the value of CMD’s system assets, Raftelis calculated a “Replacement Cost” of the infrastructure we currently have, which values the system in today’s dollars. The Replacement Cost is reflected as a “Cost per Gallon per Day”, or “Cost per GPD”, and was calculated to be $1.99 per gallon per day to replace core system assets.

Second, RFC collected customer usage data to develop an “Equivalent Residential Unit”, or ERU. This is the estimated level of demand per customer based on a ¾” water meter. Residential average daily demand was determined to be 300 gallons per day per residence.  RFC also computed a “System Peaking Factor”, or the ratio between average water production and maximum water production (maximum annual daily peak demand).  This is to account for periodic high water usage a customer may have from time to time and the System Peaking Factor was calculated to be 1.40.  A Water Loss Factor was also developed to account for lost water resulting from water theft, water line flushing, firefighting, and water system leakage that is estimated to occur throughout the water system.  The Water Loss Factor was determined to be 1.25.  To compute the cost of an ERU you must first calculate the number of gallons that make up an ERU.  The number of gallons is calculated as follows:

Adjusted GPD = 300 gal. per day X  1.4 (System Peaking Factor) X 1.25 (Water Loss Factor) = 525 GPD


To calculate the cost of an ERU, the cost per gallon per day for water ($1.99) is multiplied by the the Adjusted GPD.  The cost of an ERU is as follows:


ERU = $1.99 (Cost per Gallon per Day) X 525 GPD = $1,044.75 (Rounded to $1,045.00)


The cost of one ERU is $1,045.00 for a single ¾” residential water meter. As meter size increases, the number of ERUs associated with that meter also increases.

To Calculate Capital Recovery Fees for 1” and 2” water meters, a “Capacity Ratio” is used to determine the number of ERUs associated with that meter size based on a ¾” water meter. For example, a 1” water meter has a Capacity Ratio of 1.6667, which means a 1” meter can flow 1.6667 times more water than a ¾” meter under normal conditions.  A 2” water meter has a Capacity Ratio of 5.3333, which means a 2” meter can flow 5.3333 times more water than a ¾” water meter under normal conditions.  Therefore a 1” water meter has a Capital Recovery fee of (1.6667 X 1,045.00) = $1,741.70 (rounded to $1,740.00) and a 2” water meter has a Capital Recovery Fee of (5.3333 X 1045.00) = $5,573.30 (rounded to $5,575.00).

The Capital Recovery Fee for  large commercial and industrial connections with water meter sizes ranging from 3” to 10” will be based on the requested average water demand in gallons per day times the Cost per Gallon per Day of $1.99.  Average water demands will be adjusted using the system peaking factor and the water loss factor.  The capital recovery fee for a prospective industrial customer with an average daily water demand of 100,000 gallons per day is computed as follows:

100,000 GPD X 1.4 (System Peaking Factor) X 1.25 (Water Loss Factor) X $1.99 =$348,250.00


The Bottom Line

Capital Recovery Fees are not new. Water utilities and municipalities across the country have been charging Capital Recovery Fees for years to help pay for expansions to water and wastewater systems to serve new growth. York County, the City of Rock Hill, and Lancaster County charge capital recovery fees for new development. It is the fairest way to pass on the cost of new growth to those who are developing new sites. History has proven that Capital Recovery Fees do not adversely impact growth. Fort Mill and Indian Land are two examples.

The full Capital Recovery Fee report and draft Capital Recovery Fee Schedule will be available on our website in mid-April 2018. Chester Metropolitan District will conduct a public hearing in April 2018 to receive comments on the proposed Capital Recovery Fees and Capital Recovery Fee Schedule.  Comments can be mailed to Chester Metropolitan District at P.O. Box 550, Chester, South Carolina 29706 or submitted by Clicking Here.

CMD Notice of Meeting – 04/11/18

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Chester Metropolitan District Regular Commission Meeting

Wednesday, April 11, 2018
6:30 PM

Great Falls Town Hall
810 Dearborn Street
Great Falls, South Carolina

Please note: This agenda is subject to change 24 hours before the scheduled meeting date and time.


I. Call Meeting to Order


II. Approval of Last Meeting Minutes



Old Business

  1. Filter Plant
  2. Engineer’s Report
  3. DMAG Report
  4. Capital Recovery

IV. New Business

  1. Director’s Update

V. Reports

  1. Director’s Report
  2. Hydrant Report
  3. Financial Report

VII. Adjourn