Tacoma Water asked the Government Performance and Finance Committee on Nov. 4 to forward proposed revisions to the city's System Development Charge (SDC) rules for first consideration by the City Council. Presenters said the updated SDCs reflect capital investments in the utility and new usage data from the utility's advanced metering infrastructure (AMI).

The study authors described the SDC as a one-time charge, due when a new meter is purchased, intended to recover the capital costs required to serve new connections rather than shift those costs to existing ratepayers. "This is the charge that we assess for a new connection to our water system," said Andrew Snoroff, the financial subject-matter expert presenting the study. Staff said the methodology buckets allocable capital assets into functions that serve average-day demand, peak-day capacity and fire flow and then divides dollars by the appropriate denominators for each customer class using AMI-derived usage and capacity metrics.

The study produced a table of charges by meter size and customer class. As an example shown to the committee, the proposed SDC for a 5/8-inch residential meter is $2,017.95; the currently coded charge for that meter size is $809. Staff also recommended lowering the multifamily per-unit factor from the current 60% of a 5/8-inch residential equivalent to 44%, based on AMI actual per-unit consumption data for multifamily buildings.

Staff told the committee that the updated SDCs reflect roughly $300 million in capital projects identified as allocable to growth, including pipeline pressurization work and PFOS treatment projects for South Tacoma wells. To avoid a single-year jump in charges, Tacoma Water proposed phasing the study results in over a five-year period with the first step effective Feb. 1 (staff said that date aligns with the time needed for first and second readings at council) and equal-dollar increases on Jan. 1 of subsequent years.

Committee members asked whether the SDC charges new customers for previously built infrastructure and how ordinary wear-and-tear is addressed. Presenters said ongoing repairs and maintenance remain a ratepayer expense and that the SDC is a one-time buy-in tied to the value of system capacity at the time of connection. Staff described current meter-installation lead times as measured in weeks (routine installs) and said plan review timelines can extend to roughly 15 weeks for more complex service requests. They also described the existing practice of crediting the difference when a customer upsizes a meter: the owner pays only the differential between the larger and smaller SDC.

Several committee members asked what is driving large increases shown in the table (many meter classes show multi-fold increases at the end of the five-year phase). Staff attributed this mainly to the updated capital improvement plan and to the inclusion of projects identified since the last SDC update; staff offered to provide the consultant's report with line-item project drivers for members who requested it. Staff also noted that comparisons to peer utilities are informative but not determinative because utilities face different supply and capital challenges (for example, surface-water utilities versus groundwater utilities).

A committee member moved to forward the proposed municipal-code amendments (chapter 12.1) to the City Council for first consideration. The motion was seconded and adopted by voice vote. Staff indicated the item will also go to the Public Utility Board for public hearing and a vote prior to council consideration. Presenters said they will return with the consultant report and additional operational details when requested.

Meeting context: the proposal was presented as a briefing and the committee's action was to forward the code changes to Council for legislative consideration. The forwarding vote does not adopt the new charges into code; it starts the Council process (including the Public Utility Board hearing noted by staff).