Guidelines for Calculating System Development Charges

Many water utilities impose system development charges (SDCs) to pay for the costs incurred by new developments connecting to a system. This article describes the purpose of SDCs and the criteria that should be followed when developing a methodology for calculating SDCs that can help a utility determine fees that are both cost‐based and equitable. This methodology also ensures that customers are avoiding double payment, which could occur when an SDC is imposed on customers and then they are also required to pay debt service on new or existing infrastructure (including both revenue bonds and general obligation bonds).