Kittitas County Conservation District. Rate Study Report June 2016

Transcription

1 Kittitas County Conservation District Rate Study Report June 2016 Kittitas County Conservation District 2211 W Dolarway Road, Suite 4 Ellensburg WA T: FCS Group th Avenue NE, Suite D-215 Redmond WA T: F:

2 Table of Contents Preamble:... 2 Section I: Introduction... 3 Section II: Rate Analysis... 4 A. General Approach... 4 B. BUDGET... 8 C. CUSTOMER BASE D. RATE CALCULATION E. RATE ADJUSTMENT Appendices Rates & Charges Model (1 page) Summary of Customer Database (2 Pages) Allocation Bases (2 Pages) Budget (2 Pages) Natural Resources Priority 1 Water (6 Pages) Natural Resources Priority 2 Fish & Wildlife (5 Pages) Natural Resources Priority 3 Forestry (5 Pages) Natural Resources Priority 4 Education/Outreach (4 Pages) s (1 Page) Allocated Costs by Customer Class (2 Pages) Rates (4 Pages)

3 Kittitas County Conservation District: Providing Special Benefits to Kittitas County Land and Landowners Preamble: Since 2007, the Kittitas County Conservation District ( KCCD ) has charged a Special Assessment per Revised Code of Washington That assessment includes a $5 per parcel assessment and a per acre charge up to $0.10 to fund basic natural resource related assistance programs and services. The Special Assessment was approved for a 10-year period. Due to pending litigation in Washington State regarding property assessments, several conservation districts, including the Pierce, King, Snohomish, Mason, and Spokane Conservation Districts collaborated in the 2012 Legislative Session to add an alternative method of collecting local revenue called a rate or a charge. This method is described in RCW A conservation district cannot impose both an assessment ( ) and a rate or charge ( ). An assessment is generally related to a service or improvement that adds value to a parcel of property. Alternately, a rate is a charge intended to recover the cost of public improvements, services or programs, received by or available to properties in the District, or to pay for costs to mitigate negative impacts on natural resources from those properties i.e. protection of soil and water quality, forest health, or habitat restoration. Under rates and charges, each eligible parcel is subject to a charge; there is still a cap of $5 per parcel on eligible parcels to be charged and $0.10 per acre; and, rates cannot be increased without authorization from the State Legislature, the District Board of Supervisors, and the Board of County Commissioners. The KCCD is seeking to renew the local funding currently collected through an assessment. In that renewal process, the KCCD proposes to switch to rates and charges. In doing so, a rates analysis is necessary and is contained in the remainder of this document. The property owners within the KCCD may see a slight difference in their annual bill due to the results of this rate analysis. However, the funds will still be collected through the property tax statements sent by the County, and there will still be a maximum of $5 per parcel and $0.10 per acre. This document is modeled after documents produced by the FCS Group and the Pierce Conservation District and King Conservation District, as well as efforts by the Snohomish Conservation District, and Whidbey Island Conservation District. DRAFT KCCD Rates Analysis Page 2 of 15 June 22, 2016

4 Section I: Introduction Effective March 20, 2012, Engrossed Substitute House Bill (ESHB) 2567 added a new section to RCW 89.08, giving conservation districts the option of rates and charges as an alternative to the assessment approach. Districts are now able to charge per acre rates, per parcels rates, or both, subject to limitations. Section (3)(a) of the bill states: The system of rates and charges may include an annual per acre amount, an annual per parcel amount, or an annual per parcel amount plus an annual per acre amount. If included in the system of rates and charges, the maximum annual per acre rate or charge shall not exceed ten cents per acre. The maximum annual per parcel rate shall not exceed five dollars, except that for counties with a population of over one million five hundred thousand persons, the maximum annual per parcel rate shall not exceed ten dollars. Previously, conservation districts were only able to charge an assessment based on RCW The statute specified that (a)n annual assessment rate shall be stated as either uniform annual per acre amount or an annual flat rate per parcel plus a uniform annual rate per acre amount. The caps for per parcel and per acre amounts were the same as the five or ten dollar per parcel charge and the ten cent per acre charge in the new ESHB Both sections treat timber and forest lands similarly, stating that forest lands used solely for the planting, growing, or harvesting of trees may be subject to rates/special assessments if such lands are served by the activities of the conservation districts. However, both sections also state that the per acre rate/assessment shall not exceed one-tenth of the weighted average per acre rate or charge/assessment on all other lands, but in lieu of a per parcel charge, a charge of up to three dollars per forest landowner may be imposed on each owner of forest lands whose forest lands are subject to a per acre rate/assessment. To approve the rates and charges, ESHB 2567 references RCW , which states that (t)he supervisors of a conservation district shall hold a public hearing on a proposed system of assessments shall gather information and shall alter the proposed system of assessments when appropriate. The main difference between these two sections of the statute is in the definitions of assessments and rates. An assessment is a user charge intended to recover the cost of improvements/services that increase the value of the property charged. A rate is a charge intended to recover the cost of public programs based on services received or negative impacts customers impose. In a rate construct the services received and the impacts charged for may be indirect. Further, the rate may show consideration for services furnished, to be furnished, or available to the landowner or benefits received, to be received, or available to the property in addition to other factors. The following section summarizes the rate analysis that has been developed by the KCCD. The goal of the analysis is to develop a rate structure and supporting rate that equitably recovers program costs within the constraints defined by RCW DRAFT KCCD Rates Analysis Page 3 of 15 June 22, 2016

5 Section II: Rate Analysis The Kittitas County Conservation District (KCCD) rate structure features distinct rates by land use, based on the services/benefits received from District programs. KCCD worked to create the rate structure and supporting analysis with the support of the FCS Group. This work is based on similar efforts completed by the FCS Group with the Pierce Conservation District 1 and the King Conservation District 2. Each District program and associated cost is subject to a three-step allocation process to establish unit costs the building blocks of rate development. Each priority cost is first allocated between direct and indirect service/benefit provided. Cost recovery is then assigned to either the per parcel or per acre basis. Finally, cost recovery is allocated among customer classes based on the comparative amount of service/benefit enjoyed by each customer class from the resource priority. The technical analysis in its entirety is provided in Appendix A. A. General Approach Within the Kittitas County Conservation District boundaries, there are four major identified land use types, irrigated, non-irrigated, forestland and urban (incorporated municipalities). These land use types tie directly to priority natural resource concerns. A combination of classifications was utilized to identify these land use types. First, similar to the Special Assessment approved in 2006, the boundaries of the local Noxious Weed Districts were utilized to delineate irrigated, non-irrigated and forestlands. Within these designations, Department of Revenue land use codes assigned by the Kittitas County Assessor were utilized to further differentiate land uses. In order to facilitate application of the rate approach, KCCD staff split programs/services into the following major headings: Water, Fish & Wildlife, Forestry and Education/Outreach. These are broad categories that often include multiple priority resource concerns. For, example Water includes both water quality and water quantity. A major practice to address both is conversion from rill irrigation to sprinkler irrigation on cropland. This practice benefits soil health as well, as it allows landowners to more precisely apply nutrients and reduces soil erosion. Both the Water and the Fish & Wildlife categories include range health as related to livestock grazing. Work to improve the resiliency of range lands inherently improves water quality and habitat. In addition, embedded in each of these programs are the activities involved in operation of the KCCD that are necessary to implement the programs. These programs/services and the benefits they provide are further defined below: 1 FCS Group (2014). Pierce Conservation District Rate Study Report. Redmond, WA: Pierce Conservation District. 2 FCS Group (2014). King Conservation District Rate Study Report. Redmond, WA: King Conservation District. Retrieved February 12, 2015 from DRAFT KCCD Rates Analysis Page 4 of 15 June 22, 2016

6 Table 1. Description of Natural Resource Priorities and the services and benefits. Priority Description Details Water Fish & Wildlife Water Quantity Water Quality Cost Share Programs Direct Technical Assistance Fish Habitat Access & Restoration Upland Wildlife Habitat Restoration Cost Share Programs Direct Technical Assistance to Producers/Landowners Partner with landowners, water right holders, irrigation water purveyors, nongovernmental entities and state, federal and tribal agencies working to improve water use efficiencies both on-farm and in delivery systems in a coordinated effort with the improvement of storage capacity. Monitor stream flows and Trust Water. Participate in implementation of the Upper Yakima Temperature TMDL and participate in the Lower Kittitas Valley Temperature Reduction Work Group. Develop plans and strategies to work with landowners/land managers. Implement PAM program to reduce irrigation induced soil erosion. Monitor water quality conditions to determine impacts of the implementation. Implement projects with landowners including conversions from rill to sprinkler irrigation, piping of earthen ditches, and livestock management practices. Direct technical assistance to landowners to plan, design, fund and implement practices (both on-theground and management). This includes both one on one assistance and facilitation of working groups (e.g. Coordinated Resource Management or CRM processes) Inventorying and assessing habitat conditions and access, as well as addressing unscreened irrigation diversions, fish passage barriers (irrigation dams, culverts, etc.) and habitat conditions (instream and riparian) with a focus on Mid-Columbia Steelhead (listed as threatened under the Endangered Species Act) as well as spring chinook and coho. Improving habitat conditions for wildlife in upland areas includes birds, deer, elk, and other terrestrial species by improving grazing management and planting trees, shrubs, and grasses. These practices have related soil and plant health impacts as well as water quality benefits. Livestock and Range Practices, including fencing, spring developments and grazing management with landowners and/or lessees to improve the resiliency of working lands. Direct technical assistance to landowners to plan, design, fund and implement practices (both on-theground and management). This includes both one on one assistance and facilitation of working groups (e.g. Coordinated Resource Management or CRM processes) DRAFT KCCD Rates Analysis Page 5 of 15 June 22, 2016

7 Forestry Education/Outreach Wildland Fire Fuels Reduction Forest Health Firewise USA Communities/Fire Adapted Communities Direct Technical Assistance to Landowners Youth Education Opportunities Producer Workshops Public Outreach Partner with landowners, Fire Districts, and Kittitas County to complete projects to reduce wildland fire risks with a focus on Community projects that involve multiple landowners. Partner with landowners, USDA Natural Resources Conservation Service, and Department of Natural Resources to complete projects to improve forest health by reducing the potential of damage from pests and disease. Partner with communities to create a fire adapted community that is working to prepare for, respond to, and recover from wildfire. It incorporates people, buildings, businesses, infrastructure, cultural resources, and natural areas into the preparedness effort. Direct technical assistance to landowners to plan, design, fund and implement practices (both on-theground and management practices). Support Wheat Week/Water on Wheels curriculum in local schools, support WSU Extension as they organize and facilitate the Ag Appreciation Day for third graders at the Kittitas County Event Center. Work with local schools and volunteers to host a Kids in the Creek event in Kittitas County. Present to producer groups including Association of Kittitas County Hay Growers & Suppliers, Kittitas County Farm Bureau, Kittitas County Cattlemen, and other stakeholders as necessary/requested. Host specific workshops as appropriate. Publish KCCD Newsletter Biannually Maintain website to be a significant source of up-todate technical and educational resources for landowners/managers. Using the collective expertise and judgement of KCCD staff and the Board of Supervisors, each program/service cost was allocated between direct and indirect benefits provided. These decisions were reached after much discussion and based on specific benefits each program/service provides. Most services provided by the KCCD are of indirect benefit. Service costs assigned to direct benefit represent unique services that specifically target a subset of the customer base. The direct and indirect benefit costs of each program/service were then allocated to each land use category. Each customer class was evaluated for the level of service/benefit received: no benefit, partial benefit compared to other classes, or full proportional benefit received. The chart below shows how these steps were followed for each Natural Resource Priority. DRAFT KCCD Rates Analysis Page 6 of 15 June 22, 2016

8 Service Cost How is cost allocated? Direct Indirect How is cost recovered? How is cost recovered? Per Parcel Charge Per Acre Charge Per Parcel Charge Per Acre Charge Who receivesservice share (full, partial, or none)? Who receives service share (full, partial, or none)? Who receives service share (full, partial, or none)? Who receives service share (full, partial, or none)? 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space Figure 1. Chart displaying the allocation of costs as direct or indirect and per parcel and per acre. The allocations for each program/service between direct and indirect benefits were influenced by the Earth Economics report Special Benefit from Ecosystem Services: Economic Assessment of the King Conservation District 3 which states that approximately 1% of the total value provided by ecosystems is excludable benefit to the landowner. The report explains that over 98% of the total economic value provided by healthy ecosystems is in the form of non-excludable services or special benefits that landowners share with others. The King Conservation District has since used this report to inform their Rates and Charges proposal, stating that programs/services with economic support to working lands were allocated at 25% direct and 75% indirect. The programs and services in this proposal were allocated similarly. The programs/services with economic support of working lands (Cost Share Programs) are allocated at 25% direct and 75% indirect as these were deemed to be directed more specifically at those receiving the service/benefit, but still 3 Pittman, J. & Batker, D. (2006). Special Benefit from Ecosystem Services: Economic Assessment of the King Conservation District. Tacoma, WA: Earth Economics. Retrieved February 12, 2015 from DRAFT KCCD Rates Analysis Page 7 of 15 June 22, 2016

9 significantly of benefit to others indirectly. A number of other programs/services that were deemed to have some increased direct benefit to the property owner were allocated 5% direct and 95% indirect, including direct technical assistance and the forestry programs to improve forest health and/or reduce wildland fire fuels. The education/outreach components were deemed to be all indirect, as were the contingency funds for each natural resource priority category. One important result of the general approach is the recommendation that costs be recovered primarily in a per parcel, rather than per acre, rate. This determination recognizes that in particular, the indirect benefits/services provided by the KCCD are oftentimes enjoyed by parcel owners with little or no relationship to the size of the parcel. The exception to this approach is with regard to working resource lands and forest lands, where projects are completed and financial assistance is provided proportionate with the acreage addressed through the projects. B. BUDGET The 2016/2017 KCCD budget, developed by KCCD staff, was split and allocated as shown in the following table. The contingency fund line item is intended to provide a reasonable working capital fund balance. DRAFT KCCD Rates Analysis Page 8 of 15 June 22, 2016

10 Table 2. Budget and allocation of costs for each Natural Resource Priority service or program. Total Budget Allocation Allocation Percentages Allocated Costs Indirect Direct Total Indirect Direct Total Water Water Quality (meeting water clean-up plan goals) $ 35,497 1% Direct / 99% Indirect 99.0% 1.0% 100.0% $ 5,142 $ 355 $ 35,497 Water Quantity (meeting instream flow goals) $ 198,884 1% Direct / 99% Indirect 99.0% 1.0% 100.0% $196,896 $ 1,989 $198,884 Cost Share Programs - Irrigation Delivery & $ 862,851 25% Direct / 75% Indirect 75.0% 25.0% 100.0% Application System Improvements $647,138 $215,713 $862,851 Cost Share Programs - Livestock and Range practices $ 2,002 25% Direct / 75% Indirect 75.0% 25.0% 100.0% $ 1,501 $ 500 $ 2,002 Direct Technical Assistance to Producers $ 147,951 5% Direct / 95% Indirect 95.0% 5.0% 100.0% $140,554 $ 7,398 $147,951 Contingency Reserve $ 62,359 All Indirect 100.0% 0.0% 100.0% $ 62,359 - $ 62,359 Subtotal $1,309,544 $1,083,590 $225,954 $1,309,544 Fish & Wildlife (Irrigated and Rangeland) Fish Habitat Access & Restoration $491,830 1% Direct / 99% Indirect 99.0% 1.0% 100.0% $486,912 $ 4,918 $491,830 Upland Wildlife Habitat Restoration $ 2,763 1% Direct / 99% Indirect 99.0% 1.0% 100.0% $ 2,735 $ 28 $ 2,763 Cost Share Programs - Livestock and Range Practices $ 3,004 25% Direct / 75% Indirect 75.0% 25.0% 100.0% $ 2,253 $ 751 $ 3,004 Direct Technical Assistance to Producers/Landowners $242,619 5% Direct / 95% Indirect 95.0% 5.0% 100.0% $ 230,488 $12,131 $242,619 Contingency Reserve $ 37,011 All Indirect 100.0% 0.0% 100.0% $ 37,011 - $ 37,011 Subtotal $777,227 $759,399 $17,828 $777,227 Forestry Wildland Fire Fuels Reduction $251,461 5% Direct / 95% Indirect 95.0% 5.0% 100.0% $ 238,888 $ 2,573 $251,461 Forest Health $ 10,041 5% Direct / 95% Indirect 95.0% 5.0% 100.0% $ 9,539 $ 502 $ 10,041 Firewise USA Communities/Fire Adapted $ 25,254 All Indirect 100.0% 0.0% 100.0% $ 25,254 $ - $ 25,254 Direct Technical Assistance to Landowners $ 42,716 5% Direct / 95% Indirect 95.0% 5.0% 100.0% $ 40,580 $ 2,136 $ 42,716 Contingency Reserve $ 16,474 All Indirect 100.0% 0.0% 100.0% $ 16,474 $ - $ 16,474 Subtotal $345,944 $ 330,733 $15,211 $345,944 Education/Outreach Youth Education Opportunities $ 6,024 All Indirect 100.0% 0.0% 100.0% $ 6,024 $ - $ 6,024 Producer Workshops $ 8,539 All Indirect 100.0% 0.0% 100.0% $ 8,539 $ - $ 8,539 Public Outreach $15,599 All Indirect 100.0% 0.0% 100.0% $15,599 $ - $15,599 Contingency Reserve $ 1,508 All Indirect 100.0% 0.0% 100.0% $ 1,508 $ - $ 1,508 Subtotal $ 31,671 $31,671 $ - $31,671 TOTAL $2,464,386 $2,205,393 $258,993 $2,464,386 DRAFT KCCD Rates Analysis Page 9 of 15 June 22, 2016

11 C. CUSTOMER BASE Kittitas County parcel files have been used to determine the number of chargeable parcels available to KCCD. When charging a rate, it is recommended to charge all those who receive a service/benefit. The only exceptions include federally owned lands, parcel account types other than Real Property, community owned parcels, and municipalities that have not opted in to the KCCD service area, including Ellensburg, Kittitas, South Cle Elum and Roslyn. There are 27,865 tax parcels available to be charged encompassing 799,032 acres in the boundaries of the KCCD. See Table 3 for a summary of the customer database. Customer types in this model were broken into three broad land use categories: Irrigated Land, Non- Irrigated Land, and Forestland using the boundaries of the Kittitas County Noxious Weed Districts as a guide (See Figure 2). Within these categories, land use was further broken down by the current Department of Revenue codes (WAC ) assigned by the Kittitas County Assessor (see Figure 3). Table 3 Summary of the customer database in the KCCD. LAND USE CATEGORIES SUMMARY 4 Total # of Parcels Total # of Acres Except Cities # of Parcels Exempt Cities # of Acres Other Exemptions # of Parcels 5 Other Exemptions # of Acres Parcels Currently Available to Charge Acres Currently Available to Charge # of Owners (forest only) 1 Residential 17,713 35,396 6,065 1, ,648 34, Commercial Transportation , , Trade Services 3,768 1,082, ,047 1, ,158 1, , Recreational 268 3, , Resources AG 5, , , , Resources , , Resource Designated Forest Land , , IRRIGATED 7 14, , , , Undeveloped/Open Space 7,553 49, ,767 48, ,414 1,454,370 8,049 6,176 1, ,162 27, , Department of Revenue Code categories except as noted. Not including any unassigned parcels. 5 All Federals Lands are exempt. 6 Category 9 meets the definition of forest land in RCW (3). This definition is different than the definition of forest land in the Department of Revenue (DOR) Codes, in that lands must be used solely for planting, growing and harvesting trees. All other forestlands are included in category 8. 7 Irrigated lands are subset of all of the DOR codes and not included in the totals of this table. Irrigated lands were determined using the Kittitas County Noxious weed district boundaries. DRAFT KCCD Rates Analysis Page 10 of 15 June 22, 2016

12 Figure 2. The Kittitas County Noxious Weed Control Districts define the boundaries of irrigated and non-irrigated lands. Weed Districts 1-5 (shades of green above) are in the irrigated areas of the County. Weed District 9 (in yellow) encompasses the non-irrigated lands and forest lands. Figure 3. The Kittitas County Assessor utilizes the Department of Revenue land use codes. This map displays the categories of those land use codes. DRAFT KCCD Rates Analysis Page 11 of 15 June 22, 2016

13 The portion of RCW that addresses forest land states that Forest lands used solely for the planting, growing, or harvesting of trees may be subject to rates and charges if such lands are served by the activities of the conservation district. The Department of Revenue Code is based on RCW (5), which defines forestland as... devoted primarily to growing and harvesting timber.... Thus, the forest land parcels indicated on the map in Figure 3 are further broken down by those meeting the definition in so that in Table 3, 9 includes only lands that are solely utilized for planting, growing and harvesting trees. The remaining lands in the Department of Revenue Code for forest land are included in Category 8. D. RATE CALCULATION As described above, the land use categories were evaluated based on direct and indirect benefits received and were allocated either no benefit, partial benefit compared to other classes, or full proportional benefit compared to other classes. Each line item in the budget is allocated based on the direct or indirect service/benefit provided, assigned to either the per parcel or per acre basis, then allocated among customer classes based on the comparative amount of benefit/service received. The full rates are then calculated after subtracting other revenue, such as grant reimbursements, contracts, rental income, and other miscellaneous revenue. To the extent warranted, these offsetting revenues are allocated proportionately to each program/service. Per parcel rates necessary to recover the costs of programs and services range from $12.05 for nonirrigated land parcels to $12.26 for irrigation land parcels. All calculated rates can be seen in the following table. DRAFT KCCD Rates Analysis Page 12 of 15 June 22, 2016

14 Table 4. Calculated Rates and Revenue Reconciliation Calculated Rates No of Charge Units Revenue Reconciliation Per Parcel Per Acre No of Parcels No of Acres Parcel Charge Acreage Charge 1 Residential $ $ ,648 34,368 $ 140,358 $ 4,124 $ 144,483 2 Commercial $ $ $ 434 $ 46 $ Transportation $ $ ,927 $ 2,422 $ 1,191 $ 3,613 4 Trade $ $ $ 2,434 $ 19 $ 2,453 5 Services $ $ , ,903 $ 20,533 $ 51,588 $ 72,122 6 Recreational $ $ ,292 $ 2,205 $ 395 $ 2,600 7 Resources AG $ $ , ,903 $ 71,299 $ 22,068 $ 93,367 8 Resources $ $ ,913 $ 10,712 $ 8,030 $ 18,742 9 Resource Designated Forest Land $ $ ,351 $ 2,098 $ 2,562 $ 4, Undeveloped/Open Space $ $ ,767 48,834 $ 81,610 $ 5,860 $ 87,470 TOTAL 27, ,032 $ 334,106 $ 95,884 $ 429,990 TOTAL 10 IRRIGATED Incremental $ $ , ,336 $ 2,904 $ 44,084 $ 46,988 Grand Total $ 337,011 $ 139,968 $ 476,978 Total Costs $ 2,464,386 Less: Total Other Revenues $(1,988,499) Net Revenues Needed from Rates $ 475,886 DRAFT KCCD Rates Analysis Page 13 of 15 June 22, 2016

15 E. RATE ADJUSTMENT The rates shown above would cover all budgeted costs less other revenue, but would exceed the five dollar per parcel limit prescribed in RCW and upheld by ESHB To conform to this cap, the highest rate is decreased to five dollars and the others are decreased proportionately. When the rates are decreased, the lowest per parcel rate becomes $4.91 and the lowest per acre rate $0.03. All reduced rates can be seen in the following table. The per landowner rate for the forest land is $3. Table 5. Rates to be Charged and Revenue Calculation Including Incremental Irrigation Calculated Rates No of Charge Units Revenue Reconciliation No of Acreage Per Parcel Per Acre Parcels No of Acres Parcel Charge Charge TOTAL 1 Residential $ $ ,648 34,368 $57,192 $1,031 $58,223 2 Commercial $ $ $177 $11 $188 3 Transportation $ $ ,927 $987 $298 $1,285 4 Trade $ $ $992 $5 $997 5 Services $ $ , ,903 $8,367 $12,897 $21,264 6 Recreational $ $ ,292 $899 $99 $997 7 Resources AG $ $ , ,903 $29,087 $5,517 $34,604 8 Resources $ $ ,913 $4,365 $2,007 $6,372 9 Resource Designated Forest Land $ ,351 $522 - $ Undeveloped/Open Space $ $ ,767 48,834 $33,294 $1,465 $34,759 TOTAL 27, ,032 $135,880 $23,330 $159, IRRIGATED Incremental $ $ , ,336 $ 1,162 $12,344 $13,505 Grand Total $137,042 $35,674 $172,716 Table 6. Rates to be charged including the IRRIGATED Incremental. Irrigated Rates Calculated Rates Per Parcel Per Acre 1 Residential $ $ Commercial $ $ Transportation $ $ Trade $ $ Services $ $ Recreational $ $ Resources AG $ $ Resources $ $ Resource Designated Forest Land $ - $ - 11 Undeveloped/Open Space $ $ DRAFT KCCD Rates Analysis Page 14 of 15 June 22, 2016

16 Appendices DRAFT KCCD Rates Analysis Page 15 of 15 June 22, 2016

17 Rates & Charges Model Service Cost How is cost allocated? Direct Indirect How is cost recovered? How is cost recovered? Per Parcel Per Acre Per Parcel Per Acre Who receives service share (full, partial, or none)? Who receives service share (full, partial, or none)? Who receives service share (full, partial, or none)? Who receives service share (full, partial, or none)? 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space 1. Residential 2. Commercial 3. Transportation 4. Trade 5. Services 6. Recreational 7. Resources AG 8. Resources 9. Resource Designated Forest Land 10. Unassigned 11. Undeveloped/Open Space Diagram Page 1 of 1

18 Rates & Charges Model Summary of Customer Database LAND USE CATEGORIES SUMMARY Total # of Parcels Total # of Acres Except Cities # of Parcels Exempt Cities # of Acres Other Exemptions # of Parcels Other Exemptions # of Acres Parcels Currently Available to Charge Acres Currently Available to Charge # of Owners (forest only) 1 Residential 17,713 35,396 6,065 1,028 11,648 34, Commercial Transportation , , Trade Services 3,768 1,082, ,047 1, ,158 1, , Recreational 268 3, , Resources AG 5, , , , Resources , , Resource Designated Forest Land , , IRRIGATED 14, ,336 14, , Undeveloped/Open Space 7,553 49, ,767 48, ,414 1,454,370 8,049 6,176 1, ,162 27, , Control 37,414 1,454,370 8,049 6,176 1, ,162 27, , Unassigned Assigned DOR Code Total # of Parcels [a] Total # of Acres Except Cities # of Parcels Exempt Cities # of Acres Other Exemptions # of Parcels Other Exemptions # of Acres Parcels Currently Available to Charge Acres Currently Available to Charge 1 Residential 11 Residential Single Family 13,429 26, , ,928 26,018 1 Residential 12 Residential 2 4 Units Residential 13 Residential Multiunits Residential 14 Residential Condo Residential 15 Residential MH Park Residential 16 Residential Hotels/Motels Residential 17 Residential Institutional lodging Residential 18 Residential All other Residential 19 Residential Vacation and Cabin 3,039 8, ,036 7,997 2 Commercial 21 Commercial Food Commercial 24 Commercial Lumber and Wood Commercial 25 Commercial Furniture & Fixtures Commercial 28 Commercial Chemicals Commercial 32 Commercial Stone, Clay & Glass Commercial 34 Commercial Fabricated Metal Products Commercial 39 Commercial Misc Commercial Transportation 41 Transportation Railroad 92 2, ,990 3 Transportation 42 Transportation Motor Vehicle Transportation 43 Transportation Aircraft Transportation 45 Transportation Highway Transportation 46 Transportation Auto Parking Transportation 47 Transportation Communication Transportation 48 Transportation Utilities 79 7, ,798 3 Transportation 49 Transportation Other Trade 50 Trade Condominiums Trade 51 Trade Wholesale Trade Trade 52 Trade Retail Trade Trade 53 Trade General Merchandise Trade 54 Trade Food Trade 55 Trade Auto Trade 56 Trade Apparel Trade 57 Trade Furniture & Equipment Trade 58 Trade Eating & Drinking Trade 59 Trade Other Services 61 Services Finance/Insurance/RealEstate Services 62 Services Personal Services 63 Services Business Services 64 Services Repair # of Owners (forest only) Parcel Page 1 of 2

19 Rates & Charges Model Summary of Customer Database Total # of Parcels Total # of Acres Except Cities # of Parcels Exempt Cities # of Acres Other Exemptions # of Parcels Other Exemptions # of Acres Parcels Currently Available to Charge Acres Currently Available to Charge # of Owners (forest only) 1 Residential 17,713 35,396 6,065 1,028 11,648 34, Commercial Transportation , , Trade Services 3,768 1,082, ,047 1, ,158 1, , Recreational 268 3, , Resources AG 5, , , , Resources , , Resource Designated Forest Land , , IRRIGATED 14, ,336 14, , Undeveloped/Open Space 7,553 49, ,767 48, ,414 1,454,370 8,049 6,176 1, ,162 27, , Control 37,414 1,454,370 8,049 6,176 1, ,162 27, , Unassigned Assigned LAND USE CATEGORIES SUMMARY DOR Code Total # of Parcels [a] Total # of Acres Except Cities # of Parcels Exempt Cities # of Acres Other Exemptions # of Parcels Other Exemptions # of Acres Parcels Currently Available to Charge Acres Currently Available to Charge # of Owners (forest only) 5 Services 65 Services Professional Services 66 Services Contract Services 67 Services Governmental 3,380 1,081, ,844 1, ,158 1, ,073 5 Services 68 Services Educational Services 69 Services Misc Recreational 71 Recreational Cultural Recreational 72 Recreational Public assembly Recreational 73 Recreational Amusements Recreational 74 Recreational Rec. Activities Recreational 75 Recreational Resorts & Group Camps 60 1, ,138 6 Recreational 76 Recreational Parks Recreational 79 Recreational Other Recreational Resources AG 81 Resource Agriculture , ,623 7 Resources AG 82 Resource Agriculture Activities Resources AG 83 Resource Agriculture Current Use 5, , , ,053 8 Resources 85 Resource Mining Resources 88 Resource Designated Forest Land , ,881 9 Resource Designated Forest Land 88 Resource Designated Forest Land , , Resources Undeveloped/Open Space 91 Undeveloped Land 7,228 42, ,444 41, Undeveloped/Open Space 92 Undeveloped Noncommercial Forest Undeveloped/Open Space 93 Undeveloped Water areas Undeveloped/Open Space 94 Undeveloped Open Space 318 6, , IRRIGATED IRRIGATED 14, , , , Undeveloped/Open Space 99 Undeveloped Other Select Select Select 37,414 1,454,370 8,049 6,176 1, ,162 27, , [a] Total parcels including any exempt [b] Exempt cities include Ellensburg, Kittitas, Roslyn, S. Cle Elum (Cle Elum has opted in) [c] Other exemptions include all federal land [d] Not including any unassigned parcels 58% Parcel Page 2 of 2

20 Rates & Charges Model Allocation Bases Functional Allocation Bases Allocation Bases Indirect Direct TOTAL 1 All Indirect 100.0% 0.0% 100.0% 2 All Direct 0.0% 100.0% 100.0% 3 1% Direct / 99% Indirect 99.0% 1.0% 100.0% 4 50% Direct / 50% Indirect 50.0% 50.0% 100.0% 5 75% Direct / 25% Indirect 25.0% 75.0% 100.0% 6 25% Direct / 75% Indirect 75.0% 25.0% 100.0% 7 5% Direct / 95% Indirect 95.0% 5.0% 100.0% 8 15% Direct/85% Indirect 85.0% 15.0% 100.0% 9 [Other] 100.0% 100.0% 10 [Other] 100.0% 100.0% 11 [Other] 100.0% 100.0% 12 [Other] 100.0% 100.0% Customer Allocation Bases Land Use Categories (Customer Classes) No. of Parcels [a] No. of Acres Irrigated Parcels Irrigated Acres [Other] [Other] [Other] 1 Residential 11,648 34,368 2 Commercial Transportation 201 9,927 4 Trade Services 1, ,903 6 Recreational 183 3,292 7 Resources AG 5, ,903 8 Resources ,913 9 Resource Designated Forest Land , IRRIGATED 14, , Undeveloped/Open Space 6,767 48,834 TOTAL 27, ,032 14, ,336 [a] using number of owners for designated forest land per RCW AllocBases Page 1 of 2

21 Currently Exempt Cities South Cle South Cle Ellensburg Ellensburg Kittitas Kittitas Roslyn Roslyn Land Use Categories Elum Elum # of Parcels # of Acres # of Parcels # of Acres # of Parcels # of Acres # of Parcels # of Acres 1 Residential 4, Commercial Transportation Trade Services , Recreational Resources AG Resources 2 9 Resource Designated Forest Land IRRIGATED 11 Undeveloped/Open Space TOTAL 6,037 3, , Currently Exempt Federal Land Land Use Categories Federal Land Federal Land # of Parcels # of Acres 1 Residential 2 Commercial 3 Transportation 4 Trade 5 Services 1, ,158 6 Recreational 7 Resources AG 8 Resources 9 Resource Designated Forest Land 10 IRRIGATED 11 Undeveloped/Open Space 1 4 TOTAL 1, ,162 AllocBases Page 2 of 2

22 Rates & Charges Model Budget FY 2017 Total Cost Allocation Allocation Percentages Allocated Costs Indirect Direct Total Indirect Direct Total Water Water Quality (meeting water clean up plan goals) $ 35, % Direct / 99% Indirect 99.0% 1.0% 100.0% $ 35,142 $ 355 $ 35,497 Water Quantity (meeting instream flow goals) 198, % Direct / 99% Indirect 99.0% 1.0% 100.0% 196,896 1, ,884 Cost Share Programs Irrigation Delivery and Application S 862, % Direct / 75% Indirect 75.0% 25.0% 100.0% 647, , ,851 Cost Share Programs Livestock and Range practices 2, % Direct / 75% Indirect 75.0% 25.0% 100.0% 1, ,002 Direct Technical Assistance to Producers 147, % Direct / 95% Indirect 95.0% 5.0% 100.0% 140,554 7, ,951 Contingency Reserve 62,359 1 All Indirect 100.0% 0.0% 100.0% 62,359 62,359 Subtotal $ 1,309,544 $ 1,083,590 $ 225,954 $ 1,309,544 Fish & Wildlife (Irrigated and Rangeland) Fish Habitat Access & Restoration $ 491, % Direct / 99% Indirect 99.0% 1.0% 100.0% $ 486,912 $ 4,918 $ 491,830 Upland Wildlife Habitat Restoration 2, % Direct / 99% Indirect 99.0% 1.0% 100.0% 2, ,763 Cost Share Programs Livestock and Range Practices 3, % Direct / 75% Indirect 75.0% 25.0% 100.0% 2, ,004 Direct Technical Assistance to Producers/Landowners 242, % Direct / 95% Indirect 95.0% 5.0% 100.0% 230,488 12, ,619 Contingency Reserve 37,011 1 All Indirect 100.0% 0.0% 100.0% 37,011 37,011 Subtotal $ 777,227 $ 759,399 $ 17,828 $ 777,227 Forestry Wildland Fire Fuels Reduction $ 251, % Direct / 95% Indirect 95.0% 5.0% 100.0% $ 238,888 $ 12,573 $ 251,461 Forest Health 10, % Direct / 95% Indirect 95.0% 5.0% 100.0% 9, ,041 Firewise USA Communities/Fire Adapted Communities 25,254 1 All Indirect 100.0% 0.0% 100.0% 25,254 25,254 Direct Technical Assistance to Landowners 42, % Direct / 95% Indirect 95.0% 5.0% 100.0% 40,580 2,136 42,716 Contingency Reserve 16,474 1 All Indirect 100.0% 0.0% 100.0% 16,474 16,474 Subtotal $ 345,944 $ 330,733 $ 15,211 $ 345,944 Education/Outreach Youth Education Opportunities $ 6,024 1 All Indirect 100.0% 0.0% 100.0% $ 6,024 $ $ 6,024 Producer Workshops 8,539 1 All Indirect 100.0% 0.0% 100.0% 8,539 8,539 Public Outreach 15,599 1 All Indirect 100.0% 0.0% 100.0% 15,599 15,599 Contingency Reserve 1,508 1 All Indirect 100.0% 0.0% 100.0% 1,508 1,508 Subtotal $ 31,671 $ 31,671 $ $ 31,671 TOTAL $ 2,464,386 $ 2,205,393 $ 258,993 $ 2,464,386 Budget Page 1 of 2

23 Rates & Charges Model Budget FY 2017 Total Cost Allocation Allocation Percentages Allocated Costs Indirect Direct Total Indirect Direct Total Summary Total Cost Percentage Allocated Costs Indirect Direct Total Water $ 1,309, % $ 766,965 $ 17,846 $ 784,812 Fish & Wildlife (Irrigated and Rangeland) 777, % 217,709 2, ,228 Forestry 345, % 690, , ,707 Education/Outreach 31, % 274,077 14, ,844 Natural Resource Priority 5 0.0% 194,038 7, ,436 Natural Resource Priority 6 0.0% 62,359 62,359 Natural Resource Priority 7 0.0% Natural Resource Priority 8 0.0% TOTAL $ 2,464, % $ 2,205,393 $ 258,993 $ 2,464,386 less: Other Revenues (1,988,499) NET TOTAL $ 475,886 Budget Page 2 of 2

24 Rates & Charges Model 0 No benefit Water 1 Partial benefit compared to other classes 2 Full proportional benefit compared to other classes Water Quality (meeting water clean up plan goals) Indirect Benefit Costs TOTAL COST % to be Recovered from "per Parcel " Charge: 100.0% % to be Recovered from "per Acreage " Charge: 0.0% $ 35,142 Allocated Cost for "per Parcel " Charge: $ 35,142 Allocated Cost for "per Acreage " Charge: $ No. of Parcels No. of Acres [a] 1 Residential 11, , % $ 14,769 11,648 $ , , % $ 34,368 $ 2 Commercial % $ $ % $ 381 $ 3 Transportation % $ $ , , % $ 9,927 $ 4 Trade % $ $ % $ 160 $ 5 Services 1, , % $ 2,161 1,704 $ , , % $ 429,903 $ 6 Recreational % $ $ , , % $ 3,292 $ 7 Resources AG 5, , % $ 7,496 5,912 $ , , % $ 183,903 $ 8 Resources % $ 1, $ , , % $ 66,913 $ 9 Resource Designated Forest Land % $ $ , , % $ 21,351 $ 10 IRRIGATED 11 Undeveloped/Open Space 6, , % $ 8,580 6,767 $ , , % $ 48,834 $ TOTAL 27,716 27, % $ 35,142 27,716 $ , , % $ 799,032 $ [a] Resource Designated Forest Land reflects # of owners Water Quality (meeting water clean up plan goals) Direct Benefit Costs TOTAL COST % to be Recovered from "per Parcel " Charge: 75.0% % to be Recovered from "per Acreage " Charge: 25.0% $ 355 Allocated Cost for "per Parcel " Charge: $ 266 Allocated Cost for "per Acreage " Charge: $ 89 No. of Parcels No. of Acres [a] 1 Residential 11, , % $ ,648 $ , , % $ 4 34,368 $ Commercial % $ 0 36 $ % $ $ Transportation % $ $ , , % $ 1 9,927 $ Trade % $ $ % $ $ Services 1, , % $ 16 1,704 $ , , % $ ,903 $ Recreational % $ $ , , % $ 0 3,292 $ Resources AG 5, , % $ 57 5,912 $ , , % $ ,903 $ Resources % $ $ , , % $ 7 66,913 $ Resource Designated Forest Land % $ $ , , % $ 2 21,351 $ IRRIGATED 11 Undeveloped/Open Space 6, , % $ 65 6,767 $ , , % $ 5 48,834 $ TOTAL 27,716 27, % $ ,716 $ , , % $ ,032 $ NRP 1 Page 1 of 6

25 Rates & Charges Model 0 No benefit Water 1 Partial benefit compared to other classes 2 Full proportional benefit compared to other classes Water Quantity (meeting instream flow goals) Indirect Benefit Costs TOTAL COST % to be Recovered from "per Parcel " Charge: 100.0% % to be Recovered from "per Acreage " Charge: 0.0% $ 196,896 Allocated Cost for "per Parcel " Charge: $ 196,896 Allocated Cost for "per Acreage " Charge: $ No. of Parcels No. of Acres [a] 1 Residential 11, , % $ 82,748 11,648 $ , , % $ 34,368 $ 2 Commercial % $ $ % $ 381 $ 3 Transportation % $ 1, $ , , % $ 9,927 $ 4 Trade % $ 1, $ % $ 160 $ 5 Services 1, , % $ 12,105 1,704 $ , , % $ 429,903 $ 6 Recreational % $ 1, $ , , % $ 3,292 $ 7 Resources AG 5, , % $ 41,999 5,912 $ , , % $ 183,903 $ 8 Resources % $ 6, $ , , % $ 66,913 $ 9 Resource Designated Forest Land % $ 1, $ , , % $ 21,351 $ 10 IRRIGATED 11 Undeveloped/Open Space 6, , % $ 48,073 6,767 $ , , % $ 48,834 $ TOTAL 27,716 27, % $ 196,896 27,716 $ , , % $ 799,032 $ Water Quantity (meeting instream flow goals) Direct Benefit Costs TOTAL COST % to be Recovered from "per Parcel " Charge: 75.0% % to be Recovered from "per Acreage " Charge: 25.0% $ 1,989 Allocated Cost for "per Parcel " Charge: $ 1,492 Allocated Cost for "per Acreage " Charge: $ Allocation of Costs Calculation of Rates 2 Allocation of Costs Calculation of Rates Irrigated No. of Acres Parcels 1 Residential 11,648 $ 34, % $ 34,368 $ 2 Commercial 36 $ % $ 381 $ 3 Transportation 201 $ 9, % $ 9,927 $ 4 Trade 202 $ % $ 160 $ 5 Services 1,704 $ 429, % $ 429,903 $ 6 Recreational 183 $ 3, % $ 3,292 $ 7 Resources AG 5,912 $ 183, % $ 183,903 $ 8 Resources 889 $ 66, % $ 66,913 $ 9 Resource Designated Forest Land 174 $ 21, % $ 21,351 $ 10 IRRIGATED 14, , % $ 1,492 $ % $ 11 Undeveloped/Open Space 6,767 $ 48, % $ 48,834 $ TOTAL 14,521 14, % $ 1,492 27,716 $ , % $ 799,032 $ NRP 1 Page 2 of 6

26 Rates & Charges Model 0 No benefit Water 1 Partial benefit compared to other classes 2 Full proportional benefit compared to other classes Cost Share Programs Irrigation Delivery and Application System Improvements Indirect Benefit Costs TOTAL COST % to be Recovered from "per Parcel " Charge: 70.0% % to be Recovered from "per Acreage " Charge: 30.0% $ 647,138 Allocated Cost for "per Parcel " Charge: $ 452,997 Allocated Cost for "per Acreage " Charge: $ 194,141 No. of Parcels No. of Acres [a] 1 Residential 11, , % $ 190,378 11,648 $ , , % $ 8,350 34,368 $ Commercial % $ $ % $ $ Transportation % $ 3, $ , , % $ 2,412 9,927 $ Trade % $ 3, $ % $ $ Services 1, , % $ 27,851 1,704 $ , , % $ 104, ,903 $ Recreational % $ 2, $ , , % $ 800 3,292 $ Resources AG 5, , % $ 96,627 5,912 $ , , % $ 44, ,903 $ Resources % $ 14, $ , , % $ 16,258 66,913 $ Resource Designated Forest Land % $ 2, $ , , % $ 5,188 21,351 $ IRRIGATED 11 Undeveloped/Open Space 6, , % $ 110,601 6,767 $ , , % $ 11,865 48,834 $ TOTAL 27,716 27, % $ 452,997 27,716 $ , , % $ 194, ,032 $ Cost Share Programs Irrigation Delivery and Application System Improvements Direct Benefit Costs TOTAL COST % to be Recovered from "per Parcel " Charge: 0.0% % to be Recovered from "per Acreage " Charge: 100.0% $ 215,713 Allocated Cost for "per Parcel " Charge: $ Allocated Cost for "per Acreage " Charge: $ 215,713 3 Allocation of Costs Calculation of Rates 4 Allocation of Costs Calculation of Rates Irrigated Irrigated Parcels Acres 1 Residential 11,648 $ 34,368 $ 2 Commercial 36 $ 381 $ 3 Transportation 201 $ 9,927 $ 4 Trade 202 $ 160 $ 5 Services 1,704 $ 429,903 $ 6 Recreational 183 $ 3,292 $ 7 Resources AG 5,912 $ 183,903 $ 8 Resources 889 $ 66,913 $ 9 Resource Designated Forest Land 174 $ 21,351 $ 10 IRRIGATED 14, , % $ 14,521 $ 176, , % $ 215, ,336 $ Undeveloped/Open Space 6,767 $ 48,834 $ TOTAL 14,521 14, % $ 42,237 $ 176, , % $ 215, ,368 $ NRP 1 Page 3 of 6