New development pays a capacity fee based on the size of their water service to "buy in" to the existing system. For example, a new single-family home pays $6,296 to connect to the water system. Funds collected from new development are used for system-wide capital improvements. In 2020- 2023 City has been collecting about $0.80 to $1.1 million per year from new development. Those connection fees are used to offset the amount ratepayers contributed for capital improvements. New development is required to pay for and install infrastructure required to serve their project. For example, if a new or larger water main is required to supply a new subdivision, the City does not pay for it out of capital improvement funds. The new development pays all costs. The $6 million increasing to $8 million in annual capital improvements supported by the rates are not used to benefit new development.