Our team completed an estimate for the water treatment plant of the Water Works Properties for the City of Evanston, Illinois. To complete the study, the historical costs for the water treatment plant were analyzed at the plant account level. These costs were summarized by year and escalated to reproduction costs using the Engineering News-Record 20 Cities Construction Cost Index.
Adjustments to the estimated reproduction costs for depreciation of value were determined. These adjustments reflected estimates of the overall useful life of appropriate water treatment plants that were primarily based on the assessed condition of the facilities. Book depreciation was utilized as the starting point for depreciating the reproduction cost of the plant.
The study report was completed in accordance with the specific requirements for a reproduction cost new less depreciation value as of two specific dates. The valuation was conducted for purposes of determining billings and rates for water delivered by the City and received by the Northwest Water Commission utilizing a specific contract formula.