The Marin Municipal Water District is changing how it calculates its connection fees, a move expected to increase the average charge about $6,000.

Under a plan approved by the board Tuesday, the district will shift to using the size of water meters instead of their estimated usage. The utility says the switch will bring it closer to industry standards.

“I think it’s just an important step for our agency’s desire to do things right and be more amongst the norm of other agencies out there,” said Jed Smith, vice president of the board. “This seems like a great step and a good cleanup.”

Connection fees, also called capacity charges, are one-time costs paid by new customers to get service, or by current customers who need to increase capacity.

Bret Uppendahl, the district’s finance director, said the method the district used to determine the fees is overly complicated and relies on usage estimates instead of capacity demand.

“There’s a key distinction there,” Uppendahl said. “Capacity charges are meant to be a share of total capacity, meaning up to the amount you could use, as opposed to use estimates, which are more targeted based on individual usage each year, and that’s not common in the industry.”The utility hired Bartle Wells Associates to do a study on its capacity charges. Erik Helgeson, a consultant with the firm, recommended switching to “meter equivalent units,” which are based on the size of the pipe that connects to the water main, to determine the fee. He said using the same charge for all meters 1 inch or smaller is a more accurate reflection of possible demand.

The capacity charges were last updated in 2018. The district uses a buy-in method, where charges are set based on the value of the infrastructure divided by the capacity of the water system. Fees were set at $44,089 per acre-foot of a customer’s estimated water demand.

For houses in the district’s nearly 300 zones, the fees ranged from about $4,850 to $89,500, with the average at $10,500, Uppendahl said. Commercially, the charge is based on the business type.

“We’re trying to really standardize that and keep the range to be much more manageable and much more transparent to our customers,” Uppendahl said.

Under the changes, a one-time charge of $16,740 will be applied to single-family home and duplex water connections with a 1-inch-or-smaller meter, which affects more than half the district’s customers, according to a staff report. Fees go up from the base rate for all other connection types — $25,110 for a 3/4-inch meter, $41,850 for a 1-inch meter, $83,700 for a 1.5-inch meter, for example.

The fee was based on the district’s total capacity of 95,360 meter equivalent units, which accounts for the estimated development in the area by 2045, and the system’s value of about $1.6 billion.

“Moving to meter size is a very straightforward and uniform approach to just reflect the capacity of commercial connections or multifamily connections based on the connection which is sized to their need rather than a more complex way to determine capacity,” Helgeson said.

Helgeson also said the district should continue to use a buy-in method, and not charge for additional capacity, because the system has enough capacity to support any development that would increase water demand. He said the district’s assets should be reevaluated to reflect today’s financial environment.

“A lot of assets were built a long time ago, so we want to look at the replacement costs today to make it on an apples-to-apples footing, but then also reflect that these assets have experienced wear,” Helgeson said.

Some district policies can help with the costs, including a 50% discount or deferred payments on some affordable housing projects, and a five-year payment plan.

The new charges will go into effect on July 1 and be reevaluated for inflation in July 2026.