UPFRONT CHARGES FOR WATER & SEWER UTILITIES Clerks Winter - - PDF document

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UPFRONT CHARGES FOR WATER & SEWER UTILITIES

Clerks Winter Conference 2017 Kara A. Millonzi, UNC-CH School of Government millonzi@sog.unc.edu

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NC GOVERNMENTS

Municipalities (Cities, Towns, Villages) Counties Special Purpose Local Governments General Assembly

Government Water / Sewer Services

Joint Agencies (City/County Utility Commission) County Water and Sewer Districts Water and Sewer Authorities Sanitary Districts Metropolitan Water Districts Metropolitan Sewerage Districts Metropolitan Water and Sewerage Districts Fayetteville PWC / Greenville Utilities Commission

Municipalities Counties

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Impact Fees Contractual Charges Availability Fees Tap Fees User Fees

Assessed on developer as condition of development Assessed pursuant to contract to extend water/ sewer lines to property Assessed on property owner at time of connection Assessed on certain properties when water/sewer lines available but property owner chooses not to connect Assessed on water/sewer utility customer—typically has fixed and variable component

WHAT’S IN A NAME?

Impact Fees Contractual Charges Capacity Fees System Development Fees Tap / Connection Fees User Fees Capital Fees Capital Facility Fees System Buy-in Charges Capital Investment Fees Capital Recovery Fees Capital Reserve Fees Capacity Use Fees Development and Technology Fees Acreage Fees Privilege Fees Initial Hook-up Fees Monthly Fees System Capacity Charge ???

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WHO CAN YOU CHARGE? WHEN CAN YOU CHARGE IT? WHAT CAN YOU CHARGE? (AND SOMETIMES) HOW CAN YOU SPEND THE MONEY? MUNICIPALITIES AND COUNTIES….

“MAY ESTABLISH AND REVISE FROM TIME TO TIME SCHEDULES OF RENTS, RATES, FEES, CHARGES, AND PENALTIES FOR THE USE OF OR THE SERVICES FURNISHED BY ANY [WATER OR SEWER UTILITY].”

G.S. 160A-314; G.S. 153A-277

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TOWN OF CARTHAGE IMPACT FEE CASE

• WATER IMPACT FEE
• ASSESSED ON NEW DEVELOPMENT (TRIGGERED OFF FINAL PLAT APPROVAL)
• AMOUNT BASED WATER METER SIZE
• REVENUE “USED TO COVER THE COST OF EXPANDING THE WATER SYSTEM.

THE COSTS OF EXPANSION ARE WATER TREATMENT PLANT EXPANSION, ELEVATED STORAGE EXPANSION, AND TRANSMISSION MAINS.”

• SEWER IMPACT FEE
• ASSESSED ON NEW DEVELOPMENT (TRIGGERED OFF FINAL PLAT APPROVAL)
• AMOUNT BASED ON METER SIZE
• REVENUE “USED TO COVER THE COST OF EXPANDING THE SEWER SYSTEM. . . .

INCLUD[ING] GRAVITY MAINS, FORCE MAINS, AND LIFT STATIONS.”

• TAP FEE
• ASSESSED WHEN PROPERTIES CONNECTED TO WATER AND SEWER SYSTEMS

Impact Fees

Contractual Charges Availability Fees Tap Fees User Fees

WERE THE FEES ASSESSED….

“FOR THE USE OF” THE UTILITY? OR “SERVICES FURNISHED BY” THE UTILITY?

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TOWN OF CARTHAGE IMPACT FEE CASE

• WATER IMPACT FEE
• ASSESSED ON NEW DEVELOPMENT (TRIGGERED OFF FINAL PLAT APPROVAL)
• AMOUNT BASED WATER METER SIZE
• REVENUE “USED TO COVER THE COST OF EXPANDING THE WATER SYSTEM.

THE COSTS OF EXPANSION ARE WATER TREATMENT PLANT EXPANSION, ELEVATED STORAGE EXPANSION, AND TRANSMISSION MAINS.”

• SEWER IMPACT FEE
• ASSESSED ON NEW DEVELOPMENT (TRIGGERED OFF FINAL PLAT APPROVAL)
• AMOUNT BASED ON METER SIZE
• REVENUE “USED TO COVER THE COST OF EXPANDING THE SEWER SYSTEM. . . .

INCLUD[ING] GRAVITY MAINS, FORCE MAINS, AND LIFT STATIONS.”

• TAP FEE
• ASSESSED WHEN PROPERTIES CONNECTED TO WATER AND SEWER SYSTEMS

Impact Fees

Contractual Charges Availability Fees Tap Fees User Fees

WHO CAN YOU CHARGE? WHEN CAN YOU CHARGE IT? WHAT CAN YOU CHARGE? (AND SOMETIMES) HOW CAN YOU SPEND THE MONEY?

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WHAT IF YOUR UNIT ALSO CHARGED AN UNLAWFUL FEE?

10-YEAR STATUTE OF LIMITATIONS

FEES “FOR THE USE OF OR SERVICES FURNISHED BY” Not Allowed Allowed

IMPACT FEE:

• Automatically assessed on developer as

condition of development;

• Calculated to fund future capital costs of

water/sewer system

*Unless unit has local act authority

CONTRACTUAL CHARGE:

• Assessed on developer or property owner

pursuant to development agreement or other contractual agreement;

• Calculated to cover direct and indirect costs of

expanding / extending public infrastructure to serve property(ies) TAP/CONNECTION FEE:

• Assessed on developer or property owner when

property connects to water or sewer system;

• Calculated to cover direct and indirect costs of

connecting property to system USER FEE:

• Assessed on water/sewer customer (after

property connected);

• Calculated to cover past, current, and future

costs necessary to serve property;

• May include profit component

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FEES “FOR THE USE OF OR SERVICES FURNISHED BY”

Not Allowed

Maybe???

Allowed

IMPACT FEE:

• Automatically

assessed on developer as condition of development;

• Calculated to fund

future capital costs of water/sewer system *Unless unit has local act authority

1. Assessed on developer as condition of development, no matter how calculated

• r used

2. Assessed when property connects (or contracts to connect) to water/sewer system; calculated solely to cover future expansion costs 1. Assessed when property connects (or contracts to connect) to water/sewer system; calculated to cover some measure

• f reserved capacity

in system (combined

• r hybrid approach—

includes both existing and planned capacity) 2. Assessed when property connects (or contracts to connect) to water/sewer system; calculated to cover unknown future maintenance / upgrade costs of system 1. Assessed when property connects (or contracts to connect) to water/sewer system; Calculated by equity

• r system buy-in

method as reimbursement for past investments in system 2. Assessed when property connects (or contracts to connect) to water/sewer system; Calculated to cover known or predictable future maintenance / upgrade costs necessary to provide service to property

CONTRACTUAL CHARGE:

• Assessed on developer or

property owner pursuant to development agreement or

• ther contractual

agreement;

• Calculated to cover direct

and indirect costs of expanding / extending public infrastructure to serve property(ies) TAP/CONNECTION FEE:

• Assessed on developer or

property owner when property connects to water

• r sewer system;
• Calculated to cover direct

and indirect costs of connecting property to system USER FEE:

• Assessed on water/sewer

customer (after property connected);

• Calculated to cover past,

current, and future costs necessary to serve property;

• May include profit

component