1/23/2017 UPFRONT CHARGES FOR WATER & SEWER UTILITIES Clerks Winter Conference 2017 Kara A. Millonzi, UNC-CH School of Government millonzi@sog.unc.edu 1
1/23/2017 NC GOVERNMENTS General Assembly Municipalities Counties Special Purpose Local (Cities, Towns, Governments Villages) Fayetteville Municipalities PWC / Greenville Utilities Counties Commission Metropolitan Joint Agencies Water and (City/County Sewerage Utility Districts Government Commission) Water / Sewer Services Metropolitan County Water Sewerage and Sewer Districts Districts Water and Metropolitan Sewer Water Districts Authorities Sanitary Districts 2
1/23/2017 Impact Contractual Availability Tap Fees User Fees Fees Charges Fees Assessed pursuant Assessed on to contract to water/sewer utility extend water/ customer—typically Assessed on certain has fixed and sewer lines to properties when variable component property water/sewer lines available but property owner Assessed on chooses not to Assessed on developer as connect property owner condition of at time of development connection WHAT’S IN A NAME? Contractual Capital Tap / Impact Fees Capital Fees Charges Connection Fees Investment Fees System Capital Facility User Fees Capacity Fees Privilege Fees Capacity Fees Charge Development Capital System Buy-in Capacity Use Initial Hook-up and Technology Recovery Fees Charges Fees Fees Fees System Capital Reserve Development ??? Monthly Fees Acreage Fees Fees Fees 3
1/23/2017 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 4
1/23/2017 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 Contractual Availability Tap Fees User Fees Fees Charges Fees WERE THE FEES ASSESSED…. “FOR THE USE OF” THE UTILITY? OR “SERVICES FURNISHED BY” THE UTILITY? 5
1/23/2017 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 Contractual Availability Tap Fees User Fees Fees Charges Fees WHO CAN YOU CHARGE? WHEN CAN YOU CHARGE IT? WHAT CAN YOU CHARGE? (AND SOMETIMES) HOW CAN YOU SPEND THE MONEY? 6
1/23/2017 WHAT IF YOUR UNIT ALSO CHARGED AN UNLAWFUL FEE? 10-YEAR STATUTE OF LIMITATIONS FEES “FOR THE USE OF OR SERVICES Not Allowed Allowed FURNISHED BY” IMPACT FEE: CONTRACTUAL CHARGE: Automatically assessed on developer as Assessed on developer or property owner • • condition of development; pursuant to development agreement or other Calculated to fund future capital costs of contractual agreement; • water/sewer system Calculated to cover direct and indirect costs of • expanding / extending public infrastructure to *Unless unit has local act authority 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 • 7
1/23/2017 FEES “FOR THE USE OF OR SERVICES Maybe??? Not Allowed Allowed FURNISHED BY” IMPACT FEE: 1. Assessed on developer 1. Assessed when 1. Assessed when CONTRACTUAL CHARGE: as condition of property connects (or property connects (or Automatically Assessed on developer or • development, no contracts to connect) contracts to connect) to • assessed on developer property owner pursuant to matter how calculated to water/sewer water/sewer system; as condition of development agreement or or used system; calculated to Calculated by equity development; other contractual Calculated to fund cover some measure or system buy-in agreement; • future capital costs of Calculated to cover direct 2. Assessed when of reserved capacity method as • water/sewer system and indirect costs of property connects (or in system (combined reimbursement for past expanding / extending contracts to connect) to or hybrid approach— investments in system *Unless unit has local act public infrastructure to water/sewer system; includes both existing authority serve property(ies) calculated solely to and planned 2. Assessed when cover future expansion capacity) property connects (or TAP/CONNECTION FEE: costs contracts to connect) to 2. Assessed when water/sewer system; Assessed on developer or • property connects (or Calculated to cover property owner when property connects to water contracts to connect) known or predictable or sewer system; to water/sewer future maintenance / Calculated to cover direct • system; calculated to upgrade costs and indirect costs of cover unknown future necessary to provide connecting property to maintenance / service to property system upgrade costs of 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 8
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