city of versailles wastewater impact fee program …...water rates, fees and charges," 6th...

City of Versailles

Wastewater Impact Fee Program Manual

October 2017

prepared by: Salt River Engineering, PLLC

Harrodsburg, KY

CityofVersaillesWastewaterImpactFeeProgramWastewaterImpactFeeProgram

TheCityofVersaillesownsandoperatesamunicipalutilitythatprovideswastewatercollectionandtreatmentforapproximately6000customers.About87percentofVersailles’wastewatercustomersareresidential;theremaining13percentarecommercialandlightindustrialaccounts.Thewastewaterutilityoperatesa3.0milliongallonperday(MGD)treatmentplantandmaintainsover100milesofcollectionandinterceptorlines.Thecityiscurrentlyinthemidstofa$20millionprojecttoincreasethetreatmentplantcapacityto4.5MGD.AccordingtotheUSCensus,Versailles’populationin2000was7,511,increasingto9,164in2010.Theincreaseinpopulationrepresenteda22percentgrowthrate.Estimatesfor2017indicateapopulationof9,437,a3percentgrowthfrom2010.Versaillesisthe8thfastestgrowingcityinBluegrassAreaDevelopmentDistrictand,accordingtoHomeSnacks,isthe29thfastestgrowingofKentucky’s85cities.Theavailabilityofaffordable,dependableandregulatorycompliantwaterandwastewaterservicecannotbeoverstatedwhenfamiliesandbusinesseslookforaplacetolocate.TheexistingcustomersoftheVersailleswastewaterutilityhavebuiltavibrantandcompliantwastewaterutilitythroughtherevenuegeneratedbytheirutilitybills.Seeingthat,inmanycases,thecontributiontocapitalhasbeenalife-longinvestment,cityleaderswantedtorecognizetheequityexistingcustomershaveintheutility.Additionally,whileresponsiblegrowthiscertainlywelcomeinVersailles,theburdenoffundingthecapitalconstructionrequiredforgrowthshouldbepredominatelycarriedbythoserequestingnewwastewaterservice.Impactfees(alsocalledsystemdevelopmentchargesanddevelopmentfees)areone-timefeespaidbythosecustomerspresentinganewdemandontheutility(neworadditionalwastewaterflow,inthiscase).Thefeeisdesignedandassessedtominimizetheimpactofgrowth-relatedcostsonexistingcustomersand,instead,assignmuchofthefinancialburdentothoseresponsibleforthegrowth-relatedcosts.Impactfeeshavecometoprominenceonapathinverselyrelatedtothetoleranceofhighertaxes.Asthepublicresistshighertaxes,themunicipalitieshavehadtoconsideradditionalwaystogeneraterevenue,presumablyinanequitablemanner.Additionally,grantfundshavebecomeathingofthepastandthedebtservicecomponentofutilityratesnowdwarfstheoperationandmaintenanceportion.SaltRiverEngineeringwascontractedbytheCityofVersaillestodevelopanimpactfeeprogramforthemunicipalwastewaterutility.SREusedAmericanWaterworks


Association(AWWA)ManualM-1,WaterEnvironmentFederation(WEF)ManualofPractice#27andNelson’s“SystemDevelopmentChargesforWater,WastewaterandStormwaterFacilities”forguidanceindevelopingtheprogram.WhileKentuckymunicipalutilitiesarenotsubjecttoPublicServiceCommissionregulation,thedevelopmentandadministrationoftheimpactfeeprogramissubjecttocertainrationalnexustests,bestsummarizedbytheBanberry1factors:

• thecostofexistingfacilities;

• howexistingfacilitieswerefinanced;

• howmuchnewdevelopmenthasalreadypaid;

• howmuchnewdevelopmentwillpayinthefuture;

• creditforfacilitiesinstalledbydeveloper;

• extraordinarycostsandtime-pricedifferentials;

• newdevelopmentbenefitsfromfeeitpays.Otherkeyrequirementsinvolvethecapitalimprovementsplan(CIP)uponwhichthefeeisbasedandtherevenuescollected.TheCIPmustbeadynamicfileofplannedinfrastructureprojectsandtheimpactfeeprogramrevenuesmustbe“fenced”foreligibleinfrastructureprojects.The“TotalCostAttributionMethod”isdescribedintheNelsonbook.ItiswellsuitedforVersailles’wastewaterutilitybecauseitaddressestheequitytheexistingcustomershaveinthesystemaswellasthecostsassociatedwithnewdemandsandgrowth.Itcombinestheelementsoftherationalnexuscriteria,includingsuchBanberryfactorsashowexistingfacilitieswerefinanced,thecostsofaccommodatingnewdevelopment,andthetime-valueofmoney.2Thetotalcostattributionmethodconsiderstheexistingsystem,realizingexistingcustomersfinancedthecapitalthroughrates,andattemptstoprovideawayfornewcustomersto“buy-in”totheequity.Theratebase,asreportedbythecityauditor,isreviewedandeachpieceofcapitalassessedforitsintendedbenefit—theexistingsystem(systemwideimprovements)and/ornewdemands(growth-relatedexpansion).Additionally,theCIPadoptedbythecityprovidestheestimatedcostfromfutureprojects,whethertheyaredesignedtoreplaceandupgradetheexistingsystem(systemwideimprovements)orprovidenewcapacityforneworincreaseddemands(growth-relatedexpansion).Theratebase(inventory)includesthe

1BanberryDevelopmentCompanyv.SouthJordanCity(631P.2d899,Utah1981).2NelsonA.,”SystemDevelopmentChargesforWater,Wastewater,andStormwater2NelsonA.,”SystemDevelopmentChargesforWater,Wastewater,andStormwaterFacilities,”1995CRCPress,Inc.,page81.


existingprincipal(capital).TheCIPincludesfutureprincipal(capital)andfutureinterestestimates.Additionally,theCIPidentifiesandincludestheremaininginteresttobepaidonexistingprincipal(capital).Toidentifythevalueoftheexistingcapital,thedepreciationschedulewasamendedtobringthevalueofexistingcapitaltothebaseyear2016.Theexistingcapitalisannotatedintheamendeddepreciationschedule,nowreferredtoastheinventory.Theinventoryincludescapitalprojectsbuiltfortheexistingcustomersandreplacementsandupgradestothatsystemwidecapital.Additionally,somecapitalfacilitiesareincludedintheinventorythatwereconstructed,inpart,forgrowth.Thecapitalimprovementsplanisacriticalcomponentoftheimpactfeeprogram.TheCIPliststhecapitalprojectsthatVersaillesplanstoconstructwithintheplanningperiod,usually20years.TheCIPwasamendedtoidentifythoseprojects,orthepercentageofprojects,tobeconstructedtorepairorreplaceexistingsystemwidefacilitiesandthoseprojectstobeconstructedinwholeorinpartforgrowth.TheCapitalImprovementsElement(CIE)oftheCIPliststheproposedcapitalprojectsandtheestimatedfutureinterestcostassociatedwiththoseprojects.Additionally,theCIEincludestheremaininginterestcostfromexistingcapitaldebt.AdherencetotheCIP,oratleastanhonestefforttoconstructtheprojectsontheCIPinaccordancewiththetimeschedule,iscrucialtothelegaldefenseoftheimpactfeeprogram.Thecapacityofthewastewaterutilityplaysasignificantroleinthecalculationoftheimpactfee.Boththeavailablecapacityinthebaseyearandtheplannedcapacityareusedinthecalculation.SREworkedcloselywithVersailles’consultant,GRWEngineers,inidentifyingthegrowth-relatedpercentageoftheCIPandthewastewatersystem’slimitingcapacity,inthiscasetheWWTPcapacity.Theinventory,theCIE,andthelimitingcapacitywereusedtoarriveatthesystemwideimprovementscostandthegrowth-relatedimprovementscost.Thesumofthetwoisthegrossimpactfee.Inkeepingwiththerationalnexusprincipals,newcustomerssubjecttotheimpactfeechargeshouldnotpaytwiceforthecapital(principal)andinterestassociatedwiththewastewaterutility.Topreventdouble-chargingfortheprincipalandinterest,thenetpresentvalue(NPV)oftheremainingexistingprincipalandinterestandtheestimatedfuturedebtserviceiscalculated.Then,theNPVforeachoutstandingbondissueandtheestimatedfuturebondissueissubtractedfromthegrossimpactfee.TheNPVoftheadministrativecostisaddedtoarriveatthefinalimpactfeeonacost($)pergallonbasis.


Oncetheimpactfeeisknown,thechargeiscalculatedbyestimatingthewastewaterflowintroducedbythenewcustomerandmultiplyingthefee($/gallon)bythevolume(gallons).Thewastewaterflowoftheaveragesingle-familyresidenceisestimatedbydividingtheaveragedailyresidentialflowthroughtheWWTPbythenumberofresidentialcustomers.Theresult,calledtheequivalentresidentialunit(ERU),isthebasisfortheimpactfeechargeschedule.Theimpactfeechargeforanewsingle-familyresidentialcustomerissimplytheimpactfeemultipliedbytheERU.Ratherthanestimatingthewastewaterflowforeverynewmulti-familyresidential,commercialandindustrialcustomer,theERUismultipliedbyafactorthatrepresentstypicalflowsfromcustomersotherthansingle-familyresidences.Thereareseveralmethodstoarriveatthefactors;Versaillesoptedtousethe“meterequivalency”method.ThemeterequivalenciesusedintheimpactfeecalculationaretakendirectlyfromTableVI.2-5inAmericanWaterWorksAssociation'sManualM-1,"PrincipalsofWaterRates,FeesandCharges,"6thEdition,2012.The“ImpactFeeChargeSchedule”includedattheendofthissectionliststheERUfactor(meterequivalencies)associatedwithvariousmetertypesandsizes.Forexample,ifacustomersubjecttotheimpactfeeinstallsa3-inchcompoundmetertosupplywatertotheirbusiness,theimpactfeechargewouldbetheimpactfeemultipliedbytheERU,thenmultipliedby16.Thespreadsheetsthatfollowshowthecalculationsinvolvedindevelopingtheinitialimpactfee.ThesamespreadsheetsappearinAppendixA,butwithalphanumericreferencestoillustratethesourceofthefactorsthatmakeupthefeecalculations.Thecityshouldendeavortorecalculatetheimpactfeeseveryfiveyearsincluding,butnotlimitedto,reassessingtheERUandupdatingtheCIP.Itisimperativethatthecityadheres,ascloselyaspossible,totheapprovedCIP.AppendixBincludesthehandoutsprovidedtotheworkcommitteeandthecouncilthroughoutthecourseoftheprogramdevelopment.AppendixCcontainsthedraftordinancedevelopedastheauthorizationfortheimpactfeeprogram.

City of VersaillesImpact Fee Charge Schedule

2017 - 2022

SRE; c allen11/27/17

caluclated ERU 185 gallons per day

calculated impact fee $7.41 per gallon

water meter size ERU factorsewer impact

fee⅝ inch displacement 1.0 $1,370.85¾ inch displacement 1.5 $2,056.281 inch displacement 2.5 $3,427.13

1½ inch displacement 5.0 $6,854.252 inch displacement 8.0 $10,966.80

3 inch singlejet 16.0 $21,933.603 inch compound 16.0 $21,933.60

3 inch turbine 17.5 $23,989.884 inch singlejet 25.0 $34,271.25

4 inch compound 25.0 $34,271.254 inch turbine 31.5 $43,181.78

6 inch singlejet 50.0 $68,542.506 inch compound 50.0 $68,542.50

6 inch turbine 65.0 $89,105.258 inch compound 80.0 $109,668.00

8 inch turbine 140.0 $191,919.0010 inch turbine 210.0 $287,878.5012 inch turbine 265.0 $363,275.25

Meter equivalencies, which are based on meter capacity, are taken directly from Table VI.2-5 in American Water Works Association's Manual M-1, "Principals of Water Rates, Fees and Charges," 6th Edition, 2012.

If, in the opinion of the impact fee administrator, the determination of the sewer impact fee on the basis of meter size is not representative of the nature of the installation's flow volume, the installation's equivalent residential unit (ERU) factor may be custom-calculated by using a ratio of the installation's gpd usage and the average single-family residence gpd usage (the ERU) for the utility.

sewer impact fee charge = (ERU) X (ERU factor) X (impact fee)

A "Buy-In" credit may be granted by the program manager in accordance with the Impact Fee ordinance. The Buy-In credit associated with the average single-family residence has been calculated to be $97.85. Buy-In credits for facilities other than single-family residences shall be calculated, on a case-by-case basis, by the program manager.

City of VersaillesImpact Fee Calculation

for years 2018 through 2022


system capacity, 2016 gallons 3,000,000planned system capacity, gallons 4,500,000current local asset value, systemwide improvements $21,046,519local CIP systemwide improvements $24,733,053existing & planned systemwide improvements $45,779,572existing & planned systemwide improvements per gallon (planned capacity) $10.17planned growth-related expansion (gallons) 1,500,000excess capacity, 2016 gallons 232,000total excess and planned growth-related capacity, 2016 gallons 1,732,000current asset value, local growth-related improvements $6,171,459CIP growth-related costs $12,510,600total growth-related costs $18,682,059balance in impact fee account $0growth-related expansion cost/gallon (excess & planned capacity) $10.79gross wastewater impact fee charge per gallon $20.96

Adjustmentsless credit for outstanding debt service, 2011 Bond Issue $0.08less credit for outstanding debt service, 2012 Bond Issue $1.11less credit for outstanding debt service, 2013 Bond Issue $1.24less credit for outstanding debt service, 2014 Bond Issue $1.52less credit for outstanding debt service, 2016 Bond Issue $2.31less credit for future debt service $7.32plus administrative costs1 $0.03

Net Wastewater Impact Fee Charge Per Gallon $7.41

Net Wastewater Impact Fee Charge Per ERU $1,370.85

Gross Wastewater Impact Fee

1NPV of $6,000 initial set up; $4,000 every 5 years thereafter plus $6,000 admin per year for 20 year planning period

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City of VersaillesENR Factor Calculation 2016


year 4th Q ENR indexannual avg ENR

indexENR factor 2016

1969 1305 8.06901970 1445 7.28721971 1672 6.29781972 1816 5.79851973 1939 5.43061974 2101 5.01191975 2297 4.58421976 2490 4.22891977 2660 3.95861978 2869 3.67031979 3140 3.35351980 3376 3.11911981 3695 2.84981982 3950 2.66581983 4110 2.56201984 4144 2.54101985 4228 2.49051986 4351 2.42011987 4478 2.35151988 4568 2.30521989 4685 2.24761990 4777 2.20431991 4889 2.15381992 5059 2.08141993 5310 1.98311994 5439 1.93601995 5524 1.90621996 5744 1.83321997 5858 1.79751998 5991 1.75761999 6127 1.71862000 6283 1.67602001 6390 1.64792002 6563 1.60442003 6782 1.55262004 7308 1.44092005 7647 1.37702006 7888 1.33492007 8089 1.30182008 8551 1.23142009 8641 1.21862010 8952 1.17632011 9172 1.14812012 9412 1.11882013 9668 1.08922014 9936 1.05982015 10152 1.03722016 10530 1.0000

City of VersaillesSewer System Demand and Treatment Capacity


yearavg demand

(MGD)peak demand

(MGD)avg capacity

(MGD)peak capacity

(MGD)notes

1990 3.000 9.000 original (of current) WWTP

1995 3.000 9.000

2000 3.000 9.0002001 3.000 9.0002002 3.000 9.0002003 3.000 9.0002004 3.000 9.0002005 3.000 9.000 sludge mgmt, clarifier upgrd only2006 3.000 9.0002007 3.000 9.0002008 3.000 9.0002009 3.000 9.0002010 1.950 3.500 3.000 9.000 RFP by GRW approved 2015 pg 712011 2.810 11.000 3.000 9.000 RFP by GRW approved 2015 pg 712012 2.280 9.000 3.000 9.000 RFP by GRW approved 2015 pg 712013 2.440 7.248 3.000 9.000 RFP by GRW Exhibit 7-12014 2.564 7.616 3.000 9.000 RFP by GRW Exhibit 7-12015 2.688 7.983 3.000 9.000 RFP by GRW Exhibit 7-12016 2.768 8.223 3.000 9.000 RFP by GRW Exhibit 7-12017 2.849 8.462 3.000 9.000 RFP by GRW Exhibit 7-12018 2.930 8.702 3.000 9.000 SIS CE report (GRW) pg 112019 3.010 8.942 4.500 12.500 RFP by GRW Exhibit 7-12020 3.091 9.181 4.500 12.500 RFP by GRW Exhibit 7-12021 3.169 9.413 4.500 12.500 RFP by GRW Exhibit 7-12022 3.247 9.646 4.500 12.500 RFP by GRW Exhibit 7-12023 3.326 9.878 4.500 12.500 RFP by GRW Exhibit 7-12024 3.402 10.104 4.500 12.500 RFP by GRW Exhibit 7-12025 3.478 10.329 4.500 12.500 RFP by GRW Exhibit 7-12026 3.554 10.555 4.500 12.500 RFP by GRW Exhibit 7-12027 3.630 10.781 4.500 12.500 RFP by GRW Exhibit 7-12028 3.706 11.007 4.500 12.500 RFP by GRW Exhibit 7-12029 3.782 11.232 4.500 12.500 RFP by GRW Exhibit 7-12030 3.858 11.458 4.500 12.500 RFP by GRW Exhibit 7-12031 3.925 11.658 4.500 12.500 RFP by GRW Exhibit 7-12032 3.992 11.858 4.500 12.500 RFP by GRW Exhibit 7-12033 4.060 12.058 4.500 12.500 RFP by GRW approved 2015 pg 74

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CityofVersaillesWastewaterImpactFeeProgram

APPENDIXA

GuidestoCalculations


ThefollowingpagesdepictspreadsheetsusedinthecalculationofVersailles’wastewaterImpactfee.Theversionsofthepagesincludedinthisaddendumincludenumberstoillustratetheoriginofthefactorsusedinthecalculations.Keyfactorsareshownasletters“A”through“E”andareusedintheequationatthebottomofthe“ImpactFeeCalculation”page.Adescriptionofeachnumber/stepinthecalculationshownonthe“ImpactFeeCalculation”andthenameofthesourcespreadsheetareprovidedbelow:1 thesystemcapacityissimplythedesigncapacityofthe

WWTPasitexistedinthebaseyear(2016,inthiscase)—fromengineeringdesign

“SewerSystemDemandandTreatmentCapacity”spreadsheet

2 theplannedsystemcapacityisthecapacitythatresultsfromtheexistingWWTPupgradeproject—fromengineeringdesign


3 thecurrentlocalassetvalue,systemwideimprovementsisthevalueoftheratebase,in2016dollars,forcapitalinusebyallcustomers—fromauditor’sdepreciationschedule

“InventoryandCurrentValueofSewerFacilities”

4 thelocalCIPsystemwideimprovementsisthevalueoftheplannedcapitalprojectstoupgradeandreplaceexistingfacilitiesorcapacity—fromVersailles’capitalimprovementsplan

“CapitalImprovementsElement(2017-2037)”

5 theexistingandplannedsystemwideimprovementsissimplythesum#3and#4

operationwithintable

A 1of2componentsofthegrosswastewaterimpactfee,theexisting&plannedsystemwideimprovementspergallonis#5dividedby#2


6 theplannedgrowth-relatedexpansionissimply#2minus#1


7 theexcesscapacity,2016gallonsistheunusedcapacityintheexistingWWTPinthebaseyear—fromRegionalFacilitiesPlanbyGRW


8 thetotalexcessandplannedgrowth-relatedcapacityisthesumof#6and#7


9 thecurrentassetvalue,localgrowth-relatedimprovementsisthevalueoftheratebase,in2016dollars,oftheportionofcapitalthathasbeenprovided

“InventoryandCurrentValueofSewerFacilities”


forgrowth—fromauditor’sdepreciationschedule10 theCIPgrowth-relatedcostsisthevalueoftheplanned

capitalprojectstoincreasecapacitytoaccommodategrowth—fromVersailles’capitalimprovementsplan

“CapitalImprovementsElement(2017-2037)”

11 thetotalgrowth-relatedcostsissimplythesumof#9and#10


12 thebalanceinimpactfeeaccountisthetotalfundsinthefencedimpactfeeaccountatthebeginningofthebaseyear,sincethiswastheinitialcalculation,thebalancewas$0

inthefuture,thisnumberwillcomefromthebaseyearaudit

B thegrowth-relatedexpansioncostpergallonisthesecondof2componentsinthegrosswastewaterimpactfeeandis#11minus#12,thendividedby#8


13 thegrosswastewaterimpactfeechargepergallonisthesumofAandB


14 shownasanegativenumber,thecreditforoutstandingdebtservice,2011BondIssueisthecreditgiventonewcustomersfortheNPVofthedebtserviceincludedintheirmonthlywastewaterservicerates/fees

“2011IssueWastewaterRevenueBonds”

15 shownasanegativenumber,thecreditforoutstandingdebtservice,2012BondIssueisthecreditgiventonewcustomersfortheNPVofthedebtserviceincludedintheirmonthlywastewaterservicerates/fees(NPV=netpresentvalue)








19 shownasanegativenumber,thecreditforfuturedebtserviceisacreditfortheNPVoftheestimateddebtservicethatwillbeincludedinmonthlyservicerates/feesforservicingthedebtassociatedwiththeCIPprojects—fromVersailles’capitalimprovementsplan

“EstimatedFutureWastewaterRevenueBonds(20YearTerm)”

20 theadministrativecostsisanestimate,theNPVstatedin$pergallon,ofthecostsassociatedwithadministering

“EstimatedAdministrativeCosts


theimpactfeeprogram forImpactFeeProgram”

C thetotaladjustmentsisthesumofalltheadjustmentstobemadetothegrosswastewaterimpactfeecharge


D theNetWastewaterImpactFeeChargePerGallonis(A+B)+C(in$/gallon)


E theNetWastewaterImpactFeeChargePerERUisDXERU(indollars)


City of VersaillesImpact Fee Calculation

for years 2018 through 2022


1 system capacity, 2016 gallons 3,000,0002 planned system capacity, gallons 4,500,0003 current local asset value, systemwide improvements $21,046,5194 local CIP systemwide improvements $24,733,0535 existing & planned systemwide improvements $45,779,572A existing & planned systemwide improvements per gallon (planned capacity) $10.176 planned growth-related expansion (gallons) 1,500,0007 excess capacity, 2016 gallons 232,0008 total excess and planned growth-related capacity, 2016 gallons 1,732,0009 current asset value, local growth-related improvements $6,171,459

10 CIP growth-related costs $12,510,60011 total growth-related costs $18,682,05912 balance in impact fee account $0B growth-related expansion cost/gallon (excess & planned capacity) $10.79

13 gross wastewater impact fee charge per gallon $20.96

Adjustments14 less credit for outstanding debt service, 2011 Bond Issue $0.0815 less credit for outstanding debt service, 2012 Bond Issue $1.1116 less credit for outstanding debt service, 2013 Bond Issue $1.2417 less credit for outstanding debt service, 2014 Bond Issue $1.5218 less credit for outstanding debt service, 2016 Bond Issue $2.3119 less credit for future debt service $7.32

20 plus administrative costs1 $0.03C total adjustments $13.55

D Net Wastewater Impact Fee Charge Per Gallon $7.41

E Net Wastewater Impact Fee Charge Per ERU $1,370.85

Gross Wastewater Impact Fee

1NPV of $6,000 initial set up; $4,000 every 5 years thereafter plus $6,000 admin per year for 20 year planning period

where ERU is the Equivalent Residential Unit, or the estimated flow (use) per single-family residence

(A + B) + C = DD ($/gallon) X ERU (gallons) = E ($)


APPENDIXB

Handouts

Salt River Engineering – 108 West Poplar – Harrodsburg KY – 859.734.2334 – www.saltrivereng.com

13 September 2017 Versailles Impact Fee Program Program Summary What the Impact Fee Program Is… A way for new development to buy-in to the equity existing customers (owners) have built in the wastewater utility. A way to help ensure that growth-related investments follow an established capital improvements plan. The assessment of an impact fee provides a signal to developers of the costs incurred by the utility to accommodate their proposals. Impact Fee revenues reduce the capital costs that must be debt-financed, thereby reducing increases to wastewater service rates. What the Impact Fee Program Is Not… The impact fee is not the same thing, nor a portion of, the tap fee. The impact fee is not a tax. Referenced Used American Waterworks Association (AWWA) Manual M-1 Water Environment Federation (WEF) Manual of Practice #27 Nelson’s “System Development Charges for Water, Wastewater and Stormwater Facilities” Factors Used in Calculating the Impact Fee

- for the Equivalent Residential Unit (ERU): average annual residential wastewater flow to WWTP; estimated number of residential and small commercial customers (gallons)

- for the Systemwide Improvements Fee: current local asset value; capital improvements plan (CIP) systemwide improvements; planned system capacity ($ per gallon)

- for the Growth-Related Expansion Fee: current local asset growth-related value; CIP growth-related costs; growth and excess capacity ($ per gallon)

- adjustments: debt service, current and future ($/gallon); administrative costs ($/gallon); balance in fund ($ subtracted from growth-related costs)

Critical Pieces of the Program

- The CIP must be a dynamic file of planned infrastructure projects. - Impact Fee program revenues are “fenced” for eligible infrastructure projects. - The Impact Fee program must meet rational nexus tests, best summarized by the

Banberry Factors: • the cost of existing facilities; • how existing facilities were financed; • how much new development has already paid; • how much new development will pay in the future; • credit for facilities installed by developer; • extraordinary costs and time-price differentials; • new development benefits from fee it pays.

Impact Fee Program Summary Page 2 of 2

Rules of the Impact Fee Program - collect from all new installations (single family residence = 1 ERU = ⅝ inch meter) - assess fee at time of building permit application or service request, former is preferred - allow for refunds, refinements and appeals - allow for installation-specific calculation of ERU factor - allow for construction credits from developers - determine if any exemptions will be allowed (federal and state agencies may be

exempt) - revisit the ERU every five years, at least - update the capital improvements plan every year; revise the capital improvements

element (the spreadsheet) with recalculation of impact fee - update the ERU factor schedule periodically - recalculate the impact fee every five years, at least - move constructed items from CIE to inventory as auditor updates rate

base/depreciation schedule - perform obligatory planning and construction - fence the impact fee proceeds and detail receipts/expenditures on audit - determine the impact fee program administrator - realize this version of impact fee calculation uses 2016 for a base year - chose one, system-wide, service area to assess impact fees - based the level of service on average daily flows, where water usage = sewer flow - used the CIE in calculations; show details of the projects on the CIP - used vintage capital cost calculations for existing and marginal cost for

future/expansion (hybrid method) - must expend collected impact fees within a specified amount of time - may use impact fees for cost recovery for projects that added to available capacity at

time of program initiation, but be extra cautious - except for above, must assign collected impact fees, generally speaking, against the

projects upon which they were calculated

Salt River Engineering – 108 West Poplar – Harrodsburg KY – 859.734.2334 – www.saltrivereng.com

19 September 2017 Versailles Impact Fee Program Notes What is an Impact Fee? 2-part definition: 1) A way for new development to buy-in to the equity existing customers (owners) have built in the wastewater utility. 2) A way for growth to pay its share of the costs for those facilities their demand necessitates. Impact Fee program revenues are “fenced” for eligible infrastructure projects. Why do we need an Impact Fee program? Impact Fee revenues reduce the capital costs that must be debt-financed, thereby reducing increases to wastewater service rates. And, the impact fee program recognizes the owner equity and assigns a value to it, albeit limited to those items in the rate base. What do we use to calculate the Impact Fee?

• average wastewater flow of Versailles’ households • current value of rate base, growth-related assets separated • estimated costs of items on capital improvements plan, growth-related items separated • existing and planned WWTP capacity

The impact fee is not the same thing, nor a portion of, the tap fee. The impact fee is not a tax. Who pays an Impact Fee? new customers, whether residential, commercial or industrial and existing customers who increase their burden on the wastewater treatment and/or collection system How much is the Impact Fee?

- charges are based on meter size; residential units use 5/8-inch meters - the one-time charge is $1,369 per 5/8-inch meter - we have an established impact fee schedule that goes from 5/8 to 12-inch meters - there are allowances for refunds, refinements, developer contributions, and appeals

Who else in KY has an Impact Fee (System Development Charge, Developers Fee) program?

- Lexington-Fayette Urban County Government - Owensboro-Daviess County (Regional Water Resource Agency) - Louisville Water Company - Williamstown - Richmond Utilities - Oak Grove - Northern Madison County Sanitation District

Referenced Used American Waterworks Association (AWWA) Manual M-1 Water Environment Federation (WEF) Manual of Practice #27 Nelson’s “System Development Charges for Water, Wastewater and Stormwater Facilities”


APPENDIXC

Ordinance

1

CITYOFVERSAILLES

ORDINANCENO.2017-30

TITLE:ANORDINANCEESTABLISHINGANIMPACTFEEPROGRAMTODEFRAY

THECOSTOFCAPITALIMPROVEMENTSFORWASTEWATERTREATMENT

ANDCOLLECTIONREQUIREDBYINCREASEDDEMANDSUPONTHEWASTEWATER

SYSTEM.

Whereas,theCityCouncilhasdeterminedthatisnecessaryandappropriateto

establishandimpactfeeprogramtoallocatethecostofcapitalimprovementsfor

wastewatertreatmentandcollectionuponthedevelopments,orredevelopments,that

createtheneedfororincreasethedemandsupontheCity’swastewaterutility;

NOW,THEREFORE,BEITORDAINEDINTHECITYOFVERSAILLES,KENTUCKYas

follows:

SECTION1.Purpose.Thepurposeoftheimpactfeeprogramistoimposea

portionofthecostofcapitalimprovementsforwastewatertreatmentandcollection

uponthosedevelopmentsandredevelopmentsthatcreatetheneedfororincreasethe

demandsupontheVersailleswastewaterutility.

SECTION2.Definitions.Forpurposesofthisordinance,thefollowingtermsshall

mean:

1.“CapitalImprovements”shallmeanpublicfacilitiesorassetsusedfor

wastewatercollection,transmission,treatmentordisposal,oranycombination.

2.“City”shallmeanthecityofVersailles,Kentucky.

3.“CityClerk”shallmeantheClerkofthecityofVersailles,Kentucky.

4.“Council”shallmeantheVersaillesCityCouncil.

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5.“Development”shallmeanallimprovementsonasite,includingbuildings,

otherstructures,parkingandloadingareas,landscaping,pavedorgraveledareas,and

areasdevotedtoexteriordisplay,storageoractivitieswhichhavetheeffectof

increasingthedemandsuponthecity’swastewaterutilityfacilities.Development

includesredevelopmentofpropertywhichresultsinanincreaseindemanduponthe

city’swastewaterutilityfacilities.Developmentincludesimprovedopenareassuchas

plazaandwalkways,butdoesnotincludenaturalgeologicformsorunimprovedlands.

6.“ExistingCustomer”shallmeanacustomeroftheVersailleswastewater

utilitywhohas,for120consecutivemonths,paidwastewaterratesandfeestothecity

andwhoisingoodstandingwithregardtooverduebalances.

7.“Growth-RelatedExpansion”shallmeanafeeforcostsassociatedwithcapital

improvementstobeconstructedafterthedatethefeeisadoptedpursuanttoSection4

ofthisordinance.

8.“ImpactFee”shallmeanachargecomprisedofasystemwideimprovements

fee,agrowth-relatedexpansionfee,oracombinationthereof,assessedorcollectedat

thetimeofincreasedusageofthewastewaterutility,atthetimeofissuanceofa

developmentpermitorbuildingpermit,oratthetimeofconnectiontothewastewater

system.

A.Animpactfeechargeisnotpaymentorreimbursementforthe

utility’saveragecostofinspectingandinstallingconnectionswithwastewater

facilities—thatreimbursementiscalleda“tapfee”andconstitutesaseparatecharge.

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B.Animpactfeechargedoesnotincludefeesassessedorcollectedas

partofalocalimprovementdistrictorachargeinlieuofalocalimprovementdistrict

assessment,orthecostofcomplyingwithrequirementsorconditionsimposedbyaland

usedecision.

9.“LandArea”shallmeantheareaofaparceloflandasmeasuredbyprojection

oftheparcelboundariesuponahorizontalplanewiththeexceptionofaportionofthe

parcelwithinarecordedright-of-wayoreasementsubjecttoaservitudeforapublic

streetorforapublicscenicorpreservationpurpose.

10.“Owner”shallmeantheOwnerorOwnersofrecordtitleofrealpropertyor

thepurchaserorpurchasersunderarecordedlandsalesagreement,andotherpersons

havinganinterestofrecordinthedescribedrealproperty.

11.“ParcelofLand”shallmeanalot,parcel,blockorothertractoflandthatin

accordancewithcityregulationsisoccupiedormaybeoccupiedbyastructureor

structuresorotheruse,andthatincludestheyardsandotheropenspacesrequired

underthezoning,subdivision,orotherdevelopmentordinancesandregulations.

12.“Permittee”shallmeanthepersonorentitytowhomabuildingpermit,

developmentpermit,apermitorplanapprovaltoconnecttothecity’swastewater

system,orright-of-wayaccesspermitisissued.

13.“ProgramAdministrator”shallmeantheimpactfeeprogram

administrator/coordinator.ThePublicWorksDirectorforthecityofVersailles,orhis

designee,shallbetheimpactfeeprogramadministrator/coordinator.

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14.“QualifiedPublicImprovements”shallmeanacapitalimprovementthatis:

A.requiredasaconditionofdevelopmentapproval;or

B.identifiedintheplanadoptedpursuanttoSection8ofthisOrdinance

andeither:

i.notlocatedonorcontiguoustoaparceloflandthatisthe

subjectofthedevelopmentapproval;or

ii.locatedinwholeorinpartonorcontiguoustoaparcelofland

thatisthesubjectofthedevelopmentapproval.

C.forpurposesofthisdefinition,contiguousmeansinapublicway

whichabutstheparcel.

15.“Redevelopment”shallmeanrepurposinganexistingstructure.

16.“SystemwideImprovementsFee”shallmeanafeeforcostsassociatedwith

capitalimprovementsconstructedorunderconstructiononthedatethefeeisadopted

pursuanttoSection4ofthisOrdinance,andforwhichtheCouncildetermines

wastewatertreatmentcapacitytoexist.

17.“Utility”shallmeanthepublicly-ownedwastewatertreatmentandcollection

systemofthecityofVersailles,Kentucky.

SECTION3.ThefactorstheCityCouncilshallconsiderindeterminingan

appropriateimpactfeechargeareasfollows:

1.EquivalentResidentialUnit,withtheacronymERU,shallbethe

basisofassigninganimpactfeecharge.TheERUshallbeestablishedon

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thebasisoftheaverageresidentialwaterusageinthecity,andservesas

anestimationofthegallonsofwastewaterdischargeddailytothecity’s

wastewatertreatmentworksbyasingle-familyresidence.Asshownon

theImpactFeeChargeSchedule,theimpactfeeiscalculatedby

multiplyingtheERU(ingallonsperday)bytheERUfactor

(dimensionless),thenbytheimpactfee(indollarspergallon).TheERU

shallbecalculatedspecifictotheVersailleswastewaterutility.Ata

minimum,theERUshouldberecalculatedevery5years.

2.MeterSize.Impactofnewdevelopment,orredevelopment,uponthe

wastewatersystemshallbeestimatedbythemetersizeoftheproposed

facility.Sincethevastmajorityofsingle-familyresidencesareserved

througha¾inchlineby⅝inchwatermeter,the⅝inchwatermeterwill

represent1equivalentresidentialunit(ERU).Othermetersizesarelisted

ontheImpactFeeChargeScheduleandshallbeassignedanERUfactor

toestimatetheirimpactonthewastewatersystem.

3.AgriculturalMeters.SinceSection50.22(c)oftheCodeofOrdinances

permitscustomersoftheVersailleswastewaterutilitytoinstallan

agriculturalmeter,attheirowncost,andsubsequentlyapplyfora

reductiontothevolumeuponwhichthewastewaterservicechargeis

calculated.Apermitteemayrequestareductionoftheimpactfee

chargeforanewdevelopmentoraredevelopmentusingdatafromthe

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agriculturalmeter.Areductiontotheimpactfee(intheformofa

refund)willbeconsideredbytheimpactfeeadministratoronlyafter12

monthsofwastewaterflowdataiscollected.Thepermitteemust

contacttheimpactfeeadministratorpriortocommencingdatacollection

forspecificdatarequirements.Undernocircumstancesshallafacility

contributingwastewatertothewastewaterutilitybeassignedanERU

factoroflessthan1.0.

SECTION4.ImpactFeeChargeEstablished.

1.ImpactFeechargesshallbeestablishedandmayberevisedbyresolutionof

theCouncil.Theresolutionshallsettheamountofthecharge,thetypeofpermitto

whichthechargeapplies,and,ifthechargeappliestoageographicareasmallerthan

theentirecity,thegeographicareasubjecttothecharge.

2.Unlessotherwiseexemptedbytheprovisionsofthisordinanceorotherlocal

orstatelaw,animpactfeechargeisherebyimposeduponalldevelopmentwithinthe

city,upontheactofmakingaconnectiontothecitywastewatersystemwithinthecity,

anduponalldevelopmentoutsidetheboundaryofthecitythatconnectstoor

otherwiseusesthewastewaterfacilitiesofthecity.

SECTION5.Methodology.

1.Themethodologyusedtoestablishormodifythesystemwideimprovements

feeshall,whereapplicable,bebasedonthecurrentlocalassetvalueoffacilities

includingwithoutlimitationdesign,financingandconstructioncosts,priorcontributions

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bythen-existingusers,giftsorgrantsfromfederalorstategovernmentorprivate

persons,thevolumeofunusedcapacityavailabletofuturesystemusers,rate-making

principalsemployedtofinancepublicly-ownedcapitalimprovements,andother

relevantfactorsidentifiedbytheCouncil.Themethodologyshallpromotetheobjective

thatfuturesystemusersshallcontributenomorethananequitableshareofthecostof

then-existingfacilities.

2.Themethodologyusedtoestablishormodifythegrowth-relatedexpansion

feeshall,whereapplicable,demonstrateconsiderationoftheestimatedcostof

projectedcapitalimprovementsneededtoincreasethecapacityofthesystemsto

whichthefeeisrelated.Themethodologyshallbecalculatedtoobtainthecostof

capitalimprovementsfortheprojectedneedforavailablesystemcapacityforfuture

systemusers.

3.Theequationandfactorsusedtoestablishormodifythesystemwide

improvementsfee,thegrowth-relatedexpansionfee,orboth,shallbecontainedina

resolutionadoptedbytheCouncil.

SECTION6.AuthorizedExpenditures.

1.SystemwideImprovementsfeesshallbeappliedonlytocapitalimprovements

associatedwiththesystemforwhichthefeesareassessed,includingexpenditures

relatingtorepaymentofindebtedness.

2.Growth-RelatedExpansionfeesshallbespentonlyoncapacity-increasing

capitalimprovementsassociatedwiththesystemforwhichthefeeisassessed,

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includingexpendituresrelatingtorepaymentoffuturedebtfortheimprovements.An

increaseinsystemcapacityoccursifacapitalimprovementincreasesthelevelof

performanceorserviceprovidedbyexistingfacilitiesorbyprovidingnewfacilities.

A.Theportionofthecapitalimprovementsfundedbygrowth-related

expansionmustberelatedtodemandscreatedbycurrentorprojecteddevelopment.A

capitalimprovementbeingfundedwhollyorinpartfromrevenuesderivedfromthe

growth-relatedexpansionfeeshallbeincludedintheplanadoptedbythecitypursuant

toSection8ofthisOrdinance.

3.NotwithstandingSubsections(1)and(2)ofthissection,impactfeerevenues

maybeexpendedonthedirectcostsofcomplyingwiththeprovisionsofthisordinance,

includingthecostsofdevelopingimpactfeechargemethodologiesandprovidingan

annualaccountingofimpactfeeexpenditures.

4.Thereshallbecreatedarestrictedaccountentitledthe“WastewaterImpact

FeeAccount.”Allmoniesderivedfromthewastewaterimpactfeeshallbeplacedinthe

WastewaterImpactFeeAccount.FundsintheWastewaterImpactFeeAccountshallbe

usedsolelytoprovidethewastewatercapitalimprovementsplan(CIP)listedcapacity

increasingimprovementsaccordingtothewastewaterCIPasitcurrentlyexistsoras

hereinafteradoptedandamended,andeligibleadministrativecosts.Inthisregard,

wastewaterimpactfeerevenuesmaybeusedforpurposesthatinclude:

A. designandconstructionplanpreparation;

B. permitting;

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C. right-of-wayacquisition,includinganycostsofacquisition

andcondemnation;

D. constructionofnewwastewatertreatmentfacilities,

including,butnotlimitedto,sludgehandlingfacilities;

E. constructionofcollectionandinterceptorlines;

F. constructionofpumpingandliftstations;

G. demolitionthatispartoftheconstructionofanyofthe

improvementsonthislist;

H. paymentofprincipalandinterest,necessaryreservesand

costsofissuanceunderanybondsorotherindebtednessissued

bythecitytoprovidemoneytoconstructoracquirewastewater

facilities;

I. directcostsofcomplyingwiththeprovisionsofthe

KentuckyRevisedStatutesthatallowsorlimitsimpactfees/SDCs,

includingthecostsofdevelopingimpactfeemethodologiesand

providinganannualaccountingofimpactfeeexpenditures.

SECTION7.ExpenditureRestrictions.

1.Impactfeechargesshallnotbeexpendedforcostsassociatedwiththe

constructionofadministrativeofficefacilitiesthataremorethananincidentalpartof

othercapitalimprovements.

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2.Impactfeechargesshallnotbeexpendedforcostsoftheoperationorroutine

maintenanceofcapitalimprovements.

SECTION8.CapitalImprovementsPlan.

1.Priortotheestablishmentofawastewaterimpactfee,theCouncilshalladopt

aCapitalImprovementsPlanthatincludesalistof:

A.thecapitalimprovementsthatthecouncilintendstofundinwholeor

inpartwithimpactfeerevenues;

B.theestimatedcostandbeginningdateofconstructionofeach

improvementandthepercentageofthatcosteligibletobefundedwithgrowth-related

expansionfeerevenues;and,

C.adescriptionoftheprocessformodifyingtheplan.

2.Inadoptingthisplan,theCouncilmayincorporatebyreferenceallora

portionofanypublicfacilitiesplan,masterplan,capitalimprovementsplanorsimilar

planthatcontainstheinformationrequiredbythissection.

3.TheCouncilmaymodifysuchplanandlistatanytime.Iftheimpactfee

chargewillbeincreasedbyaproposedmodificationtothelist,toincludeacapacity-

increasingpublicimprovement,theCouncilwill:

A.atleast30dayspriortoadoptionoftheproposedmodification,

providewrittennoticetopersonswhohaverequestednoticepursuanttoSection13of

thisordinance;and

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B.holdapublichearingifawrittenrequestforahearingisreceived

within7daysofthedateoftheproposedmodification.

4.Achangeintheamountofasystemwideimprovementsfeeoragrowth-

relatedexpansionfeeisnotamodificationoftheimpactfeechargeifthechangein

amountisbasedontheperiodicapplicationoftheEngineeringNews-Record’s(ENR)

ConstructionCostIndexoramodificationtoanyofthefactorsrelatedtotheratethat

areincorporatedintheestablishedmethodology.TheCouncilmayelecttorevisethe

impactfee,annually,baseduponchangesintheENRConstructionCostIndex.

SECTION9.CollectionofWastewaterImpactFeeCharge.

1.Thewastewaterimpactfeechargeispayableupon:

A.arequestforwaterservice;

B.arequestforwastewaterservice;or

C.atthetimetapfee(s)arecollected,whicheverisearliest.

2.Ifnobuilding,development,orconnectpermitisrequired,theimpactfee

chargeispayableatthetimetheusageofthecapitalimprovementisincreasedbased

onchangesintheuseofthepropertyunrelatedtoseasonalororderlyfluctuationsin

usage.

3.Ifdevelopmentiscommencedorconnectionismadetothewastewater

systemwithoutanappropriatepermit,theimpactfeechargeisimmediatelypayable

upontheearliestdatethatapermitwasrequired.

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4.Ifrequestedbytheapplicant,theCityClerkmayprovidetheapplicantan

estimateoftheimpactfeechargewhenapermitthatallowsbuildingordevelopmentof

aparcelisissued.

5.Theimpactfeeprogramadministratorshallnotissuesuchpermitorallow

suchconnectionuntilthechargehasbeenpaidinfull,oruntilprovisionforinstallment

paymentshasbeenmadepursuanttoSection10ofthisOrdinance,orunlessan

exemptionisgrantedpursuanttoSection11ofthisOrdinance.

SECTION10.InstallmentPayment.

1.Whenanimpactfeechargebasedonametersizeof4inchesormoreisdue

andcollectible,theowneroftheparceloflandsubjecttotheimpactfeemayapplyfor

paymentin6semi-annualinstallments,toincludeinterest(at2pointsabovetheprime

rateatthetimeofrequest)ontheunpaidbalancewhichshallbesecuredbyalienon

theparcelsubjecttotheimpactfee.

2.Theimpactfeeprogramadministratorshallprovideapplicationformsfor

installmentpayments,whichshallincludeawaiverofallrightstocontestvalidityofthe

lien,exceptforthecorrectionofcomputationalerrors.

3.Anapplicantforinstallmentpaymentsshallhavetheburdenof

demonstratingtheapplicant’sauthoritytoassenttotheimpositionofalienonthe

parcelandthatthepropertyinterestoftheapplicantisadequatetosecurepaymentof

thelien.

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4.TheimpactfeeprogramadministratorshallreporttotheCityClerkthe

amountoftheimpactfeecharge,thedatesonwhichthepaymentsaredue,thename

oftheowner,andthedescriptionoftheparcel.

5.TheCityClerkshallrecordthelienfortheunpaidportionoftheimpactfee

charge.Fromthattimethecityshallhavealienuponthedescribedparcelforthe

amountoftheimpactfeecharge,togetherwithinterestontheunpaidbalanceatthe

rateestablishedbytheCouncil.Thelienshallbeenforceableinthemannerprovided

KRS82.720.

6.Forpropertythathasbeensubjecttoacancellationofassessmentofimpact

fees,anewinstallmentpaymentcontractshallbesubjecttothecodeprovisions

applicabletoimpactfeesandinstallmentpaymentcontractsonfileonthedatethenew

contractisreceivedbythecity.

SECTION11.Exemptions.

1.Thecouncilshallhavetheauthoritytowaivetheimpactfeeforanyentity

thatisexemptfromtapfees,i.e.,charitableorganizations,orotherorganizations

determinedtobeworkingonlyforthegoodofthecommunity.

2.Additionstosingle-familydwellingsthatdonotconstitutetheadditionofa

dwellingunit,asdefinedbytheKentuckyUniformBuildingCode,areexemptfromall

portionsofthewastewaterimpactfee.

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3.Analteration,addition,replacementorchangeinusethatdoesnotincrease

theuseofthewastewaterutilityanditsfacilitiesareexemptfromallportionsofthe

impactfeecharge.

SECTION12.Credits.

1.Whenaredevelopmentoccursthatissubjecttoanimpactfeecharge,the

impactfeechargefortheexistinguse,ifapplicable,shallbecalculatedandifitisless

thantheimpactfeechargefortheusethatwillresultfromthedevelopment,the

differencebetweentheimpactfeefortheexistinguseandtheimpactfeeforthe

proposeduseshallbetheimpactfeecharge.Ifthechangeintheuseresultsinthe

impactfeefortheproposedusebeinglessthantheimpactfeefortheexistinguse,no

impactfeechargeshallberequired.Sincemetersizeisusedtocalculateimpactfees,

theimpactonthewastewatersystemisassessedbyconsideringthemetersizeofthe

existingdevelopmentversusthemetersizeoftheredevelopment.Norefundorcredit

shallbegivenunlessprovidedforbyanothersubsectionofthissection.

2.Acreditshallbegiventothepermitteeforthecostofaqualifiedpublic

improvementuponacceptancebythecityofthepublicimprovement.Thecreditshall

notexceedthegrowth-relatedexpansionfeeevenifthecostofthecapital

improvementexceedstheapplicablegrowth-relatedexpansionfeeandshallonlybefor

thegrowth-relatedexpansionportionoftheimpactfeechargedforthetypeof

improvementbeingconstructed.

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3.Ifaqualifiedpublicimprovementislocatedinwholeorinpartonor

contiguoustothepropertythatisthesubjectofthedevelopmentapprovalandis

requiredbytheutilitiesmanagerforthecityofVersaillestobebuiltlargerorwith

greatercapacitythanisnecessaryfortheparticulardevelopmentproject,acreditshall

begivenforthecostoftheportionoftheimprovementthatexceedsthecity’s

minimumstandardfacilitysizeorcapacityneededtoservetheparticulardevelopment

projectorproperty.Theapplicantshallhavetheburdenofdemonstratingthata

particularimprovementqualifiesforcreditunderthissubsection.Therequestforcredit

shallbefiledinwritingnolaterthan60daysafteracceptanceoftheimprovementby

thecity.Thecitymaydenythecreditprovidedforinthissectionifthecity

demonstratesthattheapplicationdoesnotmeettherequirementsofthissectionorif

theimprovementforwhichthecreditissoughtwasnotincludedintheimprovement

planpursuanttoSection8ofthisOrdinance.

4.Whentheconstructionofaqualifiedpublicimprovementlocatedinwholeor

inpartorcontiguoustothepropertythatisthesubjectofdevelopmentapprovalgives

risetoacreditamountgreaterthanthegrowth-relatedexpansionfeethatwould

otherwisebeleviedagainsttheproject,thecreditinexcessofthegrowth-related

expansionfeefortheoriginaldevelopmentprojectmaybeappliedagainstgrowth-

relatedexpansionfeesthataccrueinsubsequentphasesoftheoriginaldevelopment

project.

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5.Whenanexistingcustomer,asdefinedinSection2ofthisordinance,

constructs,orcausestobeconstructed,anewdevelopmentwithintheVersailles

wastewaterutilityservicearea,andabandonshisexistingresidenceorestablishment

thatisalsolocatedwithintheVersailleswastewaterutilityservicearea,thatcustomer

maybegranteda“buy-in”creditonhisimpactfeecharge.Thebuy-increditservesto

acknowledgetheequitythattheexistingcustomerhasamassedinthewastewater

utility.Thecreditisdeterminedbycalculatingonlythesystemwideimprovements

portionoftheimpactfeechargeusingthefactorsinplaceatthetimeofthecustomer’s

requestforthecredit.Theamountofthesystemwideimprovementsfeeconstitutes

theamountofthebuy-incredit.Toqualifyforthebuy-incredit:

A.Thesizeofthemeterservingthenewdevelopmentmustbeequalto

orlessthanthemeterservingtheexistingaccount;

B.Thepurposeofthenewdevelopmentmustbeessentiallythesame

asthatoftheexistingaccount,i.e.,single-familyresidenceversusanexistingaccount

assignedtoasingle-familyresidence;

C.Theexistingwaterandwastewateraccountservingtheexisting

residenceofestablishmentmustbeclosedbyrequestofthecustomer;and

D.Thecustomermustrequestthebuy-incredit.

6.NotwithstandingSubsections1through4above,whenestablishinga

methodologyforawastewaterimpactfeecharge,thecitymayprovideforacredit

againstthegrowth-relatedexpansionfee,thesystemwideimprovementsfee,orboth,

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forcapitalimprovementsconstructedaspartofthedevelopmentwhichreducethe

development’sdemanduponexistingcapitalimprovementsand/ortheneedforfuture

capitalimprovements,oracreditbaseduponanyotherrationaletheCouncilfinds

reasonable.

7.Creditsshallnotbetransferablefromonedevelopmenttoanother.

8.Creditsshallnotbetransferablefromtype(systemwideimprovementor

growth-relatedexpansion)ofimpactfeechargetoanother.

9.Creditsshallbeusedwithin10yearsfromthedatethecreditisgiven.

SECTION13.Notice.

1.Thecityshallmaintainalistofpersonswhohavemadeawrittenrequestfor

notificationpriortoadoptionormodificationofamethodologyforanyimpactfee

charge.Writtennoticeshallbemailedtopersonsonthelistatleast90dayspriortothe

firsthearingtoestablishormodifyanimpactfeecharge.Themethodologysupporting

theimpactfeechargeshallbeavailableatleast60dayspriortothefirsthearingto

adoptoramendanimpactfeecharge.Thefailureofapersononthelisttoreceivea

noticethatwasmaileddoesnotinvalidatetheactionofthecity.

2.Thecitymayperiodicallydeletenamesfromthelist,butatleast30daysprior

toremovinganamefromthelist,thecitymustnotifythepersonwhosenameistobe

deletedthatanewwrittenrequestfornotificationisrequiredifthepersonwishesto

remainonthenotificationlist.

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SECTION14.SegregationandUseofRevenue.

1.Allfundsderivedfromthewastewaterimpactfeechargearetobesegregated

byaccountingpracticesfromallotherfundsofthecity.Thatportionoftheimpactfee

chargecalculatedandcollectedonaccountofthewastewatersystemshallbeusedfor

nopurposeotherthansetforthinSection6ofthisordinance.

2.TheCityClerkshallprovidetheCityCouncilwithanannualaccounting,by

January1ofeachyear,forimpactfeechargesshowingthetotalandtheprojectsfunded

fromeachaccountinthepreviousfiscalyear.Alistoftheamountspentoneachproject

funded,inwholeorinpart,withimpactfeechargerevenuesshallbeincludedinthe

annualaccounting.

SECTION15.Refunds.

1.Refundsmaybegivenbytheimpactfeeprogramadministratoruponfinding

thattherewasaclericalerrorinthecalculationoftheimpactfee.

2.Refundsshallnotbeallowedforfailuretotimelyclaimcreditorforfailureto

timelyseekanalternativeimpactfeeratecalculationatthetimeofsubmissionofan

applicationforabuildingpermit.

3.Thecityshallrefundtotheapplicantanyimpactfeerevenuesnotexpended

within10yearsofreceipt.

SECTION16.ImplementingRegulations;Amendments

1.TheCityCouncilherebydelegatesauthoritytothepublicworksdirectorto

adoptnecessaryprocedurestoimplementtheprovisionsofthisordinanceincludingthe

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appointmentofanimpactfeeprogramadministrator.Allrulesadoptedpursuanttothis

delegatedauthorityshallbefiledwiththeofficeofthepublicworksdirectorandbe

availableforpublicinspection.

SECTION17.AppealProcedure.

1.Apersonchallengingtheproprietyofanexpenditureofimpactfeecharge

revenuesmayappealthedecisionortheexpendituretotheCityCouncilbyfilinga

writtenrequestwiththeCityClerkdescribing,withparticularity,thedecisionofthe

publicworksdirectorandtheexpenditureofwhichthepersonappeals.Anappealof

expendituremustbefiledwithin6monthsafterthedateoftheallegedimproper

expenditure.

2.Appealsofanyotherdecisionrequiredorpermittedtobemadebythepublic

worksdirectorunderthisordinancemustbefiledinwritingwiththeCityClerkwithin10

daysofthedecision.

3.Afterprovidingnoticetotheappellant,theCouncilshalldeterminewhether

thepublicworksdirector’sdecisionortheexpenditureisinaccordancewiththis

ordinanceandmayaffirm,modify,oroverrulethedecision(s).IftheCouncil

determinesthattherehasbeenanimproperexpenditureofimpactfeecharge

revenues,theCouncilshalldirectthatasumequaltothemisspentamountshallbe

depositedwithinoneyeartothecreditoftheaccountorfundfromwhichitwasspent.

4.AlegalactionchallengingthemethodologyadoptedbytheCouncilpursuant

toSection5ofthisordinanceshallnotbefiledlaterthan60daysafteradoptionofsuch

20

methodology.Apersonshallcontestthemethodologyusedforcalculatinganimpact

feechargeonlyasprovidedinSubsection5,andnototherwise.

5.Apersonwhowishestochallengeanimpactfeechargemustmakeawritten

challengetothechargeandfilethechallengewiththeCityClerkwithin10daysof

receivingthenotificationofcharge.Thewrittenchallengemustdescribewith

particularitythecalculationthatthepersonappeals.

A.Thewrittenchallengeshallstate:

i.thenameandaddressoftheappellant;and

ii.thenatureoftheappeal.

Failuretofilesuchwrittenchallengewithinthetimepermittedshallbe

consideredawaiverofanyobjectionstothecharge.

B.Afterprovidingtimelynoticetothechallenger,thepublicworks

directorshalldeterminewhetherthechargeisinaccordancewiththeresolution

containingthemethodologyusedtoestablishormodifytheimpactfeechargeadopted

bythecitycouncil.

C.Unlessthechallengerandthecityagreetoalongerperiod,awritten

challengetotheimpactfeechargeshallbeheardbytheMayorwithin10workingdays

ofthereceiptofthewrittenchallenge.Atleast5workingdayspriortothehearing,the

cityshallmailnoticeofthetimeandlocationthereoftothepersonwhomadethe

writtenchallenge.

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D.TheMayorshallhearanddeterminethechallengeonthebasisofthe

person’swrittenchallengeandanyadditionalevidencehe/shedeemsappropriate.At

thehearingthechallengermaypresenttestimonyandoralargumentpersonallyorby

counsel.TheKentuckyRulesofEvidenceasusedbycourtsoflawshallnotapply.

6.Afterexhaustingthecity’sadministrativereviewprocedurepursuantto

Section17(5)ofthisordinance,thepersonchallengingtheimpactfeechargemaythen

petitionfortheWoodfordCircuitCourttoreviewofthefinaldeterminationwithinthirty

(30)daysafterthemailingofwrittennoticeofsuchdecision.

SECTION18.ChangeinMeterSize.

IfanycustomeroftheVersailleswastewaterutilityinstallsawatermeterthatis

largerinsizeormaximumindustry-assignedflowcapacitythanthemeterutilizedto

determinethecustomer’simpactfeecharge,thatcustomerissubjecttoarevised

impactfeecharge.Therevisedimpactfeechargeshallbethedifferenceinthecharges

associatedwiththeexistingandnewmetersizes.Thissectionappliestoanycustomer

ofthewastewaterutility,notonlythosewhohavepreviouslypaidanimpactfee.

SECTION19.ProhibitedConnection.

Nopersonmayconnecttothewaterorwastewatersystemsofthecityunless

theappropriateimpactfeechargehasbeenpaidorthelienorinstallmentpayment

methodhasbeenappliedforandapplied.

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SECTION20.Penalty.

ViolationofSection19ofthisordinanceispunishablebyafinenottoexceed$

5,000.00.

SECTION21.Construction.

ForthepurposesofadministrationandenforcementofthisOrdinance,unless

otherwisestatedinthisOrdinance,thefollowingrulesofconstructionshallapply:

1.Incaseofanydifferenceofmeaningorimplicationbetweenthetextofthis

ordinanceandanycaption,illustration,summarytable,orillustrativetable,thetext

shallcontrol.

2.Theword“shall”isalwaysmandatoryandnotdiscretionary;theword“may”

ispermissive.

3.Wordsusedinthepresenttenseshallincludethefuture;andwordsusedin

thesingularnumbershallincludethepluralandthepluralthesingular,unlessthe

contextclearlyindicatesthecontrary.

4.Thephrase“usedfor”includes“arrangedfor,”“designedfor,”“maintained

for,”or“occupiedfor.”

5.Wherearegulationinvolves2ormoreconnecteditems,conditions,

provisions,orevents:

A.“And”indicatesthatalltheconnectedterms,conditions,

provisionsoreventsshallapply;

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B.“Or”indicatesthattheconnecteditems,conditions,provisions

oreventsmayapplysinglyorinanycombination.

C.Theword“includes”shallnotlimitatermtothespecific

example,butisintendedtoextenditsmeaningtoallotherinstancesof

likekindorcharacter.

SECTION22.Severability.

Theprovisionsofthisordinanceareseverable,anditistheintentiontoconfer

thewholeoranypartofthepowershereinprovidedfor.Ifanyclause,sectionor

provisionofthisordinanceshallbedeclaredunconstitutionalorinvalidforanyreasonor

cause,theremainingportionofthisordinanceshallbeinfullforceandeffectandbe

validasifsuchinvalidportionthereofhadnotbeenincorporatedherein.Itishereby

declaredtobetheCouncil’sintentthatthisordinancewouldhavebeenadoptedhad

suchanunconstitutionalprovisionnotbeenincludedherein.

SECTION23.Classification.

TheCityCouncildeterminesthatanyfee,ratesorchargesimposedbythis

OrdinancearenotataxsubjecttothepropertytaxlimitationsofKRS132.027.

SECTION24.EffectiveDate.

Thisordinanceshallbecomeeffectiveafteritspassageandpublicationas

requiredbylaw.

IntroducedandgivenfirstreadingatameetingoftheCityCounciloftheCityof

Versailles,Kentucky,heldonthe____dayof____________,2017,andfullyadopted

24

afterthesecondreadingatameetingofsaidcouncilheldonthe___dayof

_______________,2017.

CITYOFVERSAILLES

BRIANTRAUGOTT,MAYOR

ATTEST:

ALLISONB.WHITE,CITYCLERK

Salt River Engineering, PLLC 108 West Poplar

Harrodsburg, KY 40330 859-734-2334

city of versailles wastewater impact fee program …...water rates, fees and charges," 6th...

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