City of Lebanon, NH Article I Water Investment Fee

[Adopted 4-15-2020 by Ord. No. 2020-05[1]]

[1] Editor's Note: This ordinance also repealed former Art. I, Water Investment Fee, adopted by Ord. No. 16A, effective 3-18-1981.

§ 68-1 Title.

The title of this article of the Code is "City of Lebanon Water Investment Fee and Water Development Fee."

§ 68-2 Statement of authority.

This article is enacted pursuant to the authority contained within RSA 31:39, RSA 44:2, RSA 35, RSA 38 and the provisions of the Lebanon City Charter §§ C419:16, C419:23, C419:57 and C419:58.

§ 68-3 Legislative purpose.

A. It is regarded as inequitable to finance future capital improvements to the municipal water system solely through water user rates. Major capital improvements to a municipal water source, distribution and treatment system are most frequently required in order to service present and future customers, and it appears unfair to require present users to finance this future development, except on some equitable basis. Persons and organizations responsible for development within the City (e.g., developers) are in the best position to allocate costs applicable to the development to the persons and organizations requiring the future services.

B. Studies done to date by the City of Lebanon identify projects needed to upgrade and reinforce the existing water system in order to best meet existing service requirements and to accommodate system expansion. It is the purpose of this article to establish a system of fees for the following purposes:

(1) A capacity charge [hereinafter a water investment fee (WIF)] to recover the costs of developing new water sources and expanding the water system to serve new customers directly from those customers.

(2) A development fee [hereinafter a water development fee (WDF)] to recover the costs of maintaining the system to serve existing and new customers directly from those customers.

C. By imposing the charges set forth in this article, the costs of maintenance and expansion will be distributed more equitably than if they were to be recovered through the water user rates. This is because the charges set forth in this article allow the investment made by existing customers in core facilities on behalf of future customers, and the higher capital costs of serving new customers to be recognized.

§ 68-4 Imposition of water investment fee.

A. A water investment fee (WIF) is hereby imposed on all future customers of the Water Department and on all existing customers who seek to enlarge existing water services. (Notwithstanding the foregoing, this article shall not apply to the City, itself, in its role as a developer.) No person or organization shall be legally entitled to connect to the City water system or to enlarge an existing water service until the water investment fee imposed by this section is paid. This section is not in derogation of, but is in addition to, all other fees which may be required by the City of Lebanon under any other applicable section of the City Code. All WIF's imposed by this article shall be determined by an equivalent sewer unit of 210 gallons per day (10,000 cf per year) or as otherwise defined in City Code Chapter 136, Sewer Service, § 136-6, Definitions, sewer unit.

B. WIF's for connecting to or enlarging a service to the City water system are as follows:

Water Investment Fee
	Equivalent Sewer Unit	Cost per ESU
Single-family house	1.000	$70
1-bedroom unit, 60 gpd	0.286	$306
2-bedroom unit, 90 gpd	0.429	$209
3-bedroom unit, 120 gpd	0.571	$111
Commercial/industrial	Based on the projected number of ESUs	$70

C. With respect to persons or organizations seeking to enlarge an existing water service:

(1) The water investment fee imposed shall be the difference between the current water investment fee and the water investment fee that would have been imposed if a water investment fee had been assessed on the average actual usage for the previous five years.

(2) The water development fee imposed shall be the difference between the current water development fee and the water development fee that would have been imposed if a water development fee had been assessed on the average actual usage for the previous five years. The Director of Public Works may take other factors into account when determining the valuation of the water system.

D. Replacement connections necessitated by normal maintenance or wear and tear shall not be regarded as new connections, and no water investment fee shall be due as a result of these replacements.

§ 68-5 Imposition of water development fee.

A. A water development fee (WDF) is hereby imposed on all future customers of the City water system and on all existing customers who seek to enlarge existing water services. This requirement shall apply to customers both within the City and outside the boundaries of the City. (Notwithstanding the foregoing, this article shall not apply to the City, itself, in its role as a developer.) No person or organization shall be legally entitled to connect to the City water system or to enlarge an existing water service until the water development fee imposed by this section is paid. This section is not in derogation of, but is in addition to, all other fees which may be required by the City of Lebanon under any other applicable section of the City Code.

B. All WDFs imposed by this section shall be determined by the estimated gallons per day of sewer use by a sewer user. All WDFs imposed by this article shall be determined by an equivalent sewer unit of 210 gallons per day (10,000 cf per year) or as otherwise defined in City Code Chapter 136, Sewer Service, § 136-6, Definitions, sewer unit.

C. Water development fee:

Water Development Fee
	Equivalent Sewer Unit	Cost per ESU
Single-family house	1.000	$680
1-bedroom unit, 60 gpd	0.286	$194
2-bedroom unit, 90 gpd	0.429	$291
3-bedroom unit, 120 gpd	0.571	$389
Commercial/industrial	Based on the projected number of ESUs	$680

D. With respect to persons or organizations seeking to enlarge an existing water service, the water development charge imposed shall be the difference between the current water development charge and the water development charge that would have been imposed if a water development charge had been assessed on the average actual usage for the previous five years. The Director of Public Works may take other factors into account when determining the valuation of the water system.

§ 68-6 Subsequent changes in water investment fee and water development fee.

A. The water investment fee and water development fee imposed by this article shall be received and updated on a biannual basis. Subsequent updates of both fees shall be determined generally in accordance with the procedure set forth in Underwood Engineers User Rate Assistance Report dated August 26, 2014 and updated by the Department of Public Works in 2020.

B. It shall be the responsibility of the City Council to establish the rates for both fees. The Council shall set rates following a biannual report and recommendation of the City Manager, and only after a public hearing has been held by the Council to receive input on the City Manager's report and recommendation. The City Manager's report shall include a five-year projection of capital expenditures for projects to be funded by moneys generated under the fees and shall further include a proposed fee rate schedule. In addition to the foregoing, the City Manager's biannual report shall include a projected schedule of improvements for the City's water system for the succeeding 10 years.

C. Following the report and recommendation of the City Manager, the City Council shall review the report and shall act to accept or modify the City Manager's proposed schedule of fees. The City Council shall act on the City Manager's recommendation within two months after the filing of the Manager's report with the Council.

§ 68-7 Water service extensions.

A. All extensions of the City water system which are made or requested to be made prior to planned extensions as indicated in the report entitled "Water Investment Fee Policy" done by Camp, Dresser and McKee, Inc., on August 7, 1980, or in the reports and recommendations made on a biannual basis by the City Manager as may be adjusted by the City Council, shall be deemed a premature extension of the City water system. Extensions of the City water system may be approved by the City Council or City Manager under the procedure described in City Code Chapter 182, Water Service. Where City Council or City Manager approval is given for a water system extension based upon a petition by a developer, the costs of extending the system shall be borne by the developer and shall not be separately assessed to the property owners fronting on the improvement.

B. In the event an extention is approved, and the Department of Public Works determines that the required line size is in excess of the standard minimum eight-inch size, then the City shall absorb the difference in material costs for the pipe and appurtenances only as necessary to oversize the line. The cost of construction of the extension, except for the oversizing costs as defined herein, shall be borne by the property owners through special assessment or by the developer to whom the petition was granted as noted above.

§ 68-8 Unpaid charges constitute a lien.

If any person shall unlawfully connect to the City water system without payment of the water investment fee or water development fee set forth in this article, all unpaid water investment fee and water development fee charges shall constitute a lien upon the property which is connected to the system. The lien pursuant to this article shall be placed on the property in accordance with the provisions of RSA 38:22. Interest on these liens shall be calculated in accordance with the provisions of RSA 76:13.

§ 68-9 Abatement.

The City Council may abate, for good cause shown, any water investment fee or water development fee assessed on any person or organization pursuant to this article. Such abatements may be made on such terms and conditions as the City Council shall deem equitable under the circumstances.