The table below attempts to summarize some of the major changes resulting from the passage of Act 57, but this table is not complete and does not fully describe all of the impacts. It does, however, provide a general idea of how the act may impact your authority.
| Reservation of Capacity Fees |
Not prohibited, but no specific calculation requirements provided. |
Calculation requirements introduced that require the fee to be based on debt and fixed operating expenses.
This fee may not exceed 60% of the average sanitary sewer bill for a residential customer.
An authority charging a reservation of capacity fee cannot collect a tapping fee until the building permit is due. |
| Connection Fees |
Based on actual costs of connection or the average costs for defined connection facilities. |
Based on actual costs of connection, average costs for defined connection facilities, or the average cost trended to current cost levels. |
| Tapping Fees - All Parts |
| Costs |
Replacement cost method allowed. |
Replacement cost method allowed only when historical cost is not available and only then for specific facilities. Engineer's written estimate required. |
| Deduction of Grants |
Order of calculation for deducting grants and trending is unclear. |
Grants deducted before trending. Trend only net amount. |
| Deduction of Outstanding Debt |
No guidance for subtracting or not subtracting debt when recalculating tapping fees initially calculated without subtracting debt. |
Debt does not need to be subtracted when computing the initial tapping fee for facilities exclusively serving new customers.
The initial fee may be increased by the interest rate on the financing since the last recalculation.
Historical cost cannot be updated if fee is trended. |
| Capacity Requirements for New Customers |
Undefined. |
Determined as follows:
Water (2 options)
- 65 gallons per capita per day times the average household size for the appropriate area as defined in the census.
- Average residential water consumption per residential customer as determined by a metered water study.
Sewer (3 options)
- 90 gallons per capita per day times the average household size for the appropriate area as defined in the census.
- Average residential water consumption per residential customer plus 10% as determined by a metered water study.
- Average sewage flow per residential customer as determined by a measured sewage flow study meeting certain requirements.
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| Tapping Fees - Capacity Part |
| Cost Basis |
Replacement cost, trended historical cost, or historical cost plus interest and financing costs. |
Trended historical cost or historical cost plus interest and financing costs. Replacement cost method allowed only when historical cost is not available and only then for specific facilities. Engineer's written estimate required. |
| Design Capacity (Denominator) |
No definition of "design capacity." |
Clarification that capacity fees are calculated using the permitted or rated system capacity. |
| Cost of Future Facilities |
Permitted if authority includes them in an annual budget or five-year capital plan and has undertaken action in furtherance of construction as defined. |
Permitted if they increase capacity, are included in the annual budget or capital plan, and the authority has taken at least two of seven enumerated actions.
Separate accounting must be undertaken for the administration of this portion of the fee.
If the project is included in the calculation and is not built within seven years (15 for some), that portion of the fee must be refunded. |
| Tapping Fees - Distribution or Collection Part |
| Cost Basis |
Same as "Capacity Part." |
Same as "Capacity Part." |
| Cost of Future Facilities |
Permitted as in "Capacity Part." |
Cannot be included in the calculation. |
| Authority-installed Extensions |
Costs may be included in the cost of distribution/collection facilities.
No provision for recovery of the cost associated with extensions. |
See "Special Purpose Part" below. |
| Tapping Fees - Special Purpose Part |
| Cost Basis |
Same as "Capacity Part." |
Same as "Capacity Part." |
| Cost of Future Facilities |
Permitted as in "Capacity Part." |
Cannot be included in the calculation. |
| Authority-installed Extensions |
No provision under "Special Purpose Part." |
Authority may recover costs for extensions that it builds and finances from those customers that are affected in addition to a fee based on the cost of the existing collection system. |
| Tapping Fees - Reimbursement Part |
| Applicability |
Unclear. |
Clarifies the applicability of this part. It can only be used pursuant to a written agreement between an authority and a person who builds sewer or water facilities. |
| Miscellaneous Provisions |
| Infiltration and Inflow |
Unclear if costs can be included. |
Clarifies that costs to reduce I/I cannot be included in the tapping fee calculation unless it results in an increase in design capacity. |
| Authority's Right to Accept or Reject Dedication of Facilities |
Unclear. |
Clarifies the right of an authority to decide what facilities it will accept or not accept in dedication. |
| Definition of Key Terms |
Not included. |
Includes definitions of "design capacity," "service line," and other key terms. |
| Dispute Resolution |
Not included. |
Includes a resolution process for disputed review, inspections, legal and other billings. |
| Enforcement for Violations |
Not included. |
Allows authorities to adopt reasonable rules and regulations that apply to sewer and water lines located on a property owned or leased by a customer.
Allows authorities to refer any violations of these rules and regulations for prosecution as a summary offense. |
