AWWA ACE95229

There are a myriad of techniques and mechanisms available to a utility to pay for the cost of growth-related capacity: use of system development charges; use of taxable "tails" to finance growth-related costs; advance/discounted collection of system development charges; establishment of a free market for connections; simulation models to determine the optimum mix of techniques; use of surcharges/rate differentials in growth-impacted areas; and use of Tax Increment Financing (TIF) districts. Each of these approaches has its advantages and disadvantages; for example: the extent to which the financial community will accept the use of one-time revenues (such as impact fees) as a revenue pledge in support of debt, can affect the rating of a debt issue; the extent to which various types of property or developments are legally subject to certain charges can impact financial risk; in California, school boards were held to be exempt from paying system development charges; in any jurisdiction, a tax-exempt entity would be exempt from any tax levy; etc. Such factors must be carefully considered before a utility decides to adopt a specific approach. Extensive review and discussion with the utility's management consultants, financial advisors and underwriters is necessary if the utility wishes to control financial risk and avoid unpleasant surprises.

Product Details

Published:

01/01/1995

ISBN(s):

0898678315

Number of Pages:

6

File Size:

1 file , 250 KB