Erie Water Works

Tapping Fees

The Erie Water Works (EWW), in an effort to control water rates and avoid passing the burden of system expansion costs to its existing customers, has established a revised Tapping Privilege Fee Policy. These rules and regulations were developed in accordance with PA Act 203 and will be applied in conjunction with the existing EWW Main Line Extension Policy. The revised regulations will supersede any reference to a Tapping Privilege Fee Policy which may appear in the existing EWW Main Line Extension Policy. The "Maximum Allowable Fees" were calculated in 1992 using the replacement cost method as described in Act 203. The 1999 Tapping Privilege Fee Policy will establish fees significantly less than those calculated in 1992. In addition, the value of the system has increased annually based on direct investment by the EWW in various system improvements. Based on these two facts, additional Act 203 maximums will also increase. Because of this, new maximums were not calculated. Any special situation that may arise and is not directly addressed by these regulations is first subject to PA Act 203 provisions. Should the Act not address a situation directly, it will then be at the discretion of the EWW Board of Directors to determine the proper action to be taken.

The following are the general regulations as approved by the EWW Board of Directors on June 17, 1999:

1) A Tapping Privilege Fee (TPF), as described in PA Act 203, shall be assessed on all new connections to the EWW water system. These fees are comprised of a "Capacity Component" and a "Distribution Component" based on the EWW's system capacity and replacement value. The fees will be determined by the size of the tap and can be found in the Tapping Privilege Fees Schedule.

2) Should a customer request an increase in tap size on an existing connection, the customer will be responsible to pay the TPF for the new sized tap, less the corresponding TPF for the existing tap. Example: A customer wants to convert an existing 3/4" tap into a 2" connection. The TPF would be calculated as: $3,000 (2" TPF) minus $1,125 (3/4" TPF), or $1,875.

3) If a potential customer, group of customers, or a contractor pays for/builds infrastructure for the EWW which is contributed to the system, they may be entitled to a reduction in their TPF. If the infrastructure is built to ECWA specifications and upon final inspection and approval by the Authority's staff, a reduction of the TPF by component associated with the contributed capital may be applied. (Example: A contractor installs the mains through a new subdivision which are approved by the EWW. These mains are then contributed to the EWW's distribution system. The TPF for the homes serviced by the contributed mains would only be responsible for the Capacity portion of the applicable TPF based on their tap size.)

4) The TPF policy will become effective system-wide on January 1, 2000. If a tap is requested prior to January 1, 2000, in an existing TPF District, the revised TPF schedule will apply.

5) Payment of applicable TPF is due upon application for service for all individual connections. For multiple connection projects, TPFs must be paid upon submittal of project construction bond. For developments of more than 50 connections, alternate payment plans may be arranged through the EWW Director of Finance. Projects in process as of 12/31/1999 must have meters set before 12/31/2000 to avoid paying the appropriate TPF as described above.

SPECIAL PURPOSE TAPPING PRIVILEGE FEES

Should an individual or group of potential customers petition the EWW for water service to an area that is not currently serviced, the Water Works may establish a Special Purpose Tapping Privilege Fee (SPTPF) zone. In accordance with PA Act 203, SPTPFs are used to fund capital projects that are designed to benefit a separate and distinct group of potential customers. Should a SPTPF zone be designated and a project move forward, the following criteria will apply:

1) A preliminary estimate of the total project cost will be performed by the EWW. In accordance with PA Act 203, only costs directly benefiting the requesting party can be included in the estimate. This estimate is then used in determining a SPTPF for the party(ies) involved in the project. (Total Cost / Number of Parties involved) Once a SPTPF is established, it applies to any connection in that zone for the following ten (10) years. The Authority requires a minimum of 60% of the estimated costs to be deposited, through SPTPFs, with the Authority before any construction work is commenced. If these criteria are met, the engineering stage can proceed.

2) The engineering study will give a more detailed description of the project as well as a more exact total cost. If the engineering study shows a significant increase in total cost, the SPTPF will be adjusted and applied accordingly to all participants.

3) The necessary construction of the infrastructure shall be performed by the EWW or its assignees and paid for by the participants through the collected SPTPFs. All connections made in this SPTPF zone for the following ten (10) years will be subject to the established SPTPF fee. The Authority will collect all SPTPFs in order to recover their amount of participation in the project.

4) If, after 10 years the EWW has collected more than its 40% share of the project, a refund will be issued to all participating parties that totals to the amount of the over-collection. This will guarantee all parties involved will pay an equal share of the total project costs.

5) At the discretion of the EWW, the participants or their assignees, may construct the necessary infrastructure improvements in accordance with EWW specifications. Once the project has received final inspection and approval from the EWW will service be started to the participants of the project. All costs associated with these improvements shall be paid by the requesting party(ies).

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