16851_Authority_Aug_2023

municipalauthorities.org | 17 A No, in both situations, the limit is 60% of the sewer bill. Outstanding Debt Q Does the definition of outstanding debt in the Act pertain only to the debt “principal?” A Yes. Q When constructing a new facil- ity to serve existing customers and future customers, do you have to deduct the outstanding debt when calculating the tapping fee for those future customers? A Any time when serving both ex- isting and new customers, you must subtract the outstanding debt. Q If the authority is expanding its facilities to serve a neighboring community (i.e. new customers) how should the tapping fee be structured for those new customers? A If the expansion involves additional facilities that serve exclusively new customers, a separate capacity/ collection/distribution, or a special purpose tapping fee can be estab- lished without deducting outstanding debt. However, if those additional facilities are simply expanding the capacity and/or collection/distribu- tion aspects of the existing system, and therefore will serve both existing and new customers, then the existing tapping fee should be updated to take into account the deduction of debt associated with the additional con- struction. There may be situations where a special purpose part could cover some of the anticipated collec- tion or distribution facilities. Q If outstanding debt is subse- quently refinanced, and debt was not deducted in the initial tapping fee calculation, would it need to be deducted once it is refinanced? A No. Lower Tapping Fees for Multi-Family Dwellings Q What does “multi-family” mean and can a separate tapping fee be established for such situations? A The term “multi-family” covers things like townhouses, apartment complexes and nursing homes. A sep- arate tapping fee can be established for such situations. In developing such fees, it may be helpful to check out available census data on “renter occupied” households. It should be emphasized that the establishment of a multi-family fee is totally at the authority’s option. Design Capacity Q Regarding the use of “design ca- pacity” in the calculation of tapping fees, if a sewer system is extended out to serve a few customers, but the sewer line is capable of carrying a much higher flow, how should this be addressed in the calculation? Continued on page 38.