Overview

The 2014 report develops updated treated water capacity charges designed to equitably recover the full cost of infrastructure and assets benefiting new connections to the District’s treated water system.

The updated charges are designed to meet all legal requirements and be fair to both existing and future customers.

About Capacity Charges

The District levies capacity charges on new or expanded connections to the District’s water system.  These charges are one‐time charges designed to recover the costs of facilities and assets needed to serve new development.   

NID Capacity Charge Update 2014

Government Code

Water and sewer capacity charges are governed by California Government Code Section 66013 et. seq.  The Code states that capacity charges “shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed” unless approved by a two‐thirds vote.  The Code also states that a capacity charge can include costs for facilities in existence at the time a charge is imposed or charges for new facilities to be constructed in the future that will provide benefit to the person or property being charged.  The Code does not specify any method for determining an appropriate charge.

The Code also details a number of accounting and reporting regulations regarding capacity charges.  Notably, the District must:

• Deposit capacity charge revenues in a separate fund, interest earned on the fund must accrue to the fund;
• Avoid commingling capacity charge revenues with other District funds; and
• Expend the funds solely for the purposes for which the charges were collected.