What are Ready to Serve and Vacant Land Fees?
The Kennebunk Sewer District (KSD) charges Ready to Serve and Vacant land fees to unconnected property owners with access to the system to pay for their share of the existing debt on the collection system and treatment facility. KSD charges a Ready to Serve fee on existing homes within 200 feet of a public sewer. Vacant Land fees are assessed a fee based on road frontage of a property adjacent to a public sewer.
Why are the Fees charged?
The district maintains 29.0 Million dollars worth of assets including the Wastewater Treatment Facility, 28 pumping stations, and 40 miles of sewer. The infrastructure requires regular maintenance and replacement of worn or failed assets including pump replacement, sewer line repair and replacement, and process control improvements. Periodically, the significant improvements require bonding to undertake projects.
Ready to Serve and Vacant land fees are common in wastewater and water utilities and are intended to fairly assess property owners that have access to the system but remain unconnected. All connected property owners and those properties that have access to the system should pay a proportionate share of the debt incurred by the district for the ability of KSD to provide service.
How are the fees calculated?
The fees are based on paying for existing debt. At this time, the district has three 20-year bonds from ,2005 and 2015 of 2.0, 2.14 and 3.75 million. These bonds were necessary for the district to make necessary upgrades and modifications to meet regulatory requirements and process improvements.
The Ready to Serve fee is based on the annual cost to amortize the two bonds divided by the total number of customers. This is currently $144.00 per year and is recalculated at the end of each year.
The Vacant Land fee is based on the linear feet of frontage that the property owner has on a public street served by public sewer. This fee is $1.30 per foot of frontage per year.
What is the District’s policy on using Ready to Serve and Vacant Land fees to reduce the Equity Buy In Fee?
The Equity Buy In Fee (EBIF) is a based on repaying the equity in capital assets of the existing system. For 2016, the EBIF is based on State of Maine Subsurface Wastewater Disposal Rules, August 3, 2015 for the primary method of determining flow from residential and commercial buildings. The flow is determined by the number of bedrooms which establishes the number of gallons used. This fee is paid when the property owner develops the property or changes use.
The district’s policy is to credit the accumulated Ready to Serve and Vacant land fees towards the Equity Buy In Fee at the time of construction. If the accumulated Ready to Serve and Vacant land fees exceed the Equity Buy In Fee, the district will cap that credit at the Equity Buy In Fee and will not issue any further credit or reimbursement of the Ready to Serve or Vacant Land fees.