AWWA INF52168

This paper describes the development of a tiered system of water and sewer service availability fees based on the finished area of single family homes. Orange Water and Sewer Authority (OWASA), of Carrboro/Chapel Hill, North Carolina, customer data exhibit a consistent pattern of increased average and seasonal water use with increasing home size, as indicated by building permit and utility billing records. Customers with more modest homes generally use less total water and exert a lower summer demand than those with larger homes. OWASA's service availability fees--utility capital recovery charges (or impact fees) assessed to new development --were traditionally based on meter capacity factors, and all single family homes were charged the same one-time fee when connecting to the water or sewer system, regardless of home size or expected water use patterns. Data developed for this analysis provided a valid utility basis for establishing availability fees that are more responsive to the actual patterns of water and sewer use that characterize different subsets of residential customers. A new tiered approach adopted by OWASA's Board of Directors established five separate size classes for new single family homes. Availability fees for homes in the smallest size class (less than 1700 square feet) are now 38 percent lower than under the previous rate structure, while new fees for the largest homes (greater than 3800 square feet) are 70 percent higher than previously. The analysis of water use patterns also provided a basis for revising service availability fees for multi-family residences (apartments, townhouses, and condominiums with individually metered units), which use an average of 35 percent less water than single family detached homes. The tiered approach represents a more precise cost-of-service focus than uniform availability fees, because it considers the actual demand patterns of different residential user groups, rather than treating all residential customers in the same way. Another benefit has been the reduction of fees charged for smaller homes, thus lowering one of the economic barriers to more affordable housing in OWASA's service area. Includes reference, figures.