40A:31-11. Connection fees

In addition to rates and rentals, a separate charge in the nature of a connection fee or tapping fee for each connection of any property with the water supply system may be imposed upon the owner or occupant of the property so connected. The connection charges shall be uniform within each class of users and the amount thereof shall not exceed the actual cost of the physical connection plus an amount computed in the following manner to represent a fair payment towards the cost of the system:

a. The amount representing all debt service, including but not limited to sinking funds, reserve funds, the principal and interest on bonds, and the amount of any loans and the interest thereon, paid by the local unit or units to defray the capital cost of developing the system as of the end of the immediately preceding budget year shall be added to all capital expenditures made by a local unit or units not funded by a bond ordinance or debt for the development of the system as of the end of the immediately preceding budget year.

b. Any gifts, contributions or subsidies to the local unit or units received from, and not reimbursed or reimbursable to, any federal, State, county or municipal government or agency or any private person, and that portion of amounts paid to the local unit or units by a public entity under a service agreement or service contract which is not repaid to the public entity by the local unit or units, shall then be subtracted.

c. The remainder shall be divided by the total number of service units served by the local unit or units at the end of the immediately preceding budget year, and the results shall then be apportioned to each new connector according to the number of service units attributed to that connector. In attributing service units to each connector, the estimated average daily flow of water for the connector shall be divided by the average daily flow of water to the average single family residence in the area served by the local unit or units, to produce the number of service units to be attributed.

The connection fee shall be recomputed at the end of each budget year, after a public hearing is held. The revised connection fee may be imposed upon those who subsequently connect in that budget year to the system.

The combination of the connection fee or tapping fee and the aforesaid water service charges shall be such that the revenues of water supply facilities shall be adequate to pay the expenses of operation and maintenance of the water supply facilities, including improvements, extensions, enlargements and replacements to water supply facilities, reserves, insurance, principal and interest on any bonds, and to maintain such reserves or sinking funds therefor as may be required under the bond covenants or any contracts, or as may be deemed necessary or desirable.

Source: New.

L.1989,c.109,s.1.