There are a myriad of techniques and mechanisms available to a utility to pay for the cost of growth-related capacity: use of system development charges; use of taxable "tails" to finance growth-related costs; advance/discounted collection of system development charges; establishment of a free market for connections; simulation models to determine the optimum mix of techniques; use of surcharges/rate differentials in growth-impacted areas; and use of Tax Increment Financing (TIF) districts. Each of these approaches has its advantages and disadvantages; for example: the extent to which the financial community will accept the use of one-time revenues (such as impact fees) as a revenue pledge in support of debt, can affect the rating of a debt issue; the extent to which various types of property or developments are legally subject to certain charges can impact financial risk; in California, school boards were held to be exempt from paying system development charges; in any jurisdiction, a tax-exempt entity would be exempt from any tax levy; etc. Such factors must be carefully considered before a utility decides to adopt a specific approach. Extensive review and discussion with the utility's management consultants, financial advisors and underwriters is necessary if the utility wishes to control financial risk and avoid unpleasant surprises.
| File Size : | 1
file |
| ISBN(s) : | 0898678315 |
| Note : | This product is unavailable in Ukraine, Russia, Belarus |
| Number of Pages : | 6 |
| Published : | 01/01/1995 |
