Improvement District Capital Expenditure
Capital expenditure charges on new development help pay for new and expanded infrastructure necessary to meet the demand created by community growth within an improvement district.
Capital expenditure charges are primarily used by improvement districts that provide water service.
The improvement district board of trustees may adopt a bylaw that establishes capital expenditure charges to be paid before a newly developed property can be connected to the water system. The charges are accumulated in a reserve fund to finance expansion of the water system.
Capital Expenditure Charge Requirements
The capital expenditure charge must fairly represent the added demand that a unit of development will impose on the water system.
The capital expenditure charge bylaw requires registration by the Inspector of Municipalities to become effective. The bylaw must be submitted with information that supports the calculation of the capital expenditure charges. This information may include professional estimates from a planner or the units of growth predicted in a future period and the cost of infrastructure necessary to serve that growth. From that information, a calculation of the capital expenditure charges is possible and would be included with the bylaw sent for Inspector approval.
The calculation pf the capital expenditure charge would also recognize if a portion of new infrastructure capacity would serve properties that are already connected to the water system. The capital expenditure charges should be calculated based on the portion of capital cost of new infrastructure will serve new development.