The cost of municipal servicing can be extensive. The Town recovers the majority of the costs from benefitting property owners, and therefore each project needs to be assessed on a case-by-case basis that considers the necessary works, available funding sources, and the end cost to the benefiting property owners.
What makes a water or wastewater service extension project "affordable"?
The most current census data is used to determine the median after-tax, single household income. This number will be used to determine the affordability, as each benefitting property owner will be required to pay for the cost of a service extension with available after-tax income.
Using the most recent Census Data, the following measures of affordability will be used:
- If the annual household cost of extending a service is equal to, or less than, 5% of the median after-tax, single household income, the project is considered affordable.
- If the annual household cost of extending a service is greater than 5%, but less than 10%, of the median, after-tax single household income, the project would require additional analysis to determine affordability, including additional financial support, in order for the project to meet the affordability threshold of 5%.
- If the annual household cost of extending services is equal to, or greater than, 10% of the median, after-tax single household income, the project would be deemed unaffordable for both the Town and the benefitting property owners.
For example, using the most recent Census Data, (2016 on the 2015 median, after-tax single household income) the principles outlined above would result in the following measures:
Description |
Household Income |
Share of Income (%/year) |
Share of Income ($/year) |
Maximum Charge |
---|
Affordable per service |
$ 33,760 |
<5% |
$ 1,690 |
$ 21,060 |
Unaffordable per service |
$ 33,760 |
>10% |
$ 3,380 |
$ 42,130 |
The above chart illustrates the Maximum Service Extension Charge per service extension. The figures are calculated assuming 20-year financing with a 5% annual interest rate. If a property is receiving both a water and wastewater service extension, the Maximum Service Extension Charge would be doubled.