Cities and towns are authorized to construct and operate waterworks to provide water for the city and its inhabitants. The city or town may charge for the use of its water, but the rates must be uniform for the same class of customers or service and cannot be less than the cost of the water and service.
Cities and towns are also authorized to construct and operate sewage, including facilities for both stormwater and sewage, and solid waste handling facilities. Rates for these services also have to be uniform for the same class of customers or service.
When setting classifications for water or sewage, the city or town can consider differences in:
Cities and towns can also consider water conservation goals and discouraging wasteful water practices under water user classifications. Cities and towns can consider the user's public benefit nonprofit status under sewerage use classifications.
Cities and towns can charge connection fees to property owners seeking to connect to the water or sewerage system as a condition to connecting to the system. In addition to the cost of connection, the legislative body of the city or town must determine a reasonable charge so that the property owners bear their equitable share of the cost of the system. The equitable share may include interest charges from the date of construction of the system until its connection, or up to ten years, whichever is less. The interest rate charged may be the same interest rate that was applicable to the city or town at the time of the construction or of a major rehabilitation of the water system, up to 10 percent per year, though the aggregate interest imposed cannot exceed the equitable share of the cost of the system allocated to the connecting users.
Cities and towns may also construct and operate gas and electrical utilities, and regulate the use, distribution, and price of those services. Cities and towns may charge service connection fees to connect properties to these utilities.
If a city or town waives or delays tap-in fees, connection fees, or hook-up fees related to municipal utilities for people with low income, the city must have established a program by an ordinance. Cities and towns may also waive electricity or gas connection charges for people with low income who purchase their property from a nonprofit organization. Waivers for the same class of electric or gas service must be uniformly applied to all qualified properties.
Municipal utilities may waive connection charges for properties owned or developed by, or on the behalf of, a nonprofit organization, housing authority, or local agency that provides emergency shelter, transitional housing, permanent supportive housing, or affordable housing. Any waived connection charges must be funded using general funds, grant dollars, or other identified revenue stream. If a property that received a waiver is no longer eligible for a waiver, any waived connection charges become immediately due and payable as a condition of continued service. Connection charges means the one-time capital and administrative charges imposed by a utility on a building or facility owner for a new utility service and costs borne or assessed by a utility for the labor, materials, and services necessary to physically connect a designated facility to the respective utility service.
Whenever a city or town waives or delays collection of tap-in charges, connection fees, or hookup fees for a nonprofit organization, public development authority, housing authority, or local agency that provides emergency shelter, transitional housing, permanent supportive housing, or affordable housing to connect to lines or pipes used by the city or town to provide utility service, the waiver or delay must be pursuant to a program established by ordinance.