Chapter 11.06


11.06.010    General.

11.06.020    Line extensions to individual residential customers.

11.06.025    Repealed.

11.06.030    Other line extension requests.

11.06.040    Exceptional cases.

11.06.050    Hardship assistance.

11.06.060    Recapture fees for privately constructed water main extensions.

11.06.010 General.

(a)    This chapter applies to extensions of primary or secondary circuits, or both, of electric and/or telecommunications facilities and/or water lines necessary to furnish utility services requested by any customer or other person.

(b)    Each line extension requested requires that a contract be entered into between the applicant requesting utility service and KPU. This contract will provide for transferring ownership of the completed utility extension to KPU. All facilities shall become and remain the property of KPU.

(c)    KPU will be the sole judge as to whether a request for utility service requires that a line extension be constructed. KPU’s decision will be based upon sound engineering practices and the best interests of KPU.

(d)    The construction of the line extension which will initiate from KPU’s existing facilities shall include all materials and equipment required to adequately serve the customer.

(e)    KPU may require that the applicant requesting the utility line extension contract with a licensed contractor that has the necessary state qualifications to accomplish construction and installation of the utility line extension.

(f)    No utility line extension constructed by a licensed contractor shall become operational until authorization therefor, accompanied by the duly signed contract, has been received from the utilities manager’s office. The required contract is for the purpose of ensuring that proper design and inspection methods are utilized, as well as to protect KPU from potential liability.

(g)    All utility services shall be installed and maintained as provided in KMC 11.04.150.

(h)    KPU Constructed Line Extensions.

(1)    Once the customer and KPU determine that a line extension will be made, the customer and KPU will enter into a written agreement to construct the utility line extension. The terms of this agreement will establish the time frame in which the work will be completed and establish the cost of the project. KPU will reserve the right to subcontract out the work once the cost and time have been established. This is to assure that if for any reason KPU’s workload is such that they cannot perform the line extension in a timely manner, KPU can, at its option, have another contractor perform the work. The customer shall not be responsible for any costs other than as established in subsection (h)(4) of this section.

(2)    KPU shall cause a written estimate of construction costs to be made for each line extension requested. Such cost estimate shall be the basis for determining the amount of the customer’s contributions in aid of construction and other calculations referred to herein. KPU shall be the sole judge as to the validity of these calculations and estimates. Actual costs shall include an amount to offset and recover KPU administrative costs.

(3)    The cost estimate for a line extension will be valid for a period of 30 days, unless mutually extended in writing. Delay in entering into a contract or making a contribution in aid of construction payment may necessitate recalculation of the cost estimate based upon more current prices. KPU shall be the sole judge as to whether a recalculation is necessary.

(4)    If construction of the utility extension is performed by KPU, and the actual construction costs are determined to be less than the written cost estimate, the customer shall be charged the actual cost. If construction of the utility extension is performed by KPU or subcontracted out by KPU, and the actual construction costs are determined to be more than the written cost estimate, the customer will not be required to pay more than 10 percent more than the original cost estimate. (Ord. 1532 § 4, 2005; Ord. 1200 § 1, 1990; Ord. 1065 § 4, 1985)

11.06.020 Line extensions to individual residential customers.

(a)    This section shall apply where the line extension will deliver service only to a single service point or service entrance of a premises that is or shall become the permanent personal residence of the applicant, or applicants, applying for the line extension. All other line extension requests must qualify under, and shall be subject to, the provisions of KMC 11.06.030.

(b)    The following requirements shall be complied with and completed as conditions of acceptance of the line extension by KPU:

(1)    The applicant (customer) must have paid all charges, fees, deposits, and any other monetary requirements relating to the line extension; it may be possible to work out credit arrangements upon approval of the general manager or his designee, with approved credit.

(2)    The design and installation relating to the line extension shall comply with all applicable codes and with all KPU rules, regulations, standards, specifications and policies which pertain to the safe construction and operation of the utility facility. All utility line extensions shall be inspected by KPU or its authorized representative.

(3)    KPU shall be granted, at no cost or expense to KPU, and on such form as is required by KPU, easements for utility line purposes as necessary to extend the utilities and for the construction, operation, and maintenance of all KPU facilities, both overhead and underground, and also such easements on the property to which the utility line is extended as are deemed necessary to accommodate providing future line extensions.

(c)    Special Conditions.

(1)    Where it is necessary to upgrade or modify existing service in order to furnish the service requested, the estimated cost thereof will be determined by KPU. The method of recovering such costs shall be as specified under subsection (d) of this section, Payments.

(2)    In dealing with multiple requests for utility service at the same approximate location, KPU staff will attempt to consummate a contractual arrangement which is acceptable to all parties involved. In the event a mutually acceptable contractual arrangement is not consummated within 60 days after the initial request for utility service, the party first requesting service will be required to individually comply with the provisions of this chapter.

(d)    Payments. The provisions of this subsection shall be applicable for permanent services only and shall not apply to line extensions within the provisions of KMC 11.06.030. In order that there be adequate and timely recovery by KPU of the costs associated with the construction of utility line extensions, the following provisions shall apply:

(1)    KPU will participate in the cost of construction of a new service utility line extension up to the following amounts:

(Note: No allowance is granted for upgrades or repair of substandard conditions.)

(A)    Permanent electric service – $2,500 maximum.

(B)    Permanent telecommunications service – $500.00 maximum.

(C)    Permanent water service – $1,000 maximum. This amount will be provided for labor and materials up to the point of demarcation; meter for electric, protector for telephone, property line for water.

(2)    If KPU is to perform the installation and the cost of construction of a utility line extension exceeds the amounts set forth in subsection (d)(1) of this section, a contribution in aid of construction shall be required to be paid by the applicant for all construction costs above the maximum amounts paid by KPU as provided in subsection (d)(1) of this section.

(3)    Generally, it will be the policy of the utility to have as many property owners along the line extension participate in the development of the extension. However, we realize that some property owners do not plan any immediate development of their property and will therefore decline to participate in the line extension at the time the line is originally installed. Therefore, to assist the customer requesting the line extension that normally would involve more than one property owner in order to facilitate the line extension, KPU will provide the requesting property owner the following options:

(A)    Customer Pays All Costs and Is Reimbursed as Development Occurs.

(i)    KPU will make the line extension and establish the total cost of the line extension for all affected property owners, subtracting the normal contribution in aid of construction fees that the utility would normally be obligated to pay and the property owner will have the responsibility to pay all other costs of the line extension; and

(ii)    KPU will reimburse the original property owner for any costs remaining on the original line extension as the other property owners request service, within five years from the date of the original line extension, less the original contribution in aid of construction fees already paid.

(B)    KPU and Customer Each Pay Certain Costs.

(i)    KPU will pay for the entire line extension, except for the costs that would pertain solely to the property owner (customer) requesting the line extension and the requesting property owner will sign a note payable to the utility bearing interest at 10.5 percent interest simple interest annually, with the note being due five years from the date of the original installation of the line extension. Any line extensions made to other properties involved in the line extension route would be deducted from the note payable to the utility. Any amounts outstanding at the end of the five-year period would be due and payable from the original customer to the utility at that time.

(ii)    Interest only would be payable annually during the five-year period on the outstanding balance and would not be refundable once due.

(iii)    Each time another property owner requests a line extension, the original property owner (or current property owner) would have a pro rata share of the note reduced.

(iv)    The note would be secured as a lien against the original property owner’s property until paid in full.

(v)    It shall be KPU’s responsibility to collect the line extension fees from subsequent property owners requesting the line extension and for KPU to reduce the account of the original property owner accordingly.

(vi)    All requests covered within this section shall be agreed to in writing. Any subsequent line extensions after five years will be dealt with by the utility as any normal line extension and no reimbursement will revert back to the original property owner that requested the initial line extension. (Ord. 1532 § 4, 2005; Ord. 1200 §§ 2, 3, 1990; Ord. 1065 § 4, 1985)

11.06.025 Electric utility line extensions to residential state subdivisions and similar subdivisions.

Repealed by Ord. 1858. (Ord. 1579 § 1, 2007)

11.06.030 Other line extension requests.

(a)    The following shall be required to be complied with by applicants requesting service of multiple premises or other facilities that would require a utility line extension and which do not qualify under KMC 11.06.020:

(1)    All of the provisions and requirements of KMC 11.06.020(b)(1), (2) and (3), inclusive, shall be met and complied with.

(2)    KPU shall be provided with a copy of a final subdivision plat, or plat of the development, and such other design, construction and engineering drawings or data as are requested by KPU, clearly delineating and depicting all of the necessary utility easements which are, or will be, granted to KPU.

(3)    If KPU determines a substation or similar facility or equipment is necessary, land required for locating such KPU facilities or equipment, including easements, shall be granted to KPU. KPU shall be the sole judge as to the need for such substation or similar facilities or equipment.

(b)    Payments. Except as provided for telecommunications extensions under subsection (c) of this section, when KPU constructs utility line extensions, 100 percent of the estimated cost of construction shall be paid to KPU prior to commencement of construction.

(c)    KPU may at its expense extend such telecommunications wiring and other telecommunications facilities as it determines to subdivisions of four or more lots which do not otherwise have available KPU telecommunications service; provided, that:

(1)    In KPU’s determination it is reasonably foreseeable that within five years from the date the line extension is completed a sufficient number of lots to be served by the extension will be developed and will be using and paying for telecommunications service provided through the line extension;

(2)    KPU determines that its costs for the telecommunications wiring and facilities are reasonable given the effects of universal service funding, the competitive market for telecommunications services, the expected return on its investment, or other business reasons;

(3)    The subdivision is located along the road system on Revillagigedo Island; and

(4)    The owners or developers of lots in the subdivision install and pay for all service connections and for all conduit or pole line that KPU determines necessary to extend telecommunications wiring.

Nothing in this subsection gives anyone a right to have any wiring or facilities extended at KPU’s expense. Nothing in this subsection authorizes KPU to pay for the costs of any wiring or facilities unless the wiring and facilities are owned by KPU telecommunications or to pay for the costs of any poles or excavations. KPU’s payment of its costs under this subsection are in lieu of any payment by KPU to any owners or developers for their costs of telecommunications line extensions. (Ord. 1573 §§ 1, 2, 2007; Ord. 1065 § 4, 1985)

11.06.040 Exceptional cases.

In situations where KPU determines that application of the provisions of this chapter relating to design of the utility appear to be impractical or inequitable to either KPU or to the applicant (such as where the use of materials would be larger or greater than necessary to serve only the applicant, or is designed to serve an area not yet developed which lays beyond or adjacent to the property the applicant requests be served), the design requirements set forth in this chapter may be modified or waived by the utilities manager in order to eliminate or reduce the impractical or inequitable result. (Ord. 1065 § 4, 1985)

11.06.050 Hardship assistance.

(a)    Where an application for utility service reflects a need to construct a utility line extension and where applying the normal KPU utility line extension contribution in aid of construction requirements would place an undue financial hardship on the applicant, and as a result thereof the request for the utility line extension and utility service would otherwise be denied, the applicant may apply to KPU for hardship assistance. Compliance with all requirements (except payment of the contribution in aid of construction) of this chapter must be met and complied with before an application for hardship assistance will be considered. KPU will consider only those applications for hardship assistance that are determined by KPU to be for utility line extensions and utility services to service a single-family dwelling that is occupied, or is to be occupied, by the applicant and which is not of uncertain duration.

(b)    An application for hardship assistance must be made in writing to KPU and the utilities manager and the city finance director shall jointly review the application and determine the eligibility of such application. All applications for hardship assistance will be answered by KPU with an explanation as to the reasoning used in arriving at the determinations regarding approval or denial of the request.

(c)    In the event eligibility is established, a contractual arrangement providing for repayment of any construction funds advanced by KPU for installation of the utility line extension shall be entered into between the applicant and the city on such form as is required by KPU. In addition, and as determined by KPU, a deed of trust, mortgage, lien, or other security in the real property to be serviced with the utility line extension, including a subordination agreement if requested, shall be executed, granted and conveyed to the city by the applicant to secure performance of the contract and the obligation to repay the costs advanced by KPU.

(d)    All construction costs advanced by KPU shall be repaid within five years after the date the utility is made available for service to the customer, in monthly or other periodic installments as determined by KPU. Any unpaid balance shall become due and payable in full within 30 days with interest as set in the contractual agreement in the event the applicant vacates the property which was the subject of line extension hardship assistance. (Ord. 1065 § 4, 1985)

11.06.060 Recapture fees for privately constructed water main extensions.

(a)    Partial Recovery of Costs. A developer of land may obtain water service at its cost by constructing an extension of KPU’s water main. Any such extension shall be constructed in accordance with KPU specifications and requirements. The water main extension shall be dedicated to KPU after KPU’s inspection and approval but before water service is provided by KPU. When in KPU’s determination, other property owners may connect to that extension through service connections, branch water mains or further water main extensions, the developer may, under the terms of a KPU water main extension agreement, recover part of its costs through recapture fees paid under this section by such other owners.

(b)    Notice of Proposed Recapture Fees. A developer who desires to recover part of its construction costs through recapture fees shall provide notice by certified mail to the owners, as shown on the most recent assessment rolls, of each parcel of land for which a recapture fee may be required. The notice shall be mailed by certified mail at least 15 days prior to council approval of any water main extension agreement that provides for such recapture fees. The notice shall provide:

(1)    A list of all the parcels of land which may be charged a recapture fee, the owners of each parcel as shown on the most recent assessment roll, and the maximum recapture fee proposed for each such parcel;

(2)    An explanation of the formula used to allocate recapture fees among the affected parcels of land;

(3)    An engineer’s estimated cost of construction for the proposed water main extension and a description of the work to be done;

(4)    The total amount the developer proposes to receive from recapture fees and the total amount the developer itself expects to pay for construction assuming all recapture fees are collected;

(5)    A description of all the developer’s land which may be connected to the water main extension;

(6)    A description of any valves, stub outs, or other work the developer will provide to allow the owner to connect to the water main extension;

(7)    The maximum length of time during which the proposed recapture fees will remain in effect;

(8)    A statement that while the recapture fee is effective, the owner will not be allowed to connect to the water main extension from the listed parcel of land without first paying the recapture fee to KPU;

(9)    A statement that in addition to the recapture fee, the owner will be required to pay the costs of connection, including any service lines, branch mains, pumps, and other work needed to deliver water from the water main extension into the owner’s property;

(10)    A statement that in addition to the recapture fee provided by this chapter, the owner will upon connection pay such other connection fees, water service charges, and other fees and charges as KPU may require;

(11)    The date and time of a meeting at which the council will consider the recapture fees;

(12)    A statement that the owner may be charged for fire hydrants regardless of any connection to the water main extension; and

(13)    Such other information as KPU may require.

(c)    Determination of Recapture Fee. The council shall determine the recapture fee applicable to each parcel of land. In making its determination, the council may consider:

(1)    The size of each parcel;

(2)    The assessed valued of each parcel;

(3)    The number, size, and costs of service connections and mains, if any, which it expects may be connected to the water main extension;

(4)    The value and relative benefit of water service to each owner of each parcel;

(5)    The likelihood that a parcel of land will be connected to the water main extension during the period that the recapture fee will be effective;

(6)    The amount of water which the developer and each owner can be anticipated to use and the costs of providing that water with and without connection to the KPU water system;

(7)    The use and zoning of the property;

(8)    The amount which the developer reasonably needs to recapture in order to construct the extension;

(9)    Any costs of construction which disproportionately benefit the developer or any other owner.

The council will be the sole judge of the weight, if any, to be given to any one of these considerations and the facts supporting any consideration. Nothing requires the council to approve any recapture fee. No recapture fee is valid until a water main extension agreement providing for that fee has been signed by KPU. If a developer begins construction prior to KPU’s execution of a water main extension agreement, the developer proceeds at its own risk.

(d)    Payment of Recapture Fees. When, after notice has been provided as described in subsection (b) of this section, the council approves a water main extension agreement with a developer which provides for a recapture fee to be paid by any owner of land, no person other than the developer, the developer’s successor in interest, or the city may, during the time the recapture fee is effective, connect to or receive water service through the water main extension to that land without paying the entire recapture fee to KPU. If an owner connects to the water main extension without paying the recapture fee, the owner shall either pay the fee within 30 days from the date a demand for payment is mailed by the city to the owner or be disconnected from the water main extension and remain disconnected until the recapture fee is paid or expires.

(e)    Conditions and Limitation. In addition to all other terms and conditions which KPU may require in a water main extension agreement, all recapture fees provided for under this section are subject to the following terms and conditions:

(1)    Certified Construction Costs. Within 30 days from the date the water main extension is dedicated to KPU, the developer shall provide KPU with the project engineer’s certified cost of construction for the water main extension minus any oversizing paid for by KPU. The statement shall not include the cost of any service lines or other work not described in the notice to owners provided under subsection (b) of this section. If the certified cost of construction is less than the estimates used to determine the recapture fee, such fees shall be reduced for each parcel in an amount equal to the ratio of the recapture fee for that parcel to the estimated cost of construction. If the certified cost of construction exceeds the estimate, the additional costs shall be the developer’s responsibility.

(2)    No Interest or Payment until Connection. No owner will have any obligation to pay a recapture fee until the owner’s land is connected to the water main extension, branch main, or further water main extension. No owner will be required to pay interest on the recapture fee.

(3)    Oversizing Costs Paid by KPU. The developer shall not receive any recapture fee for any costs paid by KPU for oversizing the water main extension.

(4)    No Liability for KPU. KPU’s only obligation and liability is to pay to the developer any recapture fees it receives and to disconnect any service connections for which a recapture fee is owed but has not been paid. KPU makes no warranties or representations that recapture fees will be collected from any owner. The developer shall indemnify, defend, and hold KPU harmless from any claim or cause of action arising from or related to KPU’s refusal to permit a connection to the water main extension without payment of the recapture fee or its disconnection of a connection made without payment of the recapture fee.

(5)    Notice of Recapture Fee. When water service is available through a water main extension, the developer shall at its cost notify each property owner of the final recapture fees applicable to that owner’s land. Notice shall be made according to the procedure set forth for service of process in the Alaska Rules of Civil Procedure and shall be in a form approved by and signed by KPU.

(6)    Maximum Term. No recapture fee will apply to connections which are made to a water main extension more than 15 years after the date KPU signs the water main extension agreement providing for the fee. No recapture fee will apply to any water main extension or part thereof which has not been completed and accepted by KPU within two years from the date the water main extension agreement is signed by KPU.

(7)    Payment to Developer. Upon receipt of a recapture fee, KPU will pay the developer that portion of the recapture fee provided for in the water main extension agreement.

(8)    Recapture Fees Not Applicable to Developer’s Land or City Land. Land which the developer owns at the time notice given under subsection (b) of this section is not subject to a recapture fee. Land owned by the city is not subject to a recapture fee; provided, however, that lessees of city land who have received the notice under subsection (b) of this section will not be permitted to connect unless they pay the applicable recapture fee.

(f)    Definitions. For purposes of this section, the following terms are defined as:

“Costs of construction” include all costs for the completion of a water main extension including designs, permits, easements, fees, and KPU’s costs of plan review, inspection, and testing;

“Developer” is an owner of land who constructs and pays construction costs for a water main extension or that owner’s successor in interest. A subdivider of land is not considered a developer except to the extent that in the course of providing a water main extension to its property, the subdivider provides a water main extension to which owners of other property may connect;

“Oversizing” means the enlargement of a water main extension and parts thereof beyond what KPU determines to be necessary to provide sufficient water and water pressure to the developer’s land and to any land for which a recapture fee may be collected.

(g)    LIDs, Line Extensions, and Subdivision Requirements. The recapture fees provided for in this section are an alternative to other methods for payment of water main extensions, including, but not limited to, local improvement districts and line extension agreements. Recapture fees are not an alternative to any requirements of the borough platting board for the construction and payment of water main extensions within proposed subdivisions. (Ord. 1525 § 1, 2005)