5.95.030 General procedures.
(a) An applicant shall declare a desire to design and construct a qualified project eligible for SDC credit either as an element of its request for a hydraulic planning analysis filed with the Development Services Group or in a written response to the letter of findings prepared by the Development Services Group. For projects that were previously authorized, but have not yet been issued an SEP or MOU, the applicant may request an authorization amendment to allow the applicant to design and construct a qualified project eligible for SDC credit.
(b) The applicant agrees to pay WSSC all review fees normally due WSSC. Letters of credit are not acceptable in lieu of fees.
(c) When an applicant has requested that it be permitted to design and construct a CIP project, the Development Services Group shall prepare a map during its hydraulic planning analysis that identifies the qualified properties to be served by the CIP project which the applicant has requested to design and construct. SDC credit will only be issued to properties within the geographic boundaries identified in the map as qualified properties. A copy of the prepared map will be sent to the applicant.
(d) If WSSC either authorizes the applicant to design and construct a qualified project or requires eligible private funding from the applicant of WSSC’s design and construction costs, then the properties identified as served by the project will receive credit and/or be subject to SDC payments which may be reimbursed to the applicant up to the total eligible amount. The Permit Services Unit will establish an applicant’s SDC ledger following either (1) execution of a MOU or SEP covering applicant design and construction of the qualified project or (2) WSSC receipt of eligible private funding of the qualified project from the applicant. Prior to establishing the applicant’s SDC ledger, the Permit Services Unit requires a map identifying all qualified properties to be served by the qualified project from the Development Services Group. Please note that for pipeline jobs, the applicant will not receive SDC credit or reimbursement unless the SDC credit agreement is signed before the SEP is issued.
(e) The SDC ledger will reflect the total amount of SDC credit/reimbursement that the applicant is eligible to receive. If the applicant is designing and constructing the qualified project, the ledger will initially reflect the applicant’s SDC credit based upon the estimated total eligible costs agreed upon in the MOU or SEP. The applicant’s initial ledger credit amount will be adjusted to reflect the actual total eligible costs for the qualified project, as determined by the Inspector General (as discussed in subsections (f), (g), (h), (i) and (m) of this section), after the qualified project has been accepted and placed in service by WSSC. If WSSC is designing and constructing a qualified project, the ledger will reflect the total amount of eligible private funding received from the applicant.
(f) SDC credits may not exceed 50 percent of the estimated total eligible project cost (not to include contingency for increase in scope items (see subsection (i) of this section)) until such time as final audit is completed and the actual total eligible project cost is determined. Once the actual total eligible project cost is determined, SDC credits are available up to the eligible project cost and quarterly refunds (based upon SDC collected for qualified properties) will commence. Prior to the final audit, the credit voucher is the only method of reimbursement to the applicant.
Following WSSC receipt of eligible private funding, SDC credits against the ledger amount may be granted. However in the SDC credits toward the private funding may not exceed 50 percent of the total estimated project cost.
(g) When an applicant is designing and constructing a qualified project, SDC credit is the total eligible project cost incurred and paid by the applicant. The SDC credit is subject to the general guidelines that (1) eligible costs will be the types of costs that WSSC would have incurred had WSSC designed and constructed the qualified project, and (2) the SDC credit will not exceed the maximum amount mutually agreed upon in the SDC credit agreement. Eligible costs must be directly allocable to the qualified project. Examples include but are not limited to:
(1) Engineering Costs. Design, reprographics, survey (topo), soil borings, as-built drawing preparation and bonding fees.
(2) Permit Costs. Costs for permits that WSSC would have had to acquire had WSSC built the project.
(3) WSSC Fees for Pipelines. Fees for extra WSSC reviews or retesting will be considered only if noneligible portions of the job do not require extra reviews or retesting. Unless mentioned otherwise, fees will be allocated to the qualified project based on estimated costs and overall water and sewer project cost for the project number.
(4) WSSC Fees for Facilities. All WSSC direct costs and overhead associated with the qualified project as stated in the MOU.
(5) Construction Costs. Contractors bid price, survey (stake out), geotech (compaction testing), off-site restoration and construction management.
(6) Interest Costs. Interest costs for funds used during design and construction, at an average interest rate not to exceed the rate paid by WSSC on short-term construction notes outstanding during the period beginning with the date of WSSC signature on the SEP or MOU agreement and ending when the qualified project is substantially complete.
(7) Off-Property Rights-of-Way. Acquisition costs are eligible up to amount appraised by WSSC for purchase of applicant’s off-property right-of-way and construction strips, plus up to 25 percent of the appraised amount for direct costs associated with purchase of off-site rights-of-way and construction strips.
(h) Examples of costs that are not eligible include but are not limited to:
(1) Areawide planning not directly related to the qualified project;
(2) Attorney fees;
(3) The WSSC hydraulic review fee;
(4) Costs for negotiation of SDC credit agreement or MOU;
(5) Bonus payments or acceleration costs paid to the contractor for completion of construction;
(6) Third-party inspection costs for facility projects;
(7) Applicant’s overhead costs not directly attributable to the qualified project;
(8) Costs outside the scope of the qualified project;
(9) Permit costs associated with a development rather than the qualified project;
(10) Site acquisition costs beyond what WSSC would have paid;
(11) Facilities capital cost of money;
(12) Fines and penalties;
(13) Maintenance costs;
(14) Maintenance bond costs that are beyond both two years after substantial completion and beyond one year after release of service or final acceptance;
(15) Grading of rights-of-way;
(16) Sediment control for grading;
(17) Clearing and grubbing for public rights-of-way in which the qualified project will be installed;
(18) Federal and state income taxes;
(19) Administrative or management fees not directly associated with the qualified project; and
(20) Personal injury compensation or damages.
(i) The maximum SDC reimbursement shall not exceed 110 percent of the contractor bid price plus other eligible costs.
(j) The SDC credit agreement will not provide payment to the applicant for costs the applicant did not incur or for costs reimbursed to the applicant from other sources. The SDC credit agreement will not provide any premiums for expedited work.
(k) Prior to SDC credit agreement or MOU approval, the WSSC project manager for the project is responsible to have components of the SDC credit agreement or MOU reviewed by other offices. The Contract Technical Services Unit should review the applicant’s construction costs using a copy of the signed plans. The Inspector General is to review any item that the WSSC project manager proposes which is contrary to subsections (g) and (h) of this section. Other appropriate WSSC offices should be consulted such as the Land Acquisition Unit for additional land acquisition costs and the Planning Group for planning costs.
(l) For qualified projects, the SEP or MOU agreements should indicate that the maintenance bond should remain in effect at least two years beyond the date of release for service for SEP projects or at least one year beyond the date of final acceptance for MOU projects. The applicant will submit a written request for audit to WSSC’s Inspector General after the qualified project built by the applicant has been released for service (pipelines) or finally accepted (facilities). Along with the request, the applicant must submit an itemized listing of eligible qualified project costs, incurred and paid, supporting the total amount of SDC credit claimed. It should be emphasized that the applicant should retain all the contracts, invoices and payments for the Inspector General to inspect and review to determine the SDC credits. The Inspector General will calculate administrative costs at five percent of the construction, design and other (geotechnical, permits, etc.) qualified project costs. The five percent calculation will not include WSSC costs or interest. If the requested amount exceeds five percent, supporting documentation is required to justify all costs.
(m) In compliance with Public Utilities Article, § 25-405(d), Annotated Code of Maryland, WSSC’s Inspector General shall review and approve the costs incurred by the applicant. The Inspector General will strive to initiate the audit within 90 days of the applicant’s request, if the request includes the required itemized cost listing. The Inspector General’s Report will be the formal document that communicates the final results of the audit to WSSC and the applicant. When an audit is complete, prior to the final Inspector General Report, the Inspector General will issue to the applicant an unsigned discussion draft to allow the applicant an opportunity to discuss with the Inspector General any concerns the applicant has with the proposed SDC credit. Subsequently, the Inspector General will issue to the applicant its final report on the SDC credit to be provided the applicant.
(n) SDC credits against an applicant’s SDC credit balance will be issued by WSSC upon receipt of a complete and fully executed credit voucher submitted at the time of plumbing permit application. The application must be made in connection with a qualified property served by the qualified project being built by the applicant. Also, the amount specified in the credit voucher shall not exceed the calculated SDC for plumbing fixtures covered by the permit application. Credit vouchers reflecting and specifying an amount in excess of calculated SDC for the requested permit will not be accepted. The plumbing permit will be issued after verification that a sufficient credit balance remains to cover the credit voucher amount. Insofar as possible, credit vouchers will be considered on a “first come – first served” basis. For a plumbing permit application accompanied by a credit voucher for which an applicant’s credit balance has been exhausted, the credit voucher and the associated application will be returned to the applicant. WSSC is not responsible for managing or assisting the applicant in managing the issuance of credit vouchers. Managing the issuance of credit vouchers is not an eligible cost of reimbursement.
(o) In the event an issued plumbing permit expires or is canceled by the owner or plumber, no SDC reimbursement to the applicant will be approved for that permit. In such cases, any credit voucher will be voided and the credit amount added to the applicant’s outstanding ledger balance.
(p) In conformance with subsection (s) of this section, SDC payments received in association with applications for plumbing permits for qualified properties will be identified as eligible for reimbursement (after the Inspector General’s Report has been completed – see subsection (m) of this section) to the applicant who has constructed the qualified projects serving those qualified properties.
(q) For those situations where more than one qualified project serves a qualified property, SDC reimbursement payments shall be made in proportional shares to the applicants who have built or funded the qualified projects. A proportional share is calculated based upon a qualified project’s actual eligible costs or funding expressed as a percentage of the sum of all actual eligible costs and/or funding of qualified projects serving the qualified property.
(r) At the conclusion of each calendar quarter, the Permit Services Unit will determine the total SDC receipts eligible for reimbursement made for each previously identified qualified property. Only those SDC receipts filed in association with plumbing permits under which all covered work has received an approved final inspection are eligible for reimbursement.
(s) Based upon the quarterly reconciliation, the Permit Services Unit will prepare and forward to the Accounting Group a payment request to be made to the appropriate applicant in an amount equal to the sum of qualifying SDC receipts not yet reimbursed, and a memorandum recommending reimbursement of SDC receipts and identifying the maximum amount recoverable. The memorandum shall be accompanied by a statement detailing eligible plumbing permits.
(t) Following review of the recommended reimbursement, the Accounting Group will forward the payment request and supporting documentation to the Disbursements Group which will issue payment to the applicant.
(u) When an applicant has designed and constructed a qualified project, the sum of SDC credits and reimbursements pursuant to this procedure will be made only to the maximum determined by the Inspector General’s Report and only to the applicant identified in the MOU or SEP.
(v) The applicant may issue credit vouchers to multiple builders to facilitate construction of residential or nonresidential structures within the qualified property and reimbursement of qualified project costs. If the applicant wishes to transfer its right and title to any remaining SDC credit from a qualified project, the applicant shall notify the Permit Services Unit of the requested transfer. Such notification shall be in writing and shall identify the single entity to receive the entire remaining balance of SDC credit from a qualified project. The Permit Services Unit will acknowledge the credit transfer and forward the written request for inclusion in the qualified project’s MOU or SEP as an amendment. Thereafter, all qualified property SDC credits or reimbursements will be issued to the last designated entity in the MOU or SEP as amended.
(w) Notwithstanding any other provision of this chapter, SDC credit or reimbursements for costs identified in subsection (d) of this section are limited to SDC transactions for qualified properties served by the qualified project within a 20-year period, or until the sum of credits and reimbursements equals the total approved SDC credit. The 20-year period will commence for SEP, MOU, or eligible funding projects on the day of release for service. At the conclusion of the 20-year period, the Permit Services Unit will close the SDC reimbursement ledger and will provide written notification of exhaustion or termination of the SDC credit to the last designated recipient. (Document dated July 1, 2020)