System Development Fees
Purpose and Statement
The North Carolina General Assembly passed House Bill 436 in July 2017, amending Chapter 162A of the General Statutes by adding “Article 8, System Development Fees.” This amendment was enacted as “An Act to Provide for Uniform Authority to Implement System Development Fees for Public Water and Sewer Systems in North Carolina and to clarify the Applicable Statute of Limitations” which requires compliance with designated calculation methodology.
Through House Bill 436 (HB 436), the General Assembly of North Carolina established a uniform approach and associated methodology required for local governmental units to calculate and implement System Development Fees (SDF) for public water and sewer systems.
What are System Development Fees?
System Development Fees are are charges imposed on new customers or development to offset the incremental cost of capital facilities needed to provide adequate system capacity to serve the additional demand created by that growth. Since water system capacity must, without exception, exceed customer demands, the major infrastructure components providing this capacity, such as water treatment plants, reservoirs, wells, pump stations, etc., must be planned and constructed well in advance and in large enough increments to keep pace with anticipated demand on the available system capacity.
It is important to note that these fees do NOT apply to existing connections. System development fees will only be applied to new development connecting to public water and sewer lines. Current rates for water and sewer will not be affected by these fees.
More Information
The Town of Liberty retained McGill Associates (McGill) to complete a system development fee analysis. In doing so, McGill reviewed the town's existing system capacity and planned capital improvements to expand capacity to determine the development fee rate. McGill Associates is qualified in enginnering disciplines and financial analysis and has the expertise and experience to determine system development fees. McGill has prepared a report of their findings which may be downloaded below.
Public Presentations and Public Hearings Notice
McGill Associates presented the System Development Fee Study Findings to the Liberty Town Council at the regularly scheduled Town Council Meeting on Monday, November 17, 2025 at 5:30PM in the council room of Town Hall located at 239 S Fayetteville St., Liberty, NC 27298.
Public Comment
Public comments were solicited via this website, the Liberty Leader newspaper, and on social media for 45 days and encouraged during the public hearing held on November 17, 2025 regarding implementation of these fees.
Calculating and Paying Fees
System Development Fees are calculated based on the calculated (GPD) gallons per day flow rate of the anticipated use or increase in use of the proposed structure. Flow rates shall be determined in accordance with the flow rates established in the North Carolina Administrative Code, 15A NCAC 2T.0114 and 15A NCAC 18C.0409 as such may be amended from time to time. A licensed professional engineer is required to calculate flow rates for other uses not included within the North Carolina Administrative Code. The Town of Liberty shall not incur any expense associated with this requirement.
Fees are collected through the billing office located at 126 S. Fayetteville St., Liberty, NC 27298.
When are Fees Assessed and Collected?
For larger-scale nonresidential additions and major subdivisions, System Development Fees are assessed at the time of site plan review. However, fees are collected upon issuance of the Zoning Compliance Permit. Because collection occurs at permit issuance, the final amount due is subject to the fee schedule in effect at that time.
Smaller-scale projects, including single-unit additions, are both assessed and collected at the time the Zoning Compliance Permit is issued.