Utility Company Reimbursements

New development projects usually require costly tie-ins to utility services. In areas that are served by investor-owned utilities (as opposed to municipal utility districts), certain costs advanced by the developer are subject to reimbursement.

Neptune Company has developed significant expertise in purchasing the following forms of utility reimbursements:

Water Utilities

These reimbursement agreements usually reimburse the amount advanced by the developer from a percentage of gross utility service revenues, or fixed payments over terms of 40 years without interest. These facilities include:

· Water main extensions
· Well, pump, and storage facilities
· Backbone distribution infrastructure

Electrical & Gas Utilities

The reimbursements generally have 10-year terms that make reimbursement payments on a pro-rata basis as lots are sold, and the utility gains bonafide customers. Electrical reimbursement agreements include a depreciation factor that offsets the amount subject to reimbursement annually.

Utility Company Reimbursements