The cost of building infrastructure for fiber to the home is a financial investment, and KPUD understands that this investment can create a burdensome obligation for some. For this reason, KPUD establishes local utility districts (LUD) to collect the financial assessment for the fiber infrastructure over a 20-year term. This financing makes it possible for many homeowners to bring fiber internet service to their home. Financing is not required; homeowners also have the option of remitting full payment for costs once the financial assessment is finalized.
The LUD Process
Local utility districts (LUD) are generally finalized twice a year (June/July and December/January) for large-scale fiber projects (usually 15 or more homes). KPUD creates a boundary that identifies which homes will benefit from the fiber infrastructure project, and then the total construction costs are divided equally between participating homes.
The LUD finances the construction costs for building fiber to the home. The LUD process places a lien against the property where the fiber infrastructure is built, and the costs are repaid on an annual basis through the Kitsap County Treasurer’s Office. Based on the current interest rates at the time of the finalization of the LUD, an interest rate is applied to the financial assessment. The LUD annual invoice is billed separately from the property taxes, and there is no penalty for early payment.
Homeowners are billed by the Kitsap County Treasurer’s Office after the LUD has been finalized. After finalization, the homeowner has the option to pay the full assessment to the Kitsap County Treasurer’s office prior to interest and final lien being applied.
Small-scale projects or individual homeowners who want to participate in an LUD, can do this through a non-contiguous local utility district.
The NCLUD Process
The non-contiguous local utility district (NCLUD) process parallels the LUD process, but is for projects that build to 14 homes or less. In the NCLUD process, participating homeowners are required to sign a notarized contract committing to their participation in the fiber infrastructure project. Entering into the contract does not require any upfront payment.