New York Codes, Rules and Regulations › Title 16 - DEPARTMENT OF PUBLIC SERVICE › Chapter V - WATERWORKS CORPORATIONS › Subchapter E - Uniform Systems Of Accounts › Article 1 - Classes A and B › Part 563 - Instructions-water Plant Accounts › Section 563.3 - Components of construction cost

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The cost of construction property
					 includible in the water plant accounts shall include, where applicable, the
					 direct and overhead costs as listed and defined hereunder:
(1) Contract work includes amounts paid for
					 work performed under contract by other companies, firms, or individuals, costs
					 incident to the award of such contracts, and the inspection of such
					 work.
(2) Labor includes the pay
					 and expenses of employees of the utility engaged on construction work, and
					 related workmen's compensation insurance, payroll taxes and similar items of
					 expense. It does not include the pay and expenses of employees which are
					 distributed to construction through clearing accounts nor the pay and expenses
					 included in other items hereunder.
(3) Materials and supplies includes the
					 purchase price at the point of free delivery plus customs duties, excise taxes,
					 the cost of inspection, loading and transportation, the related stores
					 expenses, and the cost of fabricated materials from the utility's shop. In
					 determining the cost of materials and supplies used for construction, proper
					 allowance shall be made for unused materials and suppies, for materials
					 recovered from temporary structures used in performing the work involved and
					 for discounts allowed and realized in the purchase of materials and supplies.
Note: The cost of individual items of equipment of small
						value (for example, $200 or less) or of short life, including small portable
						tools and implements, shall not be charged to water plant accounts unless the
						correctness of the accounting therefor is verified by current inventories. The
						cost shall be charged to the appropriate operating expense or clearing
						accounts, according to the use of such items, or, if such items are consumed
						directly in construction work, the cost shall be included as part of the cost
						of the construction.
(4)
					 Transportation includes the cost of transporting employees, materials and
					 supplies, tools, purchased equipment, and other work equipment (when not under
					 own power) to and from points of construction. It includes amounts paid to
					 others as well as the cost of operating the utility's own transportation
					 equipment. (See paragraph [5] of this subdivision.)
(5) Special machine service includes the cost
					 of labor (optional), materials and supplies, depreciation, and other expenses
					 incurred in the maintenance, operation and use of special machines, such as
					 steam shovels, pile drivers, derricks, ditchers, scrapers, material unloaders,
					 and other labor-saving machines; also expenditures for rental, maintenance and
					 operation of machines of others. It does not include the cost of small tools
					 and other individual items of small value or short life which are included in
					 the cost of materials and supplies. (See paragraph [3] of this subdivision.)
					 When a particular construction job requires the use for an extended period of
					 time of special machines, transportation or other equipment, the net book cost
					 thereof, less the appraised or salvage value at time of release from the job,
					 shall be included in the cost of construction.
(6) Shop service includes the proportion of
					 the expense of the utility's shop department assignable to construction work,
					 except that the cost of fabricated materials from the utility's shop shall be
					 included in "materials and supplies".
(7) Protection includes the cost of
					 protecting the utility's property from fire or other casualties and the cost of
					 preventing damages to others, or to the property of others, including payments
					 for discovery or extinguishment of fires, cost of apprehending and prosecuting
					 incendiaries, witness fees in relation thereto, amounts paid to municipalities
					 and others for fire protection, and other analogous items of expenditures in
					 connection with construction work.
(8) Injuries and damages includes
					 expenditures or losses in connection with the construction work on account of
					 injuries to persons and damages to the property of others; also the cost of
					 investigation of and defense against actions for such injuries and damages.
					 Insurance recovered or recoverable on account of compensation paid for injuries
					 to persons incident to construction shall be credited to the account or
					 accounts to which such compensation is charged. Insurance recovered or
					 recoverable on account of property damages incident to construction shall be
					 credited to the account or accounts charged with the cost of the
					 damages.
(9) Privileges and permits
					 includes payments for and expenses incurred in securing temporary privileges;
					 permits or rights in connection with construction work, such as for the use of
					 private or public property, streets or highways, but it does not include rents,
					 or amounts chargeable as franchises and consents, for which see account 302,
					 Franchises and Consents.
(10) Rents
					 includes amounts paid for the use of construction quarters and office space
					 occupied by construction forces, and amounts properly includible in
					 construction costs for such facilities jointly used.
(11) Engineering and supervision includes the
					 portion of the pay and expenses of engineers, surveyors, draftsmen, inspectors,
					 superintendents and their assistants applicable to construction work.
(12) General administration capitalized
					 includes the portion of the pay and expenses of the general officers and
					 administrative and general expenses applicable to construction work.
(13) Engineering services includes amounts
					 paid to other companies, firms or individuals engaged by the utility to plan,
					 design, prepare estimates, supervise, inspect, or give general advice and
					 assistance in connection with construction work.
(14) Insurance includes premiums paid or
					 amounts provided or reserved as self-insurance for the protection against loss
					 and damages in connection with construction, by fire or other casualty, injury
					 to or death of persons other than employees, damages to property of others,
					 defalcation of employees and agents, and the nonperformance of contractual
					 obligations of others. It does not include workers' compensation or similar
					 insurance on employees included as "labor" in paragraph (2) of this
					 subdivision.
(15) Law expenditures
					 includes the general law expenditures incurred in connection with construction
					 and the court and legal costs directly related thereto, other than law expenses
					 included in protection, paragraph (7) of this subdivision, and in injuries and
					 damages, paragraph (8) of this subdivision.
(16) Taxes includes taxes on physical
					 property (including land) during the period of construction and other taxes
					 properly includible in construction costs before the facilities become
					 available for service. The period for which taxes may be capitalized shall be
					 limited to the period of construction. (See provisions set forth in paragraph
					 [17] of this subdivision, Allowance for funds used during construction, which
					 may be applicable, as appropriate, to this paragraph.)
(17) Allowance for funds used during
					 construction.
(i) Allowance for funds used
					 during construction includes the net cost of borrowed funds used for
					 construction purposes and a reasonable rate upon the utility's own funds when
					 so used. No allowance-for-funds-used-during-construction charges shall be
					 included in these accounts upon expenditures for construction projects which
					 have been abandoned. Allowance for funds used during construction shall be
					 charged to the individual job upon which the funds are expended and shall be
					 credited to account 419.1, Allowance for Funds Used During
					 Construction.
(ii) The period for
					 which an allowance for funds used may be capitalized shall be limited to the
					 period of construction. The period of construction shall extend from the date
					 of commencement of construction to the time when property is ready for service,
					 and shall also include any reasonable and necessary period during which the
					 property is held for future service. No allowance for funds used should be
					 accrued during periods of interrupted construction, unless the company can
					 justify the interruption as being reasonable under the circumstances.
Note applicable to paragraphs (16) and (17 of this
						subdivision): When a part only of a plant or project is placed in operation or
						is completed and ready for service, but the construction work as a whole is
						incomplete, that part of the cost of property placed in operation, or ready for
						service, shall be treated as "Water Plant in Service", and allowance for funds
						used and taxes thereon as charges to construction shall cease. Allowance for
						funds used and taxes on that part of the cost of the plant which is incomplete
						may be continued as charges to construction until such time as it is placed in
						operation or is ready for service, except as limited by provisions of
						paragraphs (16) and (17) of this subdivision.
(18) Earnings and expenses during
					 construction includes:
(i) all revenues
					 derived during the construction period from property which is included in the
					 cost of a project under construction; and
(ii) all expenses which are attributable to
					 the revenues received.
(a) The earnings shall
					 include revenues received or earned for water produced by plants during the
					 construction period and sold or used by the utility. When such water is sold to
					 an independent purchaser before intermingling with water from other plants, the
					 credit shall consist of the selling price of the water. When the water from a
					 plant under construction is delivered to the utility's water system for
					 distribution and sale, or is delivered to an associated company, or is
					 delivered to and used by the utility for purposes other than distribution and
					 sale (for manufacturing or industrial use, for example), the credit shall be
					 the fair value of the water so delivered. The revenues shall also include
					 rentals for lands, buildings, etc., and miscellaneous receipts not properly
					 includible in other accounts.
(b)
					 The expenses shall consist of the cost of operating the water plant, and other
					 costs incident to the production and delivery of the water for which
					 construction is credited under clause (a) of this subparagraph, including the
					 cost of repairs and other expenses (but not taxes) of operating and maintaining
					 lands, buildings and other property, and other miscellaneous and like expenses
					 not properly includible in other accounts.