N.Y. Comp. Codes R. & Regs. tit. 16 § 501.8
An applicant who cannot qualify as a reasonably permanent customer may be required to deposit the entire cost of the main extension and installed services with the water-works corporation. The portion of the deposit related to the length of main extension within the specified distance, as set forth in section 501.4(d) of this Part, and the cost of the service, hydrants and accessories shall be refunded without interest within 30 days of the applicant taking service and demonstrating reasonable permanency. For developers who are subdividing or preparing real estate for residential or commercial occupancy, who require the installation of utility plant in advance of occupancy, the waterworks corporation may retain as a deposit the cost of the entire extension, subject to annual refunds without interest determined as the proportion of the number of customers connected to the extension that year multiplied by the distance specified in section 501.4(d) of this Part, related to the total extension length. No further refunds will be made after five years after the date construction of the extension is completed and approved or after the total of all refunds equals the amount of the deposit.
N.Y. Comp. Codes R. & Regs. Tit. 16 § 501.8