Monday, October 31, 2005

Storm Sewers, Water Quality, etc.

One of the reasons I've not spoken much about the new stormwater interim impact fees is that it's a no-brainer. That is, there's practically no debate among reasonable people that New Albany is faced with an absolute, non-negotiable mandate to institute a 5-year water quality improvement regime.

Remarkably, the same council faction that has been crying "the sky is falling" all year has now come out in favor of paying these expenses out of the general fund, for Pete's sake.

Under professional guidance, the advisory committee made up of regular citizens has recommended a rate to fund stormwater management and the Rule 13 mandate. Beginning in 2006, there will be three rates - $3 a month (for most residential lots), $15 a month (for most commercial lots), and $60 a month (for large industrial and institutional lots, and presumably large shopping developments, although that is not clear).

Granted, a minority of those advisors has been very vocal in opposition, but not very persuasive. I will acknowledge that that minority has spent much time studying the issues, but then so has the majority.

What would the interim fee pay for?

First is the development and implementation of a five-year plan to get a handle on unmanaged storm runoff, point source stream pollution, and non-point source waterway pollution. The city must submit a viable plan by Spring or it will face serious fines from environmental regulators. That's not a job for amateur sleuths. Perhaps much of the aerial photography and topographical mapping has been done. Perhaps the current plat maps will speed the process. But it may also be that the city will have to institute a global GIS software system almost immediately.

Whatever the hurdles to be faced early, the cost over five years for this mandate will be roughly $180,000 a year. No one disputes this figure.

Second is the ongoing maintenance and emergency response now provided by a team of fewer than ten workers. Those costs, and the attendant payroll costs, have until now been paid from the Sewer Board fund, and total something like $450,000 a year. Maintaining a decaying underground system is costly, but no one disputes that this expenditure is necessary.

Third is planned infrastructure upgrades. These are discretionary, in the rawest sense, but deferring these upgrades would be foolish. Some estimate that New Albany needs to invest $500,000 a year in modernizing the underground storm sewers, but it's clear that there is neither the money nor the will to undertake such an ambitious program. It's likely that the annual investment there will be between $100,000 and $200,000, and probably closer to the lower figure.

So when someone tells you that you are being "lied to," that there is only a need for $180,000 a year, remember that the interim user fee is designed to fund ALL stormwater management.

But isn't this a rate increase?

Yes, it is. And it's more than just for the new water quality management mandate.

Remember, the Sewer Board has been carrying (quite logically, to my mind, but reasonable people can disagree) the costs of drainage management. The Sewer Board is reclaiming that money. It will no longer be available from sewer revenues.

In a way, the new user fee is a backdoor increase in our sewer rates. The costs of managing the sanitary sewer operation have gone up, and that board is doing everything in its power to keep from raising that rate. But they are firm about dumping the responsibility for drainage (and sanitation) back onto the city proper.

Here, I think, is the logic of Mr. Kochert and Co. Sewer rates are based on water usage, or more properly, sewer usage. My store, for example, is unlikely to ever be charged more than the minimum sewer charge - we simply don't run a lot of water through the system. On the other hand, our entire property consists of either roof or pavement, and rain that falls on our property has nothing to do with how much water we run through the pipes.

Accordingly, to be equitable, a system must be devised to apportion the costs of stormwater management according to the impact. In addition, as a commercial property, it's of added importance that we have surface roads available so that visitors can get to us. The biggest drainage impact comes from roads, so commercial and industrial entities that survive only because of those roads will pay a higher rate than mere residential properties.

Given enough time and cooperation, a perfect system could be devised to measure actual and potential impact. In the meantime, a rough but fair impact fee is being proposed. It compares favorably with the impact fees charged by other Indiana municipalities who have addressed the issue. It is under no stretch of the imagination a money-grab.

The plan to be developed over the next 6-12 months will spread the costs equitably. That is the primary charge of the citizen advisory committee - to sit through those long meetings listening to dry technical matters and come up with a recommendation for a fee system beyond the interim. Council is demanding a tight deadline be met to spread those costs equitably, so let's hope the Council will help, not hinder the process.

Why can't this be paid from property taxes or EDIT taxes?

Well, it's not a tax. Water quality impact is only marginally related to property values. It's not related to income at all.

But can't it be "tacked on" to the property tax bill?

Sure. Not right away, but it could be set up in 2007 as a property-specific charge, and it is believed that it can be taken from the first dollar paid on that bill, making the possibility of delinquencies much less likely. But in the meantime, funding must be made available. We can't just stop working on the system until the property tax bills are paid. And there will be a transition period where, if the add-on to the water bill is dropped, the city might have to borrow money while waiting for funds from the treasurer.

I've not heard of anyone who is opposed to levying delinquent fees on the top of the semi-annual property tax bill, either.

Why create a new board to oversee water quality?

The mayor has stated his belief that the existing sewer board should be the body that oversees stormwater management. His colleagues on that board disagree. Someone will have to serve as a board of directors here. It won't operate itself.

What about tax-increment financing money? Why not use that instead of apportioning the costs by impact?

One reason. There is no such thing as TIF money. TIF is not a big pile of money that can be used for anything, anytime. TIF areas are created as special taxing districts where improvements are desired. As development takes place in the area, the taxes derived from the added value are dedicated to paying off bonds. Those bonds are issued for such things as infrastructure improvements. In theory, that COULD include drainage channels, aboveground or underground, but diverting that TIF money to drainage would simply leave other improvements unfunded.

What's the bottom line?

Yuck. More money coming out of my family's pocket. During the interim period, our commercial property is getting screwed. Indeed, my 3,000 s.f. store is likely to be paying the same rate as stores 30 and 40 times larger (not to mention the disparity in parking lot space). I say, give the professionals and the advisory committee every resource they need to implement an impact fee that's fair. Don't issue a dare to the regulators by delaying the creation of a 5-year plan. Don't bitch about funding stormwater operations from this fee.

How about Wednesday's vote?

Vote yes. Put the interim fee on the Indiana American Water bill so we don't just stop managing the drainage problems. Don't put the city at risk of more environmental fines.

Bonus consideration

A few have actually suggested the stormwater operations be funded out of property taxes. Is there a secret agenda at work here? Who pays property taxes? More importantly, who doesn't?

An impact fee based on actual contributions to stormwater runoff volume would capture the costs generated by the institutional property owners who are already exempt from property taxes. How much land (and impervious surfaces) would escape paying their share of the costs? The school system. Some non-profits. Property-holding churches, particularly the mega-churches that are starting to resemble theme parks. Private schools. Floyd County. Under the user fee, no property is exempt. But as a property tax, many high-impact properties would escape paying their fair share.

The equities here are certainly debatable, but let's do that some other time. Just consider a church like Southeast Christian in Kentucky, a church that operates businesses and owns properties that are being subsidized by the taxpayers of Jefferson County. At what point does being a church give you license to take money and services from those around you, especially those who don't share your particular brand of worship?


Blogger ceece said...

so, ok maybe the reason that I have been having so much trouble figuring out why people are crying over this is due to exactly what you stated in the first paragaph of this post.

here are my questions, and answers will be helpful.

This is a state-mandated program, correct?

The most feasable solution is a fee per month of $3.00?

Some people want to take the money from other areas on the county (or city?) budget and use that money to pay for it?

MOney that is already marked for other items such as scribner place, salaries, etc?

Some people want to take these funds to pay for this and the sanitation department?

Thanks and pardon my ignorance.

Tuesday, November 01, 2005 10:10:00 AM  
Blogger Tim Deatrick said...

very well stated Randy and this ordinance will pass despite the obstructionism of the gang of Four and fellow committee member Yvonne Kersey, who for the record endorsed this ordinance with a show of hands at our meeting previously two weeks ago.

Also for the record the committee did not endorse the TIF option, a non-option.

To answer your question Ceece, yes this is a federal mandate and is enforced per IDEM and for the iterim a $3.00 per resident fee is quite the norm nationwide.

The Gang of four led by Coffey and Schmidt with backing form Kochert have turned this into a political agenda and that is just plain wrong and irresponsible on thier part, actually its pathetic and I will have something to say about that at the council meeting wed. night assuming the public can speak.

By the way Randy, I think you should ask the Mayor to sit on this committee we could use you

Tuesday, November 01, 2005 11:53:00 AM  

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