Stormwater utility rate increase fails its initial pass through

Newton City Council didn’t pass the first consideration of a proposed stormwater utility rate increase, which would have raised rates by 5 percent over five years. Doing so would have slightly raised resident water bills, but it would have also allowed the city to grow its funding stream for stormwater improvements.

Some council members disagreed over the five-year lock-in and what they deemed as high financial burdens for nonprofits, churches and businesses.

According to council agenda documents, the city provided elected officials seven options to choose from. One of the options was to eliminate the stormwater utility fee altogether, and another option was to make no changes. Other alternatives increased the rate ranging from the moderate to the extreme.

City of Newton recommended the most balanced option, which raises rates in a “reasonable manner” but still allows the city to address goals articulated in the Stormwater Capital Improvements Planning Study. The city stated it would also allow more Road Use Tax funds to be spent on streets.

Council member Randy Ervin was “adamantly against” the proposal to raise the rates. He is worried about the effect the proposed rate increase would have on businesses, churches and nonprofit organizations in town. Residential rates would see relatively minor increases, but larger properties will see more.

“The last time we put the implementation in I heard from several businesses in town, as well as my own church board of trustees going, ‘What are we doing?’ Because this is all based off square footage of land. A foot stamp, if you will,” Ervin said. “That foot stamp of our church is way bigger than our church.”

Ervin argued that basing the rates solely off square footage of a parcel is going to be detrimental. He also disagrees with the 5 percent increase per year, saying it is compounding the amount residents and business owners have to pay. While he believes the extra funding will no doubt help, Ervin feels it is overpriced.

However, it is important to note the rates are not just based on square footage. It is based on the impervious areas of a property: buildings, concrete, etc.

Council member Mark Hallam said he is not a fan of locking in future increases. Fellow council member Melissa Dalton asked if either Hallam or Ervin had any other options or solutions. Ervin said a raise is in order but 5 percent a year is not right. He also proposed the rate equation change for churches and businesses.

“We’re looking at the Mercedes Benz of projects here,” he said. “And I don’t think we need that. I don’t think that’s fair to the businesses or the nonprofits in town.”

Hallam said he would support 5 percent on the first ERU (equivalent residential unit) rate, but he also suggested the city should consider addressing the financial burden on larger properties. Council member Stacy Simbro argued the council owes it to its citizens to mitigate sewer backups during heavy rains or floods.

“I’m not anti-business, but if you have a huge parking lot, that’s the cost of business,” Simbro said. “The water runs off on pavement …If I live next to a huge business that has a parking lot and all that stormwater runs in the storm sewer right next to me and it comes into my basement? That’s a problem for me.”

Simbro also did not like the idea of passing off giving businesses a break when all of the residents have been asked to pay a 5 percent increase. He also said a year-over-year increase, while compounding, is an easier pill to swallow than a massive jump. But he did see the validity in the argument for nonprofits.

Newton Mayor Evelyn George suggested nonprofits, governments and schools do have some other perks that may offset the stormwater fees, like the ability of not paying property taxes. Council member Joel Mills said the stormwater issues are a problem that should have been addressed many years ago.

“If we’re not going to invest in these things we’re just going to have more people showing up that have flooded basements — including me,” Mills said. “…We have to be responsible with these things and we have to be responsible with our ask of our fellow citizens.”

Mills also referenced data that Newton’s minimum stormwater fees are almost half of what similarly sized communities are paying.

Joe Grife, director of public works, also noted that there is not an unlimited amount of ERUs that a business can attain. There is a cap in order to avoid excessively high bills. Grife said commercial properties and exempt properties are charged the full price for the first 20 ERUs, after that they get a discount.

“For a commercial property or an exempt property, the absolute max they would be charged right now is, at the $4.50, about $180 per month,” Grife said.

Grife also clarified every single residential property is based on one ERU.

Hallam again reiterated his main concern is locking the city in for rate increases for the next five years. Mills is also concerned about that, but only because he does not feel it is enough. Newton City Administrator Matt Muckler said a five-year lock-in does grant the city more stability when it comes to budgeting.

Still, Ervin pushed back on that rationale, saying the city would not be expecting any less revenue from the funding stream and thus it would not affect planning.

“I’m still a strong no on this,” Ervin said.

Hallam did propose an amendment to approve the five percent raise but not lock in the subsequent raises the following years. It would have been revisited the following year. But the matter ended in a 3-3 vote and failed. Ervin, Hallam and Vicki Wade voted yes. Simbro, Mills and Dalton voted no.

The vote to pass the first consideration and approve a 5 percent increase over the next five years ended the same way, 3-3, which means it failed. But staff can make changes and present a new recommendation to city council.