Discussion continues on proposed new storm water fee

Talk about it

Residents and business owners got the chance to question city officials and discuss a proposed storm water utility fee at an Operations Committee meeting last week.

Some expressed their fear that the fee could start a snowball effect, with the city coming up with more fees for other things. Others questioned the city’s basic reasoning for attempting to impose the fee, and said if they, as business owners, were faced with a drop in revenue and an increase in the cost of doing business (as the city is), they wouldn’t be able to pass on a price increase or extra fee to their customers.

Operations Committee Member and Council Member Danna Elling Schultz said if the fee isn’t approved, the city is going to have to cut the 2010 budget by about $233,000 to keep the basic operations of storm water management on track, and that the cut will mean a loss of some city services.

The proposed fee would take in about $467,000 a year and that revenue stream has already been factored into the city’s 2010 budget. The money would go into a dedicated fund for storm water management and wouldn’t be spent on anything else.

Of that total amount, about half, $233,000, goes to the basic, day-to-day operations of storm water management. The city has to have that money to maintain the system and manage storm water, Elling Schultz said.

The rest is $175,000 for equipment purchases and $59,000 for studies and work on storm water permits and requirements from the state and federal governments.

After cutting $1.8 million out of the city’s $25.1 million 2010 budget, Elling Schultz said finding $233,000 worth of things to take out will mean cuts to city services.

“We will have to make big cuts if we have to go forward without this, and it will hurt,” she said.

Still, it’s hard to generate sympathy over cutting a budget from a room full of business owners who have had to do just that in the face of a bad economy.

“It’s a tough pill to swallow when we have the same problems,” said one business owner from the industrial park.

Hastings Ford and Hastings Chrysler owner Doug Erickson said he understands the city’s position and the need to pay for new, unfunded government mandates on storm water management. But he compared the city to his businesses in saying everyone has mandates from the government, and he can’t tack an extra fee onto the cost of a car because of them.

“Revenues are down, well guess what? Welcome to the real world, so are ours,” he said.

Currently storm water management is funded out of a combination of general fund dollars and bonded debt. The reason the city didn’t simply raise taxes across the board to generate the money it needs for storm water is a desire for transparency, said Todd Humber of WSB and Associates, the consulting firm working with the city on the fee.

“I think it’s important that the process be as open as possible,” he said.

With a storm water fee, the money goes into a dedicated fund that can’t be spent on anything else, and the records of the fund are public information, which people are free to request at city hall. As it’s structured today, 65 percent of the money generated from the fee would come from residential properties, and about 30 percent from commercial and industrial properties.

Aside from the transparency issue, the city also has a goal of reducing the amount of debt it takes on. Today, when the Public Works Department needs to buy a new street sweeper, it does so by selling bonds and going into debt. That means it’s also paying for the interest on that debt, on top of the cost of the street sweeper.

If the storm water utility fee is enacted, part of the fee would go into a savings account for those types of big ticket purchases, and then when the city needs a new street sweeper, it doesn’t have to take on more debt to buy it.

The Operations Committee will meet on the issue again sometime after Jan. 1 and before the scheduled public hearing and council vote on the storm water utility fee Jan. 19. The exact date and time of that meeting has yet to be scheduled.

Tags: local news, local government, storm water, news, hastings