Storm Water Fee a Backdoor Tax

In 2010, a citizen’s committee was convened by the mayor and City Council to study and recommend a fee to offset the costs associated with the city having to pay for various studies and actions concerning storm water runoff.

These “unfunded mandates” come from agencies of the state and federal governments. These are requirements that the city must undertake for which no money is provided to pay for these actions. The city has to come up with the money to do the studies and/or take the actions required.

In July, the City Council voted to approve a “storm water utility." This new fee is to pay for these mandates regarding storm water issues.

Literature put out by the city at the Town Hall meeting last spring listed a number of tasks that this fee would pay for, most of which are already being paid for as part of the city’s ongoing maintenance of drains, streets and sewers. One example from one of the pamphlets: “Roadside and trail litter pickup."

No fee amount was approved in July. Why? At the Aug. 15 council meeting, the mayor and council decided to table the fee amount until their regular council meeting on Nov. 7. Why? They said they needed time to allow the mayor and council to educate the citizens of Powder Springs about the need for and amount of the "storm water utility."

At least one council member expressed concern at the Aug. 10 work session that the public might perceive the "storm water utility" as a tax.

Could the mayor and at-large council members’ election on Nov. 8 have anything to do with this delay? Looking at the calendar of events on the city’s website shows no scheduled educational meetings regarding the "storm water utility," even though Nov. 7 is fast approaching.

The last discussion of the fee amount (at the August council meeting) indicated the council was leaning toward assessing a minimum beginning fee of $2 monthly per residential property. The fee would be higher for commercial and others and would be paid annually with the property owner’s city taxes.

This would yield approximately $236,000 per year from about 6,100 properties in the city, including churches and others who do not ordinarily pay property taxes.

This fee would then be increased by fifty cents each year until a final fee of $4 is reached for residential properties, bringing in substantially over $300,000 annually at that time. (For a video of the Aug. 10 council work session, click here and go to Part 3 beginning at 12:29. The Aug. 15 council meeting begins at 13:30.)

In the fiscal year that ended on June 30, the city paid $83,191 in “stormwater management” expenses. (Source: City of Powder Springs Statement of Revenue and Expenditures dated Sept. 2).

The fiscal year 2012 budget shows only $51,000 budgeted for “Storm Water Management” expenses for the period from July 1, 2011 through June 30, 2012. (Source: General Fund Budget Worksheet 2012 dated June 26).

Why will $236,000 be collected if only $51,000 is required? The difference appears to be an additional tax, not a fee as it is being called. A fee is to pay for an actual expense or use.

Anything collected above the actual expense is a “backdoor” tax. Any shifting of expense items from other general fund categories to “Stormwater Management” merely to have them paid by the tax is hiding the real cost.

I think few property owners would object to paying for the cost of these “unfunded mandates,” but anything above what is needed should be called a tax and dealt with accordingly. Calling the money collected from property owners a utility, a fee, or any other name is immaterial.

It is what it is, a tax, even if it is accounted for separately from general funds or placed in an enterprise fund, such as water and sewer revenues, which are fees for usage. Again, why is more than four times the budgeted amount being collected from Powder Springs property owners?

Finally, if this issue is such a crisis of the budget, why was there a delay from July, when the ordinance was passed, until November to decide the dollar amount, thereby delaying actual collection?

It is too late to add any fees to this year’s property tax bills, which are due to be mailed in October. Since most people’s property taxes are escrowed into their mortgage payments and their mortgage company pays the taxes to the city, this will result in the money collected being “hidden” in their house payment.

The current plan, as reported by the September issue of the Powder Springs Messenger, is to send out the bill for 2012 in December, which will add one more bill due after the holidays. Merry Christmas, Powder Springs.

There are still many unanswered questions. I’m looking forward to the “education’’ meeting(s) that the mayor promised.

—Ra Barr, Powder Springs