2009 07 14 - SSu
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CITY COUNCIL STUDY SESSION
July 14,2009
6 p.m.
Council Present: Ron Covey, Jim Liebrecht,Bill Ecret,Brent Reese,Jon Lane, DickDeane, and Richard
Pearce
The study session was called to discuss stormwater control.
The study session was adjourned at 7 p.m.
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K&LlGATES MEMORANDUM
TO:MayorJohnson
CityCouncil
FROM:Laura D.McAloon Q^—^—~~"
DATE:January 19,2009
RE:Validity ofstormwater fee structures
During theDecember 9,2008CityCouncil discussion ofthe proposed stormwater utility
ordinance andstaffs'recommendation foraproposed rate structure to fundthe activitiesofthe
stormwater utility,asuggestion was made toalso include undeveloped parcels intheschedule of
properties that will beassessed astormwater fee.When the revised ordinance was brought tothe
Council for adoption,this suggestion generated councilmember questions on thelegality of
assessingundeveloped parcels andarequestwasmadetodeferaction untilthe Councilcould
obtain advice from theCityAttorney.Letmeapologize for being unable toattend theJanuary
\;6th Council meeting,especially since my response to the stated concerns is fairly quick and
simple:There isnosignificant legal riskorconsequence to either including undeveloped parcels
inyour rate structure or leaving them out.The legal analysis ofthe validity ofPullman's utility
rate structure is separate anddistinctfromthepolicy decisionofwhoto assessandhow.
Under Washington law,when acityassesses users aregulatory fee such as a stormwater utility
fee,the guidingprinciple in establishing the feeis thatit must beset atalevel thatrecoversall of
thedirectand indirect costsassociated withthe activity,including administrative overhead.
However,if fees provide more revenue than isnecessary torecover thecosts oftheutility,they
then become more liketaxes,and cities need specific statutory authority tolevy taxes.
RCW 35.67.020 grants cities theauthority to impose stormwater utilityfees ("Everycity...has
fulljurisdiction andauthority tomanage,regulate,andcontrol [stormwater sewersystems]and,
...tojix,alter,regulate,andcontrol the rates andchargesfor their use,")and provides alist of
the criteria for the fees:
[T]he rates charged.,. mustbeuniformfor the sameclass ofcustomers orserviceand
facilities furnished.In classifying customers served orservice and facilities furnished by
suchsystem ofsewerage,thecity ortownlegislativebodymay initsdiscretionconsider
anyorall ofthe following factors:
(a)The difference incost ofserviceand facilitiesto the various customers;
)(b)The location of the various customers within and without the city or town;
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K&U GATES O
Memorandum
January 19,2009
Page4
structures and models.WhatI found was amultitude ofrate structures based on local policy
determinations ofwhat wasmostappropriate for the local area.Fundamentally,theCityneeds
tocollect sufficient fees to fund thecost ofproviding thestormwater system and regulatory
control ofthe citizens.There is great flexibility in designing rate structures and Isawexamples
ofWashington communities that included undeveloped property,excluded undeveloped
property,included residential property,excluded residential property,measured impervious
surface for all property,oronlymeasured theimpervious surface oflarge commercial parcels.
Some cities usedflat rates only,some used abase rate plus arate based on impervious surface
andsome used impervious surface formulas only.The NationalAssociation ofFloodand
Surfacewater Management webpage indicated asimilar variety ofrate methodologies
nationwide.
In short,thelegality of your sewerage system fees is based onwhether the fees are within your
legislative authority under Ch.35.67 RCWand whether thefee charged is designed to cover only
thecost ofproviding theservices.Because the fee is imposed under theCity's police power to
regulate the publichealthandsafety,thereis nospecialbenefit ornexusthatmust be
,demonstrated foreveryparcel ofproperty withinthe serviceareabecausethe stormwater
I /sewerage system providesabroadpublicbenefitto the entire area andbecause allresidents of
|\'the area contribute to the burden placed on the system.
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17035:11dm
cc:John Sherman
IC\17223UVX)0Ot\17O35_U»A17O3MC0EP
18 O
FAX FROM
{J MOSES LAKE TRUCK SALES
A division ofMoses Lake Auto Wrecking"
"SERVING THE COLUMBIA BASIN SINCE 1955"
P.O.BOX 1002
MOSES LAKE,WA.98837
OFFICE (509)764-2087 FAX (509)764-4243
Otherjurisdictions in Washington and other states have adopted programs that avoid illegal and
discriminatory impacts fromstormwaterutility assessments:
1.Special assessments are illegal unless they assess all similar property,both public and
private.Ifthe assessment is based solely on "impervious surfaces"the all owners of
property with impervious surfaces must be assessed.This includes more than just
churches,hospitals,and schools.Italso includes all city property,all state property,and
all public agency property.Indian tribe property and federal property may be exempt.
City and county streets and facilities are not exempt.State highways are not exempt
2. If the assessment is based on actual contribution to storm water,properties that treat
storm water orthat do not discharge storm water should beentitled toanexemption upto
100%as other jurisdictions have provided.Otherwise,there isno incentive to solve
storm water creation and discharge at the source.
^y1 3.If the assessment is based on "impervious surfaces,"other jurisdictions have a
differential rate based ondegree ofimpervious surface (a)asatotal ofthe entire parcel;
•and (b)based on whether the surfaceiscompletely impervious (roofs,concrete,asphalt)
or semi-pervious (like gravel or storm water retention swales).Without rational criteria
orincentives,landowners cannot invest inimprovements that actually solve the problem.
4.The maximum charge should be capped to avoid damaging impacts on businesses that
requiremoresurfaceareaper income.
Unless these problems are corrected,theordinance issubject tolegal challenge.
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