Paying For Rain: The Details

With the creation of a new stormwater authority, a city worker will check out your house via satellite — to see how big a bill you should receive.

That’s part of how a controversial new plan would work to separate out how New Haveners pay for storm run-off—and to have not-for-profits like Yale start sharing in the cost.

City officials Wednesday night offered some details of how that plan (first reported here) would work in practice. The preview came in an informal question-and-answer session with aldermen at City Hall.

The plan is part of a larger rethinking of how New Haven does government business as it confronts a budget crisis.

If aldermen approve the plan, the city would create a fund with the power to bill property owners for their share of water removal costs. That would be a change from the current system, in which stormwater removal is paid for only through the larger pool property taxes collected by New Haven; that means owners of tax-exempt property pay nothing for the city’s stormwater system. Under the new plan, homeowners would pay less than a quarter of the cost of the city’s bill for stormwater removal.

The plan was submitted last month to the Board of Aldermen, which will consider the plan on Jan. 20, in advance of a final vote in February.

Based on Wednesday night’s discussion, here’s a summarized Q&A to explain how the plan would work.

What exactly are we talking about here? Why do we pay for water falling from the sky?

Every time it rains (or snows and melts), water runs off all the impermeable surfaces in the city. That water is collected in storm drains. It eventually ends up in the Long Island Sound or other bodies of water. It costs money to maintain that drainage system and make sure it meets all federal and state environmental regulations. The city pays for it with taxpayer dollars.

Other cities, those with stormwater authorities, pay for stormwater removal through fees.

Stormwater authorities are a common feature of many cities, city Chief Administrative Officer Rob Smuts told the aldermen Wednesday night. Over 300 municipalities have them—including Portland, Seattle, Philadelphia, Charlotte, and Des Moines—but no towns yet in Connecticut. The budget crises currently hitting American cities has led more of them to consider the idea.

Who would run this new thing?

Stormwater authorities come in several flavors. They can be independent corporate entities like New Haven’s parking authority or regional authorities (like the water pollution control agency).

The plan for New Haven is for an ​“Enterprise Fund” authority. The authority would have its own board of directors. But the Board of Aldermen would ultimately retain control and would have final say on the budget and fees. All meetings of the authority’s board would be open to the public.

Smuts said the new authority would likely be headed by himself or City Engineer Dick Miller. It would require no new hires, he said.

Ultimately, the authority could become an independent corporate entity, but the city doesn’t want to rush into that without proving that it can be sustainable, Smuts said.

How’s it all going to work? What’ll it cost?

Initially, the stormwater authority represents only a change in how stormwater removal is paid for, not in services, Smuts said.

The authority would evaluate residential properties for their impermeable surface area — that is, how much of the property creates stormwater runoff instead of absorbing water. That evaluation would be done through satellite imagery and site inspections. The authority would then calculate an average rate for residential properties, called the ​“Equivalent Residential Unit,” or ERU.

Other properties — including commercial, not-for-profit, and other educational properties — would be measured separately, via satellite and in person, then converted to ERUs. Property owners would pay based on how many ERUs they have, at a rate of $40 to $50 per ERU, Smuts said.

Property owners would get an annual bill from the stormwater authority, probably as another line on the Water Pollution Control Authority bill.

So now people would pay a new fee for something they’re already paying taxes for? How about lowering taxes, then?

That was West Rock Alderman Darnell Goldson’s question.

“It depends on what you guys [aldermen] decide to do,” Smuts replied. ​“That’s the budget discussion.”

Aldermen have final say over the city budget and can decide to reduce taxes if they wish, he said.

Smuts said paying for stormwater removal through fees and an authority would likely free up $2.4 million from the general fund. At the request of Hill Alderman Jorge Perez (pictured), Smuts promised to provide aldermen with a close accounting of how that figure was calculated.

After the briefing, Perez said that if the stormwater authority is approved and city property owners don’t see their tax burden reduced by $2.4 million, they could legitimately complain they are being double-billed.

For his part, Smuts told aldermen that he will be making bigger cuts than that out of the departments that he oversees in the next fiscal year. ​“I’m cutting significantly more than $2.4 million out of my budgets.”

Would there be a way to reduce one’s stormwater fee?

Yes. Property owners could receive credits for efforts to mitigate water run-off. For instance, a homeowner could collect rainwater from roof gutters in barrels and use it later to water his lawn, instead of having it all wash down the storm drain. Such a homeowner would qualify for a reduction in the stormwater fee, Smuts said.

But you can’t credit yourself down to zero; everybody has to pay something, Smuts said. That’s because property owners are paying for the collective benefit of having water removed from city streets, he said. It’s an argument that has significant case law behind it, he said.

If you put in raincbarrels and then feel that you haven’t received the credit you deserve, there will be an appeals process, Smuts promised.

Why should the city do this anyway?

Smuts offered several reasons, based on environmental, financial, and equity concerns.

Residential taxpayers currently pay 59 percent of the cost of stormwater removal, Smuts said. If a fee structure is implemented, that would go down to 23 percent, he said.

“The concept is to tie the costs with who’s using the service,” Smuts said.

In terms of the environment, the city faces significant and increasing stormwater mandates from the Environmental Protection Agency and the Department of Environmental Protection, Smuts said. Regulations require the city to ensure that water saturated with engine oil and salt from roads and parking lots isn’t being flushed into the Long Island Sound and other waterways. Meeting those mandates does and will require expensive infrastructure, Smuts said.

The environmental mandates can also be met by reducing stormwater run-off, an effort that would also be assisted by creating an authority, Smuts said. A new use-based fee structure would ​“incentivize good behavior,” he said.

Smuts offered a personal example. ​“I have a two-family house,” he said. He said he has tenants on his first floor, and, as any landlord knows, tenants will conserve energy if they are asked to pay separately for heat and rent, he said. ​“If it’s inclusive, people don’t think about cranking up the heat.”

Similarly, a fee based on surface area will encourage property owners to mitigate their water run-off, Smuts said.

Why shouldn’t we do it?

Goldson offered a possible answer to that question. In addition to his concern about adding a fee on top of existing taxes, without an equivalent decrease in taxes, Goldson said he has concerns that creating a stormwater authority opens up a new avenue for the city to impose fees, and while those fees might be modest the first year, they might quickly increase.

“It happens all the time,” he said. The city has a knack for finding new things to charge for, he said.

Goldson said he hasn’t decided whether to support or oppose the authority plan. He said he might push to add conditions to approval that could limit fee increases.

What’s the timeframe on all this?

Smuts said he plans to hold at least one informational briefing for aldermen before the board meets as a committee-of-the-whole on Jan. 20. The committee will decide whether to recommend the plan for a vote, which would likely happen in February. The authority would then establish methods, fees, credits, and a budget, which would be reviewed and approved by the Board of Aldermen’s Finance Committee. The authority could then start collecting fees for fiscal year 2011 – 2012, which begins in July.