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HomeMy WebLinkAboutR-2011-050 Stormwater User's Fees for Church on the Move Property - Set Hearing Date RESOLUTION NO. R- 2011 -50 A RESOLUTION setting April 19, 2011 as hearing date before the City Council, regarding appeal of Church on the Move of stormwater user's fees assessed on church properties. WHEREAS, the City of Yakima has received a written appeal from Church on the Move, 3414 Tieton Drive, Yakima, Washington, seeking appeal of stormwater utility user's fees billed and assessed to the church for the church's four parcels of developed nonresidential land; and WHEREAS, YMC 7.80.150 provides that the appeal be heard by the City Council; and WHEREAS, the City Council has determined that the hearing of such appeal should be set to occur on April 19, 2011, the next regular council meeting, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: 1. The hearing of the appeal of Church on the Move regarding the assessment of Stormwater User's Fees on such church's property is set for April 19, 2011. 2. Such hearing shall be a quasi-judicial hearing, and the City Council hearing such appeal may consider the record, together with evidence and testimony presented at such hearing. ADOPTED BY THE CITY COUNCIL this 5 day of April, 2011. .„Ji Micah Cawley, ayor ATTEST: 6' e `" . ) City Cler BUSINESS OF THE CITY COUNCIL ® YAKIMA, WASHINGTON AGENDA STATEMENT Item No. (2 -- For Meeting Of April 5, 2011 ITEM TITLE: Consideration of a Resolution setting April 19, 2011 as the date for hearing of an appeal by Church on the Move regarding assessment of Stormwater User's Fees. SUBMITTED BY: Jeff Cutter, City Attorney CONTACT PERSON/TELEPHONE: Mark Kunkler, Senior Assistant City Attorney — 575 -6030 SUMMARY EXPLANATION: Church on the Move has filed an appeal to the City Council regarding the 2011 ` assessment of Stormwater User's Fees on its property. Under Chapter 7.80 YMC, an appeal of any fee assessed under the stormwater utility is heard by the City Council in a quasi - judicial hearing. Resolution X Ordinance Contract Other(Specify) Contract Mail to (name and address): Phone: Funding Source APPROVED FOR SUBMITTAL: .y Manager STAFF RECOMMENDATION: Set April 19, 2011 as date of appeal hearing. BOARD /COMMISSION /COMMITTEE RECOMMENDATION: COUNCIL ACTION: • CITY OF YAKIMA 0 LEGAL DEPARTMENT 200 South Third Street, Yakima, Washington 98901 009)575-6030 Fax (509)5756160 MEMORANDUM March 16, 2011 TO: Honorable Mayor and City Council Richard A Zais, Jr., City Manager FROM: Mark Kunkler, Senior Assistant City Attorney SUBJECT: Appeal of Stormwater User Fees — Church on the Move Church on the Move, 3414 Tieton Drive, Yakima, Washington, has filed an appeal of • the Stormwater User Fee Assessment for the church property. The appeal is dated March 1, 2011 and was received by the City Clerk on March 15, 2011. Summary of Issues: Church on the Move raises three contentions: (a) Church on the Move should be exempt from the Stormwater utility fee because, as a church, it is exempt from taxation, and the Stormwater utility fee is a "tax" billed through the Yakima County Property Tax and Assessment Statement. (b) The City's Stormwater Utility Code (Chapter 7.80 YMC) states that the "property tax payer" is responsible for payment of the Stormwater utility fee. Church on the Move is exempt from taxation and, thus, is not a "property tax payer." Not being a "property tax payer," it is exempt under the Code. (c) Church on the Move is not seeking an "adjustment" or "waiver" of the Stormwater Utility Fees the church contends that Chapter 7.80 YMC "does not address Non - Property Tax Payers in any way," and, as a result, the church's parcels "are excluded by the language of the statute itself from further encumbrances." Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 2 Summary Responses: (a) The fees assessed pursuant to the City's Stormwater Utility Code (Chapter 7.80 YMC) are "utility fees" and not "taxes." The use of the Yakima County billing system for billing and collection of utility fees does not convert the utility fee into a "tax." (b) Under the Stormwater Utility Code, the owner of each parcel is responsible for payment of the utility fee. YMC 7.80.080; YMC 7.80.100(6). The language in YMC 7.80.130 that the "property tax payer" shall pay the fee is a reference to the billing procedures only, and does not change the definition of "owner" to "owners who are subject to property taxation." (c) Church on the Move is the owner of developed nonresidential parcels and is subject to the utility fees. Background: Church on the Move represents that it is a church exempt from taxation pursuant to nonprofit corporation laws of the State of Washington and Internal • Revenue Code Section 501(c)(3). The church is the owner of four developed parcels within the City of Yakima (Yakima County Assessor's Parcel Numbers 181327 - 11007, 181327 - 11008, 181327 - 11423, and 181327 - 11435), totaling 1.86 acres. The City of Yakima operates and maintains a "Storm Drainage and Surface Water Management Utility," hereafter called "Stormwater Utility," codified at Chapter 7.80 YMC. Under the Stormwater Utility, each parcel of land within the City of Yakima is assessed a Stormwater User's Fee based upon classification of use (average single - family residence; large single - family residence; small single - family residence; duplex, triplex and fourplex; and nonresidential parcel). Classification of use, in turn, is based upon the "Equivalent Residential Unit (ERU)" calculation of impervious surface area. The ERU is the approximate average square footage of impervious surface area on a single - family residential parcel, which is set at 3,600 square feet. YMC 7.80.090. As a "nonresidential parcel," the church's annual Stormwater User Fee is calculated as follows: Owners of nonresidential parcels shall pay a stormwater fee equal to the base rate multiplied by the numerical factor obtained by dividing the total impervious surface area of the parcel by one ERU. The minimum stormwater fee for developed nonresidential parcels shall equal the base rate for average single- family residential property. • Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 3 YMC 7.80.100(6). The "Base Rate" is established in the Code as $40.00 for year 2010 and $43.00 for year 2011. The Base Rate is calculated to "provide adequate revenues to cover all costs allowable under applicable law that are incurred by the utility," and may be adjusted in subsequent years to cover the operations, maintenance and capital costs of the Stormwater Utility. YMC 7.80.110. Based on the combined area of the church's four parcels (1.86 acres), the church's 2011 Stormwater User's Fee is $645.00. The Stormwater Utility fee is billed annually. YMC 7.80.140. Because the Stormwater Utility fee is "parcel based," the City of Yakima has entered into an intergovernmental agreement with Yakima County to include the billing for the Stormwater Utility fee within the county's annual property tax billing statement for each parcel. This saves taxpayer funds by enabling the City to use the existing county billing system instead of creating a new, separate parcel -based billing system for City properties.' Because billing procedures utilize the county property tax billing system, YMC 7.80.130 states: ® 7.80.130 Property tax payers p rty p y to pay fees. The property tax payer of each nonexempt parcel shall pay the stormwater user's fee and charges as provided in this chapter. Property tax payers seeking adjustments or exemptions shall pay the full fee until such time that the adjustment or exemption is granted by the city. Discussion: A. Stormwater Utility. As recited in YMC 7.80.010, "Federal and state laws mandate that operation of such systems requires the city of Yakima to implement regional water quality protection activities and programs to reduce and control the potential to pollute surface waters and groundwaters by storm drainage originating on both public and private properties." Establishment of a Stormwater Utility within the City of Yakima 1 Other City utilities are "connection based." In other words, billing accounts for these utilities are established based on the "usage" of water, sewer, or irrigation per connection. One parcel may have • several connections, such as duplexes, triplexes, apartment complexes, each with a separate "account." Thus, a city managing a stormwater utility cannot simply bill stormwater utility fees for parcels through its existing billing system for water, sewer and irrigation utilities. Memorandum to Honorable Mayor and Members of the City Council • March 28, 2011 Page 4 has been mandated pursuant to a National Pollutant Discharge Elimination System (NPDES) Permit for stormwater. In response, the City Council adopted Ordinance No. 2004 -73, codified at Chapter 7.80 YMC. As a "utility," the Stormwater Utility Code established a funding mechanism to operate and maintain the utility (YMC 7.80.040); created stormwater operating and capital fund accounts (YMC 7.80.050); provided for annual adoption of an operating budget (YMC 7.80.060); and established a reserve fund for operating and capital needs (YMC 7.80.070). Funding of the utility is by (a) stormwater user's fees; (b) civil penalties and damage assessments arising out of violations of the code; (c) stormwater permit and inspection fees; (d) revenue bonds and /or general obligation bonds; and (e) other federal, state, local grants and funds. YMC 7.80.040. As noted above, the Stormwater User's Fee is assessed annually against each developed parcel of property in the City of Yakima. YMC 7.80.080. The assessment is based on the parcel's classification of use (average single- family residence; large single - family residence; small single - family residence; duplex, triplex and fourplex; and nonresidential parcel). Classification of use, in turn, is based upon the "Equivalent Residential Unit (ERU)" calculation of impervious surface area. The ERU is the approximate average square footage of impervious surface area on a single - family residential parcel, which is set at 3,600 square feet. YMC 7.80.090. As a "nonresidential parcel," Church on the Move's annual stormwater user fee is calculated as follows: Owners of nonresidential parcels shall pay a stormwater fee equal to the base rate multiplied by the numerical factor obtained by dividing the total impervious surface area of the parcel by one ERU. The minimum stormwater fee for developed nonresidential parcels shall equal the base rate . for average single - family residential property. 2 YMC 7.80.120 provides for. "adjustments" to stormwater user's fees. These adjustments include credits and /or waivers for parcels that operate and maintain their own stormwater NPDES Permit, approved rainwater harvesting system, etc. The section also includes "waivers" of the fees for public parks, streets and other properties that either serve as part of the stormwater system or have minimal stormwater • impact. A waiver of fees is included for all vacant/undeveloped parcels. Church on the Move is not claiming any "adjustment" or waiver of stormwater user's fees. 0 Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 5 . YMC 7.80.100(6). The Stormwater Utility Code does not include any provision that differentiates among various types of "owners," nor does the Code contain any exemption based on any tax exempt status of any owner. As in all utilities, every owner is responsible . for the utility fees. For example, no "exemption" applies to the water and sewer utilities based on the tax - exempt status of the account holder. The Stormwater User's Fee is based generally on the average square footage of impervious surface on a subject parcel. As such, the calculation of the fee is composed of two parts: (a) classification of use, and (b) size of parcel. The larger the size of parcel, coupled with a larger "footprint" of impervious surface, the more stormwater runoff is generated by the property. Hence, the Code is fashioned to account for assessment and billing on a "parcel basis" (rather than a "consumption basis" in the case of water or sewer utilities). ® The existing billing methods for "consumption based" 9 g p sed utilities are tied to a number of utility connections serving a property and the amount of water, etc., flowing through that connection as used by the customer. Consequently, the billing procedures for the City's existing utilities for water and . sewer are not effective or rationally related to assessment and billing of a parcel based utility fee. To answer this, the City entered into an intergovernmental agreement with the only local agency that has a parcel based assessment, billing and collection system — Yakima County. Yakima County is able to include the City's annual stormwater user's fees within the billing statement that includes assessment of property taxes. Inclusion of the City's stormwater user's fee billing within the County's property tax billing statement does not change the City's utility fee into a tax. Rather, as shown below, the determination of whether a particular charge is a "tax" or a "fee" is made by analyzing the Stormwater Utility Code itself — not the manner in which it is billed. B. Tax or Regulatory Fee — Case Law. In Tukwila School Dist. No. 406 v. City of Tukwila, 140 Wash.App. 735, 737, 167 P.3d 1167 (2007), the Tukwila School District challenged the City of Tukwila's stormwater fees, claiming that the fees were unconstitutional "taxes." The court ruled: We hold the charge is . not a tax under the Covell factors because Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 • Page 6 its purpose is limited to protecting property owners and local water sources from harm caused by storm and surface water runoff, the City has segregated the funds and uses them only for this purpose, and the fee is roughly proportional to the amount of impervious surface on the property being taxed. The court discussed the factors for determining whether a particular charge is a valid "fee" or an unlawful tax: To decide whether the charge is a tax or a regulatory fee, courts apply the three -part test articulated in Covell v. City of Seattle. Under this test, the first question is whether the primary purpose of the municipality is to "regulate" the fee payers or to "collect revenue to finance broad -based public improvements that cost money." The second question is whether the money collected is segregated and allocated exclusively to regulating the entity or the activity being assessed. The third factor examines the direct relationship between the rate charged and either a service received by the fee payers or a burden to which they contribute. Tukwila, id. at 744 (citations omitted). These factors are discussed below. 1. Primary Purpose. The Stormwater Utility Code of the City of Yakima contains that following legislative enactment of purpose: 7.80.010 Legislative findings and policy. The city council finds, determines and declares that the streams, rivers, lakes, waterways, groundwater, and functionally related natural and manmade stormwater control facilities constitute a stormwater control facility. The city council finds, determines and declares that the public stormwater control facility including its administration, which provides for the collection, treatment, storage and disposal of stormwater, provides benefits and services to all developed property within the incorporated city limits. Such benefits include, but are not limited to: the provision of adequate systems of collection, conveyance, detention, treatment and release of stormwater; the reduction of hazards to property and life resulting from stormwater runoff; improvements in general health and 0 Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 7 welfare through reduction of undesirable stormwater conditions; and improvements to the water quality of the stormwater and its receiving waters. Federal and state laws mandate that operation of such systems requires the city of Yakima to implement regional water quality protection activities and programs to reduce and control the potential to pollute surface waters and groundwaters by storm drainage originating on both public and private properties. The city council finds, determines and declares that development of lands alter both the amount of stormwater runoff and the amount of pollution contained in such runoff and that the variation in these two factors constitutes a fair way to determine the burdens imposed upon the system and the benefits of the services received by the customer from the pollution management and regulatory services and facilities provided by a utility for storm drainage and surface water management, and the customer's charges for management 410 of such burdens and provision of such services and facilities. The city council finds, determines and declares that the amount of impervious surface, land use, and rainfall will determine the volume of runoff and the general level of pollution from a property has been well established in both engineering practice and water quality studies by the Environmental Protection Agency, the Department of Ecology, the United States Geological Survey, the Soil Conservation Service, and others. While the relationships established by the above studies are adequate to assign charges, the city storm drainage and surface water management utility shall perform local studies and based upon the results of these may adjust rates and charges in the future to more accurately reflect the burdens imposed by customer classes within the city. The city council finds, determines and declares that to fund the costs of storm drainage and surface water management in the city, it is necessary to adopt service charges for stormwater users, with rates varying according to the services furnished, the burdens imposed or benefits received, and the character, use and stormwater runoff characteristics of the land. (Ord. 2004 -73 § 1 (part), 2004). ® The first factor comports with the finding in the Tukwila case, where the court held that the primary purpose of the stormwater utility fee was: Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 8 So too here, the purpose of the storm and surface water charge is to protect local water sources, including the Green River, from pollutants caused by storm and surface water runoff discharged by developed property with impervious surfaces. Because owners of those properties contribute to that problem, the City can properly charge a fee to defray the cost of ameliorating it. We hold that the primary purpose of the City's storm and surface water charge is to regulate runoff. As such, it satisfies the first Covell factor. Tukwila, id. at 747 (citations omitted). 2. Segregation of Funds. The second factor concerns establishment and maintenance of a separate fund for administration of the stormwater utility. The Tukwila court stated this requirement as follows: To satisfy the second prong of the Covell test, the money collected from the fees must be segregated and allocated exclusively to 410 regulating " `the entity or activity being assessed.' " Tukwila, id. at 747. The City of Yakima Stormwater Utility Code contains specific provisions establishing separate funds for the administration of the utility: 7.80.050 Stormwater funds. All revenues generated by, or on behalf of, the stormwater utility shall be deposited in the following stormwater utility funds and used in accordance with state law: (1) Fund 441 (for operating funds); or (2) Fund 442 (for capital funds). The revenue deposited into these funds shall be used only for the purposes of constructing, acquiring, adding to, maintaining, conducting, operating, managing, regulating, and controlling the stormwater system, or to secure the payment of all or any portion of any issue of general obligation bond or revenue bond issued for such purposes, or for other legal purposes consistent with this chapter. (Ord. 2004 -73 § 1 (part), 2004). 7, 80.060 Operating budget. Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 9 The city council shall adopt an operating budget for the stormwater utility each fiscal year. The operating budget shall set forth for such fiscal year the estimated revenues and the established costs for operations and maintenance, capital improvement projects, and debt service. (Ord. 2004 -73 § 1 (part), 2004). 7.80.070 Reserve account. An operating and emergency reserve account shall be maintained to provide for cash flow, emergencies and capital improvement project needs. (Ord. 2004 -73 § 1 (part), 2004). 3. Direct Relationship. In the Tukwila case, the court framed this issue as follows: Finally, we must determine whether there is a direct relationship between the fee charged and either a service property owners receive or a burden to which they contribute to satisfy the third prong of the Covell test. The School District argues there is no direct relationship because the fee is not based on the cost of providing a targeted service, but was calculated by dividing the annual revenues the City thought it needed to construct the system by the estimated number of parcels in the city with impervious surfaces. This, the District argues, is not a fee for services rendered but is more like a tax that cannot be avoided. Further, like a tax, all real property owners within the Tukwila city limits are assessed and cannot avoid the fee even if they are served by a private storm water system. The City argues that its regulatory scheme has a direct relationship to the services property owners receive in controlling storm and surface water runoff and the burden they create by increasing the rate and volume of surface and storm water runoff and pollutants. This case is not like Samis, where the. City of Soap Lake charged a fee to owners of vacant, unimproved, uninhabited lots that abutted but were not connected to the city's water and sewer lines. Here, the City charges the fee to real property owners with impervious surfaces on their land because these surfaces require storm and surface water systems to alleviate the burdens their presence ® imposes on neighboring land. We agree with the City that it rains everywhere and all parcels within the City benefit from a system Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 10 that manages the quantity and quality of storm and surface water runoff to prevent flooding, erosion, sedimentation, pollution, and danger to life and property. While there is certainly an overall public benefit, the fees assessed are still based on the amount and rate of runoff a parcel of property generates. As with garbage removal, there is a benefit to the public -at -large from having the City provide garbage removal that is paid for based on the amount of waste generated. So long as the rate is reasonably based on usage -i.e., the amount of the property owner's contribution to the problem -the fee is directly related to the service provided. Tukwila, id. at 748 -50 (citations omitted) (Emphasis added.) The City of Yakima Stormwater Utility Code incorporates a mechanism reasonably based on usage as approved by the Tukwila court. The City of Yakima's Stormwater Utility Fee is a valid regulatory fee and not an unlawful tax. • C. Response to Appeal. With the above analysis y s accomplished, we can address the specific grounds of the church's appeal. 1. Whether Church on the Move should be exempt from the Stormwater utility fee because, as a church, it is exempt from taxation, and the Stormwater utility fee is a "tax" billed through the Yakima County Property Tax and Assessment Statement. As shown above, the Stormwater Utility Fee is a regulatory fee and not a tax. Churches and nonprofit corporations, while exempt from taxation, are not exempt from regulatory fees. See, e.g., Open Door Baptist Church v. King County, 140 Wash.2d 143, 995 P.2d 33 (2000)(church's compliance with land use regulatory controls such as conditional use permit, was not impermissible burden on free exercise of religion). Inclusion of the stormwater user's fee billing in the Yakima County property tax billing statement does not convert the regulatory fee into a "tax." The validity of a regulatory fee is tested by examination of the ordinances establishing the fee, not by how the fee is billed. 110 0 Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page ll 2. The City's Stormwater Utility Code (Chapter 7.80 YMC) states that the "property tax payer" is responsible for payment of the Stormwater utility fee. Church on the Move is exempt from taxation and, thus, is not a "property tax payer." Not being a "property tax payer," is Church on the Move exempt under the Code? The use of the term "property tax payer" in YMC 7.80.130 has reference to how the stormwater user's fee is paid. It relates specifically to the use of Yakima County billing procedures for billing and collection of the fees. YMC 7.80.080 and YMC 7.80.100(6) clearly state that the "owner" of the property is responsible for payment of the fees. Because no developed parcel is exempt from the Stormwater User's Fee, no basis exists in the Code to "exempt" certain owners on the basis of "profit" or "nonprofit" status. 411 Church on the Move, as the owner of nonresidential parcels as defined in YMC 7.80.100(6), is subject to and responsible for payment of the Stormwater User's Fees. 3. Church on the Move is not seeking an "adjustment" or "waiver" of the Stormwater Utility Fees — the church contends that Chapter 7.80 YMC "does not address Non - Property Tax Payers in any way," and, as a result, the church's parcels "are excluded by the language of the statute itself from further encumbrances." The Code addresses "owners" of developed parcels, which includes Church on the Move. There is no exemption from responsibility as an owner based on the taxable or tax - exempt status of the owner. By analogy, there is no exemption in the water utility code excusing a nonprofit corporation from paying its water bills. Conclusion: Church on the Move is an "owner" of developed nonresidential parcels within the City of Yakima. All developed nonresidential parcels are subject to the Stormwater User's Fee provisions. 3 "Adjustments" or waiver of fees may be available for parcels that have separate approved stormwater treatment facilities, have constructed approved rainwater harvesting facilities, or similar stormwater remediation systems. "Waivers" of the fees are given for vacant/undeveloped parcels or for streets, parks, and other facilities with minimal stormwater impact. Any "adjustment" or "waiver" of fees is based solely upon duplication of stormwater treatment or minimal stormwater contribution from the parcel. YMC 7.80.120. Memorandum to Honorable Mayor and Members of the City Council March 28, 2011 Page 12 No exemption for the Stormwater User's Fee exists to excuse an owner from its responsibilities based on any status of the owner, whether tax - exempt, nonprofit, charitable or otherwise. • ® . • City Council Decisions on Stormwater Policy Issues • t Council Sub- Committee Policy Decisions Recommendation Phone Survey Results Council Decision (3- 16 -04) 1 Should commercial/industrial sites Give a 20% credit if they are in Most of the utilities give credits Council agreed with recommendation that retain and infiltrate their compliance with the UIC rule. ranging from 10 — 50% stormwater on -site be given a • credit? 2 Should schools be given a credit or No. Three of the utilities waive schools Council agreed with recommendation waiver? from paying the fee. One utility gave a credit • 3 Should holders of industrial Give a 20% credit if they have a valid Council agreed with recommendation stormwater permits be given a NPDES stormwater permit. (Credits credit? will not be accumulative, only eligible for one credit.) 4 Should churches be given a No. Two of the utilities waive churches Council agreed with recommendation discount or waiver? from paying the stormwater utility fee. 5 Should senior citizens be given a Low - income senior households shall be Two utilities waive the senior citizens Council agreed with recommendation discount or waiver? given a credit of 20 %. that are exempt from paying property taxes. Three utilities have credits for senior citizens (in conjunction with the other utilities). 6 Should low- income households be No. Council agreed with recommendation given discount or waiver? • 7 Should disabled persons be given a Low - income disables person Same answer as #5 Council agreed with recommendation discount or waiver ?. households shall be given a credit of 20 %. 8 Should DID members be given a No. Council agreed with recommendation discount or waiver? 9 Should businesses that installed Give a 20% credit to businesses that Council agreed with recommendation stormwater treatment facilities that have facilities that are in compliance discharge to the City storm drains with the 2004 Management be given a credit? Manual for Eastern Washington. 10 Should government -owned No. One utility provided a discount to Council agreed with recommendation buildings be exempt from the government buildings. utility? 11 Should city roads be given a Waiver Eleven of the utilities waived roads Council agreed with- recommendation discount or waiver? from paying a stormwater fee. • • Council Sub - Committee # Polic Decisions Recommendation Phone Surve Results Council Decision 3 -16 -04 12 Should state roads be exempt from Waiver Eleven of the utilities waived roads Council agreed with recommendation the utility? from paying a stormwater fee. 13 Should there be a cap on the No. Only one utility has a maximum cap. Council agreed with recommendation maximum amount that a business will pay, regardless of the number of ERUs they have? 14 What should the initial rate amount Begin at $1.50 per month per ERU and Council agreed with recommendation be and what should the timing for increase annually by $0.75 per month future rate increases be? per ERU for four years 15 Should agricultural parcels be No. Council agreed with recommendation • exempt from the utility? 16 Should vacant lands be assessed a No. Most of the utilities did not charge Council agreed with recommendation fee? undeveloped land a stormwater fee. 17 Should parks be assessed a fee? No. Council agreed with recommendation 18 Should public trails and bike paths No. Council agreed with recommendation be billed? 19 Should residential properties be Yes. Eight utilities had a flat rate for Council agreed with recommendation divided into three classifications? residential parcels. Seven utilities had residential rates that varied. 20 How should billing be done? Annually, as an assessment on the Five of the utilities collect yearly, 10 of Council agreed with recommendation County property tax bill. the utilities collect monthly. 21 Should a tax be imposed on the Staff recommends that this policy be Eight of 12 Washington cities surveyed Council opted to defer this decision stormwater utility? At what rate? deferred. tax their stormwater utility between 6% until a later date. . and 15 %. 22 How much money should be $250,000, to be paid back within the The money would enable the City to Council agreed with recommendation borrowed from other funds to pay first four years of the utility. continue to support the regional for stormwater program in 2004. stormwater program, and begin to build up the City stormwater management program. III ID • ,,, 167 ® CITY OF.YAKIMA,.WASHINGTON ADJOURNED MEETING OF THE CITY COUNCIL MARCH 16, 2004 - 7:30 A.M. COUNCIL CHAMBERS - CITY HALL 1. Roll Call Present: Council: Mayor Paul George, presiding, Council Members Ron Bonlender, Dave Edler, Neil McClure, Mary Place, Bernard Sims, and Susan Whitman Staff: Dick Zais, City Manager; Chris Waarvick, Public Works Director; Kay Adams, City Engineer; Brett Scheffield, Surface Water Engineer; and City Clerk Roberts County: John Knutson, Yakima County 2. Study Session stormwater utility policy issues Chris Waarvick narrated a PowerPoint presentation providing historical information on the mandated National Pollutant Discharge Elimination System (NPDES) Phase II rules issued in 1999. The program build -out cost was calculated to be $2.6 million annually. The program would address the NPDES Clean Water Act Program, Endangered Species Act, 411 and Injected Wells. He stated they considered the alternatives of ignoring the new mandates or comply with the and apply for coverage under an NPDES municipal stormwater permit and create a funding mechanism. We would initially apply individually, separate from the County. There are some pros to ignoring the NPDES regulations: 1) Minimal stormwater activities, and 2) less cost. The cons: 1) The City could be assessed fines and penalties, as well as face the potential loss of federal and state funds; 2) Impacts to the environment and public health; and 3) May become involved in third -party lawsuit as was experienced in Clark County: The pros to complying and obtaining a permit are: 1) Puts the City in compliance with the Clean Water Act; 2) Provides a healthier environment; and 3) Assists in compliance with Underground Injection Control Program and Endangered Species Act. The cons to complying are: 1) Money; and 2) Public perception is that this is unnecessary since we only get seven inches of precipitation per year. The staff recommendation is to acquire coverage under an NPDES Municipal Stormwater Permit and comply with the provisions, particularly since we worked hard to have them amend the regulations to fit the conditions of the dryer climate on the east side of the mountains. Staff recommends establishing a stormwater utility to pay for the program using a regional approach to consolidate as many of the features and elements of the program as feasible. Council Member Place reported that the Airport Manager advised her that they would be exempt from the stormwater utility fee. Mr. Waarvick stated he would like to see the letter the airport provided her since they are probably referring to industrial NPDES stormwater. • He will call them to clarify the issue. 166 MARCH 16, 2004 — ADJOURNED MEETING City Manager Zais reported that the Council Sub- Committee reviewed these policy issues and provided its recommendations. He reminded Council that their votes are advisory only to staff, giving staff direction to place it into the ordinance for consideration by the Council after public comments are received at the public hearings. Brett Scheffield reviewed the stormwater policy issues and received direction from Council on the policy issues. Policy Issue #1: Should commerciaVindustrial sites that retain and infiltrate their stormwater on -site be given a credit? Council Sub- Committee Recommendation: Give a 20% credit if they are in compliance with the UIC rule. Council Decision: Edler moved and Place seconded to accept #1 recommendation for 20% credit. The motion carried by unanimous voice vote. Policv Issue #2: Should schools be given a credit or waiver? Council Sub - Committee Recommendation: No. Council Decision: BONLENDER MOVED AND SIMS SECONDED TO ACCEPT THE RECOMMENDATION THAT SCHOOLS NOT BE GIVEN A CREDIT. The motion carried by 6 -1 voice vote; Edler voting nay. Policy Issue #3: Should holders of industrial stormwater permits be given a credit? Council Sub - Committee Recommendation: Give a 20% credit if they have a valid NPDES stormwater permit (Credits will not be cumulative, only eligible for one credit.) Council Decision: SIMS MOVED AND EDLER SECONDED TO ACCEPT THE COMMITTEE RECOMMENDATION. The motion carried by unanimous voice vote. • Policy Issue #4: Should churches be given a discount or waiver? Council Sub - Committee Recommendation: No. Council Decision: BONLENDER MOVED AND PLACE SECONDED TO ACCEPT THE RECOMMENDATION. The motion carried by 5 -2 voice vote; Edler and Sims voting nay. • Policy Issue #5: Should senior citizens be given a discount or waiver? Council Sub - Committee Recommendation: Low - income senior households shall be given a credit between 20% and 50 %. Council Decision: SIMS MOVED AND PLACE SECONDED TO APPROVE A 20% DISCOUNT FOR SENIOR CITIZENS. The motion carried by unanimous voice vote. Policy Issue #6: Should low- income households be given discount or waiver? Council Sub - Committee Recommendation: No. Council Decision: PLACE MOVED AND SIMS SECONDED TO ACCEPT THE COMMITTEE'S RECOMMENDATIONS FOR ITEMS NOS. 6, 7 AT 20 %, 8, 9, AND 10. The motion carried by unanimous voice vote. Policy Issue #7. Should disabled persons be given a discount or waiver? Council Sub - Committee Recommendation: Low - income disabled person households shall be given a credit between 20% and 50 %. Council Decision: 20% approved; see motion under Policy Issue #6. 2 • • 169 MARCH 16, 2004 — ADJOURNED MEETING 0 Policv Issue #8. Should .DD rnembers be given a discount or waiver? Council Sub - Committee Recommeridation: No.. . Council Decision: Committee recommendation approved; see motion under Policy Issue #6. Policy Issue #9. Should businesses that installed stormwater treatment facilities that discharge to the City storm drains be given a credit? Council Sub - Committee Recommendation: Give a 20% credit to businesses that have facilities that are in compliance with the 2004 Stormwater Management Manual for Eastern Washington. Council Decision: Committee recommendation approved; see motion under Policy Issue #6. Policy Issue #10. Should government -owned buildings be exempt from the utility? Council Sub - Committee Recommendation: No. Council Decision: Committee recommendation approved; see motion under Policy Issue #6. Policy Issue #11. Should city roads be given a discount or waiver? Council Sub - Committee Recommendation. Waiver Council Decision: EDLER MOVED AND SIMS SECONDED TO ACCEPT THE COMMITTEE RECOMMENDATION FOR NO. 11. The motion carried by unanimous voice vote. ® Policv Issue #12. Should state roads be exempt from the utility? Council Sub - Committee Recommendation: Waiver Council Decision: MC CLURE MOVED AND SIMS SECONDED TO ACCEPT THE COMMITTEE RECOMMENDATION FOR #12. The motion carried by unanimous voice vote. Policv Issue #13. Should there be a cap on the maximum amount that a business will pay, regardless of the number of ERUs they have? Council Sub - Committee Recommendation: Yes. Look at $10,000 /year, $12,000 /year, and $15,000 /year. Discussion: Mr. Waarvick stated that the Legal Department informed him there can be no cap placed on a fee; different from a tax that allows a cap. Council Decision: SIMS MOVED AND PLACE SECONDED THAT THERE BE NO CAP IN #13. The motion carried by unanimous voice vote. Policy Issue #14. What should the initial rate amount be and what should the timing for future rate increases be? Council Sub - Committee Recommendation: Begin at $1.50 per month per ERU and increase by $0.75 per month per ERU each year for four years. Council Decision: SIMS MOVED AND MC CLURE SECONDED TO APPROVE THE COMMITTEE RECOMMENDATION FOR #14. The motion carried by 6 -1 voice vote; Place voting nay. Council Member Place commented that we don't really know about the rate. 0 • 3 170 MARCH 16, 2004 — ADJOURNED MEETING • Policy Issue #15. Should agricultural parcels be exempt from the utility? Council Sub - Committee Recommendation: No. Council Decision: PLACE MOVED AND SIMS SECONDED TO APPROVE THE COMMITTEE RECOMMENDATIONS FOR ITEMS NOS. 15,16, 17, 18, 19 AND 20. The motion carried by unanimous voice vote. Policy Issue #16. Should vacant lands be assessed a fee? Council Sub - Committee Recommendation: No. Council Decision: Committee recommendation approved; see motion under Policy Issue #15. Policy Issue #17. Should parks be assessed a fee? Council Sub - Committee Recommendation: No. Council Decision: Committee recommendation approved; see motion under Policy Issue #15. Policy Issue #18. Should public trails and bike paths be billed? Council Sub - Committee Recommendation: No. Council Decision: Committee recommendation approved; see motion under Policy Issue #15. Policy Issue #19. Should residential properties be divided into three classifications? Council Sub - Committee Recommendation: Yes. Council Decision: Committee recommendation see motion under Policy issue #15. Policy Issue #20. How should billing be done? Council Sub - Committee Recommendation: Annually, as an assessment on the County property tax bill. Council Decision: Committee recommendation approved; see motion under Policy Issue #15. Policy Issue No. 21. Should a tax be imposed on the stormwater utility? At what rate? Staff Recommendation: Staff recommends that a tax be imposed at 10 %, and directed to the street fund for maintenance purposes. Council Motion: EDLER MOVED AND PLACE SECONDED TO NOT IMPOSE A TAX. Discussion: Council Member Place stated that she could not vote to place a tax on something that is mandated; if more money is needed, it should be added to the rate. Mayor George noted that it was 8:45 a.m. and asked for comments from citizens. 3. Audience Comments (8:45 a.m. — 9:00 a.m.) Clarence Barnett, 916 S. 17 Avenue, asked for a copy of the Yakima Drainage Manual that was mentioned in the ordinance. Brett Scheffield advised that the manual is still being created and until it is approved, we will use the State's Eastern Washington Stormwater Management Manual. John Knutson added that we have a draft stormwater design manual prepared by HDR, which will be a simplified version of the State's manual. Mr. Barnett 'requested clarification be provided in the ordinance regarding the requirment that revenue generated by the fee be used exclusively for stormwater utility, and Section 4 • • 171 MARCH 16, 2004 — ADJOURNED MEETING 7.80.090 and the definitions listed in the ordinance regarding fee for large single family residential parcel. Another item he felt was not clear was in Section 7.80.150 regarding the involvement of the Hearing Examiner in the appeal process. Mr. Scheffield stated he would review those sections. No other citizen came forward to address the Council, therefore, the Council resumed its discussion on Policy Issue No. 21. Policy Issue No. 21. Should a tax be imposed on the stormwater utility? At what rate? City Manager Zais responded to Council Member Place's remarks, stating that other mandated fees, such as water and sewer, are taxed. The issue is purely a revenue adjustment because we have faced resource reductions. In the General Fund, we had • 10% in utilities to support all operational divisions of the City. We proposed 10% and that it be directed to the City Street Fund for general operation and support of streets, including street sweeping. 75% of the Street budget comes from property tax. Council Members expressing support for not including, or were unsure about the tax, were Mary Place, Ron Bonlender; Dave Edler, and Neil McClure. Mayor George and Council Member Sims supported the tax. Council Member Sims suggested amending the policy so that the taxes must be a part of the overall Street program. City Manager Zais suggested postponing the decision on this issue. SIMS MOVED AND BONLENDER SECONDED TO DEFER THE VOTE ON ITEM #21 FOR UP TO 30 DAYS. The motion carried by 5 -2 voice vote; Edler and Place voting nay. Policy Issue #22. How much money should be borrowed from other funds during 2004? Council Sub - Committee Recommendation: $250,000 to be paid back within the first ® four years of the utility. Council Decision: PLACE MOVED AND BONLENDER SECONDED TO ACCEPT THE SUB - COMMITTEE'S RECOMMENDATION. The motion carried by unanimous voice vote. 4. Adjournment Mayor George adjourned the meeting at 9:30 a.m. 7/09 READ AND CERTIFIED ACCURATE BY ` / 1 COUNCI ' AMBER DATE 9 • U'_ MEMBE DATE ATTEST: • • / P CITY CLERK PAUL P. GEORGE, M YOR 411 Minutes prepared by Karen Roberts. A video tape of this meeting is available in the City Clerk's Office 5 •