City eyes storm runoff debt fee

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May 19, 2009

Option on table as council revisits water, sewer rate choices

By Patrick Anderson The Gloucester Daily Times Tue May 19, 2009, 05:55 AM EDT

Debate resumes tonight on what is the fairest way to pay for upgrades to the city's municipal plumbing — especially the systems that handle rainwater runoff.

A proposed debt shift override that would pay off debt from water-related infrastructure with property taxes, instead of water and sewer rates, is still on the table despite criticism two weeks ago from the segment of residents who may pay more under the plan.

But now, in addition to the debt shift, City Council is considering a broad-based stormwater fee that would pay for state- and federally-mandated stormwater work, including the Combined Sewer Overflow project designed to keep sewage out of the harbor.

That new fee would prevent stormwater project debt from driving up water and sewer rates and spread it among a greater number of property owners, but would not deal with any of the debt from water and sewage treatment facilities.

Since the council hearing two weeks ago, the city's legal and financial departments have been researching how other communities in the state pay for stormwater management systems.

Council President Bruce Tobey expressed interest in a stormwater fee during the first hearing session and raised the idea that the amount each property owner pays toward the stormwater fee be determined based on how much runoff-causing impervious surface is on their land.

Tobey said yesterday that, as far as he could tell, the debate over which option to choose could still go in any direction, including the previously proposed debt shift, a stormwater fee, or a return to the status quo.

The debt shift was proposed to bring relief to Gloucester's sewer water ratepayers, who face some of the highest bills in the country, by spreading the payments out among a larger set of residents, including those who don't hook up to the city system.

Residents with comparatively valuable homes would pay a larger share of the burden while high water users, including many harborside business now suffering from the high rates, would benefit.

In proposing the debt shift, officials reasoned that the infrastructure improvements mandated by the state and federal government benefit the entire community, even those who do not connect to the municipal system, and should be paid for by everyone.

But residents with expensive properties have objected to seeing their property taxes rise higher, and property owners with homes not connected to the sewer or water system have objected to paying for facilities that they do not use.

Responding to the objections, councilors have appeared to back off the idea of putting debt for water and sewer distribution and treatment facilities on the tax rate and instead are focusing on stormwater, which rolls off all properties whether the owner hooks up to the city grid or not.

In her fiscal 2010 budget proposal, Mayor Carolyn Kirk included scenarios for debt from the CSO stormwater project to be transferred to the tax rate, and for half of the CSO debt to be transferred, but not for further debt transfer. The proposal also provided estimates for the status quo.

If no debt is transferred for fiscal 2010, the sewer rate is projected to be $12.94 per thousand gallons, a 7 percent increase over this year.

If councilors do decide to pursue a stormwater management fee, there are questions about how it must be collected and levied under state law.

In advance of previous meetings on the debt shift, City Treasurer Jeff Towne has prepared projections of how the proposals would change tax bills and water and sewer bills for average Gloucester properties.

But sensing that this debate could go in a number of different policy directions, Towne this time is focusing on questions about the feasibility of the stormwater fee proposal.

"I think this is more about changing gears, finding out how we want to proceed," Towne said.

The public hearing on shifting sewer and water debt will be held at 7 p.m. at City Hall, following a special meeting called by the council to discuss deficiencies in the Gloucester Police Station cellblock.

Patrick Anderson can be reached at panderson@gloucestertimes.com