5. Storm Sewer Assessment StudyAgenda -June 2, 1997
AGENDA ITEM 5 - REVIEW STORM SEWER ASSESSMENT STUDY
BACKGROUND/CONSIDERATION: As per our previous discussions
concerning Green Acres annexation and the direction of the Council,
I formed an internal committee consisting of staff members with
direct knowledge of the program. In addition to those with direct
knowledge (such as Public Works), I included two supervisors
without direct financial or public works knowledge.
The committee report is included in your packet for review. I will
not summarize the report, but will suggest that, upon review of the
ordinance, our storm sewer needs, and our revenue stream, that any
alternatives that result in a reduction of revenue will only push
us closer to an increase in the assessment levy for all users.
RECOMMENDATION: My recommendation at this time is to not make any
changes to the existing formulas. As pointed out in the report,
the current ordinance seems to be a "fair, practical method" to
assess those benefitted properties or at least the contributors on
an equitable basis as possible. My recommendation is based upon
the philosophy of fees that require the user/contributor to pay the
share that is attributed to them (or their property), and my
responsibility to maintain viable revenue streams and budget
viability for the City services and citizens as a whole. If you
desire a change to satisfy the complaints received during the
discussion of annexation, I would suggest that the one acre maximum
be the alternative for consideration.
Agenda -June 2, 1997
No system is entirely acceptable, perfect or equitable to those who
have to pay a fee. I submit that even if there is a change
approved, we will still receive complaints about the formula.
Incorporated 1892
t elephone (406) 758-7700
FAX (406) 758-7758
Post Office Box 1997
Kalispell, Montana
Zip 59903-1997
Date: April 28, 1997
To: Clarence Krepps, City Manager
From: John Wilson, Assistant City Engineer V7v
Re: Storm Sewer Assessment Review
Attached please find the final report from the Storm Sewer Assessment Review
Committee. Our recommendations are the result of committee discussions and
a thorough review of storm drainage assessments for vacant parcels throughout
the City.
As we evaluated various alternatives, the Public Works Department developed
a more efficient method of analyzing the special assessment records. By
loading County data files directly onto our desktop computers, we are able to
i
sort information, make calculations and audit records much more quickly than
was previously possible. This new method has already helped us discover
inaccurate property records which would otherwise have resulted in lost
revenue to the City.
Douglas Rauthe
Mayor
Clarence W. Krepps
City Manager
City Council
Members:
Gary W. Nystul
Ward I
Cliff Collins
Ward I
Norbert F. Donahue
Ward II
Dale Haarr
Ward II
Jim Atkinson
Ward III
Lauren Granmo
Ward III
Pamela B. Kennedy
Ward IV
M. Duane Larson
Ward IV
In the course of recent annexation efforts, a few owners of large sparsely developed tracts have
objected to storm sewer assessments which they believe are too expensive for the services received.
A Storm Sewer Assessment Review Committee was appointed by the City Manager to review the
method of assessment for large vacant tracts and recommend alternatives as necessary.
Background
A storm sewer assessment ordinance was adopted by the City Council in 1976 to establish annual
fees for each lot or parcel of land within the City. These funds are placed in a separate account for
the payment of debt service, maintenance and construction costs for storm sewer facilities.
Each lot is assigned to a rate class based on its aggregate runoff coefficient. The coefficient is
determined by the surface type and slope of the property. The four rate classes range from Class 1,
which is typified by a grassy field with a low runoff coefficient, to Class 4, which represents a
paved parking lot. Most residential properties fall into Class 2. Each rate class has a corresponding
assessment factor which is multiplied by the area of a given property to determine an annual storm
drainage assessment. The assessment is billed to the landowner with their property taxes.
To illustrate the current pattern of assessments, the owner of an average 7000 square foot residential
lot is charged $19.23 per year. The owner of a typical undeveloped 3 acre parcel pays $179.49 per
year, while properties such as the Cattleman's Casino on Airport Road and Wendy's Restaurant on
East Idaho pay annual assessments of $167.94 and $145.93, respectively.
Relatively few large undeveloped tracts exist within the City Limits. Only 79 of the 6103 City lots
and parcels shown on the county tax records are larger than one acre. Although these parcels may
be found in several areas of the City, concerns about high storm drainage assessments have been
expressed only recently and only from areas which are newly annexed or proposed for annexation.
One City property owner on Grandview Drive, who is currently protesting the assessment on her
sparsely developed 5 acre parcel, pays $299.26 per year. Another property owner in Greenacres,
who has expressed concerns about higher assessments if her 1.5 acre parcel is annexed, would pay
approximately $90.00 per year under the present system. In these cases, the drainage facility is a
grassy swale or ditch flowing to a nearby low area. Because such primitive facilities are easy to
overlook, the benefit to a given property and the City's expense for maintenance may be taken for
granted.
Alternatives Considered
In their discussions, the review committee identified the following alternatives for further
examination.
Status Quo
The status quo was deemed worthy of consideration because this assessment method has worked
well for the past 20 years without a single request for adjustment. The ordinance is straight forward,
simple for property owners to understand and practical for City staff to administer. Every property
within the City has been analyzed and assigned a runoff coefficient and rate class.
Now the above referenced property owner on Grandview Drive believes she is charged too much
and the proposed Greenacres annexation has raised questions about the fairness of assessments for
larger tracts. Although these people have raised valid questions, we must accept the fact that some
small degree of inequity is inherent with any method of assessing a large number of properties. It is
because of such inequities that the current ordinance provides a method for appeal.
Reduced Rate for Large Parcels
A slight change to the current ordinance was considered, whereby a reduced charge per square foot
would be adopted for large vacant or sparsely developed parcels. A square footage cut off value
would be established to segregate typical residential size lots from larger vacant tracts. All
properties with a Class 1 runoff coefficient and larger than say %2 acre, or 21,780 square feet, would
be assessed at 50% of the Class 1 rate.
In the course of examination we realized a critical inequity, as shown in the following example. We
considered two adjacent undeveloped parcels with identical runoff characteristics. Parcel A might
have an area of 21,750 square feet while Parcel B has an area of 22,000 square feet. Under the
scheme outlined above, the owner of Parcel A would pay an annual assessment of $29.87 while the
owner of Parcel B, which is essentially the same size, would pay only $15.11.
This strategy may also be very difficult to accommodate in the County's computer program which
calculates our special assessments.
Maximum Assessment for Large Parcels
A different adjustment to the current ordinance was considered, whereby a maximum assessment
would be established for large vacant parcels. A square footage cut off value would be chosen, at
say'/z acre, to define a maximum assessment value. All properties with a Class 1 runoff coefficient
would be assessed by the current method with annual charges limited to that maximum value.
Reworking the example above, Parcel A would be assessed $29.87 while Parcel B, and all other
Class 1 parcels larger than %a acre, would be assessed $29.91.
We have been advised that the County's computer programming options can accommodate this type
of assessment.
Recommendations
The focus of this review is the fairness of current storm drainage assessments for large vacant or
sparsely developed parcels. It is the committee's observation that the 1976 ordinance has served its
purpose well as a straight forward, practical and generally equitable means of assessing storm sewer
charges. In resolving the issue of assessments for large vacant parcels it is reasonable to make
minor modifications to the ordinance and place a ceiling on such charges.
A maximum assessment for large Class 1 parcels will serve to reduce the financial impacts of
annexation for certain owners of vacant land. This change can be incorporated into the present
assessment system with relatively little disruption. Within this method a square footage cut off
value must be designated to segregate typical residential lots from large vacant or sparsely
developed tracts. The following information illustrates the viable options for Council consideration.
The Storm Sewer Assessment Review Committee prefers the lAcre Maximum option as a realistic
representation of large tracts and to minimize the reduction of annual storm sewer revenues.
%2 Acre Maximum
This cut off value would effect a reduction in storm drainage assessments for 151 properties. The
total revenue reduction would be approximately $15,840 from a current annual assessment of
$235,000. The maximum assessment for vacant or sparsely developed parcels would be $29.91.
3/4 Acre Maximum
This cut off value would effect a reduction in storm drainage assessments for 109 properties. The
..., _ . total revenue reduction would be approximately $13,965. The maximum assessment for vacant or
sparsely developed parcels would be $44.87.
1 Acre Maximum
This cut off value would effect a reduction in storm drainage assessments for 79 properties. The
total revenue reduction would be approximately $12,573. The maximum assessment for vacant or
sparsely developed parcels would be $59.83.
acres
1/4
V2
3/4
3
5
10
CUR -RENT
ASSESSMENT
'g'f.
$14.96
$29.91
$44.87
$59.83
$179.49
$299.15
$598.30
%2 ACRE
MAXIMUM
ASSESSMENT
$14.96
$29.91
$29.91
$29.91
$29.91
$29.91
$29.91
3/4 ACRE
MAXIMUM
ASSESSMENT
$14.96
$29.91
$44.87
$44.87
$44.87
$44.87
$44.87
1 ACRE
MAXIMUM
ASSESSMENT
$14.96
$29.91
$44.87
$59.83
$59.83
$59.83
$59.83
The runoff coefficient and rate class will be re-evaluated as each property is developed and
assessments will increase to reflect the appropriate contribution to the storm sewer fund.
Conclusion
We submit that all properties within the community benefit from the storm drainage assessment
program. Even those owners of vacant tracts enjoy the sustainable property values and desirability
of a city with proper infrastructure. Every citizen realizes the benefit of traveling throughout the
community on well drained streets and of receiving waters which are protected by properly
constructed and maintained drainage facilities.
It would be idealistic to suppose any assessment system could be completely equitable. However,
we believe the current ordinance, with it's provision for appeals and the recommendations to
accommodate large vacant parcels, is a fair, practical method of determining storm drainage
charges.
This is not to discourage a more thorough review of the ordinance in the future. Some terminology
and procedures warrant updating, but with the busy construction season upon us, the task should be
deferred as a winter project.