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Storm Sewer Fees: Tax on Poor or Funding for Needed Projects?

The village board and the storm sewer utility district had a lengthy discussion on Monday about why they want to implement a storm sewer fee. Some village board members support the fee, but others see it as a tax that isn't needed.

If a storm sewer fee the village is considering gets approval from the village board, some larger storm sewer users could see their bills increase by thousands of dollars while some single-family customers could see their bills go down.

And tax-exempt properties may be seeing a new bill that, in some cases, could total thousands of dollars for storm water run-off projects.

The village board and the storm sewerage utility district tabled the decision to create a storm water fee charge after several village board members on Monday question the fairness of the charge. Still, the board is still considering implementing a user fee that all property owners would have to pay — instead of just the customers in the two storm sewer utility districts.

Village board and storm sewer utility commission members were divided on the issue. Some saw the fee as a tax on the poor while others saw the fee as a fair way to pay for needed storm sewer projects.

Village board member Lee Wishau opposed the storm sewer fee.

"You call it a user fee, but it's an additional tax and given this economy I can not support them both," Wishau said. "My opinion is that if we go with this ERU, then the tax levy is going to go away."

Village board member Kevin Wanggaard said he needs more information on the fee.

Why the village is considering a user fee

The village currently collects $688,000 between the two storm sewer districts through a line item on the tax levy: $613,000 for the Lake Michigan District and $75,000 for the Root River District through a tax levy. All property owners, except tax exempt properties, pay into either of the two districts. The Lake Michigan District has largely been funded through borrowing while the Root River District had a surplus. Now, the Lake Michigan District will be debt free on May 1 and the Root River District will see its surplus mostly depleted.

Therefore, the village staff recommended $675,000 in funding the Lake Michigan District and $325,000 for the Root River District, which would include operational costs and capital projects.

Tony Bunkelman, assistant engineer for the Village, laid out the reason for the new funding mechanism in a memo he wrote to the Joint Board:

lf a new funding mechanism is not approved or additional tax levy dollars are not granted to the Caledonia Storm Sewer Utility District Commission, there will not be any funding available to perform any capital projects because all tax levy funding would be going toward general operations, light routine maintenance, and upcoming debt service for the Kremer Area Road and Utility Reconstruction Project.

Bunkleman also said that because the Root River's tax levy was "so ridiculously low," they would have seen that levy increase anyway because the district couldn't continue to operate on the current level of funding.

How the storm sewer fee would work

If the village funded the storm sewer project through a user fee where everyone in the Village paid the fee, they could collect up to $1 million or maintain the current level of funding at $688,000. For each ERU, the village would charge $65 to collect a total of $1 million or $45 at the $688,000 funding level.

The charge would be based an equivalent residential unit (ERU) formula for funding the storm sewer utility commission. The village calculated that the average impervious surface of a single-family home in Caledonia is 5,034, which would be equivalent to one ERU. All non-single family residential properties would be charged the storm sewer fee based on the amount of impervious surface they have and then divided by the 5,034 to calculate the number of ERUs charged.

Most single-family homeowners would pay one ERU. Those who already pay into the storm sewer districts could pay more or less, depending on which district they lived in and how much their home was valued.

So, homeowners who were in the Root River Storm Sewer District paid annually anywhere from $5.93 to $23.80, and if they were in the Lake Michigan Sewer District they paid anywhere from $45.82 to $183.28. 

The village will likely ask tax-exempt property owners – including churches, schools and non-profit organizations – to help pay for storm sewer projects. Commercial properties like We Energies, could see almost a $90,000 bill for their nine properties totaling 1,374 ERUs, Grace Church could see a bill of $12,000 for their property and the Sisters of St. Dominic could see a bill of $3,700, according to village staff.

Fair or not fair?

Village Board member Jim Dobbs, who lives in the Root River District, pointed out that his bill would go from $23.80 to $65 while someone with a $100,000 home would be paying $61.09 and would pay $65 for the user fee.

"So the theory of this is to spread the pain amongst the non-profits and the farm fields... everybody," Dobbs said.

But Gale Morgan, the storm sewer utility district commissioner, said he would pay substantially less with his home, which is valued at $300,000.

"I stand to benefit a lot because I've got a bigger house. And if you have a bigger house, the more you are going to benefit, but I think the whole purpose behind storm water management is protection of property and it ought to be based on property value," Morgan said.

However, Bunkelman said that the Green Tree Mall is currently paying $6,985, but through the ERU system they would pay $8,000.

Morgan saw the fee differently.

"So basically you are shifting this tax to non-profits and poor people," Morgan said. "Look at a $75,000 home, they are paying $7.93 and they are going to pay $65. I'm opposed to this because you are shifting the burden from people who can probably afford it to people who can not afford it."

The joint board tabled the discussion to give Bunkelman more time to work on the issues raised in the meeting.

They also unanimously approved the merger of the Lake Michigan Storm Sewer Utility District and the Root River Storm Sewer Utility District, which will now be one storm sewer utility district.

Wanggaard supported the merger because the newly formed district wouldn't be saddled with the debt of the other district.

"This is the most optimal time to do this because it would be as fair to the village as possible," Wanggaard said.

This story was changed from its original version to clarify that the storm sewer fees pay for water run-off projects and clarifies that Kevin Wanggaard's comment was in reference to the merger of the two districts.

Tuco May 01, 2013 at 08:28 PM
This is great! Let's look at the Law of Unintended Consequences. We Energies has numerous sq footage of impervious land. What do you think We-Energies will do? I bet they go to the PSC and ask for an increase, and a hefty one at that! They'll ask for 40% and smile when they walk out with 25%, what they want in the first place. Poor peple or those squeeking by, will figure out a way to circumvent or worse, move out of Caledonia. Racine has a similar tax. It really is a tax not a fee. It's included on our tax bills. User fee for everything is bull sh#$!
Caledonia Retiree May 01, 2013 at 10:58 PM
This whole thing reverts to my original comment-why should Caledonia residents who do NOT have municipal water or sewer have to pay for it? I see Waangard thinks it's a great idea. Too bad there weren't enough votes other than mine against him.
Denise Lockwood May 02, 2013 at 01:21 AM
According to my sources, this is for storm sewerage (drainage) district... which means its for water run off, not the sewer system or water. If you live in Caledonia, then you live either in the Root River or Lake Michigan watershed and pay that as a line item on your tax bill, unless your property is tax exempt.
Tansandy May 02, 2013 at 10:21 AM
You still have storm water run off even if you don't have sewer and water. I agree this tax or user fee is a total joke. A few years ago I called the village and complained about water sitting in my ditch and stinking all summer. I am in a drainage district and figured I would get something for the tax I paid. Wrong. I was told that is as good as it gets. But I said I'm in a drainage district with no drainage, do I get my money back? I was then told to make it a water garden! Ah, the shades of Greenfield and her town engineer hack she hired after he retired from Kenosha. And the water still sits there.
Heather in Caledonia May 02, 2013 at 05:25 PM
This has got me to thinking about why non-profits are tax exempt in the first place. If they use services (drainage, fire\ambulance, police), shouldn't they be required to pay for it? So, I think I understand what's changing: they want to change the amount you pay from basing it on your property value to the size of your property? In theory that sounds just fine - it would be fair to charge based on usage (a bigger property would have more drainage) than on how much your home is worth. What if they just billed separately instead of putting it on the taxes? Just like a regular utility... electric, gas, water all come on their own and are based on usage. Non-profits still have to pay for those utilities.
Tansandy May 02, 2013 at 05:35 PM
Just remember, as a tax, the cost is deductible on your taxes. As a user fee, I don't believe you can use that as a tax deduction. Correct me if I'm wrong.
Denise Lockwood May 03, 2013 at 02:39 PM
You are spot on... that is definitely one of the drawbacks to this method of funding.
Denise Lockwood May 03, 2013 at 02:46 PM
That's their thinking. The state has allowed this method of funding utilities for years. When I was with the Kenosha News, the Village of Pleasant Prairie president John Steinbrink (who is also a rep for the state assembly) got some heat because of the way they structured theirs because land that was used as agricultural was treated a lot differently than land that was residential. So you often had people who had tons of acreage, but didn't farm and the they were mad because people who had the same acreage but were farming their land got a huge tax break. Steinbrink owned a huge amount of land that was used for ag. One of the issues Caledonia is trying to sort out is how ag land would be treated. And that's huge for many landowners here.
Caledonia Retiree May 04, 2013 at 10:40 PM
That's not true. In the West end of the Village THERE ARE NO STORM (or other) SEWERS. There also aren't any "projects" pertaining to storm runoff unless you consider the ditches on each side of the highway. This is a clever scam to get people who have no benefit at all from Village sewer (storm or sanitary) or water facilities to help pay for it. I think you'd better quiz your resources further, Denise.
screwprogress May 04, 2013 at 11:33 PM
I see the same typical responses.....from the same people. We don't need a Walmart on the east side, we should put it out by the "I". We need to develop the "I" corridor not the east side.Umm.. no sewer and water there.. who'll pay for it? Maybe we could create a fee for everyone so that we could get it done? We can't, we're all poor. O.K. then maybe they should build on the east side. Nope, Caledonia doesn't need the jobs a Walmart would bring cause we've got the lowest unemployment in the state, with an average household income of around $75000? Get your story straight folks. If you don't want development on the east side then we HAVE to run sewer and water to the "I". Everybody pays. Get over it!
Tony Minto May 05, 2013 at 12:54 PM
Denise, The links you have provided are for the (Sanitary) Sewer and Water district. The water tower project and the attenuation basin project are Sewer and Water projects, and are completely outside the drainage commission's authority. The agendas and minutes for the drainage commission may be found here: http://www.caledoniawi.com/storm_sewer.aspx
Denise Lockwood May 05, 2013 at 01:33 PM
My apologies on the links. Tony, can you explain what the drainage district does?
Shirley and Marcel Dandeneau May 05, 2013 at 08:44 PM
WALMART!!!!! CALEDONIA DOES'NT NEED IT. I SEE THE SAME OLD COMMENT'S, IT WILL BRING JOBS. WHAT ABOUT THE BUSINESSES THAT ARE ALREADY HERE, NELSON'S DIME STORE, K. MART, NICE SHOPPING CENTER, MILAGAERS THE BUSINESSES ON DOUGLAS AVE, IT WOULD PUT ALL OF THOSE PEOPLE OUT OF JOBS. I HEARD TWO PEOPLE AT THE HOSPITAL SAYING IT WOULD CREATE JOBS, THEY LIVE DOWN TOWN, IF THEY CAN DRIVE TO CALEDONIA FOR A WALMART, THEN THEY CAN CONTINUE TO DRIVE TO STURTEVANT! ALSO WALMART DOES'NT WANT TO PAY FOR SEWER AND WATER TO GO OUT TO THE I, THEY WANT A LOT THAT ALREADY HAS IT! THEY ARE CHEAP AND WANT TO PUT ALL THE SMALLER BUSINESS'S OUT! ALSO, N. GREEN BAY RD IS A TWO LANE ROAD THAT IS ALREADY VERY BUSY, HAS LOTS OF CHILDREN IN THE AREA, WITH MANY SPEEDERS. WALMART DOES NOT BELONG IN THE FOUR MILE AND GREEN BAY RD SPOT/FIELD.
Adam May 06, 2013 at 02:04 AM
How about we stop having "fees" raised every time some inept government employee can't figure out a budget???? Cut some of your administrators! Raise more fees, and face a new opponent!
LAURIE from Caledonia May 06, 2013 at 02:45 AM
@ Adam ..... LOVE LOVE LOVE YOUR COMMENT!!!!!!
Tony Minto May 06, 2013 at 10:17 AM
The drainage district is responsible for enforcing the Village's storm water ordinance and for ensuring that the Village is in compliance with the Wisconsin Department of Natural Resources storm water requirements.
Tansandy May 06, 2013 at 10:30 AM
A lot of accusation without any statistics to back up your claims. And Walmart is not the only business that will not bring water and sewer out to the I. That's something our villages past regime messed up by not teaming up with Mt Pleasant to do this. We were to busy promoting water gardens, and taking property off of tax roll and putting it into conservency. I think if we ban a Walmart, or any big store from coming to Caledonia, I would hope that we people from Caledonia go to Walmart in Mt Pleasant (it's not in Sturtevant by the way) they would levy an excise tax on us out of town shoppers. You two are just like the "beuatiful people" up on the north shore. Carry around the most expensive and up to date cell phone, but fights to keep cell towers out of their neighborhoods. Put the tower in someone elses hood. Talk about hypocrites. AND I DIDN'T EVEN HAVE TO SCREAM!

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