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.