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Council wades deeper into drainage-fee issues

Thursday, June 25, 2015 by Tyler Whitson

As City Council prepares to take action on restructuring the city’s drainage fee today, it is working through several issues that the current proposal presents for residents and property owners. That conversation continued at a special called meeting Tuesday.

Council Member Ann Kitchen, who sits on the Public Utilities Committee, made a few suggestions based on its last meeting. These included considering ways to phase in the new methodology, ensuring that qualifying residents can still receive drainage-fee discounts and taking into account the potential benefits of green infrastructure on the city’s drainage system.

One of Kitchen’s aides followed up with a post on the Council Message Board on Wednesday outlining a set of amendments that Kitchen said she plans to propose at today’s meeting to address these and other issues.

According to Watershed Protection Department Engineer Saul Nuccitelli, the proposal is “revenue-neutral” in that it simply changes the methodology by which the city recoups the costs associated with drainage infrastructure and runoff. “Overall, the rate restructure is not increasing Watershed’s total budget amount,” he said.

The proposed structure is based on impervious cover rather than land use, which Watershed Protection Director Victoria Li has argued makes it more equitable than the current structure, which does take land use into account. “Basically, the fee is proportional to the contribution of runoff from the piece of property,” she said.

Despite the lack of distinction, impacts would vary by category. Staff projects that the proposal would increase the average monthly charge by $1.90 for single-family home residents and $4.20 for commercial property owners while decreasing it by $3.60 for most multifamily residents and $3 per month for residents of high-rises that are at least seven stories tall.

While these are averages, staff has also acknowledged that there are outliers. One graph, for example, appears to show that close to 10 percent of single-family residents would see their drainage charges increase by more than $10 per month.

Kitchen said that Council may address the sharp jump for some customers by imposing a cap on the amount or percentage that a customer’s fee can increase in the first year of implementation. She included such a proposal in the list of amendments she said she plans to offer today.

That proposal raises other questions, such as how the city might cope with the decrease in projected revenue that such a cap might create. Council tossed around the possibility that the city could simply take the hit in revenue as well as the idea that customers on the other side of the spectrum might shoulder the burden by having their decreases phased in as well.

Council is also considering reining in outliers by breaking customers into tiers based on the amount of impervious cover on their lots.

Council Member Ellen Troxclair, who also sits on the committee, noted that the city will have an additional opportunity to address the cost issues involved with the drainage fee when it adopts the underlying rate during the budget process. “We could lower the overall drainage charge,” she said.

Council Member Ora Houston criticized the impact that the proposal would have on residents of single-family homes. “Their fees are going up because they happened to live in Austin during a time when it was OK to have a middle-sized house,” she said.

Council Member Pio Renteria also raised concerns about how the proposal may increase the cost of living for many low-income residents. “The drainage fee, that’s one thing people can’t cut back on,” he said. “It’s adding on and on to our utility bills.”

Although most multifamily residents would see a decrease in their drainage fees under the current proposal, they would also not be eligible for aid in paying those fees through the city’s Customer Assistance Program because the city would send the bill to the property owner. Nuccitelli made it clear that it would be a major undertaking for staff to calculate costs for individual tenants based on the proposed criteria. Kitchen said Council could consider making up for this loss by providing aid to tenants through other means, such as rental assistance.

Council Member Greg Casar noted that the net shift in cost burden from multifamily to single-family residents — who would continue to be eligible for assistance — may help to balance out the equation, though he said he wants to consider the issue further.

Green infrastructure such as rainwater catchment systems and detention ponds also pose a problem because they could improve the drainage system and decrease runoff, thereby contributing outside of the drainage fee.

Staff’s proposal, however, does not take into account green infrastructure and removes a discount that commercial property owners receive for having detention ponds. Currently that discount is a cost that other customers, who may not be eligible, ultimately have to make up.

Kitchen also included in her list of amendments a proposal that staff present to Council an annual report on the drainage fee that includes recommendations for ways in which the city might offer discounts for customers who maintain green infrastructure.

Despite these issues, Council appears to be under pressure to adopt the new drainage fee structure this week so that staff has time to implement it by Oct. 1, the start of the new fiscal year. Doing so might help the city avoid potential legal action pending on its current drainage fee, which a district judge has ruled violates Texas law. That action could resume Oct. 22.

Mayor Steve Adler summed up the major challenge related to the issue. “We’re constrained on how we can charge that fee because the statute says that the fee can’t be adjusted on the basis of need or equity,” he said. “The sole criteria that can be used is, ‘How does your living unit contribute to runoff?’”

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