HomeMy WebLinkAbout06.07.2010• •
APPEAL HEARING
June7,2010
4:30 p.m.
Council Chambers
Members present: Getty, Jones, Greenwood, Schmitt, Welper, Hart. Absent: Cole.
Moved by Schmitt, seconded by Greenwood that the Agenda, as proposed, be approved. Ayes:
Six. Absent: Cole. Motion carried.
The Mayor opened the hearing for Appeal of Storm Water Sewer Fee —Requested by National
Cattle Congress.
Doug Miller, National Cattle Congress Manager, 257 Ansborough Avenue, thank you for the
opportunity for me to come in front of you today to talk a little bit about our appeal to the storm
water assessment. I'rn here today for the purpose of adding a little additional information about
the appeal regarding the storm water assessment fee that was placed on us according to the city
Ordinance no. 4980. I believe it was passed sometime in December of the last calendar year.
The financial impact of the storm water fee on our fair ground is significant. Our total water bill
increase amount is $844.25 per month against our average water bill of about $500.00 per month.
So it is nearly a 200 percent increase in our water bill. Our fair ground has been in a central part
of the City of Waterloo for 100 years. And we've been providing grounds and facilities for
hosting a multitude of agricultural, educational and leisure events. There is an average of over
400 events on our fair grounds and our facilities per year. The total number of people that come
across our fair grounds is over 200,000 every year. And a majority of those people come from
outside the City of Waterloo and outside the Cedar Valley. And they stay in our hotels, they eat
in our restaurants, they shop in our stores. Our fair ground provides a host for many people who
come into Waterloo to give a spike to our economy. We provide facilities at no cost or very little
cost to other non-profit organizations within the Cedar Valley like ASPIRE, which is a horse
program for children with mental disabilities. We provide a home for the Sunrise Exchange
Club petting zoo. This provides a place for children from low-income families where they can
learn about different species of farm animals. We provide facilities for the Iowa Youth Center
Club, Waterloo Exchange Club, Boys and Girls Club and other charitable fundraisers. We
provide all of the facilities and support to Black Hawk County 4-H annual fair, which takes place
in July of each year on our fair grounds. We also provide facilities for pet zoos, garage sales,
circuses, monster trucks, horse shows, concerts, tail gate parties, after shows, tool sales, auctions,
plant sales, boxing events, banquets, private parties, government training seminars and others.
Many of these people come from out of town as I mentioned earlier. Our fair ground is host to
the annual Cattle Congress Fair this is held on our fair grounds every September. Many of you
in this room today probably have attended that fair. This year will be our 100th anniversary and
we are planning on having a robust fair with a lot of new entertainment and special events for the
people in this community. The annual fair is truly a part of Iowa's cultural heritage. We do not
receive outside sources of funding for paying any of our operational expenses. Outside funding
comes mostly from local grants and donations. And is used for major capital improvements. We
are a small business operating on a revenue of less than $1.5 million dollars. Our budget is very
tight. We will have a very difficult time coming up with the additional storm water fee of
approximately $10,000.00 per year. The City Engineer states that everyone should share in the
responsibility in the cost to clean up storm water flows for a cleaner environment. We agree to
share that responsibility and cost but not to the extent that that $2.75 per 5000 square feet of
impervious area is placed on our venue. It is unlikely that there's another small business within
the City of Waterloo that the City Engineer is determined is having over 38 acres of impervious
service. We would request that you set a maximum amount that the city can assess for storm
water fees at 10 percent of a businesses monthly water bills. This would resolve in us having to
pay a little over $50.00 per month on top of the $519.00. This increase will be difficult to
manage but workable. The over $844.00 per month increase is next to impossible for us to
absorb. We need relief from the impact of this new fee.
Councilperson Schmitt, I don't want to get into the management of your organization or anything
but are there other avenues for you to try and recoup some of this expense. I don't whether
increasing your fees, increasing your shows or I just wanted to question if you've checked all the
options.
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June 7, 2010
Page 2
Mr. Miller, sure we have looked into that and we have to do that from time to time. As I
mentioned before we have a very tight operational budget given the situation we have with the
size of our fair ground, the multitude of our facilities and the cost to maintain those facilities.
We are constantly looking at that sort of thing. The biggest problem we have this year in
particular is our events are down about 15 percent because of the state of the economy. And it's
not only an impact on us but I am sure most of you are aware it's an impact on a lot of the
businesses in the local area. So our operational income is down about the same percentage along
with our number of events. And our budget is very tight. If we were to increase our fees we
would actually lose business rather than gain business because we would lose to our competitors.
Many of our competitors do not have the type of water fee/storm fee assessment that we would
have because of our large acreage out there at the fair ground. Most venues that compete with us
for many of the events that I suggested to you there earlier that we host every year have a smaller
facility. So the storm water fee wouldn't affect them as much. Now, granted they have other
bills and expenses just like we do. But they're not going to have the storm water fee assessment
increase on them like we have experienced here because of our acreage. So when you compare
our competitors the size of their venue is a whole lot different that ours. So it would be very
difficult for us to figure out how to come up with this extra $10,000.00 plus a year to pay this
increased bill.
Mayor Clark, I know that you appealed this to the engineer's office to begin with so was that
appeal based on the size of the area or what was the?
Mr. Miller, no it wasn't. It was based on, actually when I asked the City Engineer to do was
waive the fee and he came back and said he couldn't do that and that the council was the only
one that could do that. So when I filed the appeal to the council then I changed it from actually
waiving it to we are willing to share responsibility in paying part of this increased cost but the
amount of it is what is the problem for us. And my understanding is the City Engineer doesn't
have any flexibility in that particular area. He could give us an analysis and maybe some relief
on the impervious surface part of it but even with that the increase of that assessment of $2.75
for every 5,000 square feet of impervious surface is gonna have a major impact on our fair
ground. We have 28 buildings out there on the fair grounds. McElroy, Estel Hall and the
Agricultural buildings being the ones with the biggest roofs but when you combine all of them
that's a lot of surface area. And we also have a lot of asphalt area out there as well. So even if
we were to get some relief on some of the areas of our parking that maybe we would have a
discussion with the City Engineer on regarding whether or not its impervious or not that increase
of that rate on our fair ground $2.75 for every 5,000 square feet. That's about a multiple of 8
point something for every acre. And that is pretty tough for us to short that kind of an increase in
our water bill.
Eric Thorson, City Engineer, I passed out a document to the council and mayor this afternoon
that's three pages and double sided that you have. I just wanted to give you kind of a brief
history of our storm water fee. Back in July of 2009 Mayor Hurley directed us to get a
committee together to start working on this fee. You can see the list of people that were on that
committee, a lot of whom are sitting here this afternoon. We spent a lot of time working on this
fee. In Iowa most of the fees are either a flat fee or impervious area base fee. Mayor Hurley
guided us that we were to have a fee that was equitable and reasonable. So we spent really a lot
of time in meetings with this group working on this fee. We looked at a budget of about $1.5
million dollars is what we wanted to generate. That is of course what the council has used then
to approve last years or the current years budget and then next years budget. Ultimately we got
to a rate of $2.75 per month per dwelling unit for residential uses and $2.75 base fee plus $2.75
per square foot impervious area for the other commercial, business uses, non -profits and that sort
of thing. Council approved this fee in December of 2009. The decision was made to use the
Water Works billing system. They currently of course bill for water usage, garbage usage and
sewer fees. So it's logical for us to use their billing system then to charge this fee. So that's how
that came about. Towards the bottom of the first page you can see how the budget is broken
down to $1.5 million. All of the funds that we collect have to be used for storm water related
items. That is required by the ordinance that council passed back in December. So we are
limited to only storm water related things that we can use the funds for. On the next page we
really worked hard not to collect more money than we really needed. We didn't intend to have a
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June 7, 2010
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surplus and we don't believe we will. If we wanted to just have the fees be as reasonable and
equitable as we could. So if the council does make some kind of change then we may have to
look at either some sort of budget cutting or some sort of another fee increase to make up for
that. There are 42 cities within Iowa that currently have a storm water fee. The table in the
middle talks about the ones that are equivalent to residential unit based and there's a pretty
extensive list there. Waterloo, our fee is about in the middle of that group. As far as the
equivalent residential unit, we are kind of on the high end of that. There is actually only two
cities that are higher than we are. You'll notice Garner is at $57.50 and then Cedar Falls is at
$10,000.00 we were not sure exactly what their logic was there but that's a very conservative
number really. Most of the other communities are quite a bit less than that. On the next page,
page three you can kind of see the cities that have the flat fees. Most of them are just a flat fee.
They charge the same amount for each type of ratepayer. There are a few that are a little bit
tiered. Kind of notable in that is Cedar Rapids and Ames currently have flat fees. Cedar Rapids
has had a fee for quite a number of years and I think Ames has had it for a few years also but
they're both currently looking at reconfiguring their method of collecting the fee and using an
area based method. So that's currently in the works in both of those communities. On page four,
after we kind of went back and forth with the Cattle Congress and our letters and headed towards
the appeal here. We contacted 25 other cities with storm water utilities regarding fair grounds,
non -profits and fee reductions. We actually got responses back from 21 of those cities and there
is a chart there that shows you the responses that we received. Out of those only seven have fair
grounds within their city limits. They all charge the same no matter what. They charge
everybody the same; they don't make any fee changes. And they all do not give non -profits any
kind of reduction so that was the research we did on that. Next page, page five, Wayne had just
come across some information from the Association of Iowa Fairs that kind of lists the cities that
have fairs and actually have fair grounds within their city limits. Most of those responded to our
replies. I think it was Dewitt and Sac City did not actually respond to our request of information.
So that's just some additional information that we found as we were working through this. So
really we think that the fee is very equitable and fair. And we would recommend of course that
the council maintain that same level of fee and not grant any appeals.
Mayor Clark, I would also like to get comments on the legal standpoint on this appeal.
Chris Wendland, City Attorney, the ordinance that the council adopted last December did
provide some specific different exemptions from the user fee program. Those are in Section 8-4-
8. Basically it's government buildings, roadways, railroad track and associated right of ways. I
recall as part of the discussion that there was talk about whether to extend exemptions to non-
profit organizations of various types. And the consensus of those working on it at the time was
intentionally not to do so. The policy reasons can be more appropriately discussed by other staff
members here. But I just point out that there is no exemption to which we can resort to this
instance. This has come through a process to adjust the fee and that also is the process
prescribed by the ordinance. The ordinance speaks about that in the matter that's already been
referenced here in terms of adjusting for errors, redetermination of impervious area and so forth.
That has been addressed to some extent or at least the possibility of that has been addressed. The
City Engineer did not have authority to do what essentially is being put before you today, which
is a request to make a policy change. And a policy change would have to come about either
through an ordinance amendment to add an exemption that would apply generally to whatever
class you wish to define. Or we need an exception or variance from the ordinance. I would put
before you as well under cautionary consideration of Iowa Statute Section 388.6, which prohibits
a city utility, which is what the storm water utility is, from discriminating in its rates. Now the
Attorney General has opined many years back that a city utility can grant concessions, discounts,
etc. to organizations that traditionally benefit from those. Like non-profit, tax exempt
organizations. So that is a possibility that you could do that and not violate Iowa law, so far it's
developed today. However, keeping in mind that the opinion that was given in reference to a
restriction on discriminating against rates you should understand that any variance you make to
the ordinance scheme today is going to set you up to be compelled to follow that president in the
future and give similar consideration to any other organization that can come in here and say we
are substantially like National Cattle Congress for x, y, z reasons. Atleast one of those would
presumably be that it's a non-profit organization. So I am not here to tell you what the policy
decision is but to let you know that there are some legal repercussions if you chose to depart
from what the ordinance already provides.
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June 7, 2010
Page 4
Councilperson Greenwood, when we tried to arrive at the budget on here I see we have a $1.5
million dollar budget. Is that what we actually need? If there was some discounts or whatever
given to non-profit would we have to raise the askings from other payers to make up for that
deficit? Is the $1.5 million dollar budget pretty much what we need.
Mr. Thorson, yes that is correct. We developed how we thought we would spend the money as
we were working on the fee. And so if we did grant some sort of discount to any group and that
amount is reduced we need to have to cut budgets or raise the fee for the remaining ratepayers to
pick up that.
Councilperson Welper, has any other non-profit questioned their fee.
Mr. Thorson, at this point the National Cattle Congress has been the only non-profit that has
done an appeal. Mr. Miller said we have made a number of adjustments. People have come in
with either a classification change, something that the county wasn't aware of or we weren't
aware of, or they've got multiple water meters and they want it split among different meters or
different ways. We've done those kind of things. We've had a few billing errors that we've
taken care of. Those are things that are spelled out in the ordinance that we can do
administratively. And Wayne has spent quite a bit of time doing that, going through the various
bills and trying to make sure that we are being fair and correct as much as we can. So there have
been 50 of those or something in that range. But the folks that brought something to our
attention that the records didn't show us or whatever we have made those corrections for those
folks. And a lot of them were switching to a different meter or dividing it up differently if they
had multiple meters.
Councilperson Welper, there is a portion that I don't quite understand. Reading the hand out
many of the flat fees are tied to water meters and the water meters have absolutely nothing to do
with the storm water fee. It just the vehicle of how we are sending the bill out. So why are they
tying it to the water meters? They could tie it to the doors.
Mr. Thorson, you could. Every city does something a little bit different. We had kind of thought
early on we looked at a lot of different methods of billing that we were aware of. And we looked
at maybe doing something per water meter also. But it just didn't seem fair and equitable
especially when people have multiple meters for various reasons. They may have a multiple
meter one for fire purposes and one for domestic purposes maybe one for lawn sprinkling and
that type of thing. So it just didn't seem fair to us to do that. There are a number of cities that do
that. They seem to be smaller communities. And of course we are looking for a way to make
this relatively simple and relatively easy to bill. We did choose the Water Works to do our
billing because that's a system that's already set up. It would have been very expense to set up a
completely different billing system to bill out this fee. So since the Water Works system was
already there and also already billing some other city billing fees it works very well to do that.
Michelle Weidner, I might add that other cities don't do water meters because they already have
a billing accounting. So an easier way of billing, not necessary tied to water use but the difficult
thing about this is identifying who to bill and that's why a water meter account made sense
because they have that information.
Councilperson Welper, okay because it's very unfair.
Ms. Weidner, right, one has nothing to do with the other.
Mayor Clark, Wayne can I ask you to kind of give a sketch of where that money goes?
Wayne Castle, Associate Engineer, on our budget we have $200,000.00 budgeted for the
Engineering Department. We use that money for day-to-day operations for the storm water
management program. Per our DNR permit we are required to do construction site inspections,
review claims that come in, we have to do monitoring of the storm water system and give those
results to the DNR so they can formulate regulations at some point in time. Community
outreach, public education and we just sent out flyers last month and that is part of our goal. We
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June 7, 2010
Page 5
have a website, we have information available at our office to provide people. Those are the
things that we as the Engineering Department do. Another part of the permit is management of
the system and taking care of it. Its something that Waste Management Services has been doing
but under the DNR permit they set a requirement that every five years they system must be
cleaned so some of the money that is in that budget is going to Waste Management Services to
help them have more personnel and more equipment to do that. And then with that as well,
Street Department the $300,000.00 that they are budgeted for is to go help with street sweeping
which really helps remove a lot of the dirt and debris before it gets into the inlets and causes
those problems.
Councilperson Jones, this appeals process I don't see how it really addresses the issue of
financial hardship very well. My concern is if we made a concession for financial hardship then
it's going to be discriminatory towards other groups of some kind as well. So obviously it is a
financial hardship on Cattle Congress but I don't think the appeals process is the right place to
address this issue. I think we would have to go back into the ordinance and relook at that as far
as putting caps on anything or anything like that. I don't think that there's anything we can do in
the appeals process. Because they are not appealing square footage, they are not appealing the
$2.75 rate. I mean all of that seems fine its just coming down to financial hardship and I don't
think this appeals process can accommodate something like that.
Councilperson Getty, this afternoon I had the opportunity to go out and ride with Mr. Miller and
look at the property of where we are talking. And things that is out at the Cattle Congress. And
on a map that they had and the information that was given from the Engineer's office it showed
from the side of the dike or from the fence that sits on the dike that there was 60 foot that
according to the map belonging to the city. And we discussed that out there. Not knowing did it
or didn't it. So when I came back to city hall I sat down with Eric Thorson this afternoon and
years ago yes that is city land however the city did agree to let them put the fence where they
have it out there because that's 60 foot they have filled in and so forth to make an even slope
going up to the top of the dike. Then we ran into this afternoon where there is some drainage
down underneath that 60 foot. They're storm drains and there is a sanitary through that property
also. The city has put in the storm drain down on the bottom. That's exactly what its for. It's
for the water to run down into the ground and go down into that drain and then through the dike
and down into the river. So the drains that we looked at today the engineers know they are there
he knows they are covered up and that's the purpose of them according to the engineers. So
again this is a hard decision to make. They find out if that 60 foot really belongs to the city they
are using. A lot of the land out there now since they do some recycling of asphalt and so forth.
Each of you have pictures that I gave to each one of you. A set of pictures that shows kind of a
muddy type thing out there. Sure they smoothed it off and they get it hardened off a little bit for
parking and so forth but water can still go through and so they felt that wasn't right. And of
course that's not up to me that's up to the engineers to decide if that's a pervious substance I
don't know that's up to them to decide. It's a very tough decision and it's a lot of money to
charge an organization that's trying out there. And again it falls into the non-profit thing. If
everybody has heard me right we're talking $230,000.00 they brought into the program from
non -profits in Waterloo from this program. Its tough.
Mayor Clark, I don't think there is anyone up here that doesn't have a tremendous amount of
empathy for you. And we can't give you enough thank you's for what you do for the
community. As you said another $800.00 is going to be hard for you to take on your water bill
another $1.5 million is going to be hard for us to take on our tax bill. I wasn't here when this
was established but I'm relying on numbers to be accurate that what the EPA told us what we
had to do, the DNR told us what we had to do in terms of the mandate. That we as a city did for
a number of years, three to four years, without charging any fee. But it's a tough situation.
Mr. Miller, I just want to emphasize again that we talk about fair grounds and there are 106 or
107 of them in the state. There is only a very few of them that are located in a city or large
municipality where the impact of a storm water fee to this extent is applicable. For instance the
one in Johnson County in Iowa City they have their own well. I mean there's different
situations. Davenport is the closest and they have ... their fair manager tells me that the impact
on their bill is about $1,000.00 and they got it cut down in half. But they probably did it by
going through and getting a reclassification or something if what Mr. Thorson says is there have
Appeal Hearing
June 7, 2010
Page 6
been no exemptions or anything. But we are not asking for an exemption, what we are asking for
is recognition that ourfair ground is indeed unique of the non -profits in Waterloo. I can't
imagine there's another non-profit that has the type of hard surface area that we have in our fair
grounds with 28 buildings, all of those roofs, all of that asphalt, all that parking area out there.
That's what you have to have in order to have a quality fair ground. We have one here in
Waterloo, Iowa and its been here for 100 years. And we'd like to see it stay here another 100
years because we think it really has value to not only the cultural heritage in the Waterloo and
the Cedar Valley but just as providing a service to all the different people that utilizes it. So
that's what we are asking for. We want to pay our share of the storm water fee assessment. And
when you think about the impact it has on us as a small business, the increase in our water bill
almost 200 percent it just doesn't seem as fair. And it doesn't seem like there's equitable either.
You know when you say you can't provide an exception or whatever I just have a difficult time
understanding why our fair ground can't be recognized for its uniqueness and we can't get some
kind of a cap put on this bill impact. Do you know what I mean? Because we don't mind paying
extra but to that extent it is going to be very difficult for us to keep our head above the water, real
tough. And there is no way to make to make this exactly, as I understand this came about, to
make it equitable for everybody. There is no question about that but I just believe that our fair
ground is indeed a unique facility in this metropolitan area and we're just asking for some
recognition for that. That is what it is really about.
Bob Molinaro, I think Doug is very well to the economic impact that is has on the Cattle
Congress. And I guess to say that neighbors have been spit money and I would say that 80
percent of everything is private sources and contributions. The main thing that I want to deal
with on this particular issue is what's impervious. You don't find grass growing through black
top. I think we demonstrated clearly that the whole area is from the grassy areas that the only
reason that they are kept down is weed eat it or cover it again as events come. The thing of it
here of recycled material is just that. I've given pictures of what a mud triangle is. And that
demonstrates that underneath this very thing of it here there is strictly nothing but dirt. We've
covered it sufficiently so that we could us it for parking and things of that nature. But it doesn't
change the definition of what's impervious. According to the dictionary its not permitting
penetration or passage. Well the fact is it does. If you go out there after a steep rain you want to
take a shovel with you, I can give you water. All you have to do is dig around. The sewers that
are there has been covered up in this whole transition by I don't know the Corp. of Engineers or
the City. But they're at least 10 and 12 feet deep in some cases. And it's impossible to get those
to function without taking and cutting back the fill, mud and dirt that goes with it. So that we
can uncover more of these. We've uncovered about 12 sewers and about 8 of what I call waste
factors that come from Castle Hill and flow into that sewer recycling area. The main point is I
think you folks have to look at what is really impervious. Now I realize this is only part of it but
I have to ask you this. It's not just that it's a non-profit organization but who does it belong to?
That's the key so different than the parks. Who do they belong to? They belong to the people.
We are non a profit structure but the concept of the Cattle Congress has always been to serve the
people just like a park or anything else. I'm sure that in historic areas there are exemptions, there
always is when it comes to historical factors. And I just wanted to press just these few points.
You don't have grass growing if it's impervious. The drainage is there only because we are
uncovering sewers to do it. Not because they're natural sewers. They're something that have
been covered up by either the Corp of Engineers or the City. The other thing is as far as legal
repercussions, that's a two way street. There is always a counter to a counter to a counter. And
there's some very serious questions that have to be laid down here as to, who does it belong to?
Its just like a park and when we get this latest dictate that says we are exempt X number of feet
from the fence they better go measure it because that means that there they take part of the
Electric Park. It would cut right through Electric Park if we followed that same thing. I will
close by saying this, I think the only way is we have to tread carefully and have an opportunity to
review what we have and what we've got paid for. There is many stories floating as to how
much the city may owes us at this point. And how about the maintenance that's been having to
occur that hasn't occurred?
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June 7, 2010
Page 7
Moved by Greenwood, seconded by Schmitt that the hearing be closed and oral and written
comments be received and placed on file. Ayes: Seven. Motion carried.
Moved by Welper, seconded by Getty to table the issue until such time the city can re-examine
the impervious area at National Cattle Congress and not change the fees but just re-examine and
make sure that they are not paying for something that they don't have.
Councilperson Welper, I guess I would also look at as part of this as so we don't ... I have a lot
of empathy for what they do here. They make a lot of sense. They do bring a lot of people into
town, Heads on Beds. It is almost like another park for the city. I mean it's a place where other
non -profits could go. I would look at seeing if in the ordinance if we couldn't have another
classification as to not discriminate against within our ordinance but look at other classifications
saying non-profit fair grounds. That maybe the fee would be at a different rate to give some kind
of concession.
Mayor Clark, I agree that is a legitimate suggestion.
Ayes: Six. Nays: Schmitt. Motion carried.
With no further business before the committee the meeting was adjourned at 5:12 p.m. Ayes:
Six. Absent: Cole. Motion carried.
Suzy Schares
City Clerk