Tax vs. Fee
Why create a stormwater utility rather than just increasing taxes?
Stormwater utilities and user charges offer a number of advantages over property taxes. Governments all over the country are relying on user fees that are often a more stable source of revenues.
Revenues from stormwater fees can only be used for stormwater related expenditures. Funding from general revenue sources faces fierce competition each year among elected officials and department directors vying for their share of limited dollars.
Under property tax systems, stormwater managers often cannot count on budget allocations, do not have as much control over their budgets, and cannot plan as well.
Impervious area, the basis for most stormwater charges, can be measured and is a reasonably objective measure. The idea that property owners pay in proportion to the measured amount of hard surface on their property seems fair. Property values, conversely, are unrelated to the problem of stormwater runoff.
Property taxes are not an equitable means of collecting funding from everyone who uses and benefits from the stormwater system. Even though user fees are not tax deductible for individuals, businesses can deduct it as a business expense.
What is an ERU?
An ERU is an Equivalent Residential Unit. It is the median value of impervious surface for all the detached single family residences in Blacksburg. For Blacksburg it is 3,300 square feet. For commercial and other non-residential properties, (except apartment complexes), the ERU will be applied to all the impervious surface of those properties. For example, if a commercial property has 33,000 square feet of impervious surface, they would be assessed at the rate of 10 ERUs.
Why do all single family residences pay the same amount regardless of size?
By accessing all single family residences at the same rate, it relieves the town from having to re-evaluate all properties annually to determine if the amount of impervious surface has changed or not. This will result in a significant cost savings, thereby keeping the fee rate down for all properties.
How will the utility be billed; and what happens if I don’t pay?
The Stormwater fee will be applied to monthly water/sewer/refuse bills. Theoretically, if a property owner effused to pay, they could be denied water service until the fee is paid.
Exemptions and Who Pays
Why are churches not exempt? Why are churches and schools being billed?
Churches and schools, just like government and other non-profit agency buildings, impact stormwater utility systems just like commercial and industrial sites. Providing for and addressing stormwater is a public service provided for by the Town of Blacksburg. All buildings contain impervious surfaces, (a surface which prevents water from being infiltrated). Impervious surfaces on the parcels of churches and schools also place a demand on the stormwater system. Stormwater runoff generated by any property must be controlled and conveyed once it leaves the property so that it does not create problems for others. Both the quantity of stormwater and the quality of stormwater, i.e. making sure pollutants are limited, impact the entire stormwater system for the Town of Blacksburg. The stormwater user fee is a utility fee, similar to water and sewer. Schools and churches have water, sewer and other utility fees; the stormwater fee should be handled similarly. Additionally, the Virginia state legislation that enables municipalities to form an enterprise fund specifically do not allow such exemptions.
Why doesn’t Virginia Tech have to pay for all of their impervious surfaces?
Virginia Tech is subject to their own Federal Municipal Separate Storm Sewer System, (MS-4), Permit. They are therefore exempt from the fee.
Why does the town need more money? We already pay taxes and have dealt with stormwater for decades without any problems. Why do we need this new fee?
New state stormwater management regulations and a new Federal MS-4 Permit will require the town to expend significantly more revenues than are currently being applied to stormwater management. Should the town choose not to comply with the mandated regulations penalties for willful non-compliance can reach up to $25,000 per day each day a separate offense or imprisonment, or both. Penalties assessed for violation of the regulations would inevitably be passed on to the citizens in the form of higher tax rates.
What kinds of activities are eligible for a credit, and who may apply?
Credits will be applied to those properties that can demonstrate compliance with specific reduction in run-off rates or volume, and those that can demonstrate water quality protections. As it would be nearly impossible to evaluate demonstrations and performance of best management practices on single family residences, the credits will only apply to apartment complexes, commercial and non-profit/non-residential properties.
What are the Benefits of a Stormwater Enterprise Fund?
Improved surface water, (and ultimately groundwater), quality
Improved stream function and value (ecosystem health)
Decreased drinking water treatment costs
Improved recreational opportunities
Potential property value enhancement
Enhanced community image and reputation
Attractive to home buyers and future businesses