May 30 2014

Sewer Tax Increase to be Considered June 2

New sources of revenue for sanitary sewers are sought despite years of diverting funds away from the Sewer Fund for other City purposes.

At a recent Council meeting, the Budget Advisory and Financial Planning Committee (BAFPC) made recommendations to seek new sources of revenue to pay for remaining renovations to the City’s aged sanitary sewer pipes.  The recommendations included:

1. A Sewer Tax surcharge of 20 – 25% for two to three years.

2. A temporary Real Estate Property Transfer Tax surcharge of $2 -$3 per $1000 of sale price

3. A $1.2 to$1.4 million loan from the General Fund to the Sewer Fund

Piedmont property owners have for decades been paying into the Piedmont Sewer Fund via their property tax bills and provided ample funds to cover EPA required renovations and maintenance of the sanitary sewer pipes. However, starting many years ago, much of the Sewer Fund money was diverted to pay for various General Fund activities, such as maintaining the storm water system and street sweeping. The sanitary sewer system is separate from the storm water system. Since the Sewer Fund was used as a revenue source for the storm water system and undefined public works activities, the General Fund was relieved of paying for these and other   standard City services.

The assignment of storm water expenses to the Sewer Fund has had little recognition by those assessing the need for “new taxes” such as increased property taxes, property transfer taxes, or debt instruments including loans. The draw down of funds from the Sewer Fund transferred to the General Fund has been largely unknown to property owners, who now might be asked by the City for more taxes through an upcoming ballot measure.

Piedmonters, in general, have appeared eager to comply with EPA decrees and requirements.   The transfer of Sewer Fund money to the General Fund has raised questions.

When looking at Public Works Department employee positions, significant costs are attributed to the Sewer Fund without backup information to support hours worked or projects completed by certain public works positions.

The City’s reserves have recently grown providing funds to support projected emergencies and general maintenance, while the Sewer Fund continues to have its funds transferred to support the General Fund activities.

Some have stated that transferring money to the General Fund from the Sewer Fund has allowed the City to enhance playfields, parks, and provide more services.

– Budget Hearing June 2 –

Changes to a recommended Budget are rarely made at the Council’s public hearings, as most of the actual work on the Budget has already been done during the Budget Workshop.  These workshops are held away from broadcast systems in the Police Emergency Operations Center and are not available for public viewing. 

The public will have an opportunity to voice opinions on the sewer issue and the entire Budget at the Council’s June 2 Budget Hearing. As required by the City Charter, this is the first of two public hearings.

Staff report on Sewer Fund.

3 Responses to “Sewer Tax Increase to be Considered June 2”

  1. I attended and spoke at the May 19 Council meeting. City Council has rejected the no-tax option and will not be considering using the General Fund as a revenue source on June 2. The no-tax option was presented as a viable alternative by the Budget and Finance Projection Advisory Report presented May 19.

    In 2011 the City stated $11M (Eleven million) was needed to complete the sewer system. Now we are told a temporary $1M (One million) infusion into the Sewer Fund will allow all needed completion work to go forward. Surely this discrepancy must be addressed before the City asks for further sewer taxes.

  2. Why would the city need to “loan” 1.2 to 1.4 million from the General Fund for the Sewer Fund? The General Fund should pay back the money from the Sewer Fund. It is a simple matter of repayment. The taxes have been paid regularly over the years to the Sewer Fund. The three “solutions” are truly offensive.

  3. I thought a million or more dollors was diverted from the sanitary sewer fund to finance the undergrounding district cash short fall in the hills 4-5 years ago. I guess the money was never put back by the City. Seems like 11 million to 1 million is a big difference.

Leave a Comment