Storm Water Management - February 26

Council for the City of Waynesboro, Virginia, held a Stormwater Work Session on Wednesday, August 15, 2007, at 12:00 P.M. with representatives from community businesses and residents in Council Chambers of the Charles T. Yancey Municipal Building, 503 West Main Street, Waynesboro, Virginia, with Mayor Thomas Reynolds presiding and calling the meeting to order:

PRESENT: Council Members: Thomas W. Reynolds, Mayor

Nancy M. Dowdy, Vice Mayor

Frank S. Lucente, Councilman

Lorie M. Smith, Councilwoman

Timothy D. Williams, Councilman

Staff: Douglas Walker, City Manager

Michael G. Hamp II, Asst. City Manager

Julia Bortle, Clerk of Council

Robert C. Lunger, Esq., City Attorney

Brian K. McReynolds, PE, Director of Public Works

Anne Showman, Finance Director

Kim Cameron, City Engineer

Pat Nicosia, Director, Budget, Purchasing & Invent.

Guests: Lewis Ferry, Ward A

Bernie Gardner, Columbia Gas of Virginia

Mike Laczynski, Invista

Tom Sykes, Reo Distribution

Webber Payne, Waynesboro Florist

Mack Jones, Barnwell & Jones Realtor

Terry Short, Ward B

Emmett Toms, VA Dominion Power

Carl Rosberg, nTelos

Ellen Winter, Ward D

Robert Fry, Ward A

ABSENT: None

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MAYOR’S OPENING REMARKS:

Mayor Reynolds opened the meeting, greeted guests and thanked them for meeting with the City Council for the discussion and sharing of ideas. He asked the guests to introduce themselves and who they represent.

The goal of this meeting was to decide on a fee schedule for an Enterprise Fund as it was decided not to use the General Fund for stormwater management. It was noted that many of the local businesses were not satisfied with the anticipated cost of the program as presented, and this meeting was an open discussion for residents and businesses to discuss funding ideas.

The floor was opened for discussion.

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Mr. Laczynski: disagreed with creating a utility versus utilizing the General Fund. Creating a new tax should be the last resort utilized, and if a utility tax is created, it must include a credit system that recognizes investments already made. If a utility is the proposed method, not instituting a credit system would also be an error.

Mayor Reynolds encouraged the use of the General Fund, as did Mr. Williams. Council instead decided to use a utility, pulling it out of the budget. Mayor Reynolds stated that televised meetings included discussions of the plan, the levels of service, and how to pay for them. Except for a brief period of time when stormwater was included in the General Fund, stormwater revolved around the creation of a utility.

Guest: The City would create a lot of expenditure and overhead just administering and operating this separate utility. He was not aware until recently there was a separate funding of another $.06 of the tax rate to pay for the $1.4 million Council is talking about spending if the utility is enacted. (Mayor Reynolds noted that stormwater was $900,000 as part of the $1.4 million in the CIP).

Mr. Lucente: stated he is against the General Fund paying for stormwater. There are ponds that have not been maintained throughout the years, and if stormwater is in the General Fund, the funds could be used elsewhere if there is no immediate stormwater concern. Since these were not dealt with in the past, they may not be dealt with by future councils. Another problem is that there is a school contract where the City gives the schools 42.5% of all monies received in General Funds. That means for every dollar spent on stormwater, the City will have to raise an additional $.73 for the schools.

Mrs. Smith: stated she agrees with Mr. Lucente. Stormwater entails multi-millions of dollars of investments and infrastructures for the City. The General Fund will continue to place that work at risk. She sees the utility as a means of protecting taxpayer’s investments in infrastructure that will be put into place. It will be well positioned through depreciation and other sound financial methods over time to manage the system. She supports the use of a utility.

Mr. Lucente: stated that a stormwater utility is more efficient, more accountable, but too expensive at its present budget. It must be made fair and palatable to all citizens and businesses. His first priority is maintenance of the present infrastructure since “you don’t know what you have to do until you fix what you have.” He stated that a utility fee would be wise because work would be cut back after the existing problems are fixed. The utility should be self-sustaining so that it doesn’t have to be voted on each year.

Vice Mayor Dowdy: stated maintenance will not take care of her Ward’s problems. She believes that the projects should be done along with the maintenance. She and Mrs. Smith looked at putting stormwater into the General Fund but decided against it. She assures all those present that every Council member is very mindful of every aspect of this community, and they are trying to put this program in a position where it is not a burden to any one sector of the community.

Mr. Frye: stated that Ward A was promised that as soon as the City got the funds, they would take care of the problem by enlarging the line from Augusta down to the river. That was 23 years ago, and it has gotten worse. If it was refigured, money could be saved.

Tom Sykes: stated that the Board of Supervisors for Augusta County addressed stormwater problems with ordinances and policies. He stated that businesses are concerned that because budgeted projects have been included in the past but not done, what assurance will they have that the City will have personnel doing maintenance in the future with more money. Reo Distribution believes that cleaning it up, putting it in a General Fund and assigning the correct management to it is the way for Council to consider this process.

Mrs. Smith: addressed Mr. Sykes, stating that smaller projects were done; the past lack of maintenance was due to a lack of capacity and a lack of funding. Whether it is in the General Fund or through a utility, the money is being allocated to increase the capacity to allow the City to manage the pond maintenance problem.

Mayor Reynolds: stated he supports a separate department whose duties will include stormwater pond maintenance. He stated that in order to make stormwater management fair and equitable, the Council is faced with the choice between a stormwater utility based on impervious surface area or put the project in the General Fund that will pay for it with taxes. He clarified that the Agreement with the School System does not add to the tax rate as it is part of the budget.

Mayor Reynolds: stated that out of the General Fund budget, approximately $900,000 is designated for maintenance. Mr. Walker added that there is a component of the stormwater utility budget that includes projects 9 and 10 for this year, as identified in the Capital Improvements Plan. Projects 1-8 were in the General Fund.

Mr. Laczynski: stated that Invista invested $6.4 million in their stormwater management system. They spend $350,000 annually to maintain, repair and manage their system. Therefore, without a rebate system or credit system that recognizes investments already made is not fair, equitable and defendable. The City of Chesapeake did it from the start. He also asked where the money allocated to the six divisions of Public Works budgeted for stormwater work was spent, since the system was not maintained.

Vice Mayor Dowdy: stated that the Council has discussed credits, but the time frame allocated did not allow that to be addressed fairly. She stated that Council will address it as soon as possible.

Mrs. Smith: stated she agrees that a credit program is appropriate for those who go above and beyond the City’s ordinances designed to manage stormwater, but credit system costs money that must be funded. That must be part of the rate structure.

Mr. Lucente: agreed with Mr. Laczynski that a credit system must be done from the beginning. He did not think time constraints are an issue and will not make a hasty decision. He would prefer to eliminate the credits and reduce the rate from the beginning. He stated that the only way the stormwater program will work is to reduce the program’s costs. The effective way to reduce costs is to do the maintenance portion first.

Mr. Frye: stated one way to cut costs is to eliminate new offices. Mr. Lucente informed Mr. Frye that those costs are not separate but will be prorated and added to the utility bill.

Guests: stated that his area of Wayne Hills has no current stormwater management; therefore, nothing to maintain. They have been waiting for 46 years for help with stormwater, and they need infrastructure now.

Mr. Lucente: stated that some projects will be done through the General Fund.

Mayor Reynolds: stated that churches will be charged according to impervious area.

Mr. Sykes: impressed upon City Council that they must maintain vigilance on this program’s cost. He questioned where the current funding for stormwater is being spent. Stormwater management and sediment control have been a state mandate for years. If Waynesboro is just catching up, then the City must make sure it is an accountable department; not a separate level of management and tax.

Mrs. Smith: stated that the issue of accountability has been raised twice during this meeting. She asked the City Manager to comment on the lack of confidence and accountability voiced here.

Mr. Jones: asked why stormwater management is not part of the normal tax revenue. He used leaf removal as an example, and asked why that is part of stormwater. He stated that a majority of the issues related to stormwater should be in the General Fund Budget.

Mr. Walker: explained there were services shifted from other areas to the stormwater budget as they relate to the stormwater program. Resources are being applied to address other problems within Public Works. Choices have been made, costs have been reduced, revenues not provided; therefore, services have not been delivered. That is part of why the City is in this position. Using the General Fund or using a utility is a choice for Council. The current utility is a blend with General expenses related to capital improvements and utility expenses related to on-going maintenance and operations.

Mrs. Winter: disagreed with Mr. Lucente about reducing rates at the start. It is not going to encourage businesses to decrease the flow off their property. If there is no runoff from your property, there is no problem; therefore, the answer is impervious surface. Without a utility, taxes must be raised. She agreed with credits for commercial and industrial entities that go above minimum requirements. She mentioned there is a pervious surface that can be used on parking lots that water will soak into rather than run off. Businesses need to be accountable for maintaining stormwater, and a better policing job must be done. If impervious surface is the main cause for stormwater runoff, they should be responsible for it, instead of from the General Fund, raising taxes for everyone.

Mr. Rosberg: stated from a business perspective, nTelos’ real estate rate is one of the lowest in the Commonwealth. Personal property taxes are one of the highest, which affects businesses. He stated that nTelos built two ponds that have been maintained. He stated that the proposed plan is hard on businesses. The General Fund seems fair to him. He agreed that consideration has to be given to those companies who have spent money on stormwater management. The proposed taxes will have an impact on proposed future businesses in the City.

Mrs. Smith: stated that rates must come down for business and industry. Relative to the real estate rate, the City has nine industries, seven have realized virtually no increase in their real estate taxation. Invista realized a .6% increase in their real estate tax rate while all other residents had an average of 35%.

Mr. Laczynski: stated that all taxes must be considered, real estate, personal property, and machinery and tool. The only way to reduce the machinery and tool tax in the City was with the physical removal of the equipment. Removing equipment, when working hard to improve competitiveness to restart the equipment should be applauded by the City, not taxed non-revenue as has been done. He stated that businesses consider total taxes when making decisions, not individually.

Mr. Rosberg: agreed that Waynesboro is on the high side of business taxes when considering all of Virginia and on the lower end for residential.

Mr. Laczynski: stated he recognizes businesses have to be part of the solution for this problem. As a resident and business person in Waynesboro, he asked Council to consider how quickly the City wants versus needs to repair 30-plus years of neglect. An answer to that may help make the decision on a credit system for a utility or how many cents to add to real estate in a General Fund.

Mr. Lucente: stated the current real estate market and property assessments must be considered. He stated that the soil and erosion personnel should focus on the ponds. He also stated that businesses should be made aware of what their fee structure will be, and noted that staff is currently working on those figures.

Mr. Jones: stated that the tax rate and the assessed rate work in tandem. The City’s operation is dependent on their sources of revenue, and the combined dollar result has to be considered.

Mayor Reynolds: stated he does not have the same concerns that some Council members have, worrying that some other future Council may choose not to do this.

Mr. Sykes: As the City only owns three stormwater ponds and the rest are in private hands, he stated that public dollars should not be expended to clean them up. If it is done, then a lien should be placed on that property until it is cleaned.

Mayor Reynolds: stated that problems have to be addressed now without concentrating on the past problems. The Council will act on enforcement of the maintenance of the private ownership ponds.

Guest: stated that enforcement of the drainfield should be addressed with current staff. He has not heard about the development of a comprehensive strategy to address this matter. He has heard there is a dollar figure suggested from a consultant based on levels of service.

Mayor Reynolds stated the projects are identified and prioritized. Mrs. Smith stated that the utility is going to be built on maintenance, addressing one, two, or three projects per year, based on available revenue. Regarding Capital Projects 1-8 may be funded by bond issues and contracted out. The smaller projects done through the utility will be done in-house.

Guest: stated everyone who benefits from the location of the City, its infrastructure, and quality of life will have to make sacrifices. Sacrificing some VDOT funding for road improvements may be a good idea. He also supports increasing property taxes to offset some of those necessary improvements. If businesses do have a self-sustaining stormwater management system, a credit system is logical and an investment of great value to residents and water quality. He also suggested the removal of some impervious surface.

Mayor Reynolds: agreed with the concept of beginning this program with a tax credit for those companies who have already invested in stormwater management. That may also encourage those businesses that have been in existence for a longer period of time to become proactive and address the issue to earn credits. He also addressed the issue of one-time expenses and their justification. He said some of those one-time expenses may be able to be shifted into the General Fund, creating a blended program.

Mrs. Smith: stated the Council has viewed numerous models, but this Council does not intend to place a burden on Invista or proportionately to other businesses. The City has lowered its tax rate by approximately 28% over the last four or five years. This has reduced the City’s capacity to pay for stormwater while running the other necessities.

Mr. Laczynski: asked Council to consider that they may want to delay this program as there is no definition for impervious surface yet. There is between 35 and 40 acres of Invista property that is gravel that is listed as impervious surface. He asked what a parking lot surface can be replaced with, if there is no clear definition.

Mr. Lucente: stated he questions the consultant’s quote of $1.4 million for stormwater. He believes it can be done for less money. The bottom line is a decision must be made about how to proceed. He wants direction from those present on how much they expect to pay and with what method. With too many ideas being discussed at this meeting, it makes it difficult to come up with a consensus. He stated that a funding mechanism must be found to correct the problems so they don’t have to be addressed every year. Using the General Fund means a shift in who pays for it. Although businesses have 2.7 times as much impervious surface as residents, he does not believe businesses can bear that share.

Mrs. Winter: stated Waynesboro would hurt itself if it ran businesses out of town due to the utility tax. However, if the stormwater is put in the General Fund, it does not encourage anybody to have less stormwater runoff. Having a utility tax with credits will encourage people to handle the stormwater issues better. That must include a good definition of impervious surface.

Mayor Reynolds: stated he has heard that stormwater should come from the General Fund from most of the visitors present. If a decision is made to do that, it can’t be done until the new Budget, necessitating a tax rate to cover the charge. He stated there are two options; either at the next Budget level figure what the bottom line is based on recommendations, or to implement the utility with clearly defined terms. When the budget is cut, service levels are affected, whether it’s moving VDOT money to stormwater, or using General Fund money affecting other projects. He stated that the only way to look at funding is to address the levels of service.

Mr. Sykes: stated that it was mentioned at a previous meeting that the stormwater department was already created and funded through September 30, 2007. He asked if that meant a utility must be created to fund that department through the rest of the year.

Mr. Walker: stated that it is his responsibility per Council to develop a plan.

Mayor Reynolds: stated he appreciated it that each of the meeting participants took time out of their day to participate in this meeting. He suggested that if there are future questions or comments to make, that they contact any member of City Council.

Mr. Walker: stated there is another meeting this evening at 6:00 p.m. with staff presentations, focusing on budget scenarios. The meeting will be televised for everyone’s information.

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There being no further business, the meeting was adjourned at 2:15 p.m.

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Julia Bortle, Clerk of Council Thomas W. Reynolds, Mayor

City of Waynesboro, Virginia City of Waynesboro, Virginia