Opinion ID: 874088
Heading Depth: 3
Heading Rank: 1

Heading: The Stormwater Fee Is a Tax

Text: It is apparent that Ordinance 4512 [14] is a revenue generating tax created to benefit the general public by charging all property owners for the privilege of using the City's preexisting stormwater system, regardless of whether they are using the stormwater system or not. See Brewster, 115 Idaho at 503-04, 768 P.2d at 766-67. By its terms, the Ordinance states that its purpose is to provide[] the funding necessary to enable on-going maintenance, operation, regulation, water quality management and improvement of the [stormwater] system. ... Ordinance 4512 only provides for the creation and administration of the Stormwater Utility, a method of assessing residential and non-residential rates, an enterprise fund, and a process for appeal and exemption. Thus, by its terms, the Ordinance is purely concerned with revenue generation. Id. The planning process for Ordinance 4512 further highlights this objective. In referring to the Council's motives for the stormwater fee, Thomas Dechert, Stormwater Program Coordinator, who was part of the planning process for the Stormwater Utility, elaborated that the stormwater fee is like police services in that it benefits the public generally. Dechert's proposal to the Council for the stormwater system asserts the main virtue of the stormwater fee as providing a solution for the Street Maintenance Department's funding concerns by freeing up $700,000 annually in general tax revenue. [15] Literature composed by the City for public dissemination posed in question and answer format further extols this theme. The document posits: All of my stormwater stays on my lot. Why should I have to pay more money now? The fee will go towards fixing, building, and maintaining the stormwater system that benefits the whole City. Just like streets or the wastewater system, it's part of what we pay for as a community. We want to ensure that stormwater discharged to the rivers and creeks from the City meets water quality standards to maintain the fish and wildlife we value. This document strongly suggests that even the City recognizes that this fee is a tax to provide community services to the general public. Ordinance 4512 contains no provisions of regulation and is not incidental to regulation. As a result, the stormwater fee is indistinguishable from the street restoration and maintenance fee in Brewster, 115 Idaho at 502-05, 768 P.2d at 765-68, and the development impact fee in Idaho Building Contractors Ass'n, 126 Idaho at 741-44, 890 P.2d at 327-30, both of which this Court characterized as unauthorized taxes. Ordinance 4512 contains no provision purporting to control activities relating to stormwater regulation, such as stormwater pollution control or illicit discharge. Furthermore, the City cannot point to any statute authorizing the imposition of the stormwater fee besides its reference to the Revenue Bond Act [16] and the Clean Water Act, 33 U.S.C. § 1342(p)(1)-(6). [17] The Stormwater Utility provides no product and renders no service based on user consumption of a commodity. See Brewster, 115 Idaho at 505, 768 P.2d at 768. The City has no involvement with the flow or removal of stormwater on private property. The essence of the charge imposed is for the privileges of having a pollutant free stormwater system and clean streets. This benefit is no different from the privilege shared by the general public, much like the public's use of city streets or police and firefighter services. See id. at 504-05, 768 P.2d at 767-68 (holding that a fee is a charge for a direct public service rendered to the particular consumer, while a tax is a forced contribution by the public at large to meet public needs). Thus, the fee serves the purpose of providing funding for public services at large previously funded out of the City's general tax revenues, not to the individual assessed. See id.; see also Idaho Bldg. Contractors Ass'n, 126 Idaho at 744, 890 P.2d at 330. As in Brewster, the stormwater fee is not dissimilar from a tax imposed for the privilege of owning property within the municipal limits of [the City]. 115 Idaho at 504, 768 P.2d at 767. The administration of the Stormwater Utility further suggests that the stormwater fee is a tax used for the non-regulatory function of cleaning, maintaining, and expanding the City's streets and stormwater infrastructure. Brewster, 115 Idaho at 504-05, 768 P.2d at 767-68. Unlike water, sewer, or electrical service fees, which are based on user consumption of a particular commodity, the stormwater fee is assessed on those who do not use the Stormwater Utility. Id. at 505, 768 P.2d at 768. The City is charging homeowners based on the extent of impervious surfaces on their property reasoning that this method equitably spreads the cost of maintaining the stormwater system to those who contribute non-stormwater and pollutants to the system. But, the City concedes that some of the individuals who are assessed the stormwater fee have their own private stormwater systems or are not connected to the stormwater system. The City's Stormwater Utility Business Plan estimates that the number of ERUs actually discharging to the City's stormwater system is probably at least 30% less than the totals given and that as much as 20% of the non-residential ERUs might be public or institutional property that could be exempted from fees. The Stormwater Utility Business Plan also relates that 30% of the ERUs might qualify for credits, immediately. There is no evidence of how much stormwater the fee payers actually contribute to the stormwater system. The ERU impervious surface area rate structure does not account for actual use of the stormwater system, which is understandable because the City plays no part in water flowing over properties unlike garbage, water, electrical, and sewer services. Id. at 504-05, 768 P.2d at 767-68. Furthermore, the stormwater activities that the City's Street Maintenance Department bills to the Stormwater Utility are broad and seem to incorporate any service that Keith Bingman, Street Maintenance Manager, declares to be storm related or stormwater maintenance related. ... Keith Bingman's stormwater activity list suggests that the City has shifted its Street Maintenance Program into the Stormwater Utility in order to free up its general revenues. Much like its method of budgeting and accounting, the Stormwater Utility has an ad hoc structure, which looks a lot like the Street Maintenance Department. As a result, there is no sure means to control how the stormwater revenue is spent contrary to Idaho Building Contractors Ass'n, 126 Idaho at 743, 890 P.2d at 329. [18] In addition, the reality of the enterprise fund is that these revenues are not segregated; instead, they are kept in a single checking account from which the City draws its general funds. See Potts Constr. Co., 141 Idaho at 681, 116 P.3d at 11; Loomis, 119 Idaho at 443, 807 P.2d at 1281.