Stormwater utility would shift costs to homeowners

Single families could pay $61.79 more than through property taxes

The average single-family homeowner would pay more while the average commercial or industrial property owner would pay less if Victoria created a new utility to manage stormwater.

Under a proposed utility fee - estimated at $265 a year - to be considered today by Victoria councillors, single-family homeowners would pay $61.79 more than what they pay through property taxes for stormwater management.

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Multi-family residential properties could expect an average increase of about $215, although that would be divided by the number of units on the property. Civic-recreational properties would see an average increase of $1,182, while commercial-industrial properties would see an average decrease of $1,148.

If the proposed fee was implemented, the portion of property taxes used for stormwater management would be removed from the tax bill.

"We said we were interested in moving forward with a stormwater utility because there are about $30 million in costs headed toward us in the next 20 years," acting mayor Chris Coleman said.

"But with every tool, it's [a question of] how it's implemented and what the impact is, so I think there will be lots of questions for staff."

As with the utilities for garbage, sanitary sewers and water, a standalone stormwater utility is seen as the best way to create dedicated funding for rehabilitation and replacement, set rates and build up reserves, meet environmental regulations and encourage green stormwa-ter projects.

A staff report says the creation of a stormwater utility would not result in an overall funding increase - rather, some property owners would pay more and others less.

The cost shift is mostly attributable to the fact that the commercial-industrial properties pay 3.5 times the amount of property taxes paid by residential properties and the proposed utility model does not use that multiplier.

Coleman said the question of whether businesses should pay less is one that council deals with often.

"Is it fair that we should be reducing the commercial side if we want to keep downtown vibrant? It's the same discussion we have when we set our commercial tax rates. They pay 3.5 times what residential properties do," he said. "Do I think we over-tax businesses? Yes."

However, the shift would be offset somewhat by properties statutorily exempt from property taxes - such as the legislature and Government House - that would have to pay the utility fees.

Properties receiving permissive tax exemptions - such as church halls, hospitals and private schools - would also have to pay.

The plan is to phase in the full stormwater utility fee for these groups over a three-year period.

City staff are also developing options for a rebate program that could provide credits for sustainable stormwater management practices or one-time incentives to offset the cost of building sustainable stormwater features.

Examples of water sensitive urban design features include grass swales or drains, artificially constructed treatment wetlands, on-site storage systems and porous or permeable paving in car parking areas.

Most of Victoria's stormwater system - which consists of 253 kilometres of pipes; 9,867 service connections; four lift stations; 2,888 manholes, with 101 combined manholes containing both a sanitary sewer pipe and a stormwater pipe; 5,692 catch basins; three stormwater rehabilitation units; 415 vents; three flush tanks; and 68 outfalls - was installed prior to 1920.

The estimated replacement cost is $362 million. City staff calculate that there is an annual shortfall in funding of $1.6 million to deal with the system's needs.

City staff have recommended extensive consultation with property owners prior to implementation, which would begin in 2014 at the earliest.

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