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News

Stormwater plan would cut fees with contingency funds

1/10/13 | By Sheila R. Cherry, Associate Editor

BERLIN — The work on a stormwater management system for Berlin took a different tack on Monday, as the Berlin Town Council directed town attorney David Gaskill to draft an ordinance instituting a fee structure that would charge homeowners $50 per year per residence, and non-residential property owners $25 per year per equivalent residential unit.

The rates are revised from what the University of Maryland suggested, because the town proposes to subsidize the effort by drawing on its contingency fund.

One ERU is equivalent to a 2,100 sq. ft. residence, Town Administrator Anthony Carson explained during the work session.

The fees are meant to pay for a new stormwater utility department and the mayor and council stated that their intent was to adopt a “fair and equitable” proposal that would have the least economic impact on the community.

How the fee would affect — and be perceived by — residents appeared to be a major concern for the mayor and council. But Mayor Gee Williams pointed out that the financial impact of the new rate should be considered in relation to the possibility of a sudden and more costly financial burden that homeowners could face from flooding if the town’s stormwater drainage system is not improved.

To that end, the town revised a proposal that was recommended by the University of Maryland by reducing a proposed rate of $45 per ERU that would otherwise be charged to nonresidential users. Under the town’s alternative, the nonresidential rate would be reduced to $25 per ERU. The town is also proposing to use $300,000 from the annual contingency fund budget to share the financial burden.

One concern the reduced rate is intended to address is that nonprofits such as churches, schools and hospitals have more square footage, but not an equivalent amount of income. As a result, they would be less able to absorb the types of fees that commercial properties would be more able to pay.

Also according to the proposal, the fees and town contributions would be part of a 10-year commitment to pay for a newly created stormwater utility department and improved storm drainage infrastructure that officials hope will help the town be better prepared when natural disasters cause flooding.

To lessen the economic blow to residents and to reduce the need to raise taxes, Williams suggested that $300,0000 of the $700,000 in the general fund that is earmarked for contingency spending could be redirected to help fund the stormwater system. Currently, most of the funds are contributed annual to the Berlin Fire Company.

By using the money that had been given to the Fire Company, the town would not be incurring an additional financial obligation and at the same time would still keep an annual balance of $400,000 in the contingency fund, Williams said. “What level the Berlin Fire Company contribution [going forward] will be is dependent on a lot of factors,” he said.

The town and the Fire Company have been at odds for months in a dispute over claims that some of the members of the fire company, who are volunteers, had been harassing some emergency service providers, who are paid by the town.

Unable to reach consensus over thidity of the claims, or whether appropriate action had been taken against the personnel allegedly involved in the harassment, the town withheld $560,000 that was slated to go to the Fire Company. It also demanded that $150,000 already spent on payroll be repaid.

Moreover, conditions that were set by the town that would have to be met before town officials would agree to allow the dispute to go to mediation were rejected by members of the Fire Company last November.

According to Williams, Gaskill has contacted the Fire Company’s attorney, at the Town Council’s request, to obtain a report that will allow the town to determine the financial condition of the Fire Company.

“That is step one,” Williams said. “Before we just wrote them a check … are saying those days are over,” he said.

But Williams insisted that the proposal to redirect the contributions was not retaliatory, but that it was “more about the fact that we have to reprioritize our spending based on how we can best support our community.”

There is still money for a possible contribution to the Fire Company, he said. But the types of financial accounting that is required from other entities that receive significant contributions from the town had been exempted for the Fire Company, which had received their annual contributions without question. Now that arrangement will be a more formal relationship, according to Williams.

The ordinance is expected to be prepared and ready to present to the council by the Jan. 14 meeting and for a public hearing two weeks thereafter, Williams said during the work session. He said that the process for considering the proposal, “So far has worked the way it was supposed to work,” in terms of community participation and input.

According to the presentation made by Carson, the proposal would institute a fee structure where the 1,400 residences in town would be charged a flat annual rate of $50 per home. That would work out to a monthly rate of $4.17 or a quarterly rate of $12.50, based on the average impervious surface of a 2,100 square foot single family home and would generate $70,000 annually, he said.

The town’s 290 non-residential properties would be charged a flat annual rate of $25 per equivalent residential unit and would generate $200,000 per year, according to Carson.

Under the University of Maryland proposal, the fee structure would raise a little more than $4.6 million over a 10-year period: $3.91 million would come from nonresident properties at $45 per ERU and $700,000 would come from residential fees.

Under the town’s plan and by using money from the contingency fund, the resulting lower fees to nonresidential properties would produce $2 million from that sector, while the residential properties would generate that same $700,000. Meanwhile, the $300,000 annual contributions from the town would raise the 10-year revenue total to $5.7 million.

Officials have slated three construction projects that they hope to begin within the first year. The projects would help mitigate flooding in the: 1) Nelson, Franklin and William Street area; 2) Flower and Showell Street area; and 3) West Street and Abbey Lane area. Carson predicted the permitting process would take approximately six months and the construction would take three to four months.

Carson said town officials have already started contacting the Maryland Emergency Management Agency, Community Development Block Grant Program and the Department of Natural Resources for possible funding.

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