Landrieu considers stormwater fees to pay for New Orleans drainage system upgrades

By Kevin Litten

Source: NOLA.com | The Times-Picayune

August 29, 2017

Mayor Mitch Landrieu  is in the early stages of a plan to put a stormwater management fee proposal before the New Orleans City Council to help pay for improvements to the city’s troubled drainage system. Similar fees are in place in 39 states and are allowed under Louisiana state law, but New Orleans would be the first jurisdiction in the state to put them in place.

It is not yet clear what form the fees would take.

Property owners currently pay to maintain the city’s extensive drainage system with 4.46-mill tax that voters renewed in 2016. But not every property owner in the city pays the tax; nonprofits, religious organizations and educational institutions are exempt.

The millages the city generates annually falls well short of what the Sewerage & Water Board has projected is needed to fix and maintain the drainage system. Some $54.5 million in new revenue will be needed by 2026, according to a Bureau of Governmental Research report.

Deputy Mayor Ryan Berni said a new millage for drainage is a possibility, but there’s also been a movement to create a more complex fee structure that would credit property owners for the amount of water-permeable property they have. Owners of properties that absorb rainfall would pay less than someone who generates more runoff. For example, a lot with a large lawn or another retaining features would face a lower fee than a parcel with an impermeable surface.

The Bureau of Governmental Research endorsed stormwater fees in a February report. It pointed out that while New Orleans is “one of the nation’s most stormwater-challenged cities,” it doesn’t have a way to collect money directly from property owners who use its drainage system.

Getting voters to approve new fees could prove a huge challenge, but there are a few ways Landrieu’s staff is exploring that look politically feasible. The timing of putting the fee request before the City Council in March or April would mean that three members — LaToya Cantrell, Stacy Head and Susan Guidry — would be voting on fees right before leaving their seats.

The vote would also be held well after this fall’s citywide election, so it’s unclear whether it would become a front-burner issue for candidates.

An important feature of stormwater management fees is that they broadly distribute the cost burden, according to BGR, as long as the city “tightly limit(s) the number and types of properties that are exempt …” BGR also recommends the city credit property owners “that create significant, quantifiable runoff reductions.”

Jurisdictions with stormwater fees often credit property owners for using reduction methods such as retention ponds, rain gardens, rain barrels and pavement designed to absorb runoff.

The City Council would need to consider a charter amendment before it imposes the fees, the BGR report said, because current law is not clear about whether the city has the authority to impose stormwater fees. Head floated such an amendment on Aug. 10, which would ask voters to authorize the City Council to impose what’s known as a “parcel fee.” It would apply to all property owners in the city, whether they are tax-exempt or not.

The deadlines for adding a charter amendment to this fall’s primary and general election ballots have passed, meaning it wouldn’t be until next year that voters could consider the change. Head’s proposal earlier this month would give authority to the Council to impose stormwater fees without voter approval, much as they have the authority over S&WB fees on ratepayers.

The charter change was a BGR recommendation that aims to clarify whether the Council has authority to impose stormwater fees without voter approval.

BGR has also identified several other key features of stormwater management fees that have helped other jurisdictions withstand legal challenges when their fees were imposed.

• Revenue from the fees should only go toward the service. That means that while the Sewerage & Water Board would benefit from the fees, it could only use the money for drainage — not for its drinking water or sewage treatment systems.
• No overcharging: The city would need to identify how much money it needs to improve and maintain the drainage system, and then only charge a fee that would cover those costs.
• Anyone who pays the fee would need to benefit from the service. So the owner of a property without stormwater runoff — a rarity in New Orleans — would not have to pay.
• Fees should only be assessed based on how much stormwater runoff is produced, and there would be a way to credit property owners who take measures to reduce runoff, such as installing permeable pavement, green roofs or retention ponds.

Read “Beneath the Surface, BGR’s primer on stormwater fees.

It’s not clear what type of stormwater fee the city would consider assessing. BGR created a menu of parcel fees in its report. They included a flat per-parcel fee, meaning property owners would pay the same whether their property was large or small; a “gross area” fee which would be calculated based on the size of the property was; and a “total impervious area” fee that would only charge property owners for areas producing runoff.

Four other parcel fees were outlined in the BGR report, including one based on the property use: residential, industrial, commercial or institutional.

Its final recommendation is for the city to adopt a fee structure that “accurately measures the demands properties place on the drainage system.” BGR said the city should “rule out crude approaches such as flat per-parcel fees and the gross area method.”

Correction: A previous version of this story incorrectly described Head’s proposal and BGR’s position on charter changes, as well as the total amount of millages the city generates to pay to maintain the drainage system.

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