The current ordinance is not legally defensible. If the city doesn’t fix it soon, they may face a court challenge. If the ordinance is found to be invalid, the city may have to refund $ millions.
Undeveloped unplatted land is not charged a fee, but undeveloped platted land is charged. How could land become a user of the stormwater system simply because some plat maps had been filed?
The "service area" was not properly delineated. The ordinance is based on the assumption (legislative finding) that all landowners within the city benefit from the stormwater system. That assertion might have been acceptable if the city had chosen to implement a special assessment district, but they did not chose to do so. They are stuck with their selection of a "user fee" to fund the system. To be charged, the land must "use" the system.
Special Assessment: This option is based on the assumption that everyone within a Special Assessment District receives a benefit from the district, such as in increase in value. As an example, property owners along Colbert Lane pay an annual special assessment to cover that road’s construction. There are clearly inequities in this type of system. For instance Colbert Lane is used by many drivers who do not reside within the Special Assessment District. Regardless, the courts have been very liberal in their interpretation of Special Assessment Districts.
Ad valorem taxes: Here is a simple solution to the legal pitfalls of the Utility fee alternative. The city can charge ad velorem (property) taxes to fund the stormwater system’s revenue requirements. A $2 per month increase would result in $1.3 million increase in revenue. But such an increase would be politically unpopular. It would affect nearly all voters. Plus it would be labeled as a tax rather than using the more easily digested euphemism; "fee."
Annual stormwater fee – $4,290
City property tax – $1,239
Annual stormwater fee – $4,092
City property tax – $1,182
Annual stormwater fee – $1,848
City property tax – $66