TRANSMITTAL LETTER FOR BOARD MEETING OF JULY 9, 2009
COMMITTEE ON STORMWATER MANAGEMENT
Mr. Richard Lanyon, Executive Director
Title
Request for policy decision on the collection of Stormwater Fees from properties outside of the Metropolitan Water Reclamation District of Greater Chicago Corporate Boundaries, but within Cook County (Deferred from the May 21, 2009 Board Meeting)
Body
Dear Sir:
On October 17, 2007, The Illinois 95th General Assembly passed Public Act 95-0669 (“Act”), which amended the District’s Stormwater Management Act (70 ILCS 2605/7h(e)) to allow the District to collect fees from areas outside of the corporate boundaries of the District, but within Cook County for performance of stormwater management services, including maintenance of streams and the development, design, planning, construction, operation and maintenance of stormwater facilities. The amended legislation imposes a cap on the amount of fees the District may collect from areas outside of the District but within Cook County. The fees may not exceed the District’s annual tax rate levied for stormwater management within the District, multiplied by the aggregate equalized assessed valuation of areas outside of the District but located within Cook County. There are approximately 23 communities that are located in whole or in part in Cook County but not within the territorial jurisdiction of the District that could receive District stormwater management services and are potentially subject to imposition of fees (“potential fee communities”).
Monies collected for stormwater management services rendered in these areas outside the corporate boundaries of the District must be in the nature of a fee and not a tax. Under Illinois law, a fee is defined as a charge fixed by law for services of public officers and is regarded as compensation for services rendered, while a charge having no relation to the services rendered, assessed to provide general revenue rather than compensation, is a tax. Crocker v. Finley, 99 Ill. 2d 444, 452 (1984). Fees, unlike taxes, should be proportional to the benefit or service rendered. Church of Peace v. Rock Island, 357 Ill. App. 3d 471, 475 (3rd Dist. 2005). If fees are assessed in these areas, a mechanism must be established for accurate valuation of the District’s services that benefit the potential fee community.
Shortly after passage of the Act, the Engineering Department contacted the Cook County Office of Tax Extension to obtain data needed to calculate the maximum amount of the fees the Act authorized the District to collect. After several attempts to obtain the data at the staff level, commissioner involvement was required to obtain the data from the Cook County Office of Tax Extension. An analysis of the data showed that the District would receive a maximum $341,029.01 for every $0.01 per $100 in Equalized Assessed Value (EAV) using the 2007 EAV data, which is an average fee of $7.04 for every parcel in the affected area. For example, if the District had collected fees for the 2007 tax year, we would have only been able to collect a maximum of $85,257.25 (based on the actual tax rate of $0.0025 per $100 in EAV) from the areas outside of the District’s corporate boundaries, which breaks down to an average fee of about $1.76 per parcel. Attached to this board letter is a table that provides a breakdown of the maximum potential fees to be collected by municipality and by township for unincorporated portions of Cook County.
While the Act provides the District with an avenue to obtain additional revenue to fund the stormwater management program, there are inherent difficulties with recovery of these fees. A major consideration is the District’s cost to collect the fee in relation to the amount that can actually be collected. The maximum collectible fee is relatively small in light of the anticipated cost of administration, collection and enforcement of non-payment. Because this is a fee and not a tax, the District would be responsible for collecting these funds directly as we cannot collect the funds on Cook County property tax bills. To collect this money, the District would be required to obtain the EAV data from the Cook County Office of Tax Extension every year and send out bills to either residents or the local municipality or township. The delay experienced with the 2007 EAV data suggests that this data might not be delivered expeditiously. Additionally, the District would be required to develop an internal accounting system and devote substantial staff time to yearly analysis of cost recovery for stormwater services in the affected areas.
The amended act allows the District to require the unit of local government in which the stormwater services are performed to collect the fee and remit the collected fee to the District. The District is authorized to pay an administrative fee to the unit of local government for said service, though such an administrative fee may not fully compensate the unit of local government in some of the potential fee communities for its actual expenses in that regard.
District stormwater management services in the potential fee communities to date have taken the form of planning efforts rather than capital improvements or maintenance activities. For example, the District has undertaken watershed planning efforts for the six major watersheds in Cook County, an activity that necessarily must study the watershed as a whole and not stop at municipal borders in order to be effective. For purposes of illustration, a breakdown of the expenditures on the Detailed Watershed Planning effort to date, indicating the pro-rata share per each potential fee community based on its area, is also included on the attachment.
In the interest of fairness, it is recommended that the District pursue the collection of fees based on an accounting of our expenditures on stormwater management services that benefit the communities in question. Cost recovery on an annual basis from any one potential fee community is limited by statue to the amount determined by multiplying the District’s annual tax rate levied for stormwater management within the District by the aggregate equalized assessed valuation of the area in that community outside of the District. Engineering further recommends not seeking fees from potential fee communities when the fees due are deminimis. The Board of Commissioners will be informed annually as to the cost effectiveness of the collection of these fees, to the degree that our expenses in administering the process can be identified.
The Board of Commissioners’ direction is requested with respect to adopting a policy of collecting fees from properties outside of the District’s boundaries but within Cook County. If pursued, these fees would be based on reimbursement of the District’s actual costs to perform stormwater management services, in an amount not exceeding the legislative cap.
Requested, Joseph P. Sobanski, Director of Engineering, NV:WSS
Respectfully Submitted, Debra Shore, Chairman Committee on Stormwater Management
Disposition of this agenda will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for July 9, 2009
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