Gainesville City Commission moves stormwater fees to property tax bills

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At a May 28 special meeting, the Gainesville City Commission voted to move stormwater fees to annual property tax bills, but Mayor Harvey Ward sent a letter after the meeting to the GRU Authority, asking the Authority to reconsider a previous 2-2 vote that effectively ended an effort to keep the fees on monthly utility bills.

New methodology for calculating stormwater fees

Kyle Stevens from Stantec gave a presentation about selecting a methodology for calculating stormwater assessments and how to transition from billing the fee on monthly GRU bills to annual property tax bills.

Single-family homes, duplexes, and condominiums are currently charged a flat fee of $11.55 per month per dwelling unit, and apartments and mobile homes are charged $6.93 per month per dwelling unit. RV parks and non-residential fees vary, based on the impervious area of the parcel.

Stevens recommended changing condominiums, apartment complexes, and mobile home parks to a measured fee, based on impervious area, instead of the current flat fee.

Stormwater fees are calculated to cover the expenses associated with managing stormwater, and Stevens calculated a net fee revenue requirement of $11.6 million a year; when that total is divided by the number of billing units, that comes to $12.55 per month per billing unit, or $150.65 per year per billing unit.

Stormwater fees would be billed to nonprofits on property tax bills; governmental entities can’t be forced to pay

Staff recommended assessing stormwater fees to charitable organizations and adding a hardship exemption that would work the same way as the current hardship exemption for the fire assessment fee. Stevens added that government-owned properties currently pay a stormwater fee because it is included on the utility bill, but they legally can’t be forced to pay fees assessed through the property appraiser “due to legal precedent,” so about $900,000 of fees that are currently paid by governmental entities would not be paid if they were billed as non-ad valorem taxes. Stevens said bills will still be sent to those parcels, but “oftentimes,… there’s not full collection on that… There’s not a fundamental recourse mechanism, like there is on the tax bill.” Dr. Shane Williams, the City’s supervising engineer for stormwater, added that the rate to non-governmental entities can’t be increased to subsidize those unpaid fees.

Nonprofits currently pay stormwater fees on their utility bills, but they typically do not pay property taxes.

Commissioner Bryan Eastman pointed out, “There’s not a fixed amount of stormwater [service]… We do have the ability to change our level of service and increase the amount of stormwater that we are doing within our city.”

Stevens agreed that it’s “never an apples-to-apples comparison… Fees… [depend] on exactly what they’re doing in a city.”

Commissioner Casey Willits agreed that nonprofits and religious organizations should pay stormwater fees “because stormwater is stormwater, and what you do on your property affects other people, and I’ve got Bible verses to talk about your responsibility on your property to not harm your neighbor. It’s very clear in multiple — in Deuteronomy and other places.”

Billing through the property tax bill costs more, will require increased rates

Stevens said the impact of the increased costs of moving billing to property tax bills would be $1 per month (billed annually) for single-family homes, an 8.7% increase from $138.60 a year to $150.65 a year; however, all payers can receive a 4% discount by paying early.

Property owner will now pay the stormwater fee; previously, the tenant paid the fee on their GRU bill

Condominium owners will see a wide variety of impacts from the new methodology (separate from the rate increase), depending on how much impervious area (like pavers, parking, and roads) is on the parcel; examples ranged from a 41% increase (for two-story and row-home complexes) to a 57% cut for complexes with more density (which usually means higher buildings). Apartment complex examples similarly varied from a 27% increase to a 19% decrease, and Stevens noted that the property owner will now pay the stormwater fee, which was previously billed to the tenant on the GRU bill. 

Motion

Commissioner James Ingle made a motion to approve staff’s recommendation, which was listed in the presentation as 1) Transition the current fee to the non-ad valorem assessment roll for collection; 2) Move to a measured impervious approach for condos, apartments, recreational vehicle parks, and mobile home parks; 3) Apply stormwater retention credit to all parcels that qualify and are billed on measured impervious area; and 4) Establish a hardship exemption. Eastman seconded the motion, and the motion passed unanimously.

Mayor Harvey Ward suggested asking GRU to put information in an upcoming bill about the change.

Mayor Ward sends a letter to the GRU Authority

On May 28, Ward sent a letter to the GRU Authority “on behalf and direction of the Gainesville City Commission,” as discussed at the Commission’s May 21 meeting. He wrote that the change in billing will have significant costs “for neighbors in the City of Gainesville” and will result in a loss of revenue to GRU. He also noted that many leases for 2027 have already been signed that do not include the transfer of stormwater fees from tenants to property owners: “Shared concerns from the Apartment Association of North Central Florida estimate an increase of $25,000 in a property tax bill for a complex of 300 units – a cost that was not factored into the already finalized leases for next year.” He asked the Authority to hold a special meeting to discuss this before June 10, along with a “timeline for the city to change our billing process.”

On May 13, the GRU Authority deadlocked on approving a Memorandum of Understanding with the City to continue billing the stormwater fees on utility bills, leaving the City without an agreement for billing the fees. 

Commission Comment: The Governor’s property tax proposal and data centers

During Commission Comment, Commissioner Cynthia Chestnut asked whether they could direct the City Manager “to prepare a public education program, a very engaging PowerPoint that Commissioners would go speak to clubs, churches, organizations, about what your property taxes pay for. When you hear about property taxes, you only hear one department, and that’s recreation. But how do you explain to the public that property taxes also pay for sustainable development, human resources, all of the other programs?”

Interim City Manager Andrew Persons said he could “put together a presentation about the myriad of services that the City provides through the use of tax dollars… I’m also happy to speak to any groups about what we do, as a City.”

Willits said, “I don’t think our City Code has good enough definitions on what a data center is, and it’s in the news, and I think we need better definitions…  So that’s just something I’m going to throw out to the Commissioners, if there’s some interest in it.”

Ward agreed, “That’s certainly something that the community is going to ask us to hold forth on soon, I would guess.”

Persons said it was a reasonable referral to staff, and he would put it on his list and probably bring it to a General Policy Committee meeting.