Stormwater utility added to Newton water bills in 2021

Utility bills in Newton are going to increase by next year, but it will allow the city to collect revenues for stormwater management issues — which had not previously been possible — while also freeing up funding for more street projects.

On Tuesday, Sept. 8, a 5-1 council vote passed the third and final reading of an ordinance creating a stormwater utility chapter into city code. Establishing a stormwater utility has been a goal of the Newton City Council for the past few years, and now it can finally start to take form.

Effective Jan. 1, 2021, residential units in Newton will be billed $3 per month until July 1, 2022, when it will increase to $4, $5, $7 and $9 each subsequent year until 2025. This payment will be added on to citizens’ water bills, Newton Public Works Director Jody Rhone said.

Prior to council’s action, the city had to use the Road Use Tax Fund dollars it receives from the state for stormwater-related issues.

“We’re constantly rebuilding storm sewer intakes and existing stormwater issues,” Rhone told Newton News. “We have one to two crews the entire construction season long. (The ordinance) will immediately begin creating a budget that diverts those costs from the Road Use Tax to stormwater utility.”

Moving forward, public works has to hire an engineering firm to evaluate stormwater and drainage calculations in all drainage basins in the city before getting started on specific projects. Rhone said residents will likely see street projects proposed before any kind of stormwater project.

Councilperson Evelyn George, who was in favor of the city’s ordinance proposal, said storms are going to continue and will cause a lot of damage. Not only that, she noted the added benefit of the city using more Road Use Tax Fund dollars for street projects, which she said are important to citizens of Newton.

“We really need more funding for this, because right now we’re taking that money out of the street fund,” George said. “Quite honestly, I had avoided Union Drive for months, and I’m thinking maybe it was over a year because I drove on it recently and it’s horrible. We just have to keep our streets maintained.”

Councilperson Mark Hallam, again, proposed another amendment to the ordinance, asking that the automatic annual fee increases be removed. Instead, he requested future increases be introduced to council members for approval. However, this amendment failed to advance since it wasn’t seconded.

Rhone cautioned council members that if Hallam’s amendment were to get implemented, the city would be looking at potentially borrowing funds against this new revenue stream. It could potentially delay implementation of stormwater management and alter what public works would be able to borrow for street work.

If the city council adopted the stormwater utility ordinance as proposed and without Hallam’s amendment, Newton City Administrator Matt Muckler said the city would be able to bond for $2.2 million in fiscal year 2022 and another $1.1 million in fiscal year 2024.

“That’s the money that right now we’re spending street dollars on (for) stormwater purposes,” Muckler said. If the ordinance passes, Muckler said the stormwater utility funds would be used for stormwater-related purposes and free up Road Use Tax money, which could pay back some of the aforementioned bonds.

“So while I can’t say if we just went to the $3 what that would allow us to bond, I know it would be considerably less than the projections we’ve been given up to this point,” Muckler added. “We have a backlog of street projects throughout the city, and one of the things we wanted to use Road Use Tax revenues bonds for is some overlays in FY22. To the tune of about $1 million in overlays.”

The city does not have enough money to take care of its streets, George said. And the more the council puts it off, the more it’s going to cost to repair or replace. Both the city and its elected officials “can’t get ahead of it if (they) don’t do something. Plus, George said the city had already made changes.

“And we’ve reduced the amount of the rate per month for a single household,” she said. “So I feel like we have a good compromise here. We’ve got to start getting some money to pay for the stormwater so we’re not stealing from our street fund all the time and getting further behind.”

When the ordinance was first proposed in March (it was eventually put on hold when the pandemic hit and then reintroduced in August), the rate for homes was set at $5 instead of $3. It, too, increased annually, but was planned to start July 1, 2021. George said the free increase now is more gradual.

“Somebody’s gotta pay for it or our streets are going to continue to fall apart,” George said. “I don’t think the federal government is going to come and give us more at this point. And our citizens want these streets repaired. Some of them are in such bad shape. I think they would appreciate it.”

Newton Mayor Mike Hansen said infrastructure is a high priority for citizens, but he also argued they do not like “automatic increases in anything,” which is what Hallam’s proposal was trying to address. Citizens, businesses and nonprofits object to those automatic increases, Hansen added.

“They felt that it should be something the council looks at on an annual basis and not an automatic increase,” he said.

George attributed the lower rate as the compromise to the automatic increases, suggesting the fee should be balanced enough to not be a burden on citizens while also being a significant revenue source for stormwater management. Hansen said citizens also want to know what they’re getting for their money.

“Some people that have storm sewer in place and what have you,” Hansen said. “Many different views on this thing, but it’s all up to you guys to decide what you want to do here. But I would be remiss in not passing that on to all of you who are making this decision.”

Ever since the stormwater utility was reintroduced to council members, Hallam has remained a staunch supporter of a stormwater management utility but also stressed the city should wait because of economic uncertainties caused by the pandemic. The councilman acknowledged he has been a bit of a contrarian.

He supports the concept, but believes this is the wrong time to implement additional fees and taxes on businesses, nonprofits and individuals in Newton. Establishments with large parking lots and the Newton Community School District, for instance, will notice a difference, he said.

When it came time to vote towards adopting the ordinance, Hallam voted “yes.” After the city council meeting commenced, he further clarified his intentions and actions. The councilman, ultimately, still stands by his views.

“However, once it was approved by my colleagues, I just wanted everyone to know — my colleagues, city staff, citizens of the community — I voted ‘yes’ to action adopt it, because I will fully support it and intend to explain the benefits of this to individuals and businesses as I’m asked about it,” Hallam said.

Contact Christopher Braunschweig at 641-792-3121 ext. 6560 or cbraunschweig@newtondailynews.com