AGENDA #4b

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            W. Calvin Horton, Town Manager

SUBJECT:       Response to Request for Stormwater Fee Assistance Program 

DATE:             November 8, 2004

 

 

The attached budget amendment would provide for stormwater fee assistance to individuals eligible for the Homestead Act Exemption (NCGS 105-105-277.1) for property tax purposes.

 

BACKGROUND

 

On September 7, 2004, a Council member petitioned the Town Council for possible relief from stormwater fees for persons covered by the Homestead Act in a manner similar to that used by Orange County for the recycling fee. 

 

DISCUSSION

 

Orange County used the guidelines set forth in the Homestead Act to define the eligibility requirements for citizens who wish to receive financial assistance for the recycling fee established as of July 1, 2004.  The Homestead Act is a program designed to reduce property taxes for elderly, low-income residents on their principal residence.  However, Orange County broadened the eligibility by eliminating the age requirement of the Homestead Act.  As a result, the County assistance program is open to households meeting the following requirements:

 

(1)    Household disposable income for the year 2003 was $18,800 or less. 

(2)    The homeowner is an Orange County resident.

(3)    The homeowner is applying for assistance for the principal residence.

 

Income is defined as the adjusted gross income, as defined in section 62 of the Internal Revenue Code, plus all other income received from every source except gifts or inheritances or income received from a spouse, lineal ancestor, or lineal descendant.  For married applicants residing with their spouses, the income of both spouses must be included, whether or not the property is in both names.  

 

Currently, the Town of Chapel Hill has approximately 110 households that are qualified for the property tax exemption.  In an effort to make such a program as easy to use and as uncomplicated as possible, we would recommend that the Town use similar eligibility requirements, the same application deadline (December 31, 2004), and the same application form as the County.  The Town is unable to expand the definition to include households that are ineligible for property tax reduction under the Homestead Act as Orange County has for the recycling fee, but otherwise would use the same definition for eligibility as the County (see Attachment 1).  Municipal authority to provide assistance to low income persons is not as broad as County authority.  The Town Attorney recommends that the Town not eliminate the age requirement contained in the ad valorem property tax exemption standard of GS 105-277.1 if it wishes to create a program for Stormwater fee assistance.  In keeping with the requirements for the Homestead Act, residents would need to be 65 years of age or permanently disabled.  Residents would need to apply for the fee assistance if the program is approved by Council (see Attachment 3, Proposed Stormwater Fee Assistance Program Application). 

 

A reserve of $6,500 would be sufficient to cover the requests for assistance based on the total of the fees for individuals who are eligible for the Homestead Exemption this year.

 

If the Council institutes the fee assistance program, we would need to use $6,500 from the Council’s contingency, reducing the balance to $24,166.  The attached resolution would require that Council continue to fund an account for reimbursement of stormwater fees unless the Council voted to rescind the resolution in a future year.

 

RECOMMENDATION

 

That the Council approve the attached resolution and budget amendment.

 

ATTACHMENT

 

  1. Memorandum of September 1 , 2004 (p. 5).
  2. Memorandum of September 7, 2004 (p. 6).
  3. Proposed Stormwater Fee Assistance Program Application (p. 7).

A RESOLUTION AUTHORIZING THE MANAGER TO INSTITUE A STORMWATER FEE ASSISTANCE PROGRAM (2004-11-08/R-4)

 

WHEREAS, the Town has established a Stormwater fee; and

 

WHEREAS, the fee is a burden to low-income residents; and

 

WHEREAS, Orange County has established a fee assistance program for their recycling fee for low-income residents;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to establish a stormwater fee assistance program for households meeting the income, age and disability requirements of the Homestead Act, who are residents of the Town of Chapel Hill and who are applying for assistance on the primary residence.

 

This the 8th day of November, 2004.

 

AN ORDINANCE TO AMEND “THE ORDINANCE CONCERNING APPROPRIATIONS AND THE RAISING OF REVENUE FOR THE FISCAL YEAR BEGINNING JULY 1, 2004” (2004-11-08/O-1)

 

BE IT ORDAINED by the Council of the Town of Chapel Hill that the Budget Ordinance entitled “An Ordinance Concerning Appropriations and the Raising of Revenue for the Fiscal Year Beginning July 1, 2004” as duly adopted on June 14, 2004 and the same is hereby amended as follows:

 

 

This the 8th day of November, 2004.