MEMORANDUM

TO:                  Edith Wiggins, Mayor Pro Tem

FROM:            Ralph D. Karpinos, Town Attorney

SUBJECT:       Stormwater Utility Fee Exemption Options

DATE:             September 1, 2004

The purpose of this memorandum is to provide information regarding the possibility of providing an exemption from the Stormwater Utility Fee for low income property owners, possibly those who receive the homestead property tax exemption.

The authority to fix and enforce stormwater utility rates is set out in General Statute Sec.160A-314. According to that statute the rates:

“may vary according to whether the property served is residential, commercial, or industrial property, the property's use, the size of the property, the area of impervious surfaces on the property, the quantity and quality of the runoff from the property, the characteristics of the watershed into which stormwater from the property drains, and other factors that affect the stormwater drainage system.”

Thus, the statute does not allow us to set rates based on someone’s age, property tax valuation or income.

You told me that the County was providing some type of assistance for its new recycyling fees. I spoke with the Orange County Attorney, Geoff Gledhill today and asked him about this. He said that Orange County is in the process of setting up a system where persons who meet certain eligibility criteria are provided reimbursement of the County’s new recycling fees. He explained to me that the County is not exempting eligible persons from the fee, but is instead paying from the County’s General Fund to the Solid Waste Enterprise Fund the amount that the person would be required to pay for the recycling fees.

He explained that eligibility for reimbursement is based on the income eligibility for a person to receive a homestead exemption under the property tax law. Persons who meet that qualification and make application will be provided the reimbursement. The specifics of the program have not yet been approved by the Commissioners. However, the County is taking applications now. Mr. Gledhill said that they rely for authority for their program on a General Statute for Counties that authorizes to provide social services programs (N.C.G.S. Sec. 153A-255).

Towns do not have the same authority as Counties to set up social services programs. However, it might be possible for the Town to establish a basis for providing a similar method of reimbursement for persons who receive the homestead exemption or meet other criteria, if the Council wished to explore this, particularly if the program were limited to senior citizens who qualify for the homestead tax exemption.

Because of the language in G.S. Sec. 160A-314 quoted above, the system would need to be based on a program of reimbursement to the Stormwater Utility Fund similar to the County’s proposed plan rather than providing exemptions.

Please let me know if I can provide further information.