The Salem Area Chamber of Commerce took political action Monday evening, October 25 as City Council began the public hearing process on the creation of a stormwater utility. The goal of the move is to decouple stormwater from wastewater. Currently, utility ratepayers throughout the City of Salem pay for the maintenance and repair of the stormwater system with roughly $10 million from the wastewater fund per year.

According to the city staff report, those costs for stormwater should be folded out of wastewater and paid for by those with an impact on the system. The recommendation of city staff is to redistribute who pays for the $10 million in costs needed for the stormwater system per year. And City staff recommends that those costs be paid for based on the impact on the system. Staff reports that a nexus must exist between impact and rates and the national model for such a system is to base costs on impervious surface areas (rooftops, parking lots, and other hard surfaces that collect rain and dispose of it into the City's stormwater system).

Over the past 4 months, the Salem Area Chamber of Commerce has met with public works staff to determine an appropriate model to pay for $10 million in stormwater expenses. If the staff recommendation were to be approved, commercial property owners thoughout the City of Salem would stand to see exponential increases in their utility bill. Currently, water usage is the determining factor in calculating the utility payment to the City.

Who stands to lose? Commercial property owners, non-profits including Marion Polk Food Share, churches, and schools all would see significant increases in their monthly utility costs. Any operations with low to average water usage and large areas of impervious surface areas (rooftops/parking lots) would be the hardest hit. For example, the Salem-Keizer School District estimates that the staff recommendation would cost $250,000 in new utility costs per year. Those costs would have to come out of the district's general operational fund.

Who else would lose? Churches throughout the City of Salem with large areas of impervious surface who are now paying for the stormwater system based on their limited water usage.

Based on the significant impact this change could have on business operations, the Salem Area Chamber of Commerce took a position in opposition to the stormwater utility and asked City Council to revisit the issue. The Chamber's recommendation was based on the following arguments:

  • The failure to recognize that mandates to build impervious surface are done so to provide a public benefit and therefore a tax on those same impervious surfaces should be borne by the entire public.

  • More consideration must be given to unincorporated areas inside the urban growth boundary but outside the city limits. Those business and properties (sometimes right across the street from businesses inside the city limits) would not have to pay these new exponential rates for the stormwater system.

  • The current proposal further escalates the difference in cost of doing business between businesses right across the street from each other. Costs for businesses inside the city limits of Salem would increase while costs for businesses just outside the city limits would remain the same. Since businesses both inside and outside the city limits all have impact on the City of Salem stormwater system, implementation of the stormwater utility would create greater inequities within business sectors (restaurants, grocery stores, etc.)

  • This is not the time to exponentially increase costs on citizens who own commercial businesses in Salem.

  • There is no immediate mandate from any government body requiring this be done now.

The Salem Area Chamber of Commerce provided three-part testimony with Board Members Brent DeHart, Mark Shipman, and Jason Brandt of the Chamber staff participating.

City Council made a motion unanimously to keep the public record open and to revisit the issue on Monday, December 6.

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Comment by David Withnell on October 27, 2010 at 7:26am
Thanks Chamber, the hardship this new "rain tax" would create is formidable. My dealerships would see a 356% increase in this utility cost ($26k annually). Needless to say we cannot take another hit, especially after the passing of Measures 66 and 67 last year. Keep fighting this!
Comment by Josh Purington, CPA on October 26, 2010 at 4:15pm
Nice job Chamber! Thanks for researching this issue and speaking up for all of us.


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