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6.1 Comparing and Selecting Billing Methods Two distinct methodologies currently exist for the purpose of collecting charges related to stormwater management. These include user fees and non-ad valorem assessments (commonly called special assessments). Based on FASU's 1997 Stormwater Utility Survey, approximately 82% of the utilities surveyed employ user fees as the basic methodology for revenue collection, while the remaining 18% of the utilities use non-ad valorem assessments or other methodologies. This portion of the chapter discusses the mechanism associated with each methodology, the advantages and disadvantages of each methodology, and special issues regarding the use of a selected method. 6.1.1 Factors Affecting the Applicability of Methodologies There are a number of factors that affect the selection of the most appropriate billing methodology for any given local government. These factors include:
Billing Coverage A key factor is the existence of a mechanism to distribute charges associated with the stormwater utility in a cost-effective and enforceable manner. For example, in a highly developed municipality, there are typically existing utilities (e.g., water and/or sewer utility), which already have a billing system in place. This billing system typically reaches the majority of the customer base within the municipal service area. To the contrary, a comprehensive utility system is not typically found in a partially developed municipality or in most unincorporated areas. Cost Perception Public perception toward the new stormwater charge is a factor in deciding which method of billing should be utilized. Within this cost perception factor, there are several sub-factors that a jurisdiction should consider when selecting a billing method. Appearance of a Tax Many customers are less likely to perceive the new charge as a tax if the charge appears on a utility bill, as opposed to the charge appearing as a non-ad valorem assessment on the tax bill. Most local governments want to reduce the perception of the charge as a tax. Monthly versus Annual Payment Another factor affecting the choice of a billing method is the impression of a large annual bill (as with an assessment) versus a smaller monthly (or other periodic) utility bill. Noticing Requirements A consideration, which often enters into the selection of the billing method type, is the special statutory noticing requirements associated with collecting assessments via the uniform method. Chapter 197 of the Florida Statutes outlines the noticing requirements that include stringent notification by specific dates if charges are to be collected as non-ad valorem assessments on the tax bill. If the local government has not adequately planned for these requirements, the local government may find itself in the position of having to delay implementation of the charges or utilizing another method of collection. In some cases the local government may need to implement a temporary billing method until the statutory requirements can be met. Bill Recipient Another key issue in selecting a billing method will be the local preference as to who should receive the bill for the stormwater charge. For non-ad valorem or special assessments, the recipient will be the property owner. In the case of a utility bill, the recipient will be the tenant or occupant of a property. In many, but not all, this may be the property owner. In some situations, the billing may be sent to the occupant/tenant unless the property is undeveloped/ uninhabited, in which case it will be sent to the property owner. The 1997 Stormwater Utility Survey (FASU) requested information on who was primarily responsible for paying the jurisdiction's utility bill. Results of the survey indicated that out of 53 survey responses, the property owner accounted for 46% of the responses, the occupant/tenant accounted for 33% of the responses, with the remaining 21% falling in the "other" category. Service Area Demographics This factor is closely related to the billing coverage factors; e.g. the parcel/property makeup of the service area of the stormwater utility. Issues such as the percentage of undeveloped and uninhabited property, variations in land use (high commercial/non-residential), seasonal residents, etc. may affect the choice of a billing system.
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