A legal challenge by a former City Council member over how the city funds stormwater drain maintenance is expected to cost the city an estimated $3.5 million by the end of 2014.
Former City Council Member Bryant Moynihan has for many years objected to the city paying for stormwater drain maintenance using wastewater fee revenues. In January, he officially filed suit, demanding that the city reimburse the wastewater enterprise fund and quit using it to fund routine storm drain maintenance and related storm water projects.
The City appears to have taken heed of the issue even before Moynihan filed suit. In December, the City Council approved a sewer and water rate plan that de-funded roughly $500,000 worth of storm drain maintenance activities annually.
During Monday's mid-year budget update, the Council briefly discussed with staff how these activities will be funded going forward.
With the city's budget already stretched thin, it appears that answering that question will take some time.
"We're in problem solving mode for a few months." John Brown at Monday's budget meeting.
Finance Director Bill Mushallo said that staff is now looking at funding options and plans to bring recommendations to the Council at its March 19 meeting.
Options could include deferring or eliminating some storm drain maintenance activities and possibly implementing a tax to cover the cost of such activities.
The city hopes to find a permanent source of funding for the projects by the end of 2014, Mushallo said.
But in the meantime, he said, the stormwater drains do need to be maintained, so the city must find a temporary way to pay for that.
"Fortunately there hasn't been much rain," Mushallo said. Since there's no money available in the General Fund, the city may take out a loan to finance the work.
It's clear, though, that Moynihan's challenge will leave a mark on the city's general fund to the tune of about $3.5 million over the course of several years.
Staff estimate that the city may already owe $2 million to the wastewater enterprise fund for previous stormwater charges, and by the end of 2014 it could owe an additional $1.5 million to another fund if it takes out a loan.
Starting around 2015, the city plans to start paying $200,000 per year from the general fund to reimburse those accounts. At that rate, it could take more than 15 years to pay back $3.5 million.
Moynihan, meanwhile, says the city hasn't fully responded to his concerns and that he's going forward with the suit.
"It really doesn't address the problem," he said, adding that the city appears "to be kicking the can down the road."
In his complaint, he listed $4.7 million that he claims the city owes the wastewater enterprise fund, and he's said that there are additional millions he thinks have been used inappropriately.
Moynihan is also known for initiating two unsuccessful ballot measures to roll back sewer rates in 2008 and 2010.
In February, City attorneys filed a response to Moynihan's complaint denying nearly all of the allegations he made.
(Contact Jamie Hansen at jamie.hansen@argus courier.com).
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