Albany City Hall in a shot from a year ago. The new city services fee came up again this August.
Why is Albany’s new city services fee not a tax? Because if you don’t pay it, the city can’t put a lien on your property and eventually foreclose on your house.
That was part of the explanation the city attorney, Sean Kidd, offered to the council and to a citizen who had questioned the fee at the council meeting on Aug. 11. He wondered why it was not put on the ballot like other tax hikes.
The citizen, a man who addressed the council in person during business from the public, described himself as a 77-year-old who lives on Social Security and a small pension, has never had a computer and doesn’t know what “online” is.
He complained about the $9-a-month services fee that the city started adding to water/sewer bills in July. Water is already too expensive for him to water his lawn, if I heard him right, and if the council keeps raising the price he will have to stop watering his vegetable garden.
The ordinance that enacted the fee, approved by the council 5-1, says that water and sewer payments are to be applied to the service fee first. So if someone refuses to pay just the extra fee, he’ll be short on his water/sewer bill so that, eventually, he’ll face the loss of water service and being turned over to collections.
You may still consider the services fee a tax if you want but — and this is the crucial distinction — it’s not a property tax. It’s a tax on utility bill payers, not on whatever property they own.
The distinction was made by the Oregon courts in a 2007 case from Jacksonville in Jackson County. That town’s three separate services fees now total $58 a month for police and fire protection and parks.
On Wednesday night, by the way, the Albany council adopted an amended budget that accounts for the anticipated revenue from the fee over the two-year budget period from now through June 2023. That amount is just over $5.4 million and, among other things, retains six positions in the fire service, five in the police, as well as three part-time jobs in the libraries. It also adds money to parks for maintenance and other activities.
The supplemental budget answers the question of administrative costs. They total $356,600 over two years, or just under $15,000 per month. The total is far less than what had been estimated at one time during the council debates on this fee. Or tax. (hh)
It appears the city attorney is saying the “fee” does not constitute a “tax” because it does not violate the property tax limitations of Measure 5. (Knapp v. City of Jacksonville)
But this “fee” has nothing to do with the property tax rate. This “fee” is a NEW tax that needs to be approved by voters.
The obligation to pay the new “fee” doesn’t arise because a person receives added benefit from using the city’s water service.
A person receives the same water service whether this “fee” is imposed or not.
Let’s not ignore the basics:
“Tax” means a charge or surcharge imposed by Albany for the purpose of generating revenue to perform general governmental operations.
“Fee” means a charge or surcharge imposed by Albany to defray or recover the costs of the city providing a specific service, privilege, or benefit. It is paid by the person who receives the specific service, privilege or benefit.
Go to law school. You are just another “sea lawyer”. It’s been to court and the courts say you’re wrong.
And it’s not part of the water service. It’s merely one of several separate charges that are put on the Utility Billing Bill, because it saves a hell of a lot of money to do that rather than set up a new independent billing system with extra programming, mailing, processing, and supplies expenses.
So Woods, please enlighten us with your definitions of “tax” and “fee” in the context of the council’s ordinance.
If “fee” means “anything the city attorney says it is”, I don’t think you’ll get much support.
It seems maybe this fee is being enacted bcause they asked us for money for emergency services so when we gave it to them they did major remodels & built a new pd station. Then we voted again, it was decided they needed to find
funds elsewhere. So boom let’s just charge a fee. Call it what you like but it is NOT tax. The citizens have been gracious in supporting emergency services but pretty state of the art buildings with pretty vehicles don’t keep us safe. The point is whatever you call it you are in essence forcing all citizens to pay a fee. My contention is that in essence is armed robbery. Not enforcing the fee letting it cause termination of service seems like a pretty powerful weapon to be armed with guaranteeing payment.
Albany is a nice town and city leaders need to be commended for their efforts but this is one issue that citizens are being treated unfairly.because we are going to get noisy but we need our water. . . .
Anybody experienced in writing a petition?
Here are a few more questions and statements that the council must hear:
What direct or indirect value-added water/sewer service or benefit will I receive? Be specific and tell me how you will measure the added water/sewer service or benefit I must now pay for.
My water/sewer will not be better?
And the city will turn off my service and fine me up to $1,000 if I don’t pay this “fee” that provides zero water/sewer benefit to me?
The fact that your action is legal does not mean that it is moral or even respectable. Do what other Oregon local governments (Portland, Ashland, Portland Metro, et al) have done – refer a measure to the voters and recognize their right to decide every NEW tax. Do the right thing…..please.
Because city officials know if they put it up to the citizens it wouldn’t pass. This is just a way around so they can get away with fee
I see the immigration add above. They are building a three story facility in Lebanon just for that.
With only 3 responses, two from the usual suspect, it strikes this reader that the vast majority of Albanians either don’t give a hoot about this fee/tax, or the vast majority of Albanians don’t read the Hasso Hering Blog.
JJ, I think a lot of people are just giving up. Many are just going into survival mode at this point, which is terrible for any economic expansion or prosperity, trying to outlast current Oregon leadership. Compounding can be your best friend but it can also destroy you. We’re only a few budget cycles away from many residents not being able to afford their homes any longer, it’s the time bomb in M5 and M50. Most probably don’t even know it’s coming, but it is. I’m seeing big increases in water bills, part of it is tenants can’t afford electricity for the air conditioning so they’re using water instead to stay cool because they don’t directly pay for it, adding the fact we’re getting some rather high heat cycles, eventually that will have to correct itself. Our water bills are starting to look like our property tax statements with all the additional line items above what was originally advertised. I see affordable housing is now being referred to as an oxymoron, at some point we’re going to see a correction, but I don’t see demand going down, more likely subsidies, high deposits and stellar credit requirements as the norm going forward. The big unknowns right now are the mortgage moratoriums, we’re pretty sure the banks are going to add the outstanding balances to the back of the loans but if you couldn’t make the payments before, how can you make an even higher payment? We can go on and on about how leverage and investing in R.E. is devastated, the banks are asking for very high qualification requirements for income properties at this point, far outside the reach of modest income families. Many assets are being taken over by the hedge funds and institutional investors, the downside of a 0% FED rate and a FIAT currency, they’re actually going after the crumbs at this point, that avenue of wealth building for the middle class has mostly been eliminated, it’s going to be a challenge putting the genie back in the bottle.
Being right over being respectful, commentary over discussion and demanding the last word always ends in divorce.
In response to Johnny J.J. Jack Jacques Hartman: None of the above. I just figure we have been “had.” I agree with the basic point made by Gordon Shadle, but doubt that anything will change even if I stick my neck out.
Change only happens when a couple of city taxpayers get pissed and challenge the establishment through the initiative process.
We were successful in 2013. The voters overruled the mayor & council by changing the city charter to require voter approval of new debt and future urban renewal plans.
An initiative to repeal AMC 3.12 and require voter approval of every new “fee” would be a slam dunk. It can be done.
The Council called this fee an emergency so the initiative petition process cannot be used. That means the council said screw you we don’t care what you think and you can’t do anything about it.
“The citizen, a man who addressed the council in person during business from the public, described himself as a 77-year-old who lives on Social Security and a small pension, has never had a computer and doesn’t know what “online” is.”
I hope someone from the City caught up with the man to tell him he’s probably eligible for a discounted lifeline rate.
Why doesn’t the City Council just put the idea on the ballot like they did in May 2020 to pass a Local Option Tax (measure 22-181) to fund the ambulance, fire and police? Or, do like the City of Corvallis did in 2019 when they asked the voters to pass a local option levy to fund parks & recreation and the library. Or, do like the City of Portland did in Nov 2020 when they had a local option levy on the ballot to help fund the parks department.
Five out of six councilors were unwilling to put this on the ballot, instead agreeing to stick it to the people without their consent
I’d guess it’s because they are afraid it wouldn’t pass and then they’d have to deal with being labeled as the reason we reduced fire/police/library in our community. The cuts always come from areas that are known to be desired by the community so that fees/taxes/levies can be then added under the guise of “saving” those areas. Reduce the size of the administrative bureaucracy and save money.
They’re more worried about compression and the levies becoming null. If they hit the upper constitutional limits of property taxation or property values go south they can immediately do a unilateral increase to shore up finances even if the community decides they don’t want it. Again you still need a city council to back it, elections really do have consequences. City policies are completely unsustainable at this point, increases in years to come will swallow us up, the population just can’t afford them at least not in this economic climate, even they will admit it. They really are just trying to buy time short term until they hope some solution comes up, I think it’s called a Hail Mary pass, or they leave and go on to some other municipality. The city manager thinks in a few years we might get some relief from PERS, who knows what that will look like haven’t seen the model for the claim.
PERS provides the charts to see what’s going to happen:
https://www.oregon.gov/PERS/Pages/index.aspx
Scroll down to the link “View PERS by the Numbers”
Download the PDF file and start reading the charts…
Basically, the major choke-point is the Tier one folks (retired and the few still working) that will have to be “gone” before the system really starts to turn around. All determined by how soon that occurs…
I think that they need to cut pay for city officials/counsel and see how much money it saves instead of cutting police/ambulance and other highly needed services. Make it so when they want a raise the citizens need to vote on it. Why take from here and charge a fee for so many citizens. When city council officials can work part time (that is what they are working anyways)
The city just got $8.4 million in federal covid relief funds. The money can be spent on quite a few things, including retaining essential workers and being used in place of revenue lost due to covid.
I find it appalling that they would institute a monthly fee, knowing that $8.4 million was soon to be received. Now the federal money is a windfall they can play with. Near the top of their list is a book mobile. How many citizens would have voted for a new tax (or fee) to subsidize a book mobile for a city (not county) library, making our parks more accessible and upgrading the wireless internet at the senior center (which may not be a senior center anymore).
If you are going to bleed the citizens, how about applying money to essential city services. It could have been used to keep the fire and police personnel, thus reducing or eliminating, the monthly fee. It could have been used for street repair. Try driving down 5th Ave SE, at even 20 mph, and tell me we should entrust the city council with additional money.