“In the 1950s,” Barry Mott told the Enterprise City Councilmen.
That’s when the rates were set for building permits and inspection fees in Enterprise.
Named to the newly created position of City Engineer and Director of Public Works for the City of Progress March 16, Mott has worked since then with City Administrator Jonathan Tullos and city department heads to extensively review and report findings on several key internal issues to include the rates and fees charged for the city services offered.
“Rates and fees have not been addressed for many, many years and if they have been addressed and talked about, there were no changes made or implemented,” Enterprise City Council President Turner Townsend told those attending the council work session July 15 at the Enterprise Civic Center. “That’s what we are here to discuss tonight. The staff have been working hard to provide us this information.”
An overview of the existing city sewer and garbage rates, building permits and inspection fees, business license fees and current building codes were presented during the two-hour work session. How the rates and fees compared with those being charged in other communities and a comparison of revenue versus expenses in running the respective departments was discussed.
City sewer fees haven’t been addressed since 2008 when the $10.50 sewer maintenance fee was added on 13 years ago, Mott said.
With 10,900 customers paying about $17.07 a month, the sewer department is currently operating at a deficit of $597,010, with the funds to continue operating coming from the General Fund. “Basically General Fund is supplementing our sewage cost,” Mott said. “It’s not like we have an abundance of people on staff or an abundance of equipment. It’s just the fact that this is the nature of the game when it comes to sanitary sewer.”
With some sewer pumps 50 years old, Mott said that the immediate plan is to bring in consultants to assess the situation and provide a plan for the future.
“The reason this is important is that over the years—because we have not allocated money to have a backup fund in place—we have just robbed the General Fund or issued a massive bond issuance,” Tullos said. “In order to keep that up we would have to continue to have healthy growth in our sales tax revenues which is 70 percent of our General Fund. If we don’t have healthy growth, we might run into an issue of where we need a fire truck and we don’t have the gap in the General Fund to cover it.
“My point to this is that it will never be there if you continue to pull from the General Fund for operations,” Tullos added. “I think we can come up with alternatives to address this so we don’t put future councils in the same situation that we are in today.”
Councilman Scotty Johnson commended Mott for being proactive.
Councilwoman Sonya Rich agreed. “Dipping into the General Fund so much is not going to work moving on.
“One of the things our council has been consistent with is addressing these issues so that even when we are not here in these seats making decisions that the city will be in good standing,” Rich said. “No one wants to have their fees increased but it’s just the nature of the beast. As this discussion goes on, we’re going to be as fair as we certainly can be.”
“I think it’s pretty obvious that this council has been faced with a lot of hard decisions and I think we need to be very careful not to kick the can down the road because this, at some point, has to be decided,” said Councilman Greg Padgett. “Obviously we want to be very careful not to go any further than we have to and make it difficult for our citizens to afford it but we’ve got to get in ‘the black.’
“We keep coming back to this same conversation about one thing after another after another after another that if we don’t do something about it our infrastructure is going to fall around our ears,” Padgett added. “We’ve got to fix it and I think it’s our hard job as this council to fix it for once and for all.”
“Obviously nobody like to have these kinds of conversations but the reality is that it costs more to provide sewer today than it did in 2008, the last time we charged more,” said Townsend. “It’s just the reality. I think most reasonable people understand that we can’t continue to deficit spend.
“Last year we were down to $800,000 in the sewer fund. If you do the math, we aren’t going to have money in the sewer fund after one more year,” Townsend added. “It sounds like there is support for getting these fees in line and addressing the deficit spending.”
There is no official voting allowed at work sessions but the council reached a consensus to return the issue back to staff to develop a plan before the council starts the budget process. “The goal would be to have a balanced sewer budget,” Townsend said.
Residents of the city of Enterprise have three garbage pickups each week, Mott said. “We pick up your can, pick up yard waste and then we pick up bulk items.
“One day a week we also do a special garbage pickup for people who for medical or special needs reasons cannot get their own can to the street,” he added. “Everything we do is driven by customer service.”
Garbage rates were last reviewed in 2018, Mott said. At that time, a rate increase of $2 a year was included to create a “more cost neutral” department, he said.
The rate increase implemented at that time was set to stop on Oct. 1, 2021 at a rate of $21.50 a month.
The resolution passed in 2018 also included a provision that “on or around Oct. 1, 2022 a study will be performed to determine if garbage fees are working to make sanitation service more cost neutral and tie the garbage fees to a consumer price index adjustment.”
There are 10,532 city garbage customers, Mott said. The department currently is budgeting $2,791,137 for Fiscal Year 2020.
The current revenue projection using the $19.40 garbage fee—in place prior to the scheduled Oct. 1 $2 annual increase—is $2,464,488.
For Fiscal Year 2022, after the Oct. 1 increase, the proposed revenue will be $2,727,256, Mott said, calling the department “budget neural.”
“A lot of cities charge you for the extra things we do at no extra charge,” said Tullos. “In Enterprise we sometimes take it for granted that when we do yard work and put it by the curb, it will be picked up.
“As a citizen I am proud of the job that the sanitation department does,” Tullos added. “I get a lot of feedback about how clean our city looks.”
Business license fees
The year 2007 was the last time there was an update in the business licenses fees, said Enterprise Chief Revenue Officer Tracey Brown. That update was done to align the NAICS—North American Industry Classification System—Code with what was passed by the state regulators. No business license fees were changed.
Two proposed updated business license fee schedules were presented to the council for review by Brown and Chief Financial Officer LeeAnn Schwartz. Townsend asked the council to review the proposals and said that the Enterprise Chamber of Commerce will be given a copy of the proposed updates to disseminate to membership in order to obtain stakeholder feedback.
A new business license structure cannot be implemented until Jan. 1, 2022, Townsend said, but it could be approved so the revenue office can have the procedures in place. Townsend said the goal is to have a proposed business license fee introduced at the first council meeting in August.
A new business license fee had been discussed by the previous administration and after months of council discussion at work sessions, two public meetings were held at the Enterprise Civic Center Nov. 13, 2019 to obtain citizen input before drafting the first proposal which was introduced at the council meeting Nov. 20, 2019 and approved in December 2019.
The new business license fee structure was set to begin Jan. 1, 2019 but was put on hold for one year after a vote by the council at the Dec. 4, 2018 meeting.
The council then introduced an amended license fee ordinance set to begin Jan. 1, 2020 and approved that resolution at the Dec. 18, 2018 meeting at the recommendation of then-Enterprise City Clerk/Treasurer Bob Dean.
Dean said at that time that an additional year would give the revenue department more time to process the changes, a project expected to take some 700 man hours to complete. “That is to clean up the current business licenses, come up with fresh data and correct a lot of the misclassifications that are in the system right now,” he said. “We want to be able to come up with a clean slate.
At the Aug. 20, 2019 council work session, Brown told the council that the city’s computer software could not handle the updated Enterprise business license fees set to begin Jan. 1, 2020.
Brown said she asked the Munis Software personnel about the problems being encountered implementing the ordinance in its entirety. “There is no way to do it,” Brown told the council at that time. She explained that the fee structure ordinance had allowed for an incremental increase each year but that the software would not be able to compute that.
At the work session July 15, Swartz said that she was aware of the situation experienced by the previous council in attempting to implement the business license fee changes but had conferred with the software provider. “I don’t have any doubt that this can be done with Munis,” Swartz said. “Implementation-wise this should be no problem. The escalator problem is not a problem any more.”
Brown and Schwartz said that a review of the city’s 220 NAICS codes revealed several redundancies. “This is about cleaning up the system, as well,” Brown said. “We have a ton of flat rate fees so that prevents us from being able to grow as the industry grows and the economy grows so we’re looking atmaking those more of a percentage-based business license fee.
“The other thing that we looked at, too, is that with the change we could be more business friendly by updating the business license application,” Brown said, adding that streamlining the system would enable enhanced online applications. “Right now we have one with major redundancies.
“We have heard the complaints from the citizens about small businesses paying the same amount as big box stores. We wanted to try to even out the playing field across the board,” Brown said. “We wanted to make sure we took care of the small businesses and protect them and that everyone pays their fair share based on their gross receipts.”
Swartz agreed. “We tried to find a way to meet in the middle and find a way that is equitable and leave us room for growth,” she told the council. “So we’re not at the highest end of the spectrum and we’re not on the bottom.”
Building permits and inspection fees
“The main thing I want to get across to you is that the rates were set in the 1950s,” Mott said. “In 1989 we looked at revising the rates but the city council did not accept it.
“We are low compared to our neighboring communities,” he said. “Right now the Enterprise building permits and inspection fees rate is $226 per new home—regardless of how many times the inspector needs to come out to inspect.”
Assistant Director of Engineering Services Staci Hayes said that in the 14 years she has been in the department, she has never had a building pass inspection the first time they are inspected. “On one person they had to send an inspector out 14 times—and he paid the exact same thing a person did with one or two inspections,” she said.
Building codes were also discussed. Mott explained the difference in code structures used and provided a comparison of those used in neighboring municipalities. He said that he would like to further review data before making a recommendation to the council. “I’d like to get stakeholders’ input to make sure we don’t do this in a vacuum,” he said, citing seeking opinions of developers, engineers and business owners.
Calling the two-hour work session, “a tough conversation,” Townsend said, “It costs more to provide services today than when the fees were set.”
Swartz agreed. “Overall the general feeling is that our services should be supporting themselves,” she said. “We should be bringing in fees for what it should cost us to run those departments.”