Changing churches’ sewer fees could be costly

Study could cost taxpayers $50K, and lost fee revenue could hurt city’s bonding agreements

The Church of Jesus Christ of Latter-day Saints in Moab watered its lawn midday this week. The church is among nine others that are hoping to see their sewer usage bill decreased; it was raised recently after the city changed its formula for estimating sewer usage based on year-round water usage, meaning water from sprinklers is counted the same as water from toilets and sinks. Photo by Carter Pape

The 14th Amendment to the U.S. Constitution, in conjunction with state laws, generally requires that municipalities like the City of Moab establish justifications for its taxation and fees for the sake of “equal protection under the law,” as the Constitution reads. As such, changing local churches’ billing structures will be no trivial feat and could cost the city a hefty consulting fee to accomplish, if officials choose to do so.

The Moab City Council discussed the matter during a meeting on Tuesday, Aug. 27, after a briefing from City Manager Joel Linares on the subject. Sewer usage billing was on the table after churches sent a letter to city officials and representatives reiterating their request to have the matter addressed.

The key complaint from church leaders is that their bills for sewer usage increased in 2018 after the city implemented a new city-wide billing structure for the utility. The coalition said that the increase is in part a result of how the city estimates churches’ sewer usage, since the city does not directly measure sewer usage.

As previously reported, the city, like many municipalities, uses water usage as a proxy for sewer usage. However, water usage tends to far exceed sewer usage in summer months, when churches in particular begin landscaping, meaning that water gets counted as sewer usage in the new billing process.

For some types of properties—residences, in particular—this discrepancy is resolved in the billing by averaging each property’s winter water use to estimate its year-round sewer use.

Church leaders said that, with respect to sewer use billing, the city had previously categorized the institutions with residential properties, which have lower rates on utilities and the winter average billing structure.

City staff said that city statutes never categorized the churches as such, and that simply re-categorizing churches as residential properties was fraught with problems.

Barriers to change

A change to the billing structure would put the city in a financial hole with respect to its bonding obligations on the sewer reclamation projects it is undertaking, something that would threaten its bond rating and interest rates on the loans funding the infrastructure improvements, in the end increasing the cost burden on taxpayers.

Relatedly, because of the equal protection clause in the Constitution, if the city were to reduce the sewer usage billing for churches while increasing the cost burden on residents and other local institutions, it could face lawsuits by residents or the other institutions for increasing their cost burden without ample justification.

Linares concluded during the Tuesday meeting that he would recommend against doing a change to the billing structure in-house, i.e. without hiring a consultant. Doing so, he said, could open the city up to aforementioned lawsuits.

On the other hand, Linares said, hiring a consulting firm to research a change to the billing structure—something the city had already paid to do before its 2018 restructuring—could be costly, estimating off the top of his head that the city might spend around $50,000 for such a project.

Mayor Emily Niehaus instructed Linares to come back to the council in a month with an update on possible paths forward, including a more specific estimate on what it might cost to implement another sewer usage billing restructure.

Bruce Louthan, who is leading the coalition of 10 churches seeking a resolution to the matter, was not immediately pleased with the outcome after Tuesday’s meeting. He said he felt the council was “kicking the can down the road,” and expressed skepticism that the matter would be resolved anytime soon.