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Fee investigation finds Cape owes land owners

By Staff | Nov 5, 2010

By DREW WINCHESTER, dwinchester@breezenewspapers.com
A city-initiated inquiry into whether some big property owners were taking unfair advantage of an exemption program for stormwater fees has had an unexpected result — the city actually owes more than half a million dollars in retroactive fees.
Through May 12 of this year, 199 special master case hearings into the exemptions have been heard, according to a document from the public works office dated July 7.
Results of those hearings found not only a number of properties warranted tax breaks for stormwater, but also property owners who didn’t know they were eligible for the exemptions because their properties do not impact the city system.
The retroactive amount granted from those hearings totals $540,802.28.
The new exemption amount granted from those hearings totals $122,265.
Meanwhile, 134 properties lost exemptions totaling $125,437.50, meaning exemptions lost and new exemptions applied are about equal, in total, year over year, officials said.
City spokeswoman Connie Barron said the city ordinance that deals with stormwater exemptions allows for retroactive claims.
“It allows them to go back and seek funds that are back due,” Barron said. “They (city council) can change it moving forward, but it currently allows it for property owners who make a valid claim.”
According to the July document, the special master hearings resulted in a 14.17 percent increase in the number of exemptions administered through the stormwater utility system.
The new exemptions now equate to 12.41 percent of the total number of exemptions administered, according to the document.
Mayor John Sullivan said he hadn’t heard of retroactive storm water funds needing to be repaid to property owners.
Sullivan did say the stormwater exemption ordinance does need to be changed, but did not specify as to whether it needed to be changed for future retroactive claims.
Citizen activist Sal Grosso said he realized some time ago that the method by which exemptions were being given was unjust, and that the city was not collecting its fair share of stormwater fees.
He said he directed Mayor John Sullivan to investigate the exemption process, because he believed millions of dollars were being left on the table.
There were residents receiving the exemptions who no longer deserved them, Grosso said, though they might have at one time.
Now it seems the city is going to owe money to property owners who didn’t know they were eligible to receive exemptions in the first place.
Grosso said he didn’t believe the stormwater ordinance allowed for retroactive claims, unless the “billing process got screwed up,” he said Friday.
“I don’t believe there’s anything in the ordinance about any exemption being on a retroactive basis,” Grosso said. “Unless there was a stormwater exemption ruled a full exemption but only got half exemption … but that would be rare.”