In November 2010, Houston voters narrowly approved Proposition 1, an amendment to the City Charter to “…provide for the enhancement, improvement and ongoing renewal of Houston's drainage and streets by creating a Dedicated Pay-As-You-Go Fund for Drainage and Streets.” Houston city leaders must now implement a drainage fee.
Beginning in July 2011, owners of residential and commercial property in the Houston city limits will begin paying a drainage fee, which will be added as a line item on water bills. Apartment properties will pay an annual fee currently projected to be 3.2 cents per square foot of “impermeable surface” (building footprint, parking lot, etc.), which will be paid in monthly installments on the property’s water bill(s). The drainage fee can be allocated to residents if that allocation is agreed to as part of either the lease agreement or lease addendum. It is estimated that this fee will range between $1 to $6 per unit for most properties.
Frequently Asked Questions about the Drainage Fee
What will the drainage fee be used for?
All drainage charges collected by the city will be used exclusively for the creation, operation, planning, engineering, inspection, construction, repair, maintenance improvement, reconstruction, administration and other reasonable and customary expenses associated with the cost of service to provide drainage services within the city.
Who is responsible for paying the drainage fee?
All property owners, with certain exceptions, are required to pay the drainage fee. To recover the city’s cost of service, the drainage charges are imposed on all parcels of real property within the city, except for those properties exempted from the payment of charges as provided in this ordinance.
How is the drainage fee calculated?
Drainage fees will be calculated by multiplying 3.2 cents (the current, City Council approved rate) by the area of square feet of impervious surface on a property. Apartment properties are considered “nonresidential” in the fee structure. You can find a map of your property through the Harris County Appraisal District at www.hcad.org.
What is “impermeable?”
The drainage fee ordinance defines “impervious surface” as “any area that has been compacted or covered such that it does not readily absorb water or does not allow water to percolate through to undisturbed underlying soil strata. Surface materials considered impervious shall include, but not be limited to, bricks, pavers, concrete, asphalt, compacted oil-dirt, compacted or decomposed shale, oyster shell, gravel, or granite, and other similar materials. Surface features utilizing such materials and considered impervious shall include, but not be limited to, decks, foundations (whether pier and beam or slab), building roofs, parking and driveway areas, sidewalks, compacted or rolled areas, paved recreation areas, swimming pools, and other features or surfaces that are built or laid on the surface of the land and have the effect of increasing, concentrating, or otherwise altering water runoff so that flows are not readily absorbed.”
Your property’s impervious surface will be estimated by the city between now and July, and owners will have an opportunity to challenge the city’s number. The city is using aerial images of properties to estimate the amount of impermeable surface. If you think your number is high, you will need some documentation to show the city why you have less “hard surface” than they think.
How will I know what my drainage fee is?
An initial notification letter will be mailed by the City to each property. The notice, as well as the bill itself, will state the drainage charge that will be billed to the user and the failure of a user to pay the charge may result in the discontinuance of city drainage, water and sewer services. Bills for the charges will reflect the annual charge imposed on a property divided by the user’s number of utility billing cycles per year. For example, if the city is billing a user for drainage on a monthly basis, the user’s monthly drainage fee will equal the total annual drainage charge imposed on the property divided by 12 billing cycles per year.
If I disagree with the City’s determination of impervious surface, how do I dispute it?
The Director of Public Works and Engineering is required to establish and implement a system of verification and correction of drainage charges. Under this system, the amount of surface on a particular property determined to be impervious by the city will be reviewed based on documentation provided to the city. The user requesting the verification and correction must either use the city’s official web page or a form provided by the city with the notification letter and mailed by the user to the address shown on the notification letter. As a condition of requesting the verification and correction, the user is required to grant the city reasonable access to the property for the city to independently verify on-site information.
A user’s request for verification and correction must be made within 60 days from the date of the initial notification letter. The documentation to be provided must include, at a minimum, a drawing or other depiction, with accompanying measurements, supporting the claim that the city’s calculation of impervious area is in error. To be eligible for correction the request must, at a minimum, provide information sufficient to support a correction in the annual drainage charge in the user’s favor of at least two percent or three dollars, whichever is greater.
Any documentation submitted to the city must also include an affidavit in a form approved by the city whereby the user signs and verifies under penalty of law that any document the user is submitting is true and correct.
What if my impervious cover changes from year to year?
If a user’s amount of impervious surface changes subsequent to the initial billing year, and the user notifies the city of such change electronically or in writing and requests a verification and correction, the request will be handled as an initial request for verification and correction. Any adjustment in the drainage charge as a result of the request will become effective the first day of the month following the date of the request. Consequently, if you add green space in your community where previously an impervious area existed, it would benefit you to seek the proper verification and correction with the city.
What is the penalty for failing to pay the drainage charge in a timely manner?
Any drainage charge that is not paid when due may subject the user to late charges and reconnection fees authorized under the provisions of the city code relating to water and sewer charges. Any drainage charge not paid when due may also subject the user to discontinuance of all utility services provided by the city including drainage, water and sewer services.
Can I allocate the drainage fee to my residents?
Yes. There are no statutes or governmental regulations which govern allocation of stormwater/drainage costs. However, before you do so, the resident should agree to pay the charge. If you are beginning to allocate a fee during the middle of a lease term, the resident must agree to pay it. The easiest way to begin allocating this fee is during execution of new lease documents or renewals.
The Texas Apartment Association has developed a template for use by property owners. The resident protections incorporated into the TAA addendum are similar to the ones contained in the Public Utility Commission rules on electricity allocation and TCEQ rules for water allocation.
Pursuant to the TAA Addendum: (i) payment of the drainage fee is due 16 days after the date it is post-marked or hand-delivered to the unit; (ii) a maximum late charge of 5% of the drainage bill will be assessed if the payment is not made timely; (iii) an administrative fee not to exceed $3.00 will be added to the bill; (iv) the fee will not be changed except upon 35 days’ prior written notice and a subsequent agreement signed by both parties; and (v) the resident has the right to examine the drainage bill from the public utility as well as the owner’s calculation of the resident’s allocated share.
Can I put the drainage fee on my residents’ water bills?
Yes, as long as the drainage fee is a separate and distinct charge as part of a multi-item bill.
Can I charge an administrative fee to cover the cost of allocating this fee to residents?
Yes. You may charge a nominal administrative fee to cover the costs of billing residents. The administrative fee should be agreed to in the lease addendum (note that the TAA lease addendum provides that the administrative fee will not exceed $3.00). Owners should keep any administrative fees at reasonable levels to avoid allegations of unconscionability.
Can I charge a late fee if residents do not pay drainage fees on time?
Yes. The late fee should be agreed to in the lease addendum. Owners should keep any late fees at reasonable levels to avoid allegations of unconscionability. Note that the TAA lease addendum provides for a late charge of 5% of the bill, which will be different than the late charge provided for in the lease with respect to the late payment of rent.
Where can I find out more about this issue?
There are several places where you can learn more about drainage fees.
www.TAA.org – The Texas Apartment Association has a sample lease addendum that can be downloaded from the Redbook online area at this site or through use of Blue Moon software.
www.RebuildHouston.org – City of Houston site dedicated to the drainage fee implementation. This site includes videos about the estimation of impermeable surface and contact information for protesting your impermeable surface calculation.
Abode Magazine – HAA’s monthly magazine for members will include new information as it becomes available, regarding this fee.
Resources for HAA Members in Communicating with Residents About the Fee. Only HAA members can access these downloadable resources for owners to use when communicating with residents about the fee. If you do not have your HAA member log in and password, please contact email@example.com.