Coppell City Council Approves Amended Master Fee Schedule

From City of Coppell:

The City of Coppell is making some adjustments to its financial resources to maintain the high level of city services that it offers its residents. With the implementation of Senate Bill 2 from the Texas Legislature and Rule 3.334 from the Texas Comptroller earlier this year, which changed the system of property taxation as well as local sales tax sourcing, many Texas cities have been tasked with figuring out different ways to keep city services steady despite an expected substantial reduction in tax revenue.

The City of Coppell is meeting the challenge with a three-pronged approach, which includes exploring revenue opportunities through new or updated user fees, evaluating capital expenditures, and adjusting service levels where appropriate.

As a part of the City's annual budget process, fees were reviewed, and surveys were sent out to surrounding cities to obtain benchmark information. Coppell City Council recently approved a resolution to amend the Master Fee Schedule. Some of the most notable amendments include the addition of credit card service fees and the adoption of a new Drainage Utility District (DUD) rate model.

The City's credit card processor, Automated Merchant Systems (AMS), charges a fee each time a credit or debit card is used to pay for a bill, fee, or service both online and in-person. These fees, which are currently paid by the City and added up to $231,000 in fiscal year 2019, will now be passed onto the customer. Current legislation permits the passage of credit card fees onto customers, and surveys revealed that this is a common practice in some surrounding cities. AMS is conducting a study to determine the fee rate, but it is expected to be 3 to 3.5 percent and will show up as a separate charge on customers' credit card statements. To avoid fees, customers can request to set up bank drafting at no charge.

"As a result of SB2 and changes in Rule 3.334, staff was asked to review current fees charged by the City as well as fees currently absorbed by the City," said Director of Finance Jennifer Miller. "The Finance Department identified credit card fees as a cost being absorbed by the City and the fee will now be paid directly by customers who use a credit card rather than indirectly by all customers."

While Coppell has continued to grow and change, drainage fees have remained the same since the DUD was established in 2004. Currently, single family residents pay a monthly fee of $1, while commercial and industrial properties pay between $7-9 per acre monthly with a maximum of $75 per month. The City retained Willdan Financial Services and Halff Associates to review the system and DUD and provide recommendations on the rate structure. The analysis showed that current rates are extremely low compared to benchmark information and insufficient in recuperating the City's stormwater operation and maintenance costs. A tiered rate model, which gradually increases rates over a 5-year period, was recommended to allow the fund to build and sufficiently cover expenses. Consultants also recommended that commercial and industrial properties be charged based on square footage of impervious surface rather than acreage. In five years, residents will be paying a $5 monthly fee, which is in the middle of the market according to benchmark information. Commercial properties will be charged following the tiered fee structure based on the amount of impervious area. This fee structure is consistent with the market and will be more equitable in terms of cost share.

"In 2004, we were mostly built out residentially, but since then we've added a lot of commercial space," said Director of Public Works Kent Collins. "We've also added a lot of drainage infrastructure but have not increased the rate. Going back to 2015 when we had the flooding and issues along Denton Creek and the Elm Fork of the Trinity (River) along with our experience with heavier and more frequent rainfall events, we know that we need to invest more in the maintenance and operations of our drainage system."

Other fees have been added or adjusted as follows:

• Restoration of Service Fee — $50 fee added for after-hours restoration of service
• Animal Services Fees — adjusted based upon benchmark information
• Subdivision Regulations — adjusted based upon benchmark information
• Building Fees — adjusted based upon cost recovery analysis and benchmark information
• General Fees — Motor Vehicle Mitigation Fees were added
• Public Information Fees — the wording was changed to reference the Office of the Attorney General
• Police Fees — adjusted based upon benchmark information
• Impact Fees — adjusted based upon results of required Impact Fee Update study

The amended Master Fee Schedule will take effect on October 1, 2020.

This press release was produced by City of Coppell. The views expressed here are the author’s own.