Stormwater Rate Structure Discussion

1. StormwaterRate Structure Discussion March 12th, 2013

2. How did we get here? Stormwater Rate Structure Discussion

3. History of Rates • April 2008 • Previous ordinance legally challenged • April 2011 • New stormwater ordinance adopted • 2012 • Rate Design Study completed by Public Resources Management Group Inc. (PRMG) • September 2012 • Council adopted stormwater budget of $7.6 million • December 2012 • New rate approved by council of $11.65 per ERU • No change in structure • Increase went into effect January 1, 2013 • Council requested time to evaluate options and develop comments and questions for consideration by consultant Stormwater Rate Structure Discussion

4. Existing Operating Conditions: FY 2013 Stormwater Rate Structure Discussion

5. Recognized Fee Methods FSA Storm Water Utility Survey (2011 Edition) What is the general basis for your fee? A. Impervious area (67 respondents) B. Both gross area and impervious area (6 respondents) C. Gross area with intensity of development factor (3 respondents) D. Other (5 respondents) City Uses Impervious Area Method Billing Approach 85% by User Fees 15% by Special Assessments 83% Stormwater Rate Structure Discussion

6. Cost Recovery Alternatives - Revisited • Base Case – As presented: Budgeted $11.65/month per ERU for the Current Service Area only • Alternatives including Extended Service Area (City-wide) • System-wide Approach (No service level reductions) • Alternative I – Similar to existing method. All costs allocated per ERU. • Alternative II – All costs allocated per Parcel. • Alternative III – All costs allocated per Acre. • Cost Apportionment Approach (Fee based on service level) • Alternative IV – Base Fee All Properties per ERU / Drainage & Swale Fees per ERU • Alternative V – Base Fee All Properties per Parcel / Drainage & Swale Fees per ERU • Alternative VI – Base Fee All properties per ERU / Drainage & Swale Fees per Parcel Stormwater Rate Structure Discussion

7. Cost Apportionment Approach – Revisited(Applies to Alternatives IV to VI) • Allocates Expenditures by Type: • Base Fee: Recovered from all properties within the Comprehensive Management Area (City Limits) • Includes all properties within the Extended Benefit Area • Drainage Fee: Recovered from all properties within the Current Service Area only; except vacant commercial properties. • Excludes all properties within the Extended Benefit Area. • Swale Maintenance Fee: Recovered from all properties within the Current Service Area only; except vacant commercial properties and those single family residential properties that are not served by swales. • Excludes all properties within the Extended Benefit Area. Stormwater Rate Structure Discussion

8. Two Possible Approaches • Bring back consultantto re-evaluate proposed rate structure alternatives • Address the one largest inequity Stormwater Rate Structure Discussion

9. Inequities in Current Rate Structure Vacant Parcels > 1 Acre • Approximately 127 properties out of 474 were not eligible for a reduced service credit • Within 50 feet of a drainage structure or facility • Reduced service credits were for 70% or 95% • If a reduced service credit was extended to these properties this would reduce revenue by approximately $200,000 or by approximately 294 billable ERU. Stormwater Rate Structure Discussion

10. Questions & Discussion Stormwater Rate Structure Discussion