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March 12th, 2013StormwaterRate Structure DiscussionHow did we get here?

2Stormwater Rate Structure DiscussionApril 2008Previous ordinance legally challengedApril 2011New stormwater ordinance adopted2012Rate Design Study completed by Public Resources Management Group Inc. (PRMG)September 2012Council adopted stormwater budget of $7.6 millionDecember 2012New rate approved by council of $11.65 per ERUNo change in structureIncrease went into effect January 1, 2013Council requested time to evaluate options and develop comments and questions for consideration by consultant

History of Rates

3Stormwater Rate Structure DiscussionDescriptionBudgetProjected Operating Results System-wide Facility Costs$3,100,000 Swale Maintenance3,100,000 Drainage Improvements1,400,000 Sub-total Annual Expenditures$7,600,000Existing Operating Conditions: FY 20134Stormwater Rate Structure DiscussionFSA 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)83%Billing Approach85% by User Fees15% by Special Assessments

City Uses Impervious Area MethodRecognized Fee Methods5Stormwater Rate Structure DiscussionBase 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 ERUAlternative V Base Fee All Properties per Parcel / Drainage & Swale Fees per ERUAlternative VI Base Fee All properties per ERU / Drainage & Swale Fees per ParcelCost Recovery Alternatives - Revisited6Stormwater Rate Structure DiscussionAllocates 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.Cost Apportionment Approach Revisited(Applies to Alternatives IV to VI)7Stormwater Rate Structure DiscussionStormwater Rate Structure Discussion8Two Possible Approaches

Bring back consultant to re-evaluate proposed rate structure alternatives

Address the one largest inequityInequities in Current Rate Structure

Approximately 127 properties out of 474 were not eligible for a reduced service creditWithin 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.Vacant Parcels > 1 Acre9Stormwater Rate Structure Discussion9Stormwater Rate Structure Discussion10Questions & Discussion