HomeMy WebLinkAbout6.c. Storm Water UtilityCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: JANUARY 7, 1992
AGENDA ITEM:
Storm Water Utility
AGENDA SECTION:
Old Business
PREPARED BY:
Director of
Ron Wasmund
Public Works/Building official
AGENDIM
,6C
ATTACHMENTS:
Memo, Income/Expense Analysis
AP BY:
Attached is a memo responding to specific questions that have been
received in written form and at the public meeting in July.
There are also background memos from previous council meetings. The
analysis of income sources (fees vs. connection charges) and
expenses (service vs. construction) shows the ratios of fees and
expenses
At the meeting I will have additional information regarding run off
rates and ratio of runoff to service to use as overheads for
discussion.
I will provide copies of all overheads to you so you may follow along
during discussion.
RECOMMENDED ACTION: Support previous action to hold Public Hearing on
January 21, 1992 for public input.
COUNCIL ACTION:
PROPOSED STORMWATER UTILITY
Questions raised by residents at Public Meeting and by Council Members
1. The user fee is just a tax Let's call it a tax and not hide behind a
"user fee".
A: If everything government does for people is considered a tax then the
user fee for stormwater would be a tax. But, there are many instances
where government is the one providing a service which is necessary and
the person receiving the benefit has to pay for that service.
Assessments, license fees, building permit fees and park and
recreation fees are examples of cases where the "user" pays.
The concept behind the Stormwater Utility is to connect the "user"
with the "fee". By developing a user fee which is based on stormwater
runoff volumes and rates, the costs of managing that stormwater is
more equitable than just placing these costs on the property tax roll.
The property tax system in Minnesota is based on property value.
Stormwater management is based on the quantity of water which needs to
be managed and the system needed to manage it with no direct
relationship to property value.
2. I already paid a storm sewer assessment for the storm sewer in front
of my house, why should I have to pay again?
A: The City has the responsibility to develop an overall Stormwater
Management Program for the City which includesconstructionof ponds
and piping initially and replacement of those systems as they age and
deteriorate. It also includes the maintenance of storm sewers,
streets, curb and gutter, ponds, ditches and easements which are all
part of the stormwater management system.
Funding for the total operating program of the utilities include user
fees and connection charges which are collected at the time homes
factories, stores, churches and schools are constructed. New
developments also provide a source of revenue by providing some
easements and ponding acreage so the utility doesn't have to provide
them.
New developments as well as existing developments must all pay for a
portion of the system.
3. Cost is too high. I'm a farmer in eastern Rosemount and don't see any
advantage to me for this proposed system
A: No one likes to pay any more for taxes or other services provided yet
we all continue to demand those services. The proposed charge to
agricultural land is 10 cents per acre per quarter. For a 400 acre
Stormwater Utility
Page 2
farm this would amount to $160 pet year. That is a lot of money when
margins are slim now for profit. But if we compare the operating cost
of the utility and spread that out in the tax rolls many property
owners would pay more than by using the user fee because the tax would
be based on property value.
There are many tasks such as street sweeping, road grading, ditch
cleaning that are in reality part of maintaining a stormwater
management program that most of us don't realize have such a
connection. Responsibility for that lies with the City and thus you
as a taxpayer and property owner.
4. The City is proposing a specific utility user rate now, how long
before it will increase?
A: The proposed utility and associated fees are based upon city staff and
consultants best effort in developing a stormwater utility for the
construction, reconstruction and maintenance of an overall Stormwater
Management System. This proposed utility is based on what we know
about stormwater management today, what the necessary construction and
reconstruction projects are and what it will take to maintain that
system.
We are not proposing a "phasing in" concept where we would start out
with an artificially low rate now just to get a system up and running
and raise the rates quickly.
If requirements for stormwater system permitting water quality
management and system replacement costs increase or cause the utility
to take on an added burden obviously rates will need to be adjusted.
5. Certain properties such as golf courses, cemeteries and undeveloped
properties should not be charged a user fee since the stormwater does
not leave the property.
A: Based on engineering studies even properties which are totally
undeveloped and have a soil makeup of sand will provide runoff to
ditches, streets and ponds. Engineering studies have proven this with
as high as a 55% runoff even on properties we may think would simply
absorb all water falling on it.
This water then must be managed to control erosion, property damage
and surface water quality.
The property requires this service and should provide an equitable
payment to provide that service.
Stormwater Utility
Page 3
6. A major storm sewer/pond project was completed in recent years that
being Hawkins Pond. A portion of the cost of that project was not
assessed and now the project has a deficit balance in it. the
Stormwater Utility is proposed to fund this deficit in an amount of
approximately $300,000. Shouldn't the City's General Fund pay for
this deficit?
A: The City Council has several options open to it in recouping these
costs. some of those options are:
a. Set an assessment hearing and assess an additional amount against
the benefitting property owners
b. Pay the deficit out of the General Fund.
C. Transfer some money from another fund such as the Bonds PaidUp
Account
d. Utilize the Stormwater Utility to pay this deficit off.
Staff and consultants have suggested that the most equitable and most
defensible way to pay this cost is to utilize the Utility revenue
since the project was clearly a part of the Stormwater Management
System and the purpose of the Utility is to pay these kinds of costs.
Utilizing the General Fund and general taxes for this purpose would be
utilizing the tax system based on value not user need.
7. The proposed Utility would be a "Enterprise Fund". Who would have
authority over it?
A: Like other utilities that the City owns, being the Sewer and Water
Utilities, the existing Utilities Commission would have administrative
authority over the system with all financing, rate setting and project
approval authority lying with the City Council. The Stormwater
utility would be managed and operated by City staff as it does with
the Water and Sewer System.
8. The Stormwater Utility should not be a panacea for all our problems.
Let's use a blend of user fees and taxes.
A: The proposed operating budget and Capital Improvements Budget for the
Utility utilizes two sources of funds; user fees and connection
charges. since the development and maintenance of the system is based
on existing and continued development this is appropriate.
If the City did not have levy limits which restrict the amount of
taxes we can collect and if the City Council desired to do so these
costs could all be passed on through general taxes. This is not
feasible at this time. It would also be inequitable since it would be
based on value not service received.
Stormwater Utility
Page 4
In fact, a portion of the total costs to be incurred for stormwater
management related activities will be continued to be paid out of the
General Operating Budget as proposed.
9. Let's charge for actual services rendered to specific areas.
A: In an attempt to set up a fee structure that relates service directly
to fees based on runoff coefficients and property use we feel that we
have come as close as we can while still providing a efficient billing
method.
Calculating actual runoff for each property and determining exactly
what service is provided for each property may be the absolute most
equitable way of charging but it would be extremely costly and time
consuming and I would expect most would suggest a waste of money.
STORMWATER UTILITY (PROPOSED)
COMPARATIVE DATA 1-2-92
All numbers 1st year of operation
Total Revenue Projected: $ 445,480
Connection Charge Revenue: $ 196,000
User Fee Revenue: $ 249,480
Total Expenditures Projected: $ 297,465
Total Operating Expense: $ 158,200
Total Debt Service: $ 139,265
(Construction Expense)
Net Income/(Loss) Projected $ 148,015
Income/Expenses: 1.49:1
100%
44%
56%
100%
53%
47%
Connection Charge to Debt Service: 196,000 Income
139,265 Outlay
56,735 Diff. — Excess
Revenue
User Fee to Operating: 249,480 Income
158.200 Outlay
91,280 Diff. - Excess
Revenue
Notes: 1. Assumed rate of 200 new SF resident or equivalent
built each year.
2. Assumed borrowing rate of 7% for 12 year
amortization.
3. Assumed 5% rate of interest on investment of
reserves.
4. Connection charge income is not sufficient every
year, projected over a 10 -year period to cover
expected debt service. Combining with some user
fees is necessary in years 6 - 10 to cover debt
service.
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It
I
MEMORANDUM
TO: MAYOR NAPPER
COUNCILMEMBERS: KLASSEN
O%BOROUGH
WILLCOX
WIPPERMANN
CITY ADMINISTRATOR JILK
FROM: PUBLIC WORKS DIRECTOR/BUILDING OFFICIAL WASMUND
DATE: JULY 12, 1991
RE: STORM WATER UTILITY
Although the idea and implementation is new to us, the concept of
a Storm Water Utility is not new. Some of the first cities in
Minnesota adopted this approach more than 10 years ago. The
neighboring communities of Apple Valley and Eagan adopted their
Storm Water Utilities in 1987 and 1988 respectively. The need for
this approach in nearby communities was identified after the 100
year storm of 1987. A Storm Water Utility provides a method to
finance necessary improvements and maintenance operations that
typically take a backseat to other budget consideration.
Environmental concerns relating to surface water runoff, conveyance
systems and holding ponds are becoming increasingly difficult to
address because of their costs. New rules and regulations are
being adopted by the Environmental Protection Agency, Minnesota
Pollution Control Agency, Department of Natural Resources, and the
Army Corps of Engineers addressing wetland preservation, wetland
replacement and water quality of ponds, lakes, streams and rivers.
Storm water projects must now have approval and permit from the
DNR. In order to get these permits the local entity must have a
Storm Water Management Plan adopted and in effect. The City of
Rosemount has started that process. We have a comprehensive plan
for the western 1/3 of the City inplace known as the Master Storm -
Water Plan. All of the improvement projects that are identified
in the Capital Improvement Budget (CIB) within the Storm Water
Utility have been taken from a prioritized list in the Master Storm
Water Plan.
In addition to regulations which will affect us as administrators
of general tax dollars, we are constantly faced with the
probability of natural occurrences. I made earlier reference to
the 100 year storm of July, 1987. The City of Rosemount was
relatively lucky in that storm because of proportionately low
MEMO -STORM WATER UTILITY
PAGE 2
private property damage. Most of the cost incurred for that storm
resulted from pumping ponds and clean up from eroded slopes into
streets and storm sewer components.
There was one extremely flooded home owned and occupied by the
Tracy Kubista family. Water overflowing from a land locked basin,
known to us as Samples Pond, east of Diamond Path and north of
Connemara flowed across the road and along a natural depression and
through their house, literally! At the time of my investigation
the day after the storm, there was 4 1/2 feet of water in the
garden level of their home. The Kubista's filed a lawsuit naming
the City as a responsible party. Our insurance company has
intervened and so far has handled the legal costs. To my knowledge
this case has not been settled yet.
This is a prime example of how a Utility could be effective. The
necessary reconstruction, which has not been done yet, could be
funded as well as any legal or settlement fees that may be
incurred. If we are lucky our insurance will be adequate for this
one claim.
One of the questions we must ask ourselves and the public is how
much risk of flooding is acceptable.
There is no meandering stream in town as there is in Farmington for
instance. The threat of a stream overflowing its banks is non-
existent. But we do have ponds both natural and man-made that
swell and flood in wet years. Valley Oak Pond is a good example
of a man-made pond flooding homes. In the spring of 1990 heavy
rains coupled with rapid snow melt flooded two homes. If those
homeowners were asked how much risk they wanted to take their reply
would most likely be "none". Part of the circumstances leading up
to the flooding in this example is that the City did not have a
pump of sufficient capacity to control the pond's level. As the
situation turned into an emergency condition one of the fire trucks
was commandeered to action. The pond was able to be drawn down but
not until the homes were flooded. In addition, soil and sand
particles suspended in the flood water wore on the pump of the fire
truck causing a $1,000.00 bill for repair of the pump and seals.
Labor costs to have workers on the site 24 hours a day for two days
was not even calculated into the costs.
The soil in Rosemount for a majority of the area is light and well
drained. The classification is sand and gravel. Because of the
MEMO -STORM WATER UTILITY
PAGE 3
porosity of this type of soil during normal weather conditions
water does soak into the ground rapidly. But where does the water
go once its out of sight? Depending on location a portion of it
flows underground to the Vermillion River to the south. Another
portion flows underground and contributes to the ground water
elevations in perched ponds and lakes in the area north of a line
approximately equal to 135th Street. This area is predominately
made up of Rural Residents and Agricultural land. Still another
area of town flows underground to the Mississippi River. This area
flowing underground to the river is primarily industrial and
undeveloped land with Ag land intermittently mixed in.
As part of the overall drainage picture, Rosemount has regulations
placed on us with a review procedure necessary by the Vermillion
Watershed Management Organization. As a watershed management
organization the VWMO has costs it incurs. These costs are passed
along, divided among the entities which contribute to the watershed
district. Rosemount makes an annual contribution of $6,000.00,
which.comes out of general tax revenues.
Whether we look at a portion of the City where the development is
rapidly occurring or fringe areas where development is occurring
at a slower rate on larger lots, there are proportionate costs.
Where rapid development is occurring we have storm sewer systems
to design and install. We also have old poorly designed and
outgrown systems to replace. These improvement projects comprise
the single largest part of the Storm Water Utility budget. These
costs total $1,704,300. However, it should be kept in mind that
all portions of this budget that are required because of
development will be paid for from connection charge fees at the
rate of $980.00 per single family lot. Any oversizing of pipes or
ponds to provide future needs for undeveloped properties known as
"core" costs must be paid for from non -connection charge funds from
the Utility. Similarly all costs to replace older systems -must
come from non -connection charge funds.
Most of the information I have provided to you to this point is not
new to you. You have read some of the same information in other
documents. It has been offered as background and review.
From my discussions with each of you, I perceive two questions that
need clarification. The first question as I see it pertains to the -
Operation and Maintenance Budget. Related ° to that question is
MEMO -STORM WATER UTILITY
PAGE 4
whether the amount of service or maintenance in Rural Residential,
Ag and undeveloped areas equals the quarterly fee being proposed.
To try to answer these questions I am providing a breakdown of
activities between Operations and Maintenance. To illustrate
direct benefit to each property is just as difficult as proving
benefit for an assessment. That is the underlying reason for
looking at a Utility in the first place. Projects such as Hawkins
Pond emphasize this difficulty.
The operations portion of the Operations and Maintenance budget is
intended to include:
1. Monitoring and inspection of the conveyance system and
drainage controls on private property.
2. Monitoring of system flow and water quality.
3. Master Plan Updating
4. Regulation enforcement on private land
5. Financial planning
6. Continued public outreach
7. Engineering analysis of system components
The maintenance portion of the Operations and Maintenance budget
is intended to include:
1. Maintenance of catch basins, manholes and piping -
routine and remedial
2. Runoff contaminate control including street and surface
sweeping, solid and hazardous waste containment and
disposal.
3. Pumping of Ponds - 19 landlock basins are identified in
the Master Plan.
4. Dredging of Ponds - future needs
5. Mowing of Ponds and easement areas
6. Culvert maintenance and replacement - Staff estimates 850
culverts in rural areas.
7. Dredging and restoration of road ditches - sedimentation
removal and erosion repair
By establishing a budget to cover the Operations and Maintenance
items we can plan for those activities. We will be able to
establish a preventative maintenance schedule. If we can identify
and correct items before they become problems the costs can be
significantly lower.
MEMO -STORM WATER UTILITY
PAGE 5
The maintenance items we have performed to date have been reactive.
The current operating budget has no specific items broken out such
as street sweeping, pond pumping or ditch dredging. When we have
a problem called to our attention, we respond, make the necessary
corrections and then deliberate as to where to charge the item to.
In order to charge back the costs of correction to the property
owner, we need to go through the assessment process each time.
That approach is very impractical due to time and expenses
involved.
Operational costs, as identified above, are _costs that will be
incurred City wide. It seems appropriate to me to spread that cost
to all properties in the City at a lower rate as a Storm Water
Utility than as a general tax levy.
Part of the problem encountered in the development of our Storm
Water Utility has been convincing you the Council and the plablic
that the Utility approach is cheaper than tax levy. This has
always been assumed true because of property values. As property
values increase the proportionate share of taxes also increase.
In fact, what we may find is that the Utility fee is cheaper for
higher valued property but higher for lower valued homes.
To verify these assumptions, we have asked Ron Langness of our
Financial Consulting Firm, Springsted, Inc., to run calculations
of taxes for various valued properties.
On Friday, July 12, we selected specific properties in each billing
category based on their estimated market values on file with Dakota
County. These were provided to Mr. Langness. I do not expect the
results back in time for Tuesday nights meeting, but I will provide
them to you prior to setting a public hearing date.
I have attempted to answer the questions I know exist. I truly do
believe that the concept of a Storm Water Utility is the way to go.
I see a need in the community to perform maintenance and
improvement projects. With State Legislation controlling levy
limits, to reduce local spending, this approach seems a fair and
equitable method to achieve the improvements needed.
I will have additional overhead material at the meeting. If you
have specific questions ahead of that meeting let me know and I
MEMO-STORM WATER UTILITY
PAGE 6
will provide supportive documentation where available.
cc: Utilities Commission
TO:
FROM:
DATE:
RE:
MAYOR NAPPER
COUNCIL MEMBERS:
MEMO
KLASSEN
OXBOROUGH
WILLCOX
WIPPERMANN
RON WASMUND, PUBLIC WORKS DIRECTOR/BUILDING OFFICIAL
NOVEMBER 26, 1991
STORM WATER UTILITY
In this report I will attempt to explain the process, exercises and changes we have
gone through with the Storm Water Utility since the last time it was brought before you.
The first thing we did was to develop a project list of typical services that are provided
as storm sewer maintenance. From that list of projects we developed project cost
sheets. Each service was analyzed for costs, including labor, equipment costs, and
materials. Labor totals were derived using the 1991 salary rates for each maintenance
level position associated with the task and necessary equipment to perform the task.
Equipment costs were calculated using the standard hourly rental rate which we have
on record for each piece of City owned equipment. Material costs were figured using
1991 purchase prices and quantities of each material needed.. The only exception was
the water used for jetting. It was assumed for the present time that water would not be
charged for. As policies are examined and modified water may need to be paid for in
the future. I have provided copies of the project cost analysis sheets for your
reference.
Once these costs were derived I then compiled an Operations and Maintenance
Budget assigning other operational costs as they could be conservatively anticipated.
Those cost included such items as equipment repair, fuel, office supplies, small. tools,
refuse disposal, informational brochures, engineering and legal fees.
The next step was to determine rates for the utility which were consistent with
neighboring communities yet reflected the amounts which seemed to be acceptable to
the residents of Rosemount. Using information obtained in discussion with you and
what I felt the audience of the informational meeting in July were saying were
acceptable, I adjusted the rates. The areas which seemed to generate the most
discussion were Rural Residential, Agricultural and Undeveloped lands. The previous
rates were $2.43/acre for rural residential and $.50/acre for agricultural and
undeveloped land. There seemed to be a general consensus that the fees were
considerably higher than the level of service provided. Using the project list as a
rationale the rates were adjusted to $.10/acre for agricultural and undeveloped land.
Storm Water Utility Memo
Page 2
Rural Residential has been treated similar to the R-1 districts by assigning the R-1 rate
of $4.88 to the first acre including house and out buildings. The balance of the rural
residential parcel will be charged at the same rate as undeveloped land or $.10/acre.
Under the new rate structure, no deferments or credits will be considered or granted
for conservancy programs in Agricultural, Undeveloped or Rural Residential.
Using the new rate schedule and the first draft of the O & M Budget, there was a gross
shortage of fees to support costs of operation and construction projects not funded
with connection charges. As a result of the disparity between income and expenses
we went back and prioritized the project list. Any that duplicated operations that I
currently budget for under general operations were eliminated from the utility. Others
were cut back in scope reducing the amount of service provided each year for the
initial years. In addition to that all equipment costs were eliminated from the
calculation of the project. I have provided to you a copy of the priority list and an
itemization of which ones were eliminated completely and which ones were cut back in
scope.
With the adjustment made in maintenance projects and elimination of equipment
charges the O & M Budget was reduced from $218,470 to $96,360.
The final step we have made in the process was to examine the costs of bonded
indebtedness. In the original document the bond payments were calculated assuming
a 10% rate on all bonds issued for 10 years. By examining the City's bonding history
and good bond rating it was determined that we have never paid more than 7.5%
interest on bond sales. Using that history and the fact that our recent bond sales were
issued for less than 5% spreadsheets were run. Different examples were run using 6,
7 and 8 percent for both 10 and 12 year terms of debt issue. I have provided copies
of those spreadsheets for your examination.
The examples all show project costs, equipment costs, operation and maintenance
costs and connection charge funded projects. These costs are all totaled for each
year to obtain the respective years "Total Capital Financing Needs
It is then planned that each years capital needs will be bonded for. The amount of
repayment is then shown under "Debt Service Payments" for each respective year with
a total shown at the bottom of each years column.
The second page of the examples show the total "Income" from service fees and
connection charges. It also shows total "Operating Expenses" including operation and
maintenance costs, guide plan updates and system replacement costs.
Using the total income annually and subtracting operating and maintenance costs and
debt service costs we derive the total income or loss for each year.
storm Water utility Memo
Page 3
The balance line shows the cumulative total for each of the 10 years including interest
earned on the previous years balance.
Using the costs in the 2nd draft of the O & M Budget, the improvement projects which
have always been referred to in the document, and $35,000 every five years for
updating the Storm Sewer Guide Plan as expenses, then calculating income based
upon the fee table changes as I've earlier explained for income, I'm pleased that we
can generate a positive cash flow every year.
Please examine the information provided to see if you agree with the approach and
rates as explained. I would enjoy discussing any questions you have with you either ,
prior to or at the meeting.
ZS 0// '0 el)'�l - /'%)
Co v.vZe,
^� 401 -
DATE: JANUARY 30, 1991 ® ✓ /
SUBJECT: STORM SEWER UTILITY RATES
The possibility of funding the annual street overlay program through a
street maintenance. utility or an expanded storm sewer utility was discussed
at the 1991 goal setting session. Legal considerations indicate that
increasing the existing storm sewer utility charge would be the appropriate
mechanism.
Currently the storm sewer utility charge is $1.75 per month per residential
equivalent, which generates approximately $259,000.00 annually. This amount
is supplemented by the general fund at $140,400.00 for a total amount of
$399,400.00, which does not meet current expenses..
The following costs are directly or indirectly incurred in operating and
maintaining the storm sewer system:
1. Street Sweeping
A.
Spring clean-up
3 sweepers x 20 days x 12 hours
— 720 hours
720 hours x $55.00/hour —
$ 39,600
3 trucks x 20 days x 12 hours —
720 hours
720 hours x $50.00/hour —
36,000
B.
Summer and fall sweeping
1 sweeper x 24 weeks x 40 hours
- 960 hours
960 hours x $55.00/hour —
52,800
i truck x 24 weeks x 40 hours Q
960 hours
960 hours x $35.00/hour
33,600
PART
1 TOTAL
$162,000
2. Storm Sewer Lift Stations
A.
Pumping costs (11 stations)
$ 23,000
B.
Lift station repairs
10,000
C.
Check lift stations (truck & 2 workers)
20 days x 8 hours x $50.00/hour
e
8,000
PART 2 TOTAL $ 41,000
Council Memo
Storm Sewer Utility Rates
Page 2
January 30, 1991
3. Storm Sewer_ Maintenance and Repairs`
A.
Clean sump catch basins (Vactor & 2
workers)
2 weeks x 40 hours x $145.00/hour -
$ 11,600
B.
Storm sewer line cleaning
5 days x 8 hours x $145.00/hour -
5,800
C.
Repair storm sewer lines
Contracting
12,000
Catch basin retrofit (contractual)
24,000
Miscellaneous repairs (City crews &
equip.)
4 repairs/year x $2,000.00/repair —
8,000
D.
Ponding easements/rental costs
34,000
E.
Pond dredging
11,000
TOTAL PART 3
$106,400
4. Miscellaneous Costs - Indirect
A.
Sweeper brooms
$ 10,000
B.
Landfill dumping fees
2,000
C.
Curb, gutter and sidewalk repair
20,000
D.
Parts for lift stations
2,000
TOTAL PART 4 $ 34,000
5. Debt Service for Storm Sewer Projects
Assume 20 year recovery $100,000
TOTAL PART 5 $100,000
6. Overlay Proiect_Costs
A. Curb replacement $ 81,470
B. Milling overlay 33,270
C. Lift station replacement 20,150
TOTAL PART 6 $134,890
OVERALL TOTAL $578,290
Council Memo
Storm Sewer Utility Rates
Page 3
January 30, 1991
As can be seen, with total revenue from the storm sewer utility at $259,000
per year and total expenditures at $578,290 per year there remains a
$319,290 deficit.
It is proposed that the storm sewer utility charges be increased from $1.75
per residential unit per month to $2.75 per month, which would generate
$407,000 annually. This would still leave a $171,290 deficit, which could
be taken from .the general fund. The impact of this increase on commercial
properties is indicated on the attachment to this memo.
Please contact me at your convenience if you have further questions relative
to this matter.
utility provides creative surface water financing
Paying for storm wat (d
er ramage) projects
has become more complex with increasing
demands on city general funds and court
challenges to special assessments.
While traditional funding sources are
becoming less viable, the costs related to
water quality management and wetland
protection continue to rise. With increasing
frequency, municipalities are turning to a
utility or user charge to finance water
management projects. The utility approach
is gaining recognition as the most equitable
way to finance surface water projects.
What is a utility?
A utility is a service charge based on a
property's contribution of water to the
drainage system. A surface water
management utility is a method of financing
water quantity and quality projects. The
utility is based on the premise "users pay."
A quarterly fee is typically charged
against all developed parcels within a city.
The pie charts The fee is based on how much rain runs off
demonstrate the into streets, ditches, ponds and lakes rather
difference a utility can than soaking into the ground.
make in generating This consistent and dependable revenue
revenue. source provides the means to manage
surface water drainage and water quality
without increasing property taxes or using
controversial assessments. The utility charge
is not associated with property value or
property taxes. All properties can be subject
to the utility charge, including tax-exempt
parcels and "city -owned" lands.
What are the benefits?
The utility benefits the community by
providing a dedicated fund for surface water
management activities, including planning
and inventories, capital expenditures,
personnel and equipment, and
administration of the utility. The utility
provides a continuous source of revenue for
surface water management without
competing witlt the general fund.
The benefits associated with surface water
management include the following:
• Flood control
• Improved lake eater quality
• Wetland protection
• Erosion and sediment control
• Enhanced recreational opportunities
• Drainage system maintenance
• Community education
Administration of the utility involves
developing quarterly rates based on funding
needs; determining the means of billing and
collections, including software and
Residential
Apartments
Vacant Industrial
Ag
Comm.
General Taxes
Parks, Cemeteries
and Golf Courses
Residential
tAPartments Industrial
nt
g
Churches
Schools Commercial
Gov. Bldg.
Utility Funding -
equipment needs; determining responsible
parties to monitor program implementation;
and soliciting comments from legal and
financial advisers.
How is a utility established?
The legal basis for the utility should be an
ordinance. The ordinance establishes the
utility and outlines calculation of storm
drainage fees; credit system and appeals;
exemptions; fee payment, city policy; and
supporting computations.
The utility concept will succeed if it has
public understanding and support. It is
important to recognize that development
adds to existing drainage problems. The
property owner on a hill has, by converting
natural ground cover into streets, concrete
and rooftops, increased storm water runoff.
This increase contributes to the drainage
problem of neighbors in low-lying areas.
Because the property owner on the hill has
contributed to the drainage problem, he or
she should also contribute to the cost of
correcting the problem. s
Bus shelters simplify Rochester commute
As part of an extensive redevelopment
project in downtown Rochester, the
Architecture and Transportation
Departments joined forces to design an on -
street bus transfer station for the Rochester
Transportation Department.
Seven shelters were designed for the
station located on 2nd Street Southwest
between 1st and 2nd Avenues. The City
utilizes a "coordinated transfer system"
where the buses converge at the station
every one-half hour during peak hours and
every hour during off-peak periods. Riders
disembark or begin their journeys at the
transfer station. The station is linked to the
downtown skyway and to the elaborate
Mayo Clinic pedestrian subway system.
The sidewalk area adjacent to the transfer
station is in a heavily traveled area near the
Mayo Clinic. Special attention was given to
pedestrian circulation requirements of this
area. Architects recommended the use of
different paving materials, effectively
dividing the sidewalk into two functions —
walking and waiting. The use of different
paving materials also provides an aesthetic
transition between the Mayo Clinic's
exposed aggregate and the City's paving
pattern used for downtown redevelopment
efforts.
The station is designed to blend with the
Bus transfer stations City's skyway system. The shelters are
are linked to the skyway enclosed by glass and a standing seam metal
and pedestrian subway. roof. Landscaping elements and pedestrian
The Market Survey
will provide an accurate
look at airport demand
in the Brainerd area.
street lights are a continuation of the
downtown redevelopment theme.
In addition to aesthetics, other important
elements included:
• A comprehensive study of transfer
patterns between routes to place the
most often used buses together to
minimize "jay walking."
• Analysis of the impact of diesel fuel
odors on air quality. The close proximity
of the Mayo Clinic necessitated
mitigation of diesel vapors in the area.
• A study incorporating computerized
and graphical bus schedule information
to determine the best system of relaying
that information to the public. .
Survey measures demand for airport services
The Brainerd - Crow Wing County Airport
Commission is asking airport users and local
businesses to tell them if their air
transportation needs are being met.
As part of a routine update of the Airport
Master Plan, SEH is surveying the local area
to ascertain if there is a market for aviation or
airport services other than those currently
being provided.
Tom Foster, Airports Department
Manager, says the conventional way to
forecast aviation usage is to look at the
amount of current traffic and FAA regional
projections and formulate forecasts from that
information.
The Commission wants to make sure the
airport facility meets all the needs of users
and potential users. For instance, the survey
may reveal that there is a need for air freight
service and that service is not currently
available. The Commission can use that
information to generate a more accurate
aviation forecast and as a tool for developing
the airport.
By surveying airport users and potential
users, the Commission will develop a better
understanding of the local demand. The
survey will also reveal what type and the
amount of traffic the airport would have if,
the local demand was being met.
that met the standards of the environ-
mentally stringent section could receive
a modified National Pollution Dis-
charge Elimination System permit to
waive the secondary treatment require-
ments.
Since then, many large cities, such as
Boston, have not had their 301(h) waiv-
ers renewed, or they have opted to build
secondary treatment facilities. But a
smattering of communities has Contin-
ued to avoid the high cost of installing
a secondary treatment plant.
In 1987, Congress added require-
ments that POTWs applying for 301(h)
waivers achieve certain standards in pri-
mary treatment. One of these standards
is the 30 -percent BOD removal. The
primary treatment plant must demon-
strate that it can remove 30 percent of
the organic matter by the time the ef-
fluent leaves the plant.
The 301(h) permits may be renewed
every five years, but EPA keeps track of
the permit holders on a monthly basis.
When Anchorage applied for a renewal
of its 301(h) waiver recently, it was no-
tified by EPA that the permit was in
danger of cancellation because the plant
was not meeting the BOD regulation, a
requirement that came as a surprise to
the city.
Misinterpretation
According to Crewdson, part of the
problem lies in EPA's interpretation of
the law. Congress said the primary
treatment process must meet the 30 -per-
cent rule, but the law does not specify if
the standard is a monthly,bi-monthly,
bi-annual or annual average. We may
meet the 30 -percent BOD on an annual
average, but during spring melt our sys-
tem is swamped with fresh water, and.
then there is no way we can meet it.
After months of failing to meet the
monthly standard, Anchorage experi-
mented with a creative way to comply
I Th6lime Right Fer $tormwater Utllities2
Municipalities with pop- niflcant; and could escalate dude the installation of re and its suburbs;=Whether
ulations of more thanrapidly
if -testing for paratnxentaonponds, atoiage tun °�suchan
approach is feasible ;
-.25Q,000 must begin submit .a
eters,suchas priority pollut. neisand swirl coneentrators : ;. depends on state and. =local r";
tingstormwater discharge -`ants,
is made part of the per=;" 'The .technology:seiected' �
laws. -Any entity seeking to'
permit applications by Nov nits : ,would depend not %only on ° establish a stormwater utility,, -_,
1991 to the federal gov ,. Corrective measures would which pollutants- must be -re- :
should have the programs M.
ernment. Those With popula-' be -indicated if the sampling =�°moved;, but also 'on local viewed by legal counsel.
tions between"100,000;and,, and testing programa~show- .conditions. In heavily.popu „.�:":Selling the Concept of ax",
25U,000 mustsubmit by�May,f;
that stormwater adversely_-;dated:areas, it maynot be ��dstormwater-utility,willbe`'
1&`1992. ' �.
affects the receiviing`�stream �feastbie to build retention
�_difficult-in some places The a`.
,',
The final rule establishing >
water, quality: The'.cost ofd ponds.because of. space,liuu ,s:,
utility is, `after all, .another
permit application require-
implementing corrective . tations.In some cases, build -11-r . form of taxation, and new
ments for stormwater dis .: measures,1, ay compare, to Ming storager tunnels and then - taxes are not met with glee_t-_
charges,,published lastyear,"
the-cost'•of combined sewer 'discharging the��water.wto � Establishing the utility
does not specify the type of
>ov
eriiow'CSO) abatement, treatment plants may be pre ;may take several yearsof
controls to be included in the ''since
many of the same tech ferred._
planning: The income gener=
permits. Those controls will
.:
nologies are applicable. The ' -The potential need to treat
ated during the first few
be set by the state permitting
timing and scope of .correc- -stormwater affects other ar-
.;;years .most likely will be,,
agencies or the U.S.-Envi-
tive measures cannot be pro- eas of water pollution con-
small, so planning and sell- `
ronmental Protection ejected
now. ,..: trol. Many older_citiesnow
__. _
ing,the stormwater utility
Agency.The
approach to pollution " are implementing CSO
concept needs to begin soon
While the cost of applying
'abatement from stormwater abatement programs, and
if a viable program is to be:
may not be great, subsequent
will vary locally. Two of the some municipalities are con-
created in five years. Smaller
costs derived from additional "
applicable technologies are sidering sewer separation
communities, while not
sampling or implementation -waste
minimization, includ- programs as part ,of their
needing to file permits at this
of abatement measures may
ing improved street cleaning, strategies. But if stormwater'
time, may want to begin
have a substantial impact on `
catchbasin cleaning and lit- treatment becomes neces-
considering the utility con -
community finances.
ter -control ordinances, and sary, separation may not
cept now.
The fact that there are
storage and treatment of the provide pollution control at
Once the utility is estab-
pollutants in urban runoff
stormwaters. the lowest cost.
lished, rates can be adjusted
has been accepted for a long
The waste minimization Filing permit applications
according to needs. Typi-
time. One must believe that
approaches would result in for stormwater discharges
Cally, rates are low at incep-
the primary reasons for the
low capital expenditures but will result in additional costs
tion to facilitate adoption of
permitting systems are to al-
may increase operational to local governments. The
this concept.
low EPA to develop infor-
costs. Also of significance ultimate implementation
There are no fixed formu-
mation on pollution resulting
are the institutional prob- costs could range from mod-
las to aid communities in es -
from stormwater discharges,
lems created by the program. erate to very high, depending
tablishing a stormwater util-
as well as to develop a
Most collection and treat- on the effect of the waters on
ity, but the planning process
_framework to abate that pol-
ment/storage methods would the receiving streams. EPA
must incorporate several
lution. So it follows that
likely be geared to capturing estimates the cost of filing
stages. The extent of the
EPA will require permit
the first flush after a storm,_ for large- to medium-sized
program is dictated by local
holders to undertake a pro-
since those waters would municipalities will range
needs. ❑
gram to sample and test
contain the highest concen- from $50,000 to $75,000.
stormwater discharges. The
trations of pollutants. This The logical vehicle for
results of this program would
approach to controlling pol- raising the necessary funds
be used by EPA to determine
lution from stormwaters may be a stormwater man -
the need for corrective meas-
would be similar to that used agement utility. Drainage
This article was written by
ures.
in abating the effects of patterns do not recognize
Felix Sampayo, senior vice
The cost of a sampling and
CSOs. political subdivisions, so a
president of Jones & Henry
testing program could be sig-
This approach could in- utility could encompass a city
Engineers, Toledo, Ohio.
84 American City & County/August 1991
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NEW • IDEAS. ARE • FLOWING. AT- U.S. PIPE
Circle No. 54 On Reader Service Card
American Clty & County/August 1991
_VWastewater
w_systerns
Stormwater Management
Through User Fees
hrough the 1987 Clean Water Act
Amendments, municipalities with
populations of 100,000 or more
are required to obtain National Pollut-
ant Discharge Elimination System
.(NPDES) permits for their_ storm sewer
systems while still managing stormwater
runoff to control water quality impacts
to receiving water bodies. The final rule
is expected by the end of this month,
with permit submission deadlines as
early as two years from now.
By Nilo Priede
During the 1990s, municipalities of all
sizes will be developing and implement-
ing stormwater management programs
to control urban runoff and its effect on
water quality. Historically, stormwater
management has been limited to_ plan- _ _
ning, designing and implementing storm
drainage improvements. Water quality
controls were not required.
The new comprehensive stormwater
management approach, however, seeks
to control both the quantity and quality
of stormwater runoff by protecting the
total stream system from flooding and
water quality degradation.
Generating sufficient financial re-
sources to cope with water quality is-
sues and drainage infrastructure needs is _
critical in a stormwater management
program. Funding to meet the typical
backlog of drainage corrections ar'J the
new water quality considerations can be
substantial. Although the State Revolv-
ing Fund Loan Program makes loans
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adger Meter is
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3" "'ough 120"
fine size.
available below market rate and extends
eligibility to nonpoint source control
projects, local governments still must
bear full financial responsibility for on-
going stormwater programs.
One financing option is the stormwa-
ter utility, which relies on user fees
rather than traditional tax revenues to
fund stormwater management.
A stormwater utility is user -oriented,
with costs allocated according to the
services received. Charges are related to
a given land parcel's stormwater run-
off. Therefore, each parcel of land
within a local government's jurisdiction
is assessed a fee based on its runoff
characteristics. The user fee system must
be tailored to local goals and conditions
such as soil types, depth to groundwa-
ter, Iand use and financial needs.
Fairness and equity for all ratepayers
must be the primary focus for establish-
ing the rate base. To achieve this objec-
tive, each element of the rate structure
must be carefully determined. The typi-
cal stormwater utility rate structure is
based on the total impervious area (roof
area, patios, driveways, etc.) of each
land parcel. The fee structure is based
on the average impervious area of a
typical residential unit.
Two options exist for determining the
impervious area of the rate structure. In
New Measuring Technology Helps Operations
Local officials used to ap-
proach their work with the
confidence that the best they
could do with the resources avail-
able was all that could be ex-
pected. But times have changed,
and often standards are set by
people outside the local system.
The U.S. Environmental Pro-
tection Agency imposes substan-
tial fines on localities that do not
follow its mandates.–Between
1985 and 1989, 412 convictions
for non-compliance with federal
regulations are on record for pri-
vate organizations and individu-
als as well as local governments,
resulting in $1.3 billion in fines
and 1,254 years of jail time. Last
year, San Antonio, Texas, was
fined more than $200,000 for
failing to regulate the toxicity of
the industries that feed into the city's publicly owned treat-
ment works (POTWs).
The issue of toxicity has become a major source of worry.
A material is considered toxic if it causes harm to living or-
ganisms. Toxicity is not a property like mass, elasticity or
color that can be measured against an objective standard.
The only way to determine toxicity is to observe the effect
of the material on live specimens of some kind.
The key issue when dealing with toxicity is how much is
acceptable under prevailing conditions. Even when the
complete chemical count of a test sample is known, its tox-
icity cannot be predicted reliably. Different chemicals work
synergistically or antagonistically to increase or decrease
toxic effects. To get a comprehensive measure of the situa-
tion, two tests are necessary — biological tests for toxicity
levels and specific tests to indicate what chemicals are pres-
ent in toxic samples.
Toxicity bioassays, which expose specimens to test sam-
ples and then test for negative effects, are used for screen-
ing. They determine whether the sample is so toxic that fur-
ther action is needed. They also are used as monitors to de-
tect significant changes from normal toxicity levels,
signaling potential problems. Organisms have long served as
sensors of unseen hazards.
Theoretically, any organism may be used for testing. In
practice, only a handful of tests are used widely, not be-
cause of their simplicity or superior results, but because the
results are related easily to an already well-documented body
of knowledge.
In environmental testing, fish, water fleas, algae and bac-
teria are used commonly. While the basic idea of bioassay is
simple, the performance of the tests usually is time-consum-
Using a new method, a full bioassay can
be accomplished at the lab in half an
hour.
ing and complicated. As a result,
faster and easier testing methods
have been sought for use along-
side the old standbys. Responsi-
ble officials want testing systems
that pinpoint toxicity sources
rapidly so they can control those
sources before problems become
crises.
Certain microorganisms put as
much as 15 percent of their total
- energy into producing light. In-
tensive study of these organisms
beginning in the 1930s showed
that toxicity causes a reduction in
light output.
In the late 1960s, this knowl-
edge was applied to detecting air-
borne toxicity. Air samples were
drawn into a chamber with a col-
ony of glowing bacteria selected
for specific high sensitivity to or-
ganophosphates, widely used in pesticides. A sharp drop in
light output indicated the presence of these chemicals.
Members of that same technical team used the method in
the mid-1970s with water-based samples and an organism
selected for its response to a broad range of toxics in a sys-
tem called Microtox.
The project was surprisingly complex. No one previously
had developed all that was required for production and ef-
fective integration of living organisms, mechanical systems,
electronics and computer logic. A key development was a
special process of freeze-drying the organisms at exactly the
right point in their life cycle so they could be stored un-
changed for at least a year.
When water is added to the sample, the cells become a
suspension of living organisms once again, ready for imme-
diate use. A full bioassay, testing several dilutions of a sam-
ple, can be completed in about half an hour.
Traditional environmental testing looks only at the end
product of waste management processes, such as the final
outfall from a wastewater treatment plant. A fast biosensor
allows a different approach. The effectiveness of internal
processes can be monitored, allowing for individual adjust-
ments. Trucked -in toxic septage can be screened to protect
the living biomass of the POTW.
If local government is to maintain control of its affairs,
local authorities must have practical methods for judging
their situations. New measuring technology can provide
much of the information needed for control of operations
impacting the environment. 13
This article was written by Nelson tVinkless, director of
communications for Akrobics Corp., Albuquerque, N.hf.
the first, all detached single family
dwellings are charged a flat rate of one
single family unit (SFU), while other
parcels are charged on the basis of the
total impervious area on the individual
parcel divided by the single family unit
square footage.
The other option bases the fee on an
equivalent residential unit (ERU), which
is derived by totalling the impervious
area of all dwelling types and dividing
by the number of dwelling units.
Four factors supporting the fairness
of an ERU-based fee structure are di-
rectly connected impervious area for
each land use, increased revenue, con-
struction cost vs. density of develop-
ment and billing system savings.
The best estimate of a parcel's runoff
contribution is the directly connected
impervious area (DCIA) on the parcel.
DCIA is the impervious area that drains
directly to a gutter or drainage channel.
Driveways, for example, generally are
included in DCIA because they drain
directly to the street via the gutter.
Rooftops and patios are not included
because they drain to a surface (the
lawn) where the runoff has an opportu-
_nity to filter.. into _the .ground before
reaching the drainage channel.
Using an ERU-based structure usu-
ally results in a significant increase in
the revenue generated by the stormwa-
ter utility. Increases from an ERU base
rather than an SFU base generally range
from 25 to 35 percent. However, in
communities with large numbers of
multifamily units, increases can range
from 60 to 100 percent. The higher the
development density, the greater the
ERU total.
Some communities have incorporated
user fees for platted -vacant land in their
stormwater utilities. Computing an eq-
uitable fee for this category involves
considering soil characteristics, depth to
groundwater and the design storms se-
lected by the community to provide
Hot Mix Asphalt
Industry Examined
The National Asphalt Pavement
Association has published a report
discussing the safety hazards of test-
ing for the asphalt cement content of
hot mix asphalt.
Current Industry Practices and
Procedures for Determining Asphalt
Cement Content In Hot Mix Asphalt
examines current procedures for as-
phalt -content testing, the problems
involved and suggestions for more
environmentally safe practices.
For more information, contact the
NAPA, 6811 Kenilworth Ave., Riv-
erdale, Md. 20737-1333, (301)779
4880.
American City & County/O. Lobo, 1990
Circle NO. 25 tn-. P. Prior Rnrviro (`aril 11
Duckweed Gaining Acceptance As Treatment
ore American cities and coun-
ties are designing natural was-
tewater treatment lagoons using
duckweed to eliminate impurities and
protect the environment from un-
healthy discharge. But managing a
plant is not always the easiest thing
to do. However, a process for man-
aging natural duckweed systems to
treat wastewater effluent has been
developed by a Minnesota-based
company.
"It's Mother Nature's way of
cleaning water," says Reid Erickson,
a representative of the Lemna Corp.
The free-floating plant grows on the
surface of water bodies, drifting and
shifting positions according to wind
and wave activity. But the plant's
constant movement made removal of
nutrients from the water virtually
impossible.
That is until Viet Ngo, a civil en-
gineer and consultant, devised a sys-
tem -of floating barriers to eliminate
the wind and wave activity, which
created a stable environment for the
plant to grow. The system now has
been designated "Innovative/Alter-
native" by the U.S. Environmental
Protection Agency, placing it high in
priority for grant funding.
Several communities already are
experimenting with the process. "We
were told an upgrade and expansion
of our system would cost about $1
million," says Richard Rowe, city
manager of Ellaville, Ga. "The
Lemna retrofit cost $260,000 and
enabled us to increase our lagoon
capacity from 160,000 gallons to
200,000 gallons daily."
The Ellaville retrofit cost .
$260,000.
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drainage and water quality protection.
Including the platted -vacant parcel in
the customer base is common in com-
munities with limited large tracts of un-
developed property and numbers of
platted -vacant parcels.
Implementing the NPDES permit
program for storm sewer systems costs
an average of $500,000 for communities
of 250,000 or more.
The cost of these site-specific investi-
gations should be borne by the contrib-
uting commercial/industrial entities.
Using permit fees to recover the cost of
establishing and maintaining the
NPDES permit process also is essential.
In communities with significa:�t
growth, the long -terra success of a
stormwater management program de-
pends on the requirements for new de-
velopments. A stormwater management
ordinance that sets levels of service for
flood protection and water quality goals
should be established to guide storm -
water master planning and ensure that
new development meets stormwater
management requirements.
Developers can be required, to con-_
struct stormwater management facilities
that meet runoff quality and quantity
control requirements or pay an up -front
fee to participate in regional or basin -
wide stormwater facilities. This "front-
end" capital contribution can be nego-
tiated based on the services rendered.
Significant capital is required to re-
trofit existing facilities to meet water
quality requirements. Two options for
this cost recovery process are including
an annual capital improvement pro-
gram in the rate base and levying a spe-
cial assessment.
Using the first •-ition, costs for im-
proving the sys :m are recovered
through the user rate base with all users
paying equally. This places the respon-
sibility of bringing the existing system
up to an acceptable standard on all of
the utility's customers.
The second option for recovering
capital costs is based on contributing
areas. For example, if a customer's
property represents 10 percent of the
service area, he would pay 10 percent of
the project's capital cost.
The stormwater management utility is
a user fee system that integrates all user
classes into a fair and equitable rate
structure. As such, it can generate on-
going revenue from monthly user fees
and permit fees to cover planning, de-
sign and construction of facility im-
provements; operation and mainte-
nance; and the organizational and ad-
ministrative requirements of a
comprehensive stormwater management
program. ED
Mlo Priede is a senior technic
consultant for Camp Dre.;::•°r & n;,Wee,
Jacksonville, Fla.