Stormwater Utility Rate Increase
~~E
~~~
MEMORANDUM
February 28, 2005
FROM:
Michael C. Van Milligen, City Mana?~r--~
Gus Psihoyos, City Engineer _"Yj ',_-:-5
TO:
SUBJECT: Stormwater Utility Rate Change
INTRODUCTION
This memo outlines Engineering staff's recommendation to modify Section 44-274(d) of
the Code of Ordinances. The proposed changes modify the stormwater utility fee rate to
reflect the Drainage Basin Master Plan (DBMP) funding which is recommended in the
Fiscal Year 2006 budget.
BACKGROUND
In December of 2001, the City Council adopted the Drainage Basin Master Plan
(DBMP) prepared by HDR Engineering (Omaha, NE). Based on the study,
approximately 1,150 homes and businesses in the Bee Branch watershed are at risk of
flood damage. The DBMP recommends several capital improvement projects that
would reduce the threat of flood damage including the Carter Road Detention Basin, the
W. 32nd Street Detention Basin, and an open waterway from 16th Street to 24th Street.
The open waterway project represents the restoration of the Bee Branch/Couler Creek
and has been termed the Bee Branch Creek Restoration Project.
City staff prepared a Fiscal Year 2003 Capital Improvement Program budget that
included the three projects. In addition, staff recommended that the City Council
appropriate funds to conduct a study to determine the alignment of the Bee Branch
Creek Restoration Project from 16th and Sycamore to 24th and Elm Streets. Such a
study would identify where the waterway would be built and what properties would be
impacted.
Due to the concerns voiced by residents, the City Council separated the Bee Branch
Creek Restoration Project into two individual projects: Phase I, between 16th Street and
Garfield Avenue and Phase II, between Garfield Avenue and 24th Street.
Because Phase II involves the acquisition of approximately sixty-eight homes, the City
Council removed it from the DBMP. However, it remained under consideration pending
further study.
On December 16, 2002, the City Council authorized the solicitation of proposals from
engineering firms to conduct the Bee Branch Creek Restoration Alignment Study. On
Page 1 of 5
March 17, 2003 the City Council approved the RFP for the Bee Branch Creek
Restoration Alignment Study. The study was to include the following:
1) Establish the optimum alignment for the proposed open waterway along its
approximately 4,500-foot length (from 16th Street detention basin to 24th and
Elm Streets) based on existing environmental, utility, social, and economic
constraints;
2) Provide a preliminary design that establishes:
a. What the waterway will look like at different locations along its entire
length;
b. How the waterway will function before, during, and after rainstorms of
different magnitudes; and
3) Working with impacted residents through a citizens advisory committee to
ensure that the recommended alignment location and waterway design are
based on input from the neighborhoods impacted by the proposed open
waterway.
On May 19, 2003, the City Council approved the selection of Camp Dresser & McKee
(CDM) with WHKS and Conservative Design Forum (CDF) to provide engineering and
design services for the study.
In August of 2003, the City Council established the roster of the Bee Branch Citizen
Advisory Committee (BBCAC). The BBCAC provided input to CDM with regard to the
social and economic concerns and needs of the impacted neighborhoods, help
establish the criteria to evaluate alternative alignments/preliminary designs for the open
waterway, and ultimately make an alignment/preliminary design recommendation to the
City Council. Between September of 2003 and June of 2004, the BBCAC convened six
times.
A City Council work session was held on May 17th, 2004. Preliminary BBCAC
recommendations were outlined and individual BBCAC members presented their
individual thoughts about the study and potential solutions to the flooding problems.
Although the BBCAC recommended a closed pipe solution between Garfield and 24th
Street, the consensus from the City Council was that City staff and the City's consultant
should proceed with the study as previously directed: provide a preliminary design for
the open waterway that establishes what it would look like and how it would function.
Eight BBCAC recommendations were presented to the City Council in a letter dated
June 30,2004 from BBCAC Chairperson Dr. Charles Winterwood.
In July of 2004, the City Council established a building permit moratorium based on the
alignment preferred by the BBCAC, including the properties potentially impacted by both
the northeast and southwest alignments in the vicinity of the Smithfield Foods property.
On November 1, 2004 the City Council approved the inclusion of the Bee Branch Creek
Restoration Project Phase II (between Garfield Avenue and 24th Street) as part of the
Drainage Basin Master Plan and directed that a work session be scheduled.
Page 2 of 5
The work session, held on December 13, 2004, discussed the open waterway
alignment, appearance, performance, and impacts to existing infrastructure. The
alignment in the vicinity of the Smithfield property was also discussed. Local developer
Wayne Briggs informed the City Council that his organization has a signed purchase
agreement from Smithfield Foods Inc for the property and that the alignment west and
south of the property best suits the needs of his plan. The southwest alignment was the
alignment recommended by COM.
On December 20th, 2004 the City Council endorsed the alignment and preliminary
design of the Bee Branch Creek Restoration project. The $31.8 million estimate to
construct the project as outlined by the preliminary design was also presented. In
addition, the City Council passed an ordinance to establish a building permit moratorium
on commercial and new residential construction.
DISCUSSION
Based on the preliminary design and a 10-year funding plan, the cost estimate for the
Bee Branch Creek Restoration Project from 16th Street to 24th Street is:
Property & ROW Acquisitions
Construction
Construction Contingency
Engineering & Design
$ 8,700,000
$18,232,152
$ 1,823,215
$ 3,008,305
$31,763,672
Total Project Cost
Therefore, the cost estimate to fund the entire DBMP in the original 10-year timeframe
is $38,694,949. Table 1 outlines the change in cost estimates for the DBMP.
Because the cost estimates have changed, so too must the strategy to fund the
improvements in the DBMP. The original plan first introduced with the Fiscal Year 2003
budget called for funding the DBMP with GO Bonds and State or Federal Grants. The
current funding strategy adopted along with the stormwater utility and Fiscal Year 2004
budget calls for the combination of ORA revenue, Utility Fee revenue, and GO Bonds; it
approaches a "pay-as-you-go" funding option. Because the cost estimate for the Bee
Branch restoration has increased, a new funding option is to issue GO Bonds to pay for
the DBMP and use ORA and Utility Fees to retire the debt.
Under the current funding plan, ORA revenue and Utility revenue are also used to fund
six activities besides the DBMP. In Fiscal Year 2004 these totaled $581,000 and they
are escalated at 2.5% each year thereafter. The programs are: Administration of the
Stormwater Utility, NPDES Compliance Program, Storm Sewer
Improvements/Extensions, Stream-bank Stabilization Assistance Program, Detention
Basin Maintenance, and Stormwater Ditch Maintenance & Remediation. The Utility Fee
rates shown reflect this fact. In the spring of 2003, the City Council adopted the funding
scenario we are currently operating under, one that includes revenue from the
stormwater utility.
Page 3 of 5
Tab
Ie 1. Evolution of DBMP project costs with revised open waterway estimate.
FY03 FY04 FY05
DBMP Project Estimate Estimate Estimate
1 O-year Plan
Carter Detention $875,000 $875,000 $875,000
W. 32nd Detention $4,023,000 $4,023,000 $4,036,000
NF Catfish Improvements $1,548,000 $1,548,000 $1,659,364
Bee Branch Creek $18,029,000 $18,054,000 $31,763,672
(16th to 24th)
TOTALS $24,475,000 $24,500,000 $38,694,949
With the presentation of the proposed Fiscal Year 2006 budget on February 22nd, the
Engineering Department outlined a plan to fund the DBMP with GO Bonds to construct
the improvements and a combination of ORA and Utility Fee revenue to retire the debt.
Table 2 outlines the original stormwater utility SFU rate and compares it to the current
rate and the recommended rate to fund the open waterway and the other DBMP
projects. In addition to the stormwater utility revenue, approximately $35 million in ORA
revenue are projected to be dedicated to the implementation of the DBMP.
Table 2. Stormwater Utility SFU Rate Comparison for the Original, Current, and
Recommended 10-year Project Funding Scenario for the DBMP that Includes
th B B h C k R . p'
e ee ranc ree estoratlon rolect.
Years* Years Years Years
1 - 5 6 - 10 11-15 16-20
Plan FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14-18 FY19-23
FY03-13 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00
(Original)
FY04-13 $1.291 1.29 1.29 1.29 1.78 1.78 1.78 1.78 1.78 1.78 1.81
. (Current)
FY04-13 $1.29 1.79 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.50 3.502
(Proposed)
*Utility was established in FY04
1Rate would need to be increased to $1.79 to offset the fact that the ORA did not
receive a back tax payment from the State of Iowa when the lawsuit was settled.
2Rate would continue at $3.50 until the debt is retired in FY2032.
RECOMMENDATION
I recommend updating the City Code of Ordinances to reflect the Stormwater Utility Fee
rates proposed in Table 2.
Page 4 of 5
BUDGET IMPACT
The recommended funding plan for the DBMP involves the issuance of GO Bonds to
fully construct the projects by 2013. Along with ORA funds, the increase in the
Stormwater Utility Fee will be utilized to retire the debt.
ACTION REQUESTED
I respectfully request the amendment of the City Code of Ordinances to reflect the
Stormwater Utility Fees recommended to fund the $38.7 million DBMP.
attachment
CC: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Dawn Lang, Budget Director
Ken TeKippe, Finance Director
Deron Muehring, Civil Engineer II
Jerelyn O'Connor, Neighborhood Development Specialist
F:/lschluet/GuslMemo/MVM Memo/Stormwater Utility Rate Change Memo 2 28 05
Page 5 of 5
ORDINANCE NO. 19-05
AMENDING CITY OF DUBUQUE CODE OF ORDINANCES SECTION 44-
274(d) SFU RATE, CHARGES; UTILITY REVENUES FOR THE STORM
WATER UTILITY
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE,IOW A:
Section 1. That City of Dubuque Code of Ordinances Section 44-274(d)
is amended to read as follows:
(d) The SFU rate to be applied to residential and nonresidential properties
shall be as follows:
(1) For the period July 1,2003 through June 30, 2005 the SFU
rate shall be $1.29 per SFU;
(2) For the period July 1,2005 through June 30, 2006 shall be
$1.79 per SFU;
(3) For the period July 1,2006 through June 30, 2007 the SFU
rate shall be $2.00 per SFU;
(4) For the period July 1, 2007 through June 30, 2008 the SFU
rate shall be $2.25 per SFU;
(5) For the period July 1, 2008 through June 30, 2009 the SFU
rate shall be $2.50 per SFU;
(6) For the period July 1, 2009 through June 30, 2010 the SFU
rate shall be $2.75 per SFU;
(7) I For the period July 1, 2010 through June 30, 2011 the SFU
rate shall be $3.00 per SFU;
(8) For the period July 1, 2011 through June 30, 2012 the SFU
rate shall be $3.25 per SFU;
(9) For the period July 1, 2012 through June 30, 2033 the SFU
rate shall be $3.50 per SFU.
Passed, approved and adopted this 8th day of March, 2005.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk