Stormwater Management Utility Fee RateMasterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Gus Psihoyos, City Engineer ,`>>
DATE: February 19, 2013
SUBJECT: Stormwater Management Utility Fee Rate Change
INTRODUCTION
Dubuque
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1 I 11
2012
The purpose of this memo is to outline the Engineering staff's recommendation to
modify Section 13 -4 -5 (D) of the Code of Ordinances, thereby adjusting the stormwater
utility fee rate as proposed with the Fiscal Year 2014 budget.
BACKGROUND
In February of 2003, Ordinance 7 -03 was passed establishing a Stormwater
Management Utility and associated fee. At that time, the Stormwater Management
Utility Fee helped fund the 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.
When the Stormwater Management Utility User Fee Fund was created in Fiscal Year
2004, stormwater management activities were funded from a number of sources: 15%
from the stormwater utility fee, 22% from property taxes, 5% from sales tax, and 58%
from DRA distribution funds. With the adoption of the FY2009 budget, the Stormwater
Management Utility became for the first time a self - supporting enterprise fund; all
stormwater management activities are now funded exclusively by the stormwater
management utility and permit fees.
In March of 2012, the City Council adopted Ordinance 21 -12 establishing the
Stormwater Management Utility Rates for FY2013 to FY2033.
DISCUSSION
With the adoption of the Fiscal Year 13 CIP Budget, funding was established and
supported by a stormwater utility fee rate structure to implement the first nine phases of
the Bee Branch Watershed improvement projects and other various stormwater
management activities. Since then, changes have occurred regarding both project costs
and possible funding sources. As promised, the City has continued to seek outside
funding in the form of grants and low interest loans to cover the cost of the stormwater
management. As of Fiscal Year 2013, the City has successfully secured $11,865,500 in
local, state, and federal grant funding. And three additional grant funding opportunities
are being pursed and may be realized sometime in Fiscal Year 2014.
In the fall of 2012, the City submitted a grant request to the Economic Development
Agency (EDA) in the amount of $1.22 million. Feedback from the EDA to date has been
positive. The City expects to find out if the application was successful in early 2013 and
possibly prior to the adoption of the Fiscal Year 2014 budget.
The State Flood Mitigation Program was created in 2012. It established two possible
sources of funding for the Bee Branch watershed improvements: Flood Mitigation Fund
and a Sales Tax Increment Fund. The Flood Mitigation Fund will consist of
appropriations and other moneys and will likely be limited in scope. However, the Sales
Tax Increment Fund will receive deposits of increased sales tax revenues from
impacted areas, as calculated by the Department of Revenue. It established a 10 -year
state flood mitigation program capped at $30 million annually in state sales tax revenue
for a total of $300 million. It calls for a maximum award of up to $15 million a year for
any qualifying single community to match local and federal funds that communities
would spend on flood protection projects. A nine - member board is to be established in
the spring of 2013. The board must first establish an application process and
application procedures. Ultimately the board will scrutinize applications to allow
qualifying local entities to capture a share of the growth in their sales tax collections to
match state and federal financial assistance. The City is already taking steps to ready
itself in anticipation of an application process. HDR Engineering has been hired to
assist with updating the 2001 Drainage Basin Master Plan. The update will serve as the
basis of the City's flood mitigation application. If successful, the award is expected by
December of 2013. Such an award may significantly impact stormwater utility rates that
are currently set per ordinance to increase from the current rate of $5.60 per month for
an average household to $9.00 per month in Fiscal Year 2017. But adopting an
ordinance to maintain the current rate at $5.60 per month starting into Fiscal Year 2014
and beyond is appropriate until the anticipated additional outside revenue is better
defined.
Even though the current rate of $5.60 will not support the borrowing for construction
previously outlined for the project, due to the volatility of project costs associated with
Phase VII of the project (the Bee Branch Creek Railroad Bridge /Culvert Project) and the
anticipation of additional state and federal grant monies, the Stormwater Management
Utility rate for Fiscal Year 2014 should remain at the current rate of $5.60 with the
understanding that it may be adjusted at some point during Fiscal Year 2014 when the
project costs and funding sources crystallize.
Table 1 shows the proposed rate schedule proposed with the FY2014 budget compared
to the rates adopted with the FY2013 budget.
2
Table 1. Proposed Stormwater Management Utility Fee rate versus the rate adopted with the
FY2013 budget.
RECOMMENDATION
I recommend amending the City Code of Ordinances to maintain the current Stormwater
Utility Fee rate of $5.60 indefinitely until an adjustment is warranted in the future.
BUDGET IMPACT
The rate changes will decrease the Stormwater Utility Management fee revenue by an
estimated $1,100,000 in FY2014, $1,420,000 in FY2015, $1,750,000 in FY2016,
$2,093,000 in FY2017, and $2,135,000 in FY2018 and beyond.
REQUESTED ACTION
respectfully request passing the attached ordinance amending Section 13 -4 -5 (D) of
the City Code of Ordinances to maintain the current stormwater management utility fee
rate of $5.60 indefinitely until an adjustment is warranted in the future.
Prepared by Deron Muehring
cc: Barry Lindahl, City Attorney
Jenny Larson, Budget Director
Ken TeKippe, Finance Director
Deron Muehring, Civil Engineer II
3
FY13
FY14
FY15
FY16
FY17
FY18to
FY33
Adopted
$5.60
$7.50
$8.00
$8.50
$9.00
$9.00
Proposed
$5.60
$5.60
$5.60
$5.60
$5.60
$5.60
RECOMMENDATION
I recommend amending the City Code of Ordinances to maintain the current Stormwater
Utility Fee rate of $5.60 indefinitely until an adjustment is warranted in the future.
BUDGET IMPACT
The rate changes will decrease the Stormwater Utility Management fee revenue by an
estimated $1,100,000 in FY2014, $1,420,000 in FY2015, $1,750,000 in FY2016,
$2,093,000 in FY2017, and $2,135,000 in FY2018 and beyond.
REQUESTED ACTION
respectfully request passing the attached ordinance amending Section 13 -4 -5 (D) of
the City Code of Ordinances to maintain the current stormwater management utility fee
rate of $5.60 indefinitely until an adjustment is warranted in the future.
Prepared by Deron Muehring
cc: Barry Lindahl, City Attorney
Jenny Larson, Budget Director
Ken TeKippe, Finance Director
Deron Muehring, Civil Engineer II
3
ORDINANCE NO. 9 -13
AMENDING CITY OF DUBUQUE CODE OF ORDINANCES SECTION 13 -4 -5
(D) SFU RATE, CHARGES; UTILITY REVENUES.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section 1. That City of Dubuque Code of Ordinances Section 13 -4 -5
(D) is amended to read as follows:
(d) The SFU rate to be applied to residential and nonresidential properties
shall be $5.60 per SFU.
Passed, approved and adopted this 28th day of February
Attest: r
/�`�7•>'/,,
Kevin irnstahl,
, 2013.
y D. Buol, Mayor
OFFICIAL
PUBLICATION
ORDINANCE NO. 9-13
AMENDING CITY OF
DUBUQUE CODE OF
ORDINANCES SEC-
TION 13-4 -5 (D) SFU.
RATE, CHARGES;I
UTILITY REVENUES.
NOW, THEREFORE, BE
IT ORDAINED BY THE
CITY COUNCIL OF THE
CITY OF DUBUQUE,
IOWA:
Section 1. That City of
Dubuque Code of
Ordinances Section 13-
4-5 (D) is amended to
read as follows:
(d) The SFU rate to be
applied to residential
and nonresidential pro-
perties shall be $5.60
per SFU.
Passed, approved and
adopted this 28th day
of February, 2013.
/s /Roy D. Buol, Mayor
Attest: /s /Kevin S.
Firnstahl, City Clerk .
Published officially in
the Telegraph Herald
newspaper on the 8th
day of March, 2013.
/s /Kevin S. Firnstahl,
CMC, City Clerk
1t 3/8
STATE OF IOWA {SS:
DUBUQUE COUNTY
CERTIFICATION OF PUBLICATION
I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa
corporation, publisher of the Telegraph Herald,a newspaper of general circulation
published in the City of Dubuque, County of Dubuque and State of Iowa; hereby
certify that the attached notice was published in said newspaper on the following
dates: March 8, 2013, and for which the charge is $10.47.
Subscribed to before me, a Notary Public in and for Dubuque County, Iowa,
this g day of me, , 20 /3 .
Notary Public in and for Dubuque County, Iowa.