[PDF] - AGENDA I. Context: Transition to Impervious Area II. Program PDF Document

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ST STORM ORMWATER ER RA RATE TE TRAN TRANSITIO SITION

Chamber of Commerce January 22, 2019

11 JANUARY 2019 | PROPRIETARY AND CONFIDENTIAL

I. Context: Transition to Impervious Area II. Program Costs: UG’s Needs

III. Cost Recovery: Equitable Approach
IV. Impact: Bill Impact
V. Stakeholder Outreach

AGENDA

2

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CONTEXT: TRANSITION TO IMPERVIOUS AREA

Our top priority is protecting

protecting public public health health an and our

ur envi

enviro ronment nment and complying with federal, federal, st state and and lo local regula regulatory ry standards andards

Commission requested evaluation of service area and solutions to

address the following:

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Context: Why Focus on Stormwater?

Reduce frequent flooding risks
Improve water quality in our waterways
Enhance and maintain drainage infrastructure in a

160 square mile service area

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The Stormwater fund is fully funded by user fees; not taxes
Only customers with an electric or water account pay $4.50 per month
Current revenue is approximately $3.4M per year

Need Need to to addr ddress ess equity equity of

f cost

cost reco recovery very in in rat rate str struct cture

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Context: What is the Significance of the Existing Stormwater Rate?

Properties of different sizes pay the same fee
The charge is not proportional to stormwater

runoff from a property

The current approach of a uniform fee contributes

to significant inequities in cost recovery

Under current stormwater fee, 93% of revenue is

generated from Residential customers

Non‐Residential customers make up 64% of

impervious area

As program costs increase to address operational

needs, inequi equity ty in in cost cost reco recovery very will ill be be exacerba exacerbated ted

Prop Proposed rate rate stru structure refle reflects ts fai fair and and equitable equitable co cost rec recovery ry fr from all all pr properti

perties

es

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Context: Why is UG focusing on transitioning to an impervious area based rate now?

Residential, 36% Non-Residential, 64%

Impervious Area

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PROGRAM COSTS: WHAT ARE THE UG’S NEEDS?

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Program Costs Issues

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Approximately $2M of stormwater operation

and maintenance costs are recovered from the wastewater fee

Current Situation Solution Needed Operation & Maintenance

The services provided by the stormwater program

should be funded from the revenue generated by the stormwater fee

Costs in the wastewater budget need to be moved

to the stormwater budget

1

Due to inadequate funding of maintenance,

routine maintenance of the system has been deferred

Current Situation Solution Needed Deferred Maintenance

Increase funding for enhanced and consistent

annual maintenance activities

Provide funding to catch up on deferred

maintenance

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Program Costs Issues

1 3

Existing fee has only been able to fund 2

stormwater projects in the last 10 years for a total of $5M

Current Situation Solution Needed Major Capital Expenditures

Significant investment necessary to address flooding

and water quality issues

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The stormwater system has no emergency

reserve set aside

Current Situation Solution Needed Emergency Reserve

Industry best practice to maintain a operating

reserve equal to 30‐90 days of operating expenses

A fin financia ial plan plan prov provides ides a reaso asonable able fo forecast to to design design an an evolvin evolving fe fee program program

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What is included in the Financial Plan?

Projection

jection
f
f annual

annual O& O&M cos costs Projection

jection of
f

annual annual ex existing and and fu futu ture deb debt ser service ice Projection

jection of
f

annual annual ca cash sh fin financin ing of

f

ca capi pital Projection

jection of
f

annual annual O& O&M re reserve requir quirem emen ents Projection

jection of
f

annual annual ma manda ndatory tory tr transfers, if if an any

Stormwater O&M Additional LOS Deferred Maintenance Existing G.O. Bonds Proposed G.O. Bonds to fund Capital 25% of Major Capital to be funded from Revenue Achieve a 60‐day Reserve by Year 3 (2020) PILOT Indirect Costs

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Preview of Financial Plan

Re Revenue Requirements 2017 2017 Pr Prelim elim 2018 2018 Bud Budget 2019 2019 Bud Budget 2020 2020 Pr Projec

jected

2021 2021 Pr Projec

jected

2022 2022 Pr Projec

jected

2023 2023 Pr Projec

jected

2024 2024 Pr Projec

jected

Operation & Maintenance $697,800 $834,100 $849,000 $3,528,600 $3,626,500 $4,019,600 $4,365,500 $4,513,700 PILOT / Direct Costs 240,715 251,600 256,600 597,200 645,600 776,100 789,600 900,100 Debt Service 1,102,931 1,249,200 1,829,700 2,051,200 2,492,100 3,006,800 3,816,500 4,650,400 Capital Outlay 1,470,710 1,900,000 1,900,000 3,384,200 4,869,100 4,908,600 5,672,100 5,713,200 Transfer to Operating Reserve 135,200 141,500 331,400 56,000 16,100 Less: Miscellaneous Revenue ‐27,701 ‐17,600 ‐6,900 ‐4,100 ‐4,400 ‐5,700 ‐6,100 ‐5,100 Less: Use of Funds on Hand (a) ‐30,826 ‐817,300 ‐1,328,400 586,600 ‐557,000 753,600 ‐669,000 411,700 Net Net Re Revenu nue Requ quir irements 3, 3,453 453,629 3, 3,400 400,000 3, 3,500 500,000 10, 10,27 278,9 8,900 11, 11,21 213,4 3,400 13, 13,79 790,4 0,400 14, 14,02 024,6 4,600 16, 16,20 200,1 0,100

(a) Proposed rate increases every other year

Fee Under Parcel Based Rate Structure:

Estimated Billable ESUs 158,381 159,964 161,565 163,180 164,813 Monthly Fee per ESU (a) $5.90 $5.90 $7.35 $7.35 $8.55

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Priority Capital Investments Needed in the Community

Prioritized on the basis of:

Severity of flooding
Property damage
High visibility
Potential to integrate with other community planning and funding

Over 80 problem locations identified and prioritized 47 of those 80 were located in 8 watersheds

Pro Projec ect Est stimat ated ed Cos Cost Argentine 1 $5,572,900 Armourdale 3 $3,365,400 Armourdale 5 $23,105,700 Jersey Creek 1 $1,939,900 Little Turkey 2 $702,700 Mill Creek 3 $2,783,900 Mill Creek 5 $2,783,900 Mill Creek 6 $890,700 Muncie Creek 1 $3,358,500 Turkey Creek 4 $3,285,600 Asset Management Investment $5,000,000 Future Planning Investment $2,000,000 Engineering Design $4,622,400

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COST RECOVERY: EQUITABLE APPROACH

Impervious Area (IA)

IA data layer in GIS (based upon 2012

LiDAR survey)

Structures, Private Roadways,

Parking Lots/Driveways

2017 Tax Parcel Polygons
2018 Tax Assessment Database
Stormwater Customer Classes based
n Tax Accessor Land Use Code
No Exempt parcels

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Billable ESUs (Units of Service)

Bonner Springs, Edwardsville, Lake Quivira and Fairfax are not in the stormwater service area

Storm Stormwater er Cus Customer er Cl Class ass Nu Number of

f

Pa Parc rcels Allo Allocation

f
f Pa

Parc rcels Allo Allocation

f
f Ef

Effective Imperv rviou ious Ar Area Allo Allocation

f
f Bill

illable ES ESU (a) (a) Residential 47,520 74% 36% 39% Cemetery 31 0% 0% 0% Commercial 2,507 4% 30% 29% Educational / Institutional 491 1% 7% 7% Government 38 0% 0% 0% Industrial 753 1% 18% 18% Park / Recreation 30 0% 0% 0% Undeveloped 5 0% 0% 0% Utility 7 0% 0% 0% Water Body 19 0% 0% 0% Agricultural 814 1% 1% 1% Vacant 11,581 18% 4% 3% Unclassified 268 0% 2% 2% To Total 64, 64,064 064 99% 99% 98% 98% 99% 99%

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Preview of 2020 Rates – Single‐Family Residential

2000 4000 6000 8000 10000 12000 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 7000 8000 9000 10000 15000 20000 More PARCEL COUNT IMPERVIOUS AREA (SQUARE FEET)

Residential Impervious Area Distribution Re Resident ntial Tie Tier Sq Sq Ft Ft of

f IA

IA ESUs Monthl nthly SW SW Fe Fee Re Resident ntial Pa Parc rcels Tier 1 0 – 1,208 0.40 $2.36 6% Tier 2 1,209 – 3,626 1.00 $5.90 76% Tier 3 3,627 – 6,044 1.80 $10.62 13% Tier 4 6,045 + 3.40 $20.06 5%

1 ESU = 2,420 square feet of Impervious Area (based on median Residential IA) ESU = Equivalent Stormwater Unit

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Preview of 2020 Rates – Non‐Residential

Sam Sample le Va Vacant Land Land Pa Parcel Gross Parcel Area (sf) 50,000 Impervious Area (sf) 0.10 X 50,000 = 5,000 Calculated ESUs 5,000/2,420 = 2.07 Proposed 2020 Monthly Fee $5.90 X 2.07 = $12.21 Sam Sample le Non Non‐Re Residential Pa Parcel – G – Grocery St Stor

re

Impervious Area (sf) 91,311 Estimated ESUs 91,311 / 2,420 = 38 Proposed 2020 Monthly Fee 38 x $5.90 = $224

Vacant and Agricultural Parcels

Application of 10% runoff coefficient to

estimate stormwater runoff based on development of a site

Cap gross parcel area at 2 acres

(87,120 sf)

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Factors to be considered in designing credits
Quantity
Quality
Direct Discharge
Magnitude of credits
Maximum credit
Technical & Administrative Requirements

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Credit Program – To be determined . . .

In the context of this study, the following are not billable:
Public Streets
Public Medians
Public Right‐of‐Way
These areas are typically deemed an integral part of the
verall stormwater conveyance system
Hence, stormwater management costs associated with these

areas are recovered equitably from all the customers

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What are not billable?

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IMPACT: BILL IMPACT

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Single Family Residential

St Stats # of Parcels 1 Impervious Area (sf) 2,420 Gross Area (sf) 9,583 Residential Tier 2 Proposed 2020 Monthly Fee $5.90

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Medical Center

St Stats # of Parcels 5 Impervious Area (sf) 1,147,457 Gross Area (sf) 2,176,258 Estimated ESUs 1,147,457 / 2,420 = 474 Proposed 2020 Monthly Fee 474 x $5.90 = $2,797

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Church

St Stats # of Parcels 3 Impervious Area (sf) 65,420 Gross Area (sf) 87,843 Estimated ESUs 65,420 / 2,420 = 27 Proposed 2020 Monthly Fee 27 x $5.90 = $159

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Retail Store

St Stats # of Parcels 1 Impervious Area (sf) 412,754 Gross Area (sf) 476,982 Estimated ESUs 412,754 / 2,420 = 171 Proposed 2020 Monthly Fee 171 x $5.90 = $1,009

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Industrial

St Stats # of Parcels 3 Impervious Area (sf) 999,523 Gross Area (sf) 1,287,198 Estimated ESUs 999,523 / 2,420 = 413 Proposed 2020 Monthly Fee 413 x $5.90 = $2,437

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The difference in stormwater charges is largely due to user fees not

reflecting the full “cost of service”

High equitable cost recovery

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Benchmarking: Program‐Cost‐Fee‐Customer Nexus

Ex Exam ample: Cos Cost of

f Ser

Service ice Re Recove vere red Full Fully Thr Through User User Fees ees Seattle Public Utilities Philadelphia Water Department Bellevue, WA Ex Exam ample: Cos Cost of

f Ser

Service ice Re Recove vere red Thr Through a Com Combina ination ion of

f User

User Fees ees and and Ta Taxes Kansas City, MO San Diego Ex Exam ample: Ka Kansas Cit City, MO MO Stormwater fee is designed to recover only the stormwater operating costs Capital costs are recovered through taxes Equity of recovery lower Challenge: Tax exempt don’t pay

Total Lot Size Based Fee Total Lot Size Based Fee

Source: Black & Veatch 2018 Stormwater Utility Survey

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Benchmarking: The Stormwater Fee Structure

Flat Fee per Electric Account Flat Fee per Electric Account Impervious Area Based Fee Impervious Area Based Fee Flat Fee per Water Account Flat Fee per Water Account Fee Based on Meter Size Fee Based on Meter Size Flat Fee per Dwelling Unit Flat Fee per Dwelling Unit

What do we see nationally with respect to Stormwater Fee Structure?

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Benchmarking: Area Stormwater Charges

Communi unity ty Pa Parc rcel Ar Area ea Base Based Basis asis Av Average SF SF Re Resident ntial Pa Parc rcel $/Unit Note Bonner Springs, KS No Flat Fee N/A $3.00 / Residential $5.50 / Non‐Residential Kansas City, MO Yes IA 2,500 $0.50 / 500 sq feet Lawrence, KS Yes IA 2,366 $4.37 / ERU Lenexa, KS Yes IA 2,750 $9.08 / EDU Olathe, KS Yes GA N/A $5.77 / 10,000 sq ft $5.77 / Residential Overland Park, KS Yes IA 2,485 $2.75 / ESU Shawnee, KS Yes IA 2,773 $6.00 / ERU Topeka, KS Yes IA 2,018 $4.25 / ESU Wichita, KS Yes IA 2,139 $2.00 / ERU UG Existing NO Flat Fee N/A $4.50/ Water or Electric Account UG Proposed Yes IA 2,420 $5.90 / ESU

STAKEHOLDER OUTREACH

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Included in our Financial Plan:
Multiple strategies to mitigate monthly bill impact:
Rate Increases: Implement rate increases every other year
Billable IA Units: Low runoff coefficient and gross area cap for

Agricultural and Vacant Land customers

Credit Program: Fee reduction for private stormwater management
To Be Evaluated:
Provide a phased in transition to equitable cost recovery to allow

time for customers to budget for the new rate fee

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Financial Plan / Rate Refinement

Refinement to policies, financial plan and rates based on feedback from
Commissioners
Targeted Stakeholder Meetings
Public Open Houses
Presentation of results to Commissioners in February
Request for approval of impervious area based rates
Request for approval to proceed with implementation tasks

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