Business Advisory Committee

Business Advisory Committee July 13, 2020 MEETING MINuTES AsSEMBLY ROOM - OPERATIONS CENTER I 305 WIUJAMS ST. Present: Steve Dozier, Chair and Committee Members: William Perry Jr., Beau Waddell, Mike Summey, Tom Cooper, Ken Gordon,Judy Stroud, and Council Member Dr.Jennifer Hensley Participating Electronically: City Manager John F. Connet, Seth Robertson ofvVithersRavenel Engineering Firm, Committee Member Brittany Brady Staff Present: Assistant City Manager Brian Pahle, City Clerk Angela Reece, Communications Manager Allison Nock, Stormwater Administrator Mike Huffman, City Engineer Brent D etwiler 1. Call to Order The meeting was called to order at 11 :30 a.m. 2. Presentation regarding proposed Stormwater Management Fees Mike Huffman, City Stormwater Engineer presented the Stormwater Management Fee Update along with Seth Robertson with WithersRavenel Engineering Firm which is made part of and included in these minutes. Mr. Huffman discussed the fee evaluation overview below . Fee Evaluation Overview • City staff asked to re-evaluate its existing stormwater rate structure in order to addresses the City's short- and long-term operations, maintenance and capital needs • The City is faced with the challeng of paying for increased costs to comply with state and federal storrnwat r quality mandates as well as ongoing maintenance and necessary capital improvements • The previous current flat $3.00 stormwater fee generated revenue ($325,000}, however it was not adequate to meet the City's drainage and regulated stormwater program requirements, nor does it reflect the demands that stormwater runoff places on repairing/replacing public infrastructure. • Annual revenue of approximately $1,400,000 is necessary to maintain the City's estimated stormwater needs Mr. Huffman clarified stormwater fees are only applied to city water accounts and would be billed through water billing. He added that fees would be increased annually to compensate for Page 1 of 2 increases in project costs and emergency repairs. City Council Member Dr. Jennifer Hensley concurred stating years of infrastructure improvements were delayed or nonexistent which has further compounded increasing cost issues. Council Member Hensley stated she personally preferred a fee type schedule. Committee Member Ken Gordon inquired of calculations of fees based on the amount of impervious surface. Mr. Huffman stated non-residential users would pay a multiple of the base residential unit impervious surface area and said this is the most equitable method to charge based on each individual property measurement. Assistant City Manager Brian Pahle reminded the Committee that the NC Stormwater Permit is mandated but said how it is funded is the choice of the City. Council Member Hensley stated she is not a fan of solely taxing property owners and is in favor of everyone contributing to the system for water usage. Assistant City Manager Pahle said there is a $5.00 flat fee per water account. Committee Member Brittany Brady expressed concerns of reaching out to industrial customers and requested a list of industrial properties letters have been sent to. Following the meeting Mr. Huffman provided the average monthly fees for non-residential groups by land use as follows: • Commercial - $47.00 • Religious - $54 • Government-$71 • Industrial - $203 (Pulled up by Kimberly Clark) w/o KC - $99 • Medical - $220 (Pulled up by Carolina Village) w/o CV - $59 • All Non-Res - $52 3. New Business The Committee unanimously selected Steve Dozier to serve as Chairman. Steve Dozier stated the water service application is cumbersome for new customers and asked staff to review it. 4. Adjourn The meeting adjourned at 12:38 p.m. upon unanimous assent of the Co ATTEST: a L,<.- ,✓-L Angefa L. Reece, City Clerk Page 2 of 2 Business Advisory Committee Meeting Stormwater Fee Update July 13, 2020  Overview Stormwater Fee Example Non- City and Credit Program Evaluation Residential Questions Fees County Fees Program Background Overview NPDES Phase II Community • National Pollutant Discharge Elimination System (NPDES) Phase II is a federal and state mandated program under the Clean Water Act to address non-point source pollution and stormwater runoff • The City of Hendersonville is a federally designated NPDES Phase II community • The City has operated under the Stormwater Management Program, since August of 2007 • Drafted into the City’s Code of Ordinances • Separate Enterprise Fund • https://www.hendersonvillenc.gov/stormwater-management Six Required Management Areas • The City’s NPDES Permit consists of six management areas that reduce stormwater pollution and assures clean water is maintained in our City’s water bodies: 1. Public Outreach and Education 2. Public Involvement 3. Illicit Discharge Detection and Elimination 4. Construction Site Runoff Control 5. Post-Construction Runoff Control 6. Pollution Prevention and Good Housekeeping • Not included in the management areas but required for compliance is necessary capital improvements to replace or upgrade infrastructure Stormwater Utility Fees (GS 160A-314) • Fees are for “providing stormwater management programs and structural and natural stormwater and drainage system service” • “Must be made applicable throughout the area of the city” • Fees may vary according to: • Residential, commercial or industrial • Size of property • Area of impervious surface area • Rates, fees and charges may not exceed cost of providing the management program and the physical system • “Includes any costs necessary to assure that all aspects of stormwater quality and quantity are managed in accordance with federal and State laws, regulations, and rules” Fee Evaluation Overview • City staff asked to re-evaluate its existing stormwater rate structure in order to addresses the City’s short- and long-term operations, maintenance and capital needs • The City is faced with the challenge of paying for increased costs to comply with state and federal stormwater quality mandates as well as ongoing maintenance and necessary capital improvements • The previous current flat $3.00 stormwater fee generated revenue ($325,000), however it was not adequate to meet the City’s drainage and regulated stormwater program requirements, nor does it reflect the demands that stormwater runoff places on repairing/replacing public infrastructure. • Annual revenue of approximately $1,400,000 is necessary to maintain the City’s estimated stormwater needs Fee Evaluation Overview • Presentations were made to the City Council at a workshop in January and at meetings in March and April • Council received information regarding: • Existing revenues and expenditures • Financial needs associated with various levels of service to maintain long- term compliance • Scenarios for fee increase schedules and structures including “caps” and “floors” • Example rates for representative non-residential users based upon ERU rate structure • Credit program for stormwater improvements  $5.00 Starting Fee & Increase Options FEE INCREASE FREQUENCY YR 1 FEE YR 6 FEE YR 10 FEE Annual Increases $ 5.00 $ 6.61 $ 9.68 1st Increase @ Year 5 $ 5.00 $ 9.00 $ 9.00 3,000,000 Revenue Generated 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5 YR INCREASES ANNUAL INCREASES Non-Residential Fee Structure • Equivalent Residential Unit (ERU) • Non-residential users pay a multiple of the base residential unit impervious surface area • The most equitable method to charge since based on each individual property measurement • The most common non-residential stormwater fee structure in NC • Most residential fees in NC range between $2 and $6 ERU Example • Charge based upon comparison of an impervious surface to the average residential impervious surface of 3000 square feet • Example 1: • Property owner has 9000 square feet of impervious surface • Equivalent to 3 times the average residential size • Property owner pays 3 times the residential fee • If residential fee was $5.00, the property owner pays $15.00. Non-Residential Assumptions • Non-Residential based on ERU • Floor is lowest residential rate ($5/month) • Ceiling to limit outlier fees ($1,500/month) • Assumed vacant parcels and apartments at ½ of residential rate • No special consideration for nonprofit or governmental entities  SELECT NON-RESIDENTIAL STORMWATER MONTHLY FEES RESIDENTIAL FEE OF $5.00 LAND_CLASS PROPERTY (ERUs) AUTO DEALERSHIP PROPERTY 1 (141.5) $707.68 PROPERTY 2 (60) $299.89 PROPERTY 3 (10.7) $53.61 CHURCH PROPERTY 1 (60.7) $303.83 PROPERTY 2 (12) $59.74 PROPERTY 3 (1) $5.00 EDUCATIONAL PROPERTY 1 (145.9) $729.37 PROPERTY 2 (6.3) $31.27 PROPERTY 3 (4.2) $21.22  SELECT NON-RESIDENTIAL STORMWATER MONTHLY FEES RESIDENTIAL FEE OF $5.00 LAND_CLASS PROPERTY_OWNER GOVERNMENTAL PROPERTY 1 (461) $2,305.18 PROPERTY 2 (13) $65.11 PROPERTY 3 (1.2) $5.92 HOME IMPROVEMENT CENTER PROPERTY 1 (154.9) $774.40 PROPERTY 2 (148.4) $742.22 PROPERTY 3 (93.5) $467.70 HOSPITAL PROPERTY 1 (4) $20.02  SELECT NON-RESIDENTIAL STORMWATER MONTHLY FEES RESIDENTIAL FEE OF $5.00 LAND_CLASS PROPERTY_OWNER INDUSTRIAL PROPERTY 1 (440) $2,200.06 PROPERTY 2 (13.4) $67.26 PROPERTY 3 (1) $5.00 MEDICAL PROPERTY 1 (355.6) $1,777.79 PROPERTY 2 (14.3) $71.27 PROPERTY 3 (1) $5.00 RELIGIOUS PROPERTY 1 (39) $194.80 PROPERTY 2 (4.4) $22.22 PROPERTY 3 (1) $5.00 City and County Combined Monthly Fees $5.00 ERU • County Schools $1577 • County $4181 • Hendersonville $1632 SCM Credit Program for Stormwater Controls • Based upon reductions established in the NC Stormwater Design Manual • Runoff treatment • Runoff volume match • Dependent on the percent impervious surface area served by controls • Maximum credit established; With a floor of residential ERU rate • Require application and annual inspection to confirm operation Rebate Program Examples Walmart (ERU factor = 272.18) currently has stormwater control measures Annual Fee No Credit With 20% Credit With 60% Credit $11,432 $9,146 $4,573 Kimberly Clark (ERU factor = 440.01) could install new stormwater control measures Annual Fee No Credit With 20% Credit With 60% Credit $18,480 $14,784 $7,392 Examples assume $3.50 residential rate Implementation Plan • Increase base residential rate to $5.00 • Outreach to 30 largest fee payers under proposed changes • Public education and input • Revise ordinances, develop appeals process and SCM credit program • Implement ERU structure for non-residential properties Questions Current Level of Service Includes • Partial proactive planning of capital improvement needs • One basin studied with projects identified and scoped • Reactive (break & fix) repair/replacement of capital assets • Proactive permit compliance • City doing 5 measures • County performing 1 of the measures • Responsive only Operation and Maintenance Activities • $3 per month / parcel flat fee; Doesn’t generate enough money currently to maintain minimum level of service $5 ERU: Revenue Generation Rate Revenue Revenue Revenue Capital Outlay FTE (2021) (2025) (2030) (10yr) $5.00 $1.4m $1.75m $2.8m $36.5m 3.5  SELECT NON-RESIDENTIAL STORMWATER ANNUAL FEES RESIDENTIAL FEE RESIDENTIAL FEE RESIDENTIAL FEE OF $3.50 OF $4.00 OF $5.00 LAND_CLASS PROPERTY_OWNER OWNER_MAIL AUTO DEALERSHIP TR RENTALS LLC (141.5) 2520 ASHEVILLE HWY $5,944.54 $6,793.76 $8,492.20 EASLER, BRYAN (60) PO BOX 808 $2,519.03 $2,878.90 $3,598.62 KING VAN KIRK PROPERTIES LLC (10.7) 1105 SPARTANBURG HWY $450.34 $514.67 $643.34 FIRST BAPTIST CHURCH OF CHURCH HENDERSONVILLE (60.7) 312 5TH AVE W $2,552.19 $2,916.78 $3,645.98 HVLLE, NC JEHOVAHS WITNESSES, INC (12) 1305 5TH AVE W $501.84 $573.54 $716.92 GOOD HOPE FBH CHURCH (1) 328 MINE GAP RD $42.00 $48.00 $60.00 HENDERSON CO BOARD OF PUBLIC EDUCATIONAL SCHOOLS (145.9) 414 4TH AVENUE WEST $6,126.74 $7,001.98 $8,752.48 ANDERSON, ELAINE O (6.3) 631 WHITNEY BLVD $262.68 $300.21 $375.26 JUGIS, PETER J BISHOP ; ROMAN CATHOLIC DIOCESE OF CHARLOTTE, NC (4.2) 208 7TH AVE W $178.21 $203.66 $254.58  SELECT NON-RESIDENTIAL STORMWATER ANNUAL FEES RESIDENTIAL FEE RESIDENTIAL FEE RESIDENTIAL FEE OF $3.50 OF $4.00 OF $5.00 LAND_CLASS PROPERTY_OWNER OWNER_MAIL 1 HISTORIC COURTHOUSE GOVERNMENTAL HENDERSON COUNTY (461) SQUARE $19,363.50 $22,129.71 $27,662.14 BOYS AND GIRLS CLUB OF HENDERSON COUNTY/HENDERSONVILLE NC (13) PO BOX 1460 $546.91 $625.04 $781.30 HENDERSON CO GENEALOGICAL & HISTORY SOC (1.2) 400 N MAIN ST $49.76 $56.86 $71.08 HOME IMPROVEMENT CENTER HOME DEPOT USA INC (154.9) PROPERTY TAX DEPT #3637 $6,504.97 $7,434.26 $9,292.82 LOWES HOME CENTERS, INC (148.4) PO BOX 1000 $6,234.63 $7,125.30 $8,906.62 JUSTUS, JEFF C ; HYDER, BOYD L(93.5) PO BOX 460069 $3,928.67 $4,489.90 $5,612.38 HOSPITAL HENDERSON COUNTY (4) 800 N JUSTICE ST $168.17 $192.19 $240.24  SELECT NON-RESIDENTIAL STORMWATER ANNUAL FEES RESIDENTIAL RESIDENTIAL RESIDENTIAL FEE OF $3.50 FEE OF $4.00 FEE OF $5.00 LAND_CLASS PROPERTY_OWNER OWNER_MAIL INDUSTRIAL BERKELEY MILLS (440) 6610 MUTUAL DR $18,480.48 $21,120.54 $26,400.68 PUBLIX NORTH CAROLINA LP (13.4) PO BOX 32018 $565.01 $645.73 $807.16 MILLWOOD, GERALDINE (1) 227 LINDA VISTA DR $42.00 $48.00 $60.00 600 CAROLINA VILLAGE MEDICAL CAROLINA VILLAGE INC (355.6) RD $14,933.39 $17,066.74 $21,333.42 ALIN ENTERPRISES LLC (14.3) PO BOX 1093 $598.64 $684.16 $855.20 C/O H H HUNT ASSISTED SPRING ARBOR (1) LIVING INC $42.00 $48.00 $60.00 YOUNG MENS CHRISTIAN ASSOCIATION OF WESTERN NORTH RELIGIOUS CAROLINA (39) 53 ASHLAND AVE $1,636.35 $1,870.11 $2,337.64 MOUNT PISGAH LUTHERAN (4.4) 2606 CHIMNEY ROCK RD $186.68 $213.34 $266.68 C/O NEW HOPE BAPTIST BARKER HEIGHTS BIBLE CHURCH (1) CHURCH $42.00 $48.00 $60.00  SCM Credit Scenario Analysis: Largest Customers HENDERSONVILLE NON-RESIDENTIAL STORMWATER FEE PAYERS MONTHLY FEE GREATER THAN $1000 ERU MULTIPLIER FEE OF $5 60% 20% SCM ANNUAL ANNUAL PROPERTY_OWNER MONTHLY FEE ANNUAL FEE CREDITS? LOCATIONS CREDIT CREDIT HENDERSON COUNTY $ 2,520.30 $ 30,243.54 PARTIAL 1 PARCEL $ 4,530.94 $ 1,510.31 BERKELEY MILLS $ 2,200.06 $ 26,400.68 NO CAROLINA VILLAGE INC $ 1,777.79 $ 21,333.42 YES $ 5,600.05 $ 1,866.68 CITY OF HENDERSONVILLE $ 1,589.06 $ 19,068.74 PARTIAL 1 PARCEL $ 964.19 $ 321.40 HENDERSONVILLE HOUSING AUTHORITY $ 1,472.04 $ 17,664.42 NO BLUE RIDGE MALL LLC $ 1,470.05 $ 17,640.64 YES $ 3,384.38 $ 1,128.13 HYDER, BOYD L $ 1,395.77 $ 16,749.22 NO WAL MART REAL ESTATE BUSINESS TRUST $ 1,360.92 $ 16,331.06 YES $ 2,598.64 $ 866.21 1 PARCEL & 3 HENDERSON CO BOARD OF TRUSTEES ; PARDEE HOSPITAL $ 1,130.05 $ 13,560.56 YES VACANT LOTS $ 936.34 $ 312.11 HENDERSON CO BOARD OF PUBLIC SCHOOLS $ 1,038.35 $ 12,460.14 NO TOTAL $ 18,014.53 $ 6,004.84