Sustainable Storm Water Funding Task Force

AGENDA Sustainable Storm Water Funding Task Force July 19, 2011 City Hall, Room 209, 12:00 PM – 1:30 PM 1. Introductions of Task Force members and meeting attendees. 2. Review and approval of the SSWFTF minutes from June 21, 2011. 3. Review of the Task Force draft work plan. 4. Summary of the outcomes from the last meeting including: a. Consensus to develop a storm water fee option in greater detail. b. Preliminary discussion of allocating combined sewer costs to a storm water fee. 5. Review of revised cost projections reflecting a fifteen year CSO Tier III construction schedule. 6. Review of annualizing costs based on a five year average for the purposes of exploring and determining appropriate rate structures and rates. 7. Review of the “Dow Jones” properties list. 8. Presentation of facts on impervious area in Portland. 9. Recommendation and discussion of rate structures for further exploration from reports provided. a. Flat rate b. Tiered rate (ERU) c. Variable Rate (Impervious Area) d. Flat Rate + Variable Rate (Gross Area + Impervious Area) 10. Confirm Date for Next Meeting: The next meeting is currently scheduled for August 16, 2011 11. Adjourn  MINUTES Sustainable Storm Water Funding Task Force June 21, 2011 City Hall, Room 209, 12:00 PM – 1:30 PM 1. Introductions of Task Force members and meeting attendees. All members were in attendance except for Robinson, Bohlin, and Cannell. Cathy Ramsdell from Casco Bay Keepers came in place of Joe Payne. Also in attendance: Robin Sanders, Rich Niles, Andy Reese, Mike Bobinsky, Zach Henderson, Doug Roncarati, Barry Sheff, Kathi Early, and Ralph Carmona. 2. Review and approval of the SSWFTF minutes from May 17, 2011. Motion made by Gellerson, Dillon. Minutes approved unanimously. 3. Brief summary of material covered in previous meetings. a. Introduction to Portland’s Storm Water Systems and Performance Obligations. b. Storm Water Funding: Current Organizational Structure, Cost of Services, and Sewer Rate Implications. Houseal summarized material covered in previous meeting and where to find the meeting material on the City website. 4. Submission of revised sewer usage figures and clarification of costs related to future storm water program costs. Houseal summarized amendments. Houseal stated that the sewer usage figures were amended and the amendments were provided. Houseal stated that the program costs were reviewed, but were within a reasonable estimate of future costs. Any amendment was not required at this time. 5. Submission of addition national water and wastewater survey material by Portland Water District. Miller summarized survey material. 6. Storm water funding options and combined sewer cost allocations presentation and discussion. Reese presented on storm water funding options. The presentation covered discussion of revenue and other sources of funding such as grants and resources. Three options were presented for revenue including sewer rate, storm water rate, and property tax. Dillon asked if the storm water utility option would reduce the sewer rate. Reese responded that this sometimes occurred. Connolly asked what happens in the situation where revenue needs are fixed and someone gets a credit, but costs go up anyway? Reese stated that is depended on how the rate system was structured. Gellerson asked if Reese has seen the commercial sector try to not add waste water to the system and if how credits valued would affect commercial properties to undertake work? Dillon asked if costs include urban impaired stream restoration. Houseal responded that they do not. Impaired stream restoration is listed as unknown in the last presentation. 7. Recommended Update to the Energy and Environmental Sustainability Committee. Suslovic began the discussion by asking if property taxes were a viable option. He asked if there was a consensus that property taxes should be removed from the discussion because it was unlikely that revenue could come from this source. Martin stated that he thought property taxes should be left out of the equation. The burden was already heavy on homeowners and for-profit corporations. The task force should try to redistribute the burden not increase the inequity of payment. There was a consensus that property taxes were not a viable option that the task force would pursue or recommend at this time. Suslovic asked if the Task Force wanted to continue to explore the option of a new way of charging for storm water as distinguished from the current way of paying for storm water through water usage. Gellerson stated that he was interested in keeping things the same for political reasons. He felt that a new charge would not be received well by residents. Dillon stated that he was interested in exploring a storm water fee because it was a more equitable and fair way of paying for the costs. He felt that such a fee would be borne by the users of the system rather than an arbitrary way of billing based on water usage. Suslovic stated that he was interested in seeing how a storm water fund was received in other communities. He wanted to know if there were communities where a storm water fee was not well received. Connolly stated that if we were today to show where we stood, he strongly supported the storm water fee because the Hospital has made a lot of effort to reduce their storm water impact and would like to see a considerable repayment for what is being done in the future or what has already been done. From the Hospital’s two sites, one has made a considerable effort to reduce its storm water impact, and the other has not. This is likely repeated by other organizations in town. Ramsdell stated that she strongly supports the storm water fee as a way to incentivize runoff reduction. Runoff reduction is really important to the environment as well as reducing costs for the City. Public outreach and education are two areas that are also not to be forgotten. There needs to be a lot of public outreach surrounding this issue. Kidder stated that maintaining storm water systems and reducing pollution from storm water should be common place. She stated that the fee is about accountability. Suslovic asked if since most storm water utilities are regional should not Portland be considering a regional model as well. Bobinsky responded that the regional option was explored five years ago, but no traction was gained. The thought at this point is that other communities are watching how Portland will proceed and other will follow suit. Martin stated that the Task Force needs to be cognizant of the effect on businesses as it relates to economic competitiveness. He stated that we should be concerned that businesses may leave. Suslovic stated that the Task Force needs to be also considering the effects that the storm water utility could have on sprawl. Dillon stated that Long Creek was a good example of businesses leaving not occurring. The Long Creek area is the Maine Mall area and businesses have not been leaving there. Miller stated that the Task Force should be concerned about not doing anything and having the rate go up and as people conserve water the rate will go up even higher. The City could be facing a high rate as compared to other cities if the City does not develop a storm water fee. Connolly stated that it didn’t seem to be a question of paying or not. A company might move, but it was likely that they would have to pay for storm water costs in a new building on a green field, so competitiveness didn’t really seem to be the issue. The issue really seemed to be what mechanism do we want to pay for the costs under. Ramsdell asked if there were regional examples of storm water programs. Reese stated that Mechlanburg County in North Carolina was an example and there are other examples, but his recommendations would not be to wait on the region. It would be better to get it done. A regional option might be for practical purposes, be seven years out if at all. Suslovic was interested in a briefing on Long Creek as an example of how storm water is being dealt with locally and through a user fee. He said he was also interested in seeing how we are already requiring storm water improvements through site review. Reese stated that to undertake a storm water fund process there were number decisions that need to be met to have the storm water fund be legally defensible, politically feasible, meet some of the CSO costs, and is equitable. Suslovic stated that there are some things we do know as is presented in the DIMS Study, but there is much we don’t know and how to tailor a storm water fee to Portland’s unique needs is necessary. The issues will always need to be brought back to the question of equity. There will always be the alternative of paying for costs the way they are currently paid for, but the other viable option needs to be fleshed out and that needs the Task Force to want to move in that direction. Suslovic asked if the Task Force could take a moment to gauge where they stand on exploring the option of a storm water fee in more detail. There was a consensus that the Task Force would explore the option of a storm water fee in more detail. 8. Confirm Date for Next Meeting: The next meeting is currently scheduled for July 19, 2011 9. Adjourn  WORK PLAN – SUSTAINABLE STORM WATER FUNDING TASK FORCE April – May Meeting 1 and 2: Introduction to Storm Water Management and Review of Storm Water Cost of Services • Introduction to Storm Water Management • Review of Cost of Service, Rate Implications • Sewer Fund Ordinance • Case Studies of Funding Storm Water Programs June Meeting 3: Options for Funding a Storm Water Costs • General Fund, Sewer Fund, Storm Water Fund, Hybrid • Pros and Cons of Different Options **JULY UPDATE TO THE ENERGY AND ENVIRONMENTAL SUSTAINABILITY COMMITTEE** July Meeting 4: Rate Options and Cost Allocation • Rate Options and Implications • Combined Sewer Allocation and Implications August Meeting 5: Exemptions • Exemptions • Roadways, utilities, agricultural land, and other public uses September Meeting 6: Adjustments and Credits • Rationale and purpose for credits • Educational and other credits ** TENTATIVE COMMUNITY FORUM** October Meeting 7: Organizational Structure and Billing • Appeals • Billing November Meeting 8: Level of Service • What is funded under what funding source? December Meeting 9: Putting it all together • Level of Service (What expenses are covered?) • Rate Structure (How are cost apportioned?) • Organizational Structure and Draft Ordinance • Final Recommendation **JANUARY UPDATE TO THE ENERGY AND ENVIRONMENTAL SUSTAINABILITY COMMITTEE AND CITY COUNCIL** January Meeting 10: TENTATIVE – Start-up strategy  Monthly fee for typical residence for larger municipalities A stormwater fee to pay for the projected Portland stormwater program ($3.8M) would be about $6.41/mo © 2011 AMEC E&I all rights reserved Reese - 12 © 2011 AMEC E&I all rights reserved Reese - 22  Millions of Dollars $0 $5 $10 $15 $20 $25 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Tier III 15 YR Construction Schedule FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 Tier III 25 YR Construction Schedule FY 2034 FY 2035 FY 2036 Anticipated Tier III Expenses (15 yr and 25 yr construction schedule) FY 2037 FY 2038 FY 2039 FY 2040  Revised Sewer Fund Expenses $70 $60 $50 Millions of Dollars $40 $30 $20 $10 $- FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 FY 2036 FY 2037 FY 2038 FY 2039 FY 2040 Total Operating Expenses (1.5% inflation rate) Total Capital Renewal and Backlog (1.5% inflation rate applied to capital renewal and 30 yr construction @ 5.5% interest with 20 yr terms applied to backlog) PWD Assessment Total Debt Service (including Existing Debt and CSO Tier II and Tier III)  Five Year Average Annualized Costs (FY 2013 - FY2018) Capital PWD Operations Construction Debt Total Renewal Backlog Assessment Combined Sewer $ 3,212,855 $ 1,568,865 $ 395,200 $ 8,910,398 $ 5,625,240 CSO $ 19,712,559 Sewer $ 1,546,036 $ 1,249,863 $ 65,157 $ 4,287,711 $ 1,988,748 Existing Debt $ 9,137,514 Storm Water $ 1,835,572 $ 2,063,581 $ 117,476 $ 4,016,629 Total $ 6,594,463 $ 4,882,309 $ 577,833 $ 13,198,109 $ 7,613,988 $ 32,866,702 Notes: - Operations - Value and percentage of costs allocated to CSO based on miles of total sewer and combined sewer pipe. $ 4,758,891 68% - Operations - 1.5% inflation rate applied - Capital Renewal - 1.5% inflation rate applied - Backlog - 30 year construction schedule @ 5.5% interest rate over 20 yr terms - PWD Assessment - Value and percentage of costs allocated to CSO based on miles of total sewer and combined sewer pipe. $ 13,198,109 68% - Assumed 5 year sewer volume 2,621,930 HCF $ 12.54 $/HCF  The “Dow Jones” List % change in total sanitary/storm fee combined sewer cost reallocation from all sanitary to all stormwater Relatively big Relatively big paved areas water users  Preliminary City of Portland Impervious Area Facts Impervious Area Percentage ERU Count Gross Area (sf) (sf) Impervious (sf) Property Non-Residential 34,761 218,914,662 71,433,692 33% Residential 15,463 201,716,143 38,558,328 19% Property Total 50,224 420,630,805 109,992,020 26% Roadways MDOT - 21,572,258 7,048,923 33% City and Private - 67,974,999 47,999,248 71% Roadways Total - 89,547,257 55,048,171 61% Grand Total 50,224 510,178,062 165,040,191 32% Note: ERU (Equivalent Residential Unit) estimates based on DIMS Study calcuated at 2,500 sf.