8.2. SR 07-02-2012 - Laserfiche WebLink

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Stanfiec CITY OF ELK RIVER -STORM WATER UTILITY Executive Summary June 25, 2012 1.0 Executive Summary The Minnesota Pollution Control Agency (MPCA) requires the City of Elk River to comply with State and Federal National Pollutant Discharge Elimination System (NPDES) Program rules and regulations. The City is also designated as a Municipal Separate Storm Sewer System (MS4), which requires the City to obtain a permit to discharge stormwater to lakes, rivers and wetlands. The purpose of these regulations is to improve water quality by reducing pollutants in storm water discharges. The MPCA periodically reviews the MS4 regulations and will be increasing the MS4 requirements due to the number of impaired rivers and lakes in the State. The City currently finances their storm water utility through general tax revenue. The City dedicates $50,000 from general property tax revenues toward meeting the state storm water regulation. The City's current staffing level and storm water utility budget will not be able to meet the new requirements of the newly revised MS4 permit. As a result of the expected increased regulatory costs for maintaining the stormwater utility, the City Council authorized staff to look into the implementation of a storm water utility fee to meet the new regulations and provide a fair and equitable funding solution. This report presents the rationale and steps to guide the creation of the Elk River Storm Water Utility fee to offset expenses due to the increased stormwater regulations. A storm water utility fee is generally considered a more equitable mechanism for a funding storm water utility because the charge is based upon the amount of runoff generated from a property. Storm water utility fees are also collected from tax exempt properties like churches, schools, and government -all of whom use the municipal storm water system. The storm water utility fee is not associated in any way with property value, property taxes, or the owner's income. It is based on the amount of impervious surface and the size of the property. A "Residential Equivalency Factor" (REF) is the basic unit for the fee structures. One REF represents the runoff volume generated by a typical single family residence. The storm water utility assigns REF's for non-single family residential property based on property size and percentage of impervious surface. This report recommends implementing a $3 per REF per month fee structure to offset the expenditures needed to comply with the new MS4 requirements. The proposed fee will raise approximately $650,000 per year in additional revenue for the Storm Water Utility budget to meet the requirements of the permit and maintain the City's stormwater infrastructure. Maintaining the status quo of sources and amount for funding the Storm Water Utility budget will create a bottom line deficit in 2013. Une Te~am.lnfinite S©~utians. Project No. 193802143 1 . 1