HomeMy WebLinkAbout16. 12-310
JUNE 12, 2012 12-310 RESOLUTION
(CARRIED__7-0_____ LOST _______ LAID OVER _______ WITHDRAWN _______)
PURPOSE: ESTABLISH 2012 STORM WATER UTILITY RATE TO $83.20/ERU
INITIATED BY: DEPARTMENT OF PUBLIC WORKS
WHEREAS, the City of Oshkosh has previously established a Storm Water Utility; and
WHEREAS, Section 24.14 (C)(2)(b) of the Oshkosh Municipal Code gives the
Common Council authority to establish the Equivalent Runoff Unit (ERU) charge for the
Utility.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the Equivalent Runoff Unit (ERU) charge for 2012 shall be $83.20/ERU.
BE IT FURTHER RESOLVED that the appropriate City officials are authorized and
directed to take those steps necessary to implement this charge to become effective for
services provided on and after July 1, 2012.
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MEMORANDUM
TO: Honorable Mayor and Members of the Common Council
FROM: Steven M. Gohde, Assistant Director of Public Works
DATE: June 7, 2012
RE: Storm Water Utility Rate Increase
BACKGROUND
The City of Oshkosh implemented a Storm Water Utility in 2003 to fund improvements to the City's storm
water management facilities. Based on the initial Storm Water Utility study completed in September of
2002, the Common Council implemented a phased introduction of the rates. The rate was initially set at
$19.10 per Equivalent Runoff Unit (ERU) per year for one half of 2003. There were four subsequent rate
increases, the most recent being to $72.36 per ERU per year in 2011. The Storm Water Utility has
funded several projects to date including the Fair Acres Mall area detention basin, Anchorage Channel
Construction, the Baldwin Avenue area dry detention basin, Tipier School area dry detention basin, North
High School area wet detention basin, Oakwood Road wet detention basin, Melvin Avenue storm water
pump station, and Westhaven Circle area detention basin. In addition to these projects, storm sewers are
replaced /upgraded with each street reconstruction project.
The City has experienced significant flooding during rain storms in 1990, 1993, 1996, 1999, 2001, 2004,
2008, 2010, and 2012. Localized areas also flood during smaller events. In addition, the City is now
under a permit (MS4) from the DNR, as mandated by the EPA Clean Water Act, for discharge of storm
water. This permit requires the implementation of multiple items to reduce the amount of pollutants
entering lakes and rivers. The largest expense item in the permit is reducing the Total Suspended Solids
(TSS) generated by the City as a whole by 20% in 2008 and previous requirements for a reduction of
40% by 2013. We have met the 20% goal. The State legislature recently removed the 40% requirement.
However, upcoming targeted performance standards are anticipated to require at least a 40 % removal of
TSS within the next few years.
AECOM was hired by the City to develop a City -wide plan for pollution reduction. The City has also
completed several flood studies in the past and is currently studying several watersheds to develop plans
to reduce flooding in combination with pollution control. City staff, based on information from all studies,
developed a schedule of work needed to reduce flooding and implement pollution control measures.
The schedule calls for approximately two detention basins to be constructed per year with an emphasis
on flood control. Wherever possible, pollution control measures will be implemented with flood control
measures.
ANALYSIS
The City hired AECOM to perform a rate analysis to provide funding to implement the projects outlined in
the schedule, to implement other Capital Improvement Projects, and to fund operational costs. In order to
support these activities, a rate of $83.20 per ERU per year is recommended. This rate will allow the City
to complete all of the projects listed in the Capital improvement Program (CIP) — Storm Sewer Section
and also maintain daily operations. The rate is proposed to be in effect on July 1, 2012. Finance
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Director Steeno has reviewed the cash reserves and concluded the Storm Water Utility can reduce its
reserves in order to minimize the increase. Even with this action, the Utility is able to retain adequate
reserves to maintain favorable bond ratings and meet the operating needs of the Utility. The Storm
Water Utility Committee reviewed the proposed rate increase and recommended approval of the rate
based on the needs of the community to address flooding and pollution control requirements.
In the event grants or other monies are secured at more favorable rates than anticipated in the study, the
rate increases for future years can be offset. The intent is to review the rate annually to incorporate
actual construction costs from the previous year and incorporate other funds that became available to the
Utility.
FISCAL_ IMPACT
The rate of $83.20 per ERU per year is required to implement all of the projects and operations in the
2092 budgets. Any reduced rate increase will result in some projects listed in the CIP being postponed
until future years. Pushing projects to future years will result in less reduction of flooding during
significant rain events prior to project completion and will delay reaching the 40% TSS reduction goal.
RECOMMENDATIONS
The Storm Water Utility Committee recommends a rate increase to $83.20 per ERU per year. The
Department of Public Works and Finance Department agree with the recommendation. It is
recommended that the rate go into effect on July 9, 2092. The effect of the increase in July equates to a
total cost of $77.78 per ERU for 2092.
Respectfully Submitted,
Steven M. Gohde, P.E.
Asst. Director of Public Works
Approved:
Mark A. Rohloff
City Manager
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