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HomeMy WebLinkAbout31. 16-571 DECEMBER 13, 2016 16-571 RESOLUTION (CARRIED 7-0 LOST________LAID OVER________WITHDRAWN________) PURPOSE: ESTABLISH 2017 STORM WATER UTILITY RATE TO $160.04 PER YEAR INITIATED BY: DEPARTMENT OF PUBLIC WORKS WHEREAS, the City of Oshkosh has previously established a Storm Water Utility; and WHEREAS, Section 14-4 (B)(2) 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 2017 shall be $160.04/ERU. BE IT FURTHER RESOLVED that the appropriate City officials are hereby authorized and directed to take those steps necessary to implement this charge to become effective for services provided on and after April 1, 2017. DECEMBER 13, 2016 16-571 RESOLUTION (CARRIED LOST LAID OVER WITHDRAWN ) PURPOSE: ESTABLISH 2017 STORM WATER UTILITY RATE TO $160.04 PER YEAR INITIATED BY: DEPARTMENT OF PUBLIC WORKS WHEREAS, the City of Oshkosh has previously established a Storm Water Utility; and WHEREAS, Section 14-4 (B)(2) 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 2017 shall be $160.04/ERU. BE IT FURTHER RESOLVED that the appropriate City officials are hereby authorized and directed to take those steps necessary to implement this charge to become effective for services provided on and after April 1, 2017. City o� Oshkosh MEMORANDUM TO: Honorable Mayor and Members of the C on Council FROM: James Rabe, Director of Public Works DATE: December 8, 2016 RE: Establish 2017 Storm Water Utility Rate to $160.04 / ERU 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 have been nine subsequent rate increases, the most recent being to $148.88 per ERU per year in 2016. The Storm Water Utility has funded several major projects to date including the Fair Acres Area Detention Basin, Anchorage Channel Construction, the Baldwin Avenue Area Dry Detention Basin, the Tipler School Area Dry Detention Basin, the North High School Area Wet Detention Basin, the Oakwood Road Wet Detention Basin, the Melvin Avenue Storm Water Pump Station, the Westhaven Clubhouse Area Wet Detention Basin, the James Road Area Detention Basin, the City Hall Underground Detention and parking lot project, the Armory Area Wet Detention Basin, the 9th & Washburn Area Wet Detention Basin, and the Fernau Watershed North Main Street Area Wet Detention Basin. In addition to these major projects, storm sewers are replaced/upgraded with each street reconstruction project. The City experienced significant flooding during rain storms in 1990, 1993, 1996, 1999, 2001, 2004, 2008, 2010, and 2012. Localized areas also flood during smaller storm events. In addition, the City is now under a permit (MS4) from the Wisconsin Department of Natural Resources (WDNR), as mandated by the federal Clean Water Act, for discharge of storm water to local water bodies. This permit requires the implementation of practices 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. The City of Oshkosh has met the 20% goal. The State legislature has since removed the 40% requirement. The Federal Environmental Protection Agency (EPA), in conjunction with the WDNR, is currently developing targeted performance standards that are anticipated to require TSS reduction of 40% or more. It is anticipated that these targeted performance standards will be implemented in the next couple of years. 1:\Engineering\Storm Water Information\2017rate study memo_12-8-16.docx Page 1 of 2 AECOM was hired by the City to develop a City-wide plan for pollution reduction. The City has also completed several flood studies 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 one to two major projects 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 has worked with Ehlers (Financial Consultant) 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 $160.04 per ERU per year is recommended. This rate will allow the City to complete all of the projects listed in the 2017 Capital Improvement Program (CIP) — Storm Sewer Section, and also maintain daily operations. The rate is proposed to be in effect on April 1, 2017. Finance Director Larson and I have reviewed the cash reserves and any available funds have been incorporated in order to minimize the rate increase. The Utility must retain adequate reserves to maintain favorable bond ratings and meet the operating needs of the Utility. 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 become available to the Utility. FISCAL IMPACT The rate of $160.04 per ERU per year is required to implement all of the projects and operations in the 2017 budgets. Reduction of the rate would result in the delay of other proposed projects within the CIP. Pushing projects to future years will result in less reduction of flooding during significant rain events prior to project completion and will delay implementation of water quality improvements. RECOMMENDATIONS The Department of Public Works and Finance Department staff recommend a rate increase to $160.04 per ERU per year to fund all activities in the approved 2017 budgets. It is recommended the rate go into effect on April 1, 2017. The effect of the increase equates to a total cost of $157.25 per ERU for 2017. Approved: Mark A. Rohloff City Manager JER/tlt I:\Engineering\Storm Water Information\2017 rate study memo_12-8-16.docx Page 2 of 2