11-02-2020 Council Work Session Packet

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Feasibility Study 112316 City of Lino Lakes, Minnesota assessments and the City’s Surface Water Management Fund have typically financed most of the necessary improvements in the past. The Storm Water Utility (also referred to in other communities as a Surface Water Utility) is a funding source that can address the financing dilemma without increasing property taxes. Service charges, which have been used by communities to finance sanitary sewer and water utilities, are also being applied to surface water management (Jouseau, 1983). The storm water utility approach is gaining recognition as the most equitable way to finance storm water management activities (Honchell, 1986). This trend has continued for more that 20 years. Selecting the Best Option In evaluating financing options, the following criteria were considered: Fair • Charges are based on the volume of storm water runoff, not property value. • Land Use (Intensity of Development). • Sound Engineering Basis. Utilizes commonly accepted engineering formulas for calculating runoff utilizing runoff Curve Numbers (CN). This methodology is known as Equivalent Hydrologic Area. • The fee should represent a “users pay” philosophy. The more runoff a user property contributes, the more they should pay. • Operation and Maintenance costs increase yearly, placing increased pressure on the general levy (ad valorem) vs. a utility fee based on users pay and the actual budget based upon these costs. Dependable • No competition with the general fund. • Consistent source of revenue. • Separate, dedicated fund. • Helps increase the score in the finance section (matching funds) of grant applications. Acceptable • No increase in property tax. • A “user fee”, the more you contribute…the more you pay. • Small service charge vs. large, one time assessment. • Understandable rational for the charge and engineering sound. Simple and Flexible • Use current billing system • Includes credits, exemptions and appeals process