09/07/2010 Council Packet - Laserfiche WebLink

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(4) Person(s) responsible for implementing and/or coordinating each component of the Phase II Storm Water Program. The costs of operating this system are currently funded by property taxes. As a result of federal requirements and implementation of the SWPPP, costs for management of the storm water system have continued to increased. In 2006 the city council initiated a study to evaluate financing alternatives for storm water management. The study was intended to address costs due to federal and state storm water management compliance requirements and storm water related street reconstruction costs identified in the Pavement Management Program report (2005). The report was completed identifying the establishment of a utility as the preferred option. Two (2) public informational meetings were held, but no action was taken by the city council on the proposed utility. However, continued evaluation of the utility remained as a city council goal and a budget discussion item. In March of 2010 the council initiated an update of the report excluding costs associated with street reconstruction. The estimated budget was limited to costs associated with the operation, maintenance, repair and replacement of the storm sewer system. Funding for the expansion of the storm water system was not included. A draft copy of the report was presented to the council in July of 2010. A public hearing was held on August 9, 2010. Analysis The Minnesota Legislature authorized local governments to create "storm water utilities" (Minnesota Statutes section 444.075) in 1983. Funds obtained through a storm water utility fee must be dedicated to the purpose for which they were obtained. This allows a community to fund programs necessary to meet local needs and federal and state requirements for storm water management. Establishment of a utility has become more common with implementation of the federal storm water management requirements. A 2007 study by the Metropolitan Council identified 83 communities within the 7 county area had established a utility. Nearby communities include Blaine, Shoreview, Centerville and Circle Pines. The basic premise behind the storm water utility is that users pay including tax exempt properties. Charges are based on the volume of storm water runoff and land use, not property value. The base unit or "Utility Factor" represents a single family residential home. Multi- family, commercial, industrial and institutional properties are assigned multiple units based on the land use and size of property. The proposed monthly cost for a single family residence is $2.50 which equates to $30.00 per year. Budget The city currently spends an estimated $311,000 annually on storm water management, which is funded by property taxes. The Storm Water Utility budget is estimated at $502,500 and includes approximately $191,000 in additional funding to meet current 2