Transcript Document
Re-tooling Ann Arbor’s Storm Water Utility to Address Changing Legal Precedents Molly Wade, City of Ann Arbor, MI John Aldrich, CDM MWEA Annual Conference June 23, 2009 TFG Agenda TFG Project Objectives Public Engagement Process Revenue Requirements and Cost of Service Options Equitable Stormwater Rate Structure Utility Billing Database Revenue Scenarios and Rate Analysis Credit Provisions and Adjustments Implementation Strategy 2 TFG 3 Ann Arbor’s Storm Water Utility Formed in early 1980’s Historically simple rate structure $3.7 million revenue Expanding service needs TFG Asset management Capital improvements NPDES permitting Evolving legal requirements Improved technologies for defining imperviousness 4 Project Mission Improve the existing stormwater utility to address emerging City stormwater needs while meeting rate design requirements: TFG The fees must serve a regulatory purpose (rather than a revenue-raising purpose) The fees must be proportionate to the necessary cost of service Property owners must be able to refuse or limit their use of the service. 5 Stormwater Citizen Advisory Task Force Members Represent Community Interest Home Owners Tenants / Landlords Understand values/ interests of stakeholders Industrial Commercial Retail Institutional Schools Churches TFG 6 Role of the Storm Water Citizens Advisory Task Force Relay information about stormwater needs Provide advice on stormwater utility implementation issues: Level of service goals Policies User Fee Participate in Public Engagement program TFG Report to City Council 7 Level of Service Principles Developed by Storm Water Citizens Advisory Task Force Protect public health, safety, and welfare Protect ecological health Conduct comprehensive planning to determine priorities Encourage shared responsibility Offer incentives to guide desired behaviors Educate stormwater system users Provide an understandable, equitable rate structure TFG 8 Elements of an Effective Storm Water Management Program Goals Level of Service TFG Administrative Services Public Engagement Regulation and Enforcement Operations and Maintenance System Planning Capital Improvements Organization and Finance Results: -Flood Control -Erosion Control -WQ Enhancement 9 Level of Service Options Encompass the Full Range of the Public Expectations Table 3. Level of Service Options for Ann Arbor Stormwater Management Program Enforcement, Public Engagement, & Operations and FInance Maintenance Level of Service System Planning Capital Improvements A Comprehensive Planning Total Renewal (20-year CIP) Fully Preventive / 100% Routine Proactive B Priority Planning Partial Renewal (50-year CIP) Inspectionbased Inspection-based C Reactionary Planning Current CIP (100-year CIP) D No Planning Emergency Repairs (No CIP) TFG Only complaint- Only complaint-based based response response Less than full response Less than full response 10 Level of Service Options Encompass the Full Range of the Public Expectations Table 3. Level of Service Options for Ann Arbor Stormwater Management Program Enforcement, Public Engagement, & Operations and FInance Maintenance Level of Service System Planning Capital Improvements A Comprehensive Planning Total Renewal (20-year CIP) Fully Preventive / 100% Routine Proactive B Priority Planning Partial Renewal (50-year CIP) Inspectionbased Inspection-based C Reactionary Planning Current CIP (100-year CIP) D No Planning Emergency Repairs (No CIP) TFG Only complaint- Only complaint-based based response response Less than full response Less than full response 11 Estimated Allocation of Revenue under LOS Options Estimated Allocation of Revenue under LOS Options $20.0 $18.0 Cost of Service ($M) $16.0 $14.0 Capital Improvements $12.0 System Planning Organization & Finance $10.0 Operation & Maintenance Regulation $8.0 Public Education $6.0 Administration $4.0 $2.0 $0.0 Existing LOS TFG LOS C LOS B LOS A 12 Level of Service Options Encompass the Full Range of the Public Expectations Table 3. Level of Service Options for Ann Arbor Stormwater Management Program Enforcement, Public Engagement, & Operations and FInance Maintenance Level of Service System Planning Capital Improvements A Comprehensive Planning Total Renewal (20-year CIP) Fully Preventive / 100% Routine Proactive B Priority Planning Partial Renewal (50-year CIP) Inspectionbased Inspection-based C Reactionary Planning Current CIP (100-year CIP) D No Planning Emergency Repairs (No CIP) TFG Only complaint- Only complaint-based based response response Less than full response Less than full response 13 Rate Study Fundamentals Revenue Requirement Projections Cost of Service Analysis From Whom Should the Money be Collected? Design of Recommended Rates TFG How Much Money is Needed? How Should Stormwater Services be Priced? 14 Illustration of Functional Cost Allocation Runoff Area TFG Customer Specific Public Ed Billing Regulation CIP -- New Service 2005/06 Costs: $206,000 $218,000 Administration Operation & Maint. System Planning CIP – System Renewal $3,304,000 16 Rate Model Options TFG Non-SF Residential Properties All Properties Level-of-Service / Geography Base Runoff Coefficient / Intensity of Development Factor Tiered Flat Fee Flat Fee All properties All SF residential properties Accuracy Impervious Area Measurements Level of Effort 17 The City’s current rate model is proportionate to the runoff generated by each property. Existing Rate Model TFG Non-SF Residential Properties All Properties Level-of-Service / Geography Base Runoff Coefficient / Intensity of Development Factor Tiered Flat Fee Flat Fee All properties All SF residential properties Accuracy Impervious Area Measurements Level of Effort 18 Impervious area used as the basis for an equitable rate model and cash flow analysis. Proposed Rate Model TFG Non-SF Residential Properties All Properties Level-of-Service / Geography Base Runoff Coefficient / Intensity of Development Factor Tiered Flat Fee Flat Fee All properties All SF residential properties Accuracy Impervious Area Measurements Level of Effort 19 Automated Impervious Area Using Remote Sensing Classification TFG Use new 6-inch resolution orthoimagery to yield 2-foot resolution imperviousness map grid All pavement and other travel ways All buildings, including decks and roof overhangs Use Ann Arbor GIS data as classification benchmark Data Quality Assurance Manual digitization Field verification Iterative geo-statistical analysis 20 Commercial and Multi-Family: PropertySpecific Impervious Area Measurement Paved Area TFG Building Area Runoff contribution is typically larger than single / double family residential Fees per parcel are generally larger Inaccuracies are amplified Relatively few parcels require detailed validation 21 Statistical Evaluation of Residential Properties Defines Categories Single- and Two-Family Impervious Area Distribution 1000 900 800 2,187 sq. ft Count of Parcels 700 600 4,161 sq. ft 500 Tier Number of Parcels Average Impervious Area Upper 400 0.21 acres Large 2,843 0.12 acres Average 13,781 0.07 acres Small 3,243 0.04 acres 400 300 200 100 7,020 sq. ft Sma ll T ie r Ave ra ge T ie r La rge T ie r U ppe r T ie r TFG 1, 00 0 1, 50 0 2, 00 0 2, 50 0 3, 00 0 3, 50 0 4, 00 0 4, 50 0 5, 00 0 5, 50 0 6, 00 0 6, 50 0 7, 00 0 7, 50 0 8, 00 0 8, 50 0 9, 00 0 9, 50 0 10 ,0 00 50 0 0 Impervious Area (sq ft) 22 Online impervious area lookup TFG 23 TFG 24 Updating Impervious Area Imagery Present goal is to update every two to three years New construction during interim: Residential: Classify as Tier 2 Commercial: Required to provide impervious area during planning process Share costs with other City units Share costs with U of M TFG 25 Ann Arbor’s Proposed Rate Model with Existing Revenue Requirements Proposed “Revenue-Neutral” Fees: Rates for ALL Residential and Non-Residential Properties – $5.92 / quarter / customer – $251.44 / quarter / impervious acre Cost recovery proportionate to runoff volume Four residential tiers increase equity and distribution Credit system recognizes stormwater management Allows customers to control use of stormwater service Automates impervious area updates Disadvantages: TFG Non-stormwater: $0.27 / quarter / 1000 gal. Reductions for on-time payment Credits recognize on-site stormwater management Advantages: PLUS More complex than existing system Additional costs for future updates 26 Comparison of Rate Increases to Reach LOS B Comparison of Rate Increases to Reach LOS B $800 $600 $500 $400 $300 Current Fiscal Year Fee per Impervious Acre per Quarter $700 LOS B $200 $100 $2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Fiscal Year Ending TFG Continue Historic 11% Rate Increase to LOS B Achieve LOS B by 2017 Maintain LOS B @ 4% for Interest and Inflation Achieve LOS B by 2012 Achieve LOS B Immediately 27 Proposed Quarterly Credits for Single and Two-Family Residential Properties Quarterly Fee in 2008 Fee for Residential - Avg. Impervious 28.46 Proposed Maximum Credits o Rain Barrels (1 to 5) $1.79 o Rain Garden $2.80 o RiverSafe Home $1.24 o Chapter 63 Detention Basin $7.16 Fee With Maximum Credit 10 % Deduction for On-Time Payment Minimum Charge TFG Maximum Percent Reduction $15.47 $1.55 $13.92 51% 28 Proposed Quarterly Credits for Average Commercial and non-Single and 2-Family Residential Properties Fee per Impervious Acre in 2008 Impervious Area – Average Property Quarterly Fee 0.75 acre $239.11 Proposed Maximum Credits o Community Partners for Clean Streams $1.09 o Chapter 63 Detention Basin $68.68 o Water Quality BMP $14.21 Quarterly Fee With Maximum Credit 10 % Deduction for On-Time Payment Minimum Charge Maximum Percent Reduction TFG $155.13 $15.51 $139.62 42% 29 Right-of-Way Credit Provisions TFG Credits for Public Rights of Way Streets generate stormwater Streets receive stormwater services Streets perform conveyance, storage, WQ, and education functions for the stormwater system Stormwater utility liable for cost of easements in streets. Credits available exceed stormwater costs for Streets 30 Adjustment Provisions Recognize Customer Actions Adjustments: Impervious area interpretations Non-contributing areas – Direct discharge to Huron River – Discharges directly outside City limits Retention of all stormwater – About twice 100-year event volume plus freeboard TFG 31 Implementation Plan For Stormwater Rates Stormwater Citizen Advisory Task Force On-line access to parcel-specific imperviousness Internet-based credit applications Media Communications (press, TV, radio, web) Outreach through RiverSafe Home program, presentations WaterMatters and WasteWatcher articles TFG 32 TFG 33 Rate Design Requirements for Stormwater Service Fees Are regulatory activities the primary purpose of the funds (protect public health, safety, welfare, meet regulatory obligations)? TFG All envisioned services are regulatory Are the services provided proportional to the fees charged? Address through cost allocation Address through rate structure options Can customers control their use of the system and fees charged? Link to runoff generation Address through credit and adjustment provisions 34 Questions and Answers TFG 35