S T A F F    R E P O R T

                                                                                             For the Business Meeting of: August 16, 2005

July 22, 2005

TO:               Bill Becker, City Manager

FROM:         David J. Duritsch Jr., Environmental Services Director

PURPOSE

To obtain City Council approval of legislation to implement a Storm Water Utility.

BACKGROUND and FINDINGS

The Storm Water Advisory Committee recommendation, as presented by staff at the last City Council meeting, is to implement a Storm Water Utility where each residence is charged $3.25 per month, or one equivalent residential unit (ERU).  Non-residential properties would be charged a rate of $3.25 per month per ERU.  The fee is projected to generate approximately $1.5 million per year.

The Utility is intended to provide the City with a moderate level of service that allows the City to improve the management of the storm water infrastructure, which includes 170 miles of storm sewers and 77 miles of combined sewers.  The proposed program includes four primary components that are Operation & Maintenance, Regulatory Compliance, System Repair & Replacement, Capital Improvements, and Planning & Management.

Operation & Maintenance

The City does not currently have a maintenance division dedicated to operation of the City’s storm water system.  All storm water activities are currently performed by the City’s street, sewer, and water maintenance crews.  The recommended plan will provide the City with up to  8 maintenance workers and 2 crew leaders to perform routine and proactive operation and maintenance of the City’s storm sewer and combined sewer systems, include routine inspection and cleaning of storm water catch basins, manholes, culverts, drainage channels, streams, creeks, and detention basins.

Regulatory Compliance

The City has developed a Storm Water Management Plan as required by Ohio EPA.  The plan requires implementation of best management practices (BMP's) for each of the six minimum control measures listed in Ohio EPA’s NPDES Phase II rule.

Capital Improvements; Repair/Replacement

The City has compiled a list of storm water projects that primarily focuses on resolving storm water problems within the City.  The capital funds will be allocated to address these problem areas as well as to repair and/or replace deteriorating infrastructure in the existing system.

Planning & Management

The City will use some limited funds to conduct system investigations to prioritize infrastructure repair/replacement and capital projects in a capital improvement plan.  In addition, this component will also provide funds for GIS system development for storm water planning.

ALTERNATIVES

1.               Implement the Utility as recommended;

2.               Implement the Utility through a phased approach, or;

3.               Do nothing.

FINANCIAL IMPACT

Implementation of a Storm Water Utility is a new enterprise fund whereby each residence is charged $3.25 per month, or one equivalent residential unit (ERU).  Non-residential properties would be charged a rate of $3.25 per month per ERU (or for each 2,814 square feet of impervious surface on the property).

The Storm Water Utility fee of $3.25 per month per ERU is projected to fund approximately $1.5 million per year towards the storm water management plan.

            Regulatory Compliance                                     $     50,000

            Operation & Maintenance                                             $   650,000

            Planning & Management                                               $     50,000

            Capital Improvements, Repair/Replacement                  $   750,000

            TOTAL                                                                        $1,500,000

CONFORMITY TO CITY POLICY

Conforms.

OTHER CONSIDERATIONS

The Storm Water Utility will also include an Adjustment/Credit Policy, to be implemented by the City that would allow non-residential customers to obtain credits related to City expenses for addressing water quantity and quality issues on their property.

EMERGENCY/NON-EMERGENCY

First Reading.

RECOMMENDATION

Staff recommends implementation of a Storm Water Utility

C:            Scott Tadych, Senior Engineer

                Ginger Smith, Public Works Director

                Martin Mather, Public Works Assistant Director

                Les Landen, Law Director

                John Lyons, Finance Director

                Betsy Parr, Clerk of City Council

                File

                                                                            EXHIBIT “A”

CHAPTER 1050

STORM WATER MANAGEMENT UTILITY

         1050.01    CREATION OF A STORM WATER MANAGEMENT UTILITY

         It is hereby declared necessary for the protection of the public health, safety, welfare of the City and its inhabitants to establish a Storm Water Management System and to establish just and equitable rates or charges to be paid to the City for the use of such services which shall be used for the payment of the cost of the management, maintenance, operation, repair, construction, reconstruction, enlargement, replacement and related costs of the storm water system.

         1050.02    FINDINGS, DETERMINATION AND POWER

         It is hereby found, determined, and declared that those elements of the System which provide for the collection, treatment and disposal of storm water and regulation of ground water are of benefit and provide services to all property within the incorporated City limits, including property not presently served by the storm elements of the system.  The beneficiaries of the system include all real properties within the City of Middletown which benefit by the provision, operation and improvement of the system.  Such benefits may include, but are not limited to, the provision of adequate systems of collection, conveyance, detention, treatment and release of storm water, the reduction of hazard to property and life resulting from storm water runoff, improvement to the water quality in the storm and surface water system and its receiving waters.

         The Director of Environmental Services shall manage the Storm Water Management System, and upon approval of the City Manager, shall:

         (a)    Prepare regulations as needed to implement this chapter and forward the same to City Council for consideration and adoption, and adopt such procedures as are required to implement said regulations or carry out other responsibilities of the Utility;

         (b)    Administer the acquisition, design construction, maintenance and operation of the System, including capital improvements.

         (c)    Administer and enforce this chapter and all regulations and procedures adopted relating to the design construction, maintenance, operation and alteration of the utility system including, but not limited to, the quantity, quality and/or velocity of the storm water conveyed thereby.

         (d)    Inspect private systems as necessary to determine the compliance of such systems with this chapter and any regulations adopted pursuant to this chapter.

         (e)    Advise City Council, the City Manager and City departments on matters relating to the Utility.

         (f)     Prepare and revise a comprehensive drainage plan for adoption by City Council periodically.

         (g)    Review plans, approve or deny, inspect and accept extensions to the System.

         (h)    Establish and enforce regulations to protect and maintain water quality within the System in compliance with water quality standards established by state, regional and/or federal agencies as now adopted or hereafter amended.

         (i)     Analyze the cost of services and benefits provided, and the system and structure of fees, charges, fines and other revenues of the Storm Water User Fee annually.

1050.03       DEFINITIONS

          For the purpose of this chapter, words used in the singular shall include the plural, and the plural, the singular; words used in the present tense shall include the future tense.  The word “shall” is mandatory and not discretionary.  The word “may” is permissive.  Words not defined herein shall be construed to have the meaning given by common and ordinary use as defined in the latest edition of Webster’s Dictionary.

(a)     “Billing Period” means the period for which users of the System are billed.  Billing shall be monthly.  When a developed property that does not receive City water service changes ownership during a billing period, the account existing on the first day of the billing period shall be liable for the pro rata portion of the drainage fee for that billing period from the first day of the billing period until the day the property transaction is recorded with the County Recorder.

(b)   “Bonds" means revenue bonds, notes, loans, notes, loans or any other debt obligations issued or incurred to finance the Costs of Construction.

(c)    “Calendar year” means a twelve-month period commencing on the first day of January of any year.

(d)   “Costs of Construction” means costs reasonably incurred in connection with providing capital improvement to the System or any portion thereof, including, but not limited to, the costs of (1) acquisition of all property, real or personal, and all interests in connection therewith including all rights-of-way and easements therefore; (2) physical construction, installation and testing, including the costs of labor, services, materials, supplies and construction services used in connection therewith; (3) architectural, engineering, legal and other professional services; (4) insurance premiums taken out and maintained during construction, to the extent not paid for by a contractor for construction and installation; (5) any taxes or other charges which become due during construction; (6) expenses incurred by the City or on its behalf with its approval in seeking to enforce any remedy against any contractor or subcontractor in respect of any default under a contract relating to construction; (7) interest of any bonds; and (8) miscellaneous expenses incidental thereto.

(e)    “Debt Service” means, with respect to any particular Calendar Year and any particular series of Bonds, an amount equal to the sum of (i) all interest payable on such bonds during such Calendar Year, plus (ii) any principal installments of such Bonds during such Calendar Year.

(f)     “Developed Property” means real property other than Undisturbed Property and Vacant Improved Property.

(g)    “Director” means the Director of Environmental Services, or his designee.

(h)    “Dwelling Unit” means a singular unit providing complete, independent living facilities for one or more persons including permanent provisions for living, sleeping, eating, cooking and sanitation.

(i)      “Equivalent Residential Unit” or “ERU” means the average Impervious Area of all Residential Developed Property per Dwelling Unit located within the City.

(j)     “ERU Rate” means a Storm Water User Fee charged on each ERU as established by City Council.

(k)   “Exempt Property” means public rights of way, public streets, public alleys and public sidewalks.

(l)      “Extension and Replacement Costs” means costs of extensions, additions and capital improvements to, or the renewal and replacement of capital assets of, or purchasing and installing new equipment for, the System, or land acquisitions for the System and any related costs thereto, or paying extraordinary maintenance and repair, including the Costs of Construction, or any other expense which are not costs of Operation and Maintenance or Debt Service.

(m)  “Impervious Area” means the number of square feet of hard surfaced areas which either prevent or retard the entry of water into soil mantle, as it entered under natural conditions as Undisturbed Property, and/or causes water to run off the surface in greater quantities or at an increased rate of flow from that prevent under natural conditions as Undisturbed Property, including, but not limited to, roofs, roof extensions, patios, porches, driveway, sidewalks, pavement and athletic courts

(n)    “Nonresidential Developed Property” means developed property that is not utilized for dwelling units within the City.

(o)   “Operating Budget” means the annual operating budget adopted by the City for the succeeding Calendar Year.

(p)   “Operations and Maintenance Expenses” means the expenses, paid or accrued, of operation, maintenance and current repair of the System, as calculated in accordance with sound accounting practice, and includes, without limiting the generality of the foregoing, insurance premiums, administrative expenses, and charges for the accumulation of appropriate reserves for current expenses not annually incurred, but which are such as may reasonably be expected to be incurred in accordance with sound accounting practice.

(q)   “Revenues” means all rates, fees, assessments, rentals or other charges or other income received and placed into the Storm Water Management System Special Revenue Fund, in connection with the management and operation of the System, including amounts received from the investment or deposit of moneys in any fund or account and any amounts contributed by the City, all as calculated in accordance with accounting practices.

(r)     “Storm Water Management System” or “System” means the existing storm water management of the City and all improvements thereto which by this chapter are constituted as the property and responsibility of the City, to be operated as a Special Revenue Fund to, among other things, conserve water, control discharges necessitated by rainfall events, incorporate methods to collect, convey, store, absorb, inhibit, treat, use or reuse water to prevent or reduce flooding, over-drainage, environmental degradation and water pollution or otherwise affect the quality and quantity of discharge from such system.

(s)    “Storm Water User Fee” means a fee authorized by ordinance(s) established to pay Operations and Maintenance Expenses, Extension and Replacement Costs and Debt Service.

(t)     “Storm Water Management System Special Revenue Fund” means the Special Revenue Fund created by this chapter to operate, maintain and improve the System and for such other purposes as stated in this chapter.

(u)    “Undisturbed Property” means real property which has not been altered from its natural state by dredging, filling, removal of trees and vegetation or other activities which have disturbed or altered the topography or soils on the property.

(v)    “User Fee District” means the area or property within the corporate limits of the City of Middletown.

(w)  “Vacant Improved Property” means vacant property which is, or could reasonably be, served by any subdivision improvements that allow egress.

1050.04       STORM WATER USER FEE ESTABLISHED

Subject to the provisions of this chapter, each and every Residential Developed Property, Nonresidential Developed Property and Vacant Improved Property, other than Exempt Property, within the corporate limits of the City, and the owners and non-owner users thereof, shall have imposed upon them a Storm Water User Fee.  In the event the owner and non-owner users of a particular property are not the same, the liability for each the owner and non-owner user for the User Fee attributable to that property shall be joint and several.  The Storm Water User Fee shall be a monthly or a regular interval service charge and shall be determined by the provisions of this chapter and the ERU and ERU Rate which shall be established and changed from time to time by City Council.

1050.05    STORM WATER USER FEE COLLECTION

The Storm Water User Fee for metered property shall be billed and collected monthly with the monthly City’s services utility bill for those properties within the corporate limits of the City utilizing the City utilities and shall be billed and collected separately as Storm Water User Fees for those properties not utilizing other City utilities.  All such bills for Storm Water User Fees shall be rendered monthly by the Finance Department.  The Storm Water User Fee for those properties utilizing City utilities is part of a consolidate statement for utility customers which is generally paid by a single payment.  In the event that a partial payment is received, the payment shall be applied pro-rata to each account billed on the consolidated statement in the proportion that an individual account bears to the total consolidated statement of all current charges for all accounts.  The Storm Water User Fee for unmetered property shall be billed at regular intervals.  All bills for Storm Water User Fees shall become due and payable in accordance with the rules and regulations of the Department of Environmental Services pertaining to the collection of the Storm Water User Fees.

1050.06    STORM WATER USER FEE DETERMINATION

There is hereby established the following uniform schedule of rates for the services and use of facilities of the Storm Water Management System by the owner, tenant, or occupant of the premises using the services and facilities of said System.

(a)        The City Council, upon recommendation of the City Manager shall, by ordinance, establish reasonable rates for Storm Water Management Systems for each single family residence: each single family residence shall be billed at a flat fee established by the City Council for an Equivalent Residential Unit.  An Equivalent Residential Unit is hereby defined as the statistical average horizontal impervious area of all residential dwelling units in the City of Middletown.

(b)        Parcels which are undeveloped shall be assessed a storm water user fee.  The bill shall be determined by dividing the total land area of the property in square feet, by the area of an Equivalent Residential Unit times a correction factor.  The correction factor shall be based on the relative volume of runoff from an undeveloped property and that of a typical single family residence, under typical hydrologic conditions.

(c)        For all residential and nonresidential properties, that is enterprise, business establishment, building, or other occupancy not covered by subsections (a) and (b) of this section, the rate shall be computed on the total impervious area of the property divided by the average impervious area of an Equivalent Residential Unit times the rate established for an equivalent residential unit.  The billing amount shall be updated by the Director based on any additions to the impervious areas as approved through the building permit process.

1050.07             SCHEDULE OF RATES

There is hereby established the following uniform schedule of rates for the services and use of facilities of the storm water management system by the owner, tenant or occupant of the premises using the services and facilities of said system, which rates shall be effective for bills due on or after January 1, 2006.

(a)       The rate to be charged for the storm water use fee for equivalent residential unit (ERU) shall be a flat rate of $3.25 per month.  The equivalent residential unit equals the total square footage of impervious area of the property divided by 2,814 square feet.  Equivalent residential units will be rounded to the nearest tenth (0.1) of a unit.

(b)      The rates to be charged for all residential dwelling units will be determined by multiplying 1.0 ERU by the fee for an ERU established in(a).

(c)       Public road and freeway rights-of-way, including streets, boulevards, alleys, sidewalks, curbing, street crossings, grade separations, and other public ways and easements, and highway structures belonging to the City, state and federal government, shall be exempt from the rate established by this section because they function as part of the storm water collection and conveyance system.  Private rights-of-way will be charged as described within this section.

1050.08             ADJUSTMENT OF USER FEES, CREDITS

(a)    User Fee Credits may be available to properties that have existing storm water detention facilities, or those planning such facilities, may have their storm water management service charges reduced in a manner proportionate to the operation, maintenance and capital improvements activities not required to be undertaken by the City.  The specific application of these credits shall be set forth in the Water and Sewer Rules and Regulations, and in accordance with generally accepted engineering standards and practices to more accurately reflect the contribution to runoff from the premises and the level of service provided to such premises.  The detention facilities must be in accord with the hydrologic, hydraulic, and structural design requirements of the Engineering Director and as provided by the Codified Ordinance of the City of Middletown, Ohio.  Facilities of a temporary nature will not be permitted a decrease in their charges.

(b)   Only nonresidential customers shall qualify for user fee credits pursuant to a credit classification plan for various nonresidential storm water facilities.  The classifications are divided into water quality and quantity credits for both local and system wide facilities.  Nonresidential customers may apply for a combination of water quality and water quantity credits.

1050.09      STORM WATER MANAGEMENT SYSTEM SPECIAL REVENUE FUND

         The revenues received pursuant to this chapter shall be deposited with the Finance Director and shall be kept in a separate and distinct fund known as the Storm Water Management System Special Revenue Fund.  The Storm Water Management System Special Revenue Fund shall be used for the payment of the cost and expense of the management, maintenance, operation and repair of the Storm Water Management System.  Any surplus in the Storm Water Management System Special Revenue Fund may be used for the enlargement or replacement of the Storm Water Management System system, for the construction and reconstruction of said System, for the payment of interest on any indebtedness incurred for the construction thereof, and for the creation of a sinking fund for the payment of such indebtedness, but shall not be used for any other purpose.

1050.10     FAILURE TO PAY

For each charge or rental levied by or pursuant to this ordinance, if the same is not paid within twenty (20) days after it is due and payable, the Municipality is authorized to terminate City of Middletown water or other utility service until the charge or rental is paid.  In addition to the payment of such charge or rental, a charge as determined by the schedule of fees in the Water and Sewer Rules and Regulations shall be made to reinstate such service.

1050.11     RULES AND REGULATIONS

         The City Manager may make and enforce such rules and regulations as may be deemed necessary for the safe, economical and efficient management and protection of the municipal stormwater system, for the construction and use of the stormwater system and facilities, for connections to the stormwater system and for the regulation, collection, rebating and refunding of charges or rentals provided such rules and regulations are not in conflict with any municipal ordinance.  No person shall violate or fail to comply with any such rule or regulation.

1050.12          APPEAL

         Any person disagreeing with the calculation of the Storm Water User Fee, as provided in this ordinance, may appeal such determination to the City Manager, or his/her designee.  Any appeal must be filed in writing and shall include a survey, showing Dwelling Units, total property area, Impervious Area or Non-Residential Developed Area, drainage structures, drainage patterns and any features that contain/retain/detain storm runoff on their own property, and diminish the quantity of stormwater handled by the City, as appropriate.  The Manager may request additional information from the appealing party.  Based upon the information provided by the utility and appealing party, the Manager shall notify the parties, in writing, of the Manager’s decision.

ORDINANCE NO.                                  O2005-73                       

AN ORDINANCE CREATING A STORMWATER MANAGEMENT UTILITY IN THE CITY OF MIDDLETOWN, ESTABLISHING A STORM WATER MANAGEMENT FEE AND ENACTING CHAPTER 1050 OF THE CODIFIED ORDINANCES OF THE CITY OF MIDDLETOWN. 

WHEREAS, THE City of Middletown has experienced significant storm events over a number of years, which such events have exceeded the ability of existing public and private drainage facilities, causing flooding in the City; and

WHEREAS, in 2003, the City of Middletown established a Storm Water Advisory Committee (SWAC) to study the need for and implementation of a Stormwater Management Utility and a Storm Water Management Fee to provide the proper structure and financing of necessary stormwater projects and services; and

WHEREAS, the City of Middletown must comply with Federal and State regulations pertaining to water quality and quantity such as the National Pollutant Discharge Elimination System (NPDES) permit; and

WHEREAS, based upon the study and recommendation of the SWAC, dated April 20, 2004, the City of Middletown has determined the substantial benefits and fairness of establishing a storm water management utility structured to fund improvements to the City’s stormwater management based on the level of use;

NOW, THEREFORE, BE IT ORDAINED, by the City Council of the City of Middletown, Butler/Warren Counties, Ohio that:

                                                                    Section 1

Chapter 1050 of the Codified Ordinances creating a stormwater management utility and establishing a storm water management fee is hereby enacted to read in full as set forth in Exhibit “A”, attached hereto and made a part hereof.

                                                                    Section 2

That this ordinance shall take effect and be in force from and after the earliest period allowed by law.

Mayor                                                                         

Adopted: Sept. 6, 2005

Attest: /s/ Betsy Parr                                                      

Clerk of City Council

Now The EPA Is Going After Cities

Spiderjohn - Goes back to when then city manager Bill Becker was leading informational forums over the up-coming (at that time) proposed city income tax increase levy(which failed badly). The sewer charge ($3.25 per month?) had just been added to our water/sanitation bills. I asked for an explanation of this new fee, and called it an un-mandated tax. Then Councilmember Marconi objected to my calling it a tax, and it was explained that it was a fund created and passed by Council to help deal with the up-coming sewer line debacle that has been festering for the last few decades.

The usage lanquage was intentionally vague, and I believe that the collected funds have been already spent on curbs/gutters/new drainage sewers for the Atrium and Renaissance area properties, and a few other select areas.

Thanks Spider
Your information sounds about right to me. I will see what I can dig up about this subject and post it on the blog.
It was my understanding that this money was to be set aside. Ya know in one of those things called a DEDICATED FUND.
Yep them boys at City Hall have some explaining to do about these missing funds.