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HomeMy Public PortalAboutExhibit MSD 25 - Overview of Stormwater Capital Funding ProposalFebruary 26, 2018 Rate Commission Meeting Overview of Stormwater Capital Funding Proposal Current Status Proposition S: April 2016 •Voters passed Proposition S in April 2016. •The issue addressed by Proposition S was unequal storm sewer operations and maintenance funding across our service area. •Proposition S simplified and equalized these services with regard to operations and maintenance in the public storm sewer system. •Now, MSD is exploring options to fund District-wide capital projects addressing erosion and flooding. 2 2 Current District Funding: $0.0197 regulatory tax + $0.10 stormwater tax = $0.1197 total tax rate •Includes regulatory compliance •Includes complete operations and maintenance •Includes limited funding for necessary capital improvements: −FY17-20 = ~$67M Stormwater Capital Program (FINITE PROGRAM) Current Status Proposition S: Outcomes 3 4 Localized Flooding Regional Flooding Erosion STORMWATER PROPOSAL: Unfunded Stormwater Issues 4 " ~500 unfunded erosion and flooding issues " ~$562M total estimated cost * Based on November 2017 data STORMWATER PROPOSAL: Unfunded Stormwater Issues 5 * Map locations are approximate " MSD will implement a Stormwater Capital Rate to fund a $30 million per year stormwater capital program. "The Stormwater Capital Rate will be based on the amount of impervious area on each customer s property. "Average charge for a single family home will be $2.25 per month or $27.00 per year. "Tax exempt entities will be subject to the Stormwater Capital Rate. " Stormwater Capital Program will address unfunded stormwater issues (i.e., localized flooding, erosion, and regional flooding). "Estimates are that all currently identified issues could be addressed in ~30 years. "Creeks, streams, etc. remain privately owned. "Floodplain management responsibilities remain with municipalities. " Levee Districts under agreements w/MSD exempt from proposed Stormwater Capital Rate, as services are provided through the Districts. 6 Stormwater Capital Funding Proposal 6 " The proposed rate was determined based on the recommended capital improvement program (~$30 million annually) divided by the estimated number of Equivalent Residential Units (ERU) within MSD s service area. " An ERU is a unit of impervious surface area. "Each ERU equals 2,600 square feet. "Each ERU charged at $2.25 per month. " Multi-family, commercial customers, and other non-residential customers will be charged based on impervious surface area divided into ERUs. "Example: Commercial customer with 10,000 square feet of impervious area equals 4 ERUs. " Single-family residential customer charges will be calculated using a 4-tier system that differentiates between customer property sizes. "Tier ranges were developed using ERU as reference point. "Tiers are an acceptable and common industry practice. "Using 4 tiers shares the cost of these services more equitably amongst customers. 7 Stormwater Capital Rate Calculation 7 Note: Fiscal Year 2022 revenue is shown as the full rate that will be charged at the beginning of MSD’s Fiscal Year 2022 (July 1, 2021, through June 30, 2022). 8 Stormwater Capital Rate Calculation 8 Properties/ERUs Monthly Rate FY22 Annual Billed Revenue Residential Properties Tier 1: 200 - 2,000 Sq. Ft 120,523 1.42$ 2,050,096$ Tier 2: 2,001 - 3,600 Sq. Ft 218,750 2.25$ 5,906,250$ Tier 3: 3,601 - 6,000 Sq. Ft. 80,469 3.74$ 3,606,621$ Tier 4: >6,000 Sq. Ft. 27,122 6.84$ 2,226,174$ Customer Assistance Program Accounts 6,328 1.13$ 85,428$ Subtotal: Residential Properties 453,192 properties 13,874,569$ Non Residential & Multi-Family ERUs 601,353 ERUs 2.25$ 16,236,531$ 30,111,100$ Customers 9 Billing Frequency 9 •The Stormwater Capital Rate will be appear on the monthly bill of MSD customers that are also billed for wastewater. •Customers not billed for wastewater with properties containing more than 20 ERUs will be billed monthly. •All other customers not receiving MSD wastewater services will be billed on a quarterly basis. Impervious Based Rate Rationale •Aug 2007: Rate Commission recommended various MSD taxes and 24¢ fee be replaced by stormwater impervious fee. •Dec 2007: MSD Board approved Rate Commission recommendation to implement impervious fee. •Mar 2008: Impervious fee implemented. •July 2008: Zwieg vs MSD lawsuit, challenging the impervious fee, is filed. •Aug 2010: MSD suspended impervious fee and reinstituted various taxes and 24¢ fee. •July 2008 - Nov 2013: Circuit, Appellate, and Missouri Supreme Courts declared the impervious fee unconstitutional without voter approval. •July 2008 - Nov 2013: Courts unanimously agreed MSD not required to refund impervious fee revenue that was collected and spent on stormwater services. •Aug 2015: Rate Commission recommended MSD consider an impervious based stormwater fee in the future. •Jan - June 2017: Public outreach and surveying shows that an impervious based rate is the preferred method for funding a stormwater capital program. 10 10 " Impervious area is a hardened surface  such as concrete, blacktop, a rooftop, compacted gravel  that does not absorb stormwater; and which generates stormwater runoff. " Flooding and erosion services being proposed under the new Stormwater Capital Rate are directly impacted by the volume of stormwater runoff created by impervious area on each property. " Fairest way to determine revenue contribution of each property is through an impervious area measurement method. " All public and private property, including properties owned by governmental and nonprofit entities, will be subject to the Stormwater Capital Rate. " Funding would be reduced by ~15% if it is later determined that governmental and nonprofit entities should not be subject to the Stormwater Capital Rate. 11 Impervious Based Rate Rationale (con t) 11 " Existing OMCI District tax rates rolled back and set to zero when Prop. S was approved in 2016. " MSD intends to engage municipalities located within the OMCI Districts to help determine future of these taxes. " Options include: "Charging some level of taxes to provide additional stormwater services. "Leaving rates at zero and evaluating in the future. "Recommending MSD Board eliminates OMCI Districts. 12 Operations, Maintenance, and Capital Improvement (OMCI) Taxing Districts 13 •MSD staff will begin Rate Proposal development in July 2018 •Rate Commission meetings are scheduled to begin in September 2018 •Rate Proposal will be submitted to the Rate Commission in February/March 2019 •MSD Board will consider the Rate Proposal in October 2019 •If applicable, new rates will be effective July 2020 13 Wastewater Rate Commission Timeline www.stlmsd.com/ratecommission More Information / Questions 14