HomeMy Public PortalAboutExhibit MSD 26 - Stormwater Rate Setting Workshop1
Stormwater Rate Setting Workshop
February 26, 2018
2
Stormwater
»Stormwater is the runoff that
occurs over the surface of
the land when it cannot be
absorbed into the ground.
−It can cause flooding over streets
and land, which threatens public
safety
−It can transport sediment and
pollutants to bodies of water, which
harms water quality
»Stormwater pipes, drains and
ditches are meant to
contain the flow of
stormwater, limiting flooding.
3
Rate Changes
In accordance with Section 7.270 of the Charter Plan of the District, any proposed rate change must:
1.Be consistent with constitutional, statutory or common law as amended from time to time;
2.Enhance the District’s ability to provide sewer and drainage systems and facilities, or related services;
3.Be consistent with and not in violation of any covenant or provision relating to any outstanding bonds or indebtedness of the District;
4.Not impair the ability of the District to comply with applicable Federal or State laws or regulations as amended from time to time; and
5.Impose a fair and reasonable burden on all classes of ratepayers.
4
Rate Setting Process
Step 1 Identify
Financial & Pricing
Objectives
Step 2 Identify Revenue Requirements & Demand
Projections
Step 3 – Allocate Costs
Step 4 – Design Rate Structure
Step 5 – Assess Effectiveness of Addressing Pricing Objectives
5
Identify Pricing
Objectives
Ease of
Implementation
Cost-of-Service
Based Allocations
Revenue Stability
Customer
Understanding
Water Efficiency
Affordability
Rate Stability Minimal
Customer Impacts
Financial Sufficiency Economic
Development
Water Quality
6
Rate Setting Process
Step 1 – Identify Financial & Pricing
Objectives
Step 2 Identify Revenue
Requirements & Demand
Projections
Step 3 – Allocate Costs
Step 4 – Design Rate Structure
Step 5 – Assess Effectiveness of Addressing Pricing Objectives
7
Revenue Requirements
8
Regulatory Expenses
»The District is the lead co-permittee for St. Louis region MS4 permit
»Stormwater flowing through the drainage system is highly polluted, and is regulated like wastewater to preserve water quality in receiving surface water bodies.
»National Pollutant Discharge Elimination System (NPDES)
−Municipal Separate Storm Sewer Systems (MS4)
−Construction activities
−Industrial activities
9
Stormwater O&M
»Stormwater related O&M activities
−Removing blockages
−Open channel cleaning
−Repair of storm sewer line failures
−Inlet inspections and cleanings
»Stormwater Operating Reserve
−District targets reserve equal to 240 days of O&M expenses
10
Stormwater Capital
Improvement & Replacement
»Program addresses local flooding, regional flooding, & erosion
»Projects include:
−New storm sewer systems
−Storm system upgrades & extensions
−Stormwater detention
−Property buyouts
−Channel protection & restoration
−Green infrastructure improvements
11
Existing Stormwater Funding
»OMCI Fund – Property taxes, set to 0 under Proposition S, spending down existing balances
»Regulatory Fund – 2 cent property tax
»Districtwide Stormwater Fund for O&M – 10 cent property tax approved under Proposition S
12
Rate Design
Step 1 – Identify Financial & Pricing
Objectives
Step 2 Identify Revenue Requirements & Demand
Projections
Step 3 – Allocate Costs
Step 4 – Design Rate Structure
Step 5 – Assess Effectiveness of Addressing Pricing Objectives
13
Allocate Costs
»Cost of service concept
»Allocate costs to functional and cost components
»Customer Classes
»Amount of impervious area per customer, units of service
14
Rate Design
Step 1 – Identify Financial & Pricing
Objectives
Step 2 Identify Revenue Requirements & Demand
Projections
Step 3 – Allocate Costs
Step 4 – Design Rate Structure
Step 5 – Assess Effectiveness of Addressing Pricing Objectives
15
Rate Design
Process aligns rates and
charges with pricing objectives
Objective
Revenue Stability
Options
Dedicated revenue stream
for known capital needs
Objective
Cost of Service
Options
Costs allocated fairly, spread
across broader base
Objective
Affordability
Options
Customer Assistance
Program applies to rate
16
Designing the Rate Structure
»Basis of Billing – Impervious Area
»Proposed Rate Structure
»Fee Reduction Opportunities
»Current Stormwater Funding
17
Basis of Billing –
Impervious Area
»Most stormwater utilities base fee on impervious area
»Impervious area can be measured from aerial imagery
»Proposed stormwater rate based on recommended capital improvement program divided by estimated units of service
18
Proposed Rate Structure
ERU: Equivalent Residential Unit
Impervious area of a typical single family residential parcel
1 ERU = 2,600 square feet
Single Family
Residential
All other properties $2.25 per ERU
Flat Fee (4 tiers based on impervious area)
Area (ft2) Tier Initial Rate
(FY 20 & 21)
Full Rate
(FY 22 and beyond)
200 – 2,000 .63 ERU $0.95 $1.42
2,001 – 3,600 1 ERU $1.50 $2.25
3,601 – 6,000 1.66 ERUs $2.49 $3.74
Above 6,000 3.03 ERUs $4.56 $6.84
19
Fee Reduction Opportunities
»Proposed Stormwater Credits and Incentives
−Residential Incentives
−Commercial Incentives
−Other Incentives
•Best Management Practices Incentives
•Low Impact Development Credit
•Direct Drainage Credit
»Customer Assistance Program – 50% reduction on eligible customers bills
20
Q&A and
Other Discussion