1/22/2019 1 STORMWATER RATE TRANSITION Chamber of Commerce January 22, 2019 11 JANUARY 2019 | PROPRIETARY AND CONFIDENTIAL I. Context: Transition to Impervious Area II. Program Costs: UG’s Needs III. Cost Recovery: Equitable Approach IV. Impact: Bill Impact V. Stakeholder Outreach AGENDA 2
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STORMWATER RATE TRANSITION - wycokck.org · Stormwater fee is designed to recover only the stormwater operating costs Capital costs are recovered through taxes Equity of recovery
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STORMWATER RATE TRANSITIONChamber of CommerceJanuary 22, 2019
11 JANUARY 2019 | PROPRIETARY AND CONFIDENTIAL
I. Context: Transition to Impervious Area
II. Program Costs: UG’s Needs
III. Cost Recovery: Equitable Approach
IV. Impact: Bill Impact
V. Stakeholder Outreach
AGENDA
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CONTEXT:TRANSITION TO IMPERVIOUS AREA
•Our top priority is protecting public health and our environment and complying with federal, state and local regulatory standards
• Commission requested evaluation of service area and solutions to address the following:
Black & Veatch4
Context: Why Focus on Stormwater?
•Reduce frequent flooding risks
• Improve water quality in our waterways
•Enhance and maintain drainage infrastructure in a 160 square mile service area
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• The Stormwater fund is fully funded by user fees; not taxes
• Only customers with an electric or water account pay $4.50 per month
• Current revenue is approximately $3.4M per year
Need to address equity of cost recovery in rate structureBlack & Veatch
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Context: What is the Significance of the Existing Stormwater Rate?
• Properties of different sizes pay the same fee
• The charge is not proportional to stormwater runoff from a property
• The current approach of a uniform fee contributes to significant inequities in cost recovery
•Under current stormwater fee, 93% of revenue is generated from Residential customers
•Non‐Residential customers make up 64% of impervious area
• As program costs increase to address operational needs, inequity in cost recovery will be exacerbated
Proposed rate structure reflects fair and equitable cost recovery from all propertiesBlack & Veatch
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Context: Why is UG focusing on transitioning to an impervious area based rate now?
Residential, 36%
Non-Residential, 64%
Impervious Area
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PROGRAM COSTS:WHAT ARE THE UG’S NEEDS?
Black & Veatch
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Program Costs Issues
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Approximately $2M of stormwater operation and maintenance costs are recovered from the wastewater fee
Current Situation Solution Needed
Operation & Maintenance
The services provided by the stormwater program should be funded from the revenue generated by the stormwater fee
Costs in the wastewater budget need to be moved to the stormwater budget
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Due to inadequate funding of maintenance, routine maintenance of the system has been deferred
Current Situation Solution Needed
Deferred Maintenance
Increase funding for enhanced and consistent annual maintenance activities
Provide funding to catch up on deferred maintenance
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Black & Veatch9
Program Costs Issues
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Existing fee has only been able to fund 2 stormwater projects in the last 10 years for a total of $5M
Current Situation Solution Needed
Major Capital Expenditures
Significant investment necessary to address flooding and water quality issues
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The stormwater system has no emergency reserve set aside
Current Situation Solution Needed
Emergency Reserve
Industry best practice to maintain a operating reserve equal to 30‐90 days of operating expenses
A financial plan provides a reasonable forecast to design an evolving fee program10