Fort Walton Beach Council agenda — 12-08-2009 special — reading text

AGENDA CITY OF FORT WALTON BEACH SPECIAL MEETING December 8, 2009 5: 00pm CALL TO ORDER PLEDGE OF ALLEGIANCE 1. APPROVAL OF AGENDA 2. ACTION - DISCUSSION 2. 1 Presentation of stormwater utility issues. Synopsis: To inform Council of staff'sfindings related to the implementation ofthe City' s stormwater utility. ( City Engineer) ADJOURNMENT Any person who decides to appeal any decision made with respect to any matter at this meeting will need a record of the proceedings, and for such purpose may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. ( Chapter 286.0105 F.S.) The City of Fort Walton Beach adheres to the American with Disabilities Act and will make reasonable modifications for access to this meeting upon request. Please call City Clerk Helen Spencer at 850 -833- 9509 to make a request. For Hearing Impaired dial the City Hall TDD # 850- 833 -9925 or 1- 800 -955- 8771 ( TDD) or 1- 800 -955 -8770 ( Voice). Requests must be received at least 48 hours in advance of the meeting in order to allow the City time to provide requested service. City Council Special Meeting December 8, 2009  CITY OF FORT WALTON BEACH MEMORANDUM To: Robert T. Mearns, City Manager From: Michael D. Beedie, P. E., City Engineer Date: December 2, 2009 Subject: Stormwater Utility Equivalent Residential Unit (ERU) Calculation 1. BACKGROUND: 1. 1 Since 1937, the City has developed an extensive inventory of stormwater infrastructure, which includes: 46 miles of underground stormwater pipe, 61 outfalls to a receiving body of water, 11 stormwater retention ponds, 6. 50 miles of ditches and streams, and over 1, 768 curb and surface inlets. This infrastructure networks through 29 local drainage basins that cover more than 7. 5 square miles. The need for maintenance, rehabilitation, and new construction is a costly endeavor, especially for an aging stormwater system. 1. 2 Along with maintenance and infrastructure needs, regulations placed on water quality by State and Federal agencies have increased the need for funding. According to the National Pollutant Discharge Elimination System ( NPDES) that is enforced by the Florida Department of Environmental Protection ( FDEP), the City is mandated to implement a multitude of Best Management Practices ( BMPs) to improve water quality. 1. 3 In August 2008,City Council adopted Ordinance No. 1768 to establish a Stormwater Management Utility. Resolution 2008 -34 established the user fee of 3. 00 per Equivalent Residential Unit ( ERU). The Stormwater Management Utility began operating on October 1, 2008. 1. 3. 1 The Stormwater Management Utility was established as a City utility enterprise fund to allow for the " maintenance, planning, design, construction, regulation, surveying, and inspection related to stormwater management facilities of the City ". 1. 3. 2 The Stormwater Utility fee would be " charged to all developed property within the City that contributes stormwater runoff to the City' s stormwater management systems to accomplish the functions of such utility ". 1. 3. 3 The Equivalent Residential Unit (ERU) is used as the basis of calculating the user fee for each property in the City that has an active water meter account.  1. 3. 3. 1 The basis for calculating the ERU was determined by Tetra Tech, Inc., the City' s engineering consultant for completing the Stormwater Utility Study. 1. 3. 3. 2 Tetra Tech, Inc. performed an engineering analysis of a statistical sampling of the residential properties within the City in order to determine a gross area of effective impervious area to be used as the basis of the ERU. 1. 3. 3. 3 The original gross impervious area for one ( 1) ERU was set at 2, 700 square feet in Ordinance No. 1768. 1. 4 Based on the 2, 700 square foot per ERU, a user fee was established for both Single- family residential property" and " Other properties ". In Ordinance No. 1768, the user fees are as follows: 1. 4. 1 " Single- family residential property. Each single -family property, including those properties with up to four residential units, shall be considered one ERU for billing purposes. Monthly service charges for each single -family dwelling unit shall be identical ". 1. 4. 2 " Other properties. All other properties shall be charged a user fee equivalent to following formula: the Base ERU = Total impervious surface on property divided by the residential ERU of 2, 700 ". 1. 5 Using these user fee criteria, Tetra Tech estimated the FY 2008 -09 Stormwater Management Utility revenue as: 1. 5. 1 Estimated FY 2008 -09 Stormwater Management Utility Revenue - 594, 000 1. 5. 1. 1 Residential Property - $ 279, 180 1. 5. 1. 2 Commercial / Other Properties - $ 314, 820 1. 6 The actual Stormwater Management Utility fees collected in FY 2008 -09 were: 1. 6. 1 Actual FY 2008 -09 Stormwater Management Utility Revenue - 652, 663. 73 1. 6. 1. 1 Residential Property - $ 316, 675. 78 1. 6. 1. 2 Commercial / Other Properties - $ 335, 987. 95 1. 6. 2 The actual FY 2008 -09 Stormwater Management Utility Revenue exceeded the estimated revenue by $ 58, 663. 73, of which $ 37, 495. 78 was Residential and $ 21, 167. 95 was Commercial /Other Properties. 2-  1. 6. 3 Any overages charged to customers from October 1, 2008, through the adoption of a revised Stormwater Utility ordinance will be credited back to existing customers, and those properties who have discontinued service or changed account holders will be handled on a case -by -case basis. 2. DISCUSSION: 2. 1 During FY 2008 -09, the Engineering Services Department began developing a GIS database for the stormwater infrastructure in conjunction with the ongoing GIS Implementation Capital Improvement Program. 2. 1. 1 Included in the development of the GIS database was an internal quality assurance / quality control ( QA/QC) review of the original stormwater utility database received from Tetra Tech that was being used for billing purposes for the Stormwater Utility. 2. 1. 2 The QA/ QC was begun to verify the square footage of impervious surface for " Other properties" and to verify the basis of the ERU calculation, which was 2, 700 square feet. 2.2 During the QA/QC of the Tetra Tech database, it was determined that the properties used in the original engineering analysis for the ERU calculation was incorrect. Tetra Tech was contacted and verified that the ERU basis should have been 3, 200 square feet and not 2, 700 square feet, an increase of 18. 5 %. 2. 3 It was also determined that the square footage of impervious surfaces that were originally digitized by Tetra Tech using aerial photography were also incorrect. 3. FINANCIAL INFORMATION: 3. 1 The financial impact from the discovered errors in the original Stormwater Management Utility database is as follows: 3. 1. 1 ERU Calculation Based on Tetra Tech Digitization of Impervious Surfaces: 3. 1. 1. 1 Total Annual Revenue @ 2,700 S. F. per ERU = $ 55, 599 per month x 12 months = $ 6673,188 3. 1. 1. 2 Total Annual Revenue @ 3, 200 S. F. per ERU = $ 50, 552 per month x 12 months = $ 606, 624 3. 1. 1. 3 Annual Financial Impact = $ 60, 564 decrease ( 9. 1 % decrease) 3. 1. 2 Tetra Tech Digitization versus City Staff Digitization: 3. 1. 2. 1 Tetra Tech Digitization @ 3, 200 S. F. per ERU = $ 50,552 per month x 12 months = $ 6069624 3-  3. 1. 2. 2 City Staff Digitization @ 3, 200 S. F. per ERU = $ 50, 918 per month x 12 months= $ 611, 016 3. 1. 2. 3 Annual Financial Impact = $ 4, 392 increase ( 0. 72% increase) 3. 2 The net annual financial impact of the corrections required for the calculation of the Stormwater Utility ERU is a decrease of $56, 172 per year ( 8. 4% decrease). 3. 3 Please note that the actual revenue collected is based on the number of active water meters in the City' s billing system. 3. 4 The decrease in Stormwater Utility revenue resulting from the errors made by Tetra Tech have little to no effect on the operations of the Stormwater Division. 3. 4. 1 The projected revenue for FY 2008 -09 was $ 594, 000. 3. 4. 2 The projected revenue for FY 2009 -10 is $ 624, 000, an increase of 5. 05 %. 3. 4. 3 The projected revenue in FY 2009 -10 with all corrections made to the ERU calculation is $ 611, 016, leaving a possible shortfall of $12, 984. 3. 5 In FY 2009 -10, a total of $42,027 is being appropriated from Net Assets to allow Staff to begin a Stormwater Master Plan. Depending on the expenditures throughout FY 2009 -10, this amount may need to be increased. 4. RECOMMENDATION: 4. 1 There is no City Council action requested at this time. Staff will bring forth an amended ordinance for the Stormwater Management Utility in January 2010 to correct any issues discovered during the City' s internal QA/ QC review of the original billing database. 5. SIGNATURE BLOCK: 5. 1 Submitted By: Michael D. Bea ie, ., City Engineer 5. 2 Reviewed and Concur: John Ho d, Utility Services Director 5. 3 Reviewed and Concur: 2 3 y9 Brandy Wunker, Financial Services Director 5. 4 Reviewed for Agenda: / ? D bert T. Mearns ity Manager