09-17-2019 SWM Rate StructureOrdinance: Amending the rate structure for the Storm and Surface Water Utility
Public Works Department
(Surface Water Management Division)
Presented by
Theresa Thurlow
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Policy Question
Should City Council adopt the ordinance to amend the Storm and Surface Water Management Utility Rate Structure?
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SWM Utility
What is it and why is there a charge?
Storm and Surface Water (SWM) Utility authorized by Chapter 35.67 RCW
Established by City Federal Way Ordinance 90-32
Rate Structure
Set Charges for Utility Services
Protect life and property from storm, waste, flood, or surplus waters
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Similar to sewer service, water service, power service, SWM Utility is a service to the residents of Federal Way. When established in 1990 the Service was to remove rainfall runoff
and reduce/prevent flooding.
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NPDES Permit – Regulates Discharge to Waters of the US (WOTUS)
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Allows City of Federal Way to collect surface water runoff and discharge it to WOTUS
Rainfall is collected through the system
It picks up pollutants
NPDES Permit requires the City to take certain actions to help reduce those pollutant in the runoff
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SWM Dollars at Work
Just a few things we do
Approximately 23 square miles of land
5 miles of marine shoreline
6 major streams
6 significant wetlands
13 lakes the function as part of system
228 miles of pipe
12,536 catch basins
441 detention and water quality facilities
Dry ponds
Wet ponds
Bioswales
Underground vaults
Filtera units
Modular wetlands
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Need to update, water quality and pub ed and outreach are reversed.
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Revenue Requirement
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What are the Annual Revenue Needs?
Comp Plan/CIP Update and Rate Study
Consultant – Herrera in partnership with
FCS Group
Comp Plan update
CIP update
Program gap analysis for meeting new NPDES Permit
Rate, Rate Structure, and System Development Charge Analysis
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SWM Utility Rate Includes:
Operations and Maintenance
Capital Improvement Projects
Education and Outreach
Inspection Services
Development Services
Water Quality
Reduce/prevent flooding
Ensure Public Safety
Meet NPDES Permit Requirements
Meet NPDES Permit Requirement
Reduce/prevent flooding
Meet NPDES Permit Requirements
Meet NPDES Permit Requirement
Ensure Public Safety
Meet NPDES Permit Requirement
Ensure Public Safety
Meet State Water Quality Standards
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Current Financial Picture
2019 rate revenues + miscellaneous revenue: $4.4 million per year
2019 debt service (final payment): $0.1 million
2019 operating expenditures: $4.2 million per year
Available for capital: $0.1 million
Little to no on-going resources available for capital projects
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Revenue to Expenses Forecast
*FCS Financial Analysis for City of Federal Way
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Comparison of 2019 SWM Charges in the Region
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2021
Even after the 2021 rate increase we will be below most of the region’s SWM Charges
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Sample Annual Property Tax Bill
from King County Assessor
Annual SWM Charge
King County Billing Services
SWM Charge is assessed on all parcels (lots)
Most people aren’t aware of their SWM Charge. CFW utilizes King County billing system and the charge is added to the property bill for each parcel, then KC deposits the utility revenues
into SWM account
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Tonight’s Decision – Ordinance Amending SWM Rate Structure
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Draft Ordinance is available on the table near the entryway
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Example 2019 Annual SWM Charges
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Non Single Family Residential = $9,577
355,449 sf hard surface on 19 acres
Single Family Residential
Annual Charge = $105
3,200 sf hard surface on 0.5 acres
(Equates to $8.75/month)
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Example 2021 Annual SWM Charges
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Non Single Family Residential = $15,611
111 Units
Single Family Residential
Annual Charge = $141
1 Unit
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All Single Family Residential
1 Unit
1 Unit = Average amount of
square feet of hard surfaces for residential parcels within City (statistical calculation)
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How ESU works for Non single family residential 1 unit = 3200 sf
Equity Issue
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* Rate expressed in dollars per Equivalent Service Unit (ESU)
- Parcels with a primary single-family residential detached dwelling unit use = 1 ESU regardless of impervious area.
- All other parcels, i.e., parcels without a primary single-family residential detached dwelling unit use = 1 ESU per 3,200 impervious square feet.
** The rate shown does not include the City of Federal Way utility tax assessed on the total charge. The total Storm and Surface Water Utility charge assessed to each customer is calculated
as follows:
(Annual Rate x total ESU(s)) + City Utility Tax assessed on the total charge.
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SWM Charges 2021 - 2028
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2021 ~$3.25/month increase from 2019 rate
2028 ~$12.49/month increase from 2019 rate
$12/month in 2021
$21/month in 2028
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Rate Credits and Reductions
included in Ordinance
Public School District Curriculum credits
Maximum credit of up to 50%
Low-income, Senior Citizen exemption
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Options Considered
Approve the proposed ordinance.
Do not approve the proposed ordinance and provide direction to Staff.
Repercussions of Option 2
Will not be able to meet permit requirements
Opens City to legal action by Ecology and NGOs
No longer eligible for grant funding (could effect other City grant funding)
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Recommendations
The Mayor recommends Option 1
LUTC Unanimously voted to forward Ordinance to the September 17, 2017 City Council Meeting for First Reading.
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Background Information
Timeline:
1991
Reset Rate Structure to cover maintenance, operation, and capital expenditures
Rate Structure
Tiered system
Percent impervious surface per parcel
Impervious square feet per total acres = tier
1996
Include City Utility Tax to be assessed on utilities serving the City.
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Background Information
Timeline:
2002
Rate Structure Change to Meet Clean Water Act Requirements for application for a National Pollutant Discharge Elimination System (NPDES) Phase II Permit
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Timeline:
2014
Rate Structure Change with an annual increase adjustment based on a CPI.
CPI hasn’t kept pace
Revenue covering operating costs
$100,000 leftover for capital projects
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SWM Project: Comp Plan/CIP Update and
Rate Study
Background Information
Which brings us to the present.
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Herrera Inc.
partnered with
FCS Group
RATE STUDY
RESULTS
CONCLUSION
John Ghilarducci, Principle
Tage Aaker, Project Manager
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Now I’m going to turn it over to our Consultant, FCS Group with whom Herrera Inc, our Consultant partnered with for this project
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