12-10-2001 Council Packet - Laserfiche WebLink

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jiT REQUEST FOR COUNCIL ACTION DATE: November 13, 2001 ITEM NO.: 2. Department Approval: Name Gregory A. Gapp^ Title Director of Public Services Administrator Reviewed: Item Description: Public Hearing on EstabiiShmem of a Storm Water Utility Agenda Section: Public Scrvtccs's Directors Report Introduction Municipalities create sterm water utilities so that dedicated funds are available to operate, maintain, manage, construct or reconstruct their municipal storm water drainage systems. In the past, special assessments against benefitting properties, or general tax revenue financed most storm water improvements. These financing methods have not been uniformly successful in providing sufficient revenue. Applying assessments requires proof of benefit and it is difficult to prove a benefit to upstream properties in tlie drainage area. Recently, assessments have been successfully challenged in the courts, since tlien it has become increasingly difficult to prove benefit against assessed properties. Most commonly. Cities draw from the general fund to finance municipal improvement projects. With its levy limits for municipalities, the State Legislature has limited the ability to hind projects in this manner. For the past several years, the City of Orono has included a $45,000 tax levy for the storm water improvements in the PIR Fund. As a result of the tax levy limits, the City's ability- to adequately fund the year 2002 budget was limited. At the budget work session the Council directed staff to remove the $45,000 PIR budget item from the tax levy and to begin the process for the implementation of Storm Water Utility. A storm water utility is a dedicated revenue source intended to alle.iatc the burden on general funds and avoid the time and expense of assessment proceedings. All Minnesota cities, under MSS 444.075, can establish a storm water utility. Essentially, the storm water utility is identical to a water or sanitary sewer utilih. in which the utility's users finance the utility's infrastructure costs. A "user" is normally defined as any developed property that contributes storm water runoff to the storm drainage system. City owned property, park properties owned by oilier governmental units, and undeveloped privately owned larids do not fund utility. Typically, the City charges the storm water utility* fee to all use;s’ wiih die fee based on the amount of runoff that each property generates. The runoff geneiated relates directly to the amount of impervious area found on llie property. Consequently, a property with more impervious area uses »he sy stem to a greater extent than a property with less hard surface Page 1