11/27/1990 - City Council SpecialSPECIAL CITY COUNCIL MEETING
TUESDAY
NOVEMBER 27, 1990
530 P.M.
I. ROLL CALL
II. JOINT APC MEETING
III. 1991 STORM WATER UTILITY BUDGET
IV. 1991-1995 C.I.PJCOMMUNITY INVESTMENT FUND
V. DISCUSSION RE: DRAM' 1991 GENERAL FUND BUDGET/
DECEMBER 4 PUBLIC HEARING
VI. OTHER BUSINESS
VIL ADJOURNMENT
MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: NOVEMBER 26, 1990
SUBJECT: SPECIAL CITY COUNCIL MEETING/NOVEMBER 27, 1990
A special City Council meeting scheduled for Tuesday, November 27 at 5:30 p.m. will be a
joint meeting with the Advisory Planning Commission until 7:00 p.m. Because of the
number of persons attending, it will be easier to cater pizza for the dinner.
There is no formal agenda for the joint APC meeting; however, the Director of Community
Development and City Administrator will provide some discussion topics for City
Council/APC consideration.
At 7:00 p.m. the Planning Commission will convene in the Council Chambers for their
regular APC meeting and the City Council will continue on with presentation of the 1991
Storm Water Utility Budget, copies enclosed on pages ,:2, through .2 for your review.
Also, the City Administrator will discuss the progress to date of the proposed 1991-1995
C.I.P., which includes some comments about the proposed Community Investment Fund.
Finally, there will be a discussion regarding the final draft 1991 General Fund Budget and,
more specifically, plans for the December 4 public hearing to discuss the proposed budget.
ISI Thomas L. Hedges
City Administrator
MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: OCTOBER 31, 1990
SUBJECT: 1991 BUDGET PROPOSAL FOR PUBLIC ENTERPRISE FUNDS/STORM
RATER DRAINAGE UTILITY
Attached is a copy of the storm water drainage utility portion of
the Public Enterprise budget for 1991.
Historically, the storm water drainage was a direct expense to the
street budget and indirect cost to the water and sewer utilities.
During 1990, a storm water utility rate was approved as an
additional public enterprise revenue source. Expenses relating to
storm water drainage are being consolidated into the storm water
drainage utility fund to manage an effective water quality program
for the community. It should be noted that there is a transfer of
$36,000 from the Storm Drainage Fund to the General Fund to cover
some of the maintenance personnel costs related to street sweeping.
Since this is the first year of operation and there are a number of
start-up costs related to the new storm drainage activity, funds
are not sufficient to provide a 100% transfer of personnel services
costs for all related maintenance activities. The General Fund
will continue to provide some cleaning and maintenance costs for
1991. There is also no payment being proposed to the Sanitary
Sewer Department even though certain personnel from there will be
performing maintenance activities on the storm drainage system.
The primary focus of the water quality management plan is to
require new developments to create adequate on-site water quality
treatment basins to minimize the impact of surface water runoff on
downstream water bodies. It was determined by the City Council
that education and community awareness of the water quality
management program is an important goal for 1991.
The 1991 budget includes a request for a half-time clerical
technician, Clerk III. This position would provide support
services relating to correspondence, filing, formal report
preparation, grant applications and other details for the Water
Resources Coordinator. An alternative to the hiring of a half-time
person is to evaluate existing clerical personnel and determine if
the aforementioned responsibilities could be delegated to another
position without any major reorganization. This alternative is
preferred; however, if there are no resources available, a half-
time position will be proposed. In any event, the position is
budgeted and can be reallocated during 1991.
There are public policy considerations for the storm water drainage
utility as presented. The first public policy is consideration of
activities to be funded which include operations, renewal and
replacement and capital improvements. Over a three (3) to five (5)
year time frame, we will be able to arrive at appropriate levels of
allocation to each of these activities. In the 1991 proposed
budget, the majority of revenues are allocated to operational
expenses. The operations portion of the 1991 budget includes
specific start-up costs of approximately $76,000, including capital
outlay ($39,350) and the Schwanz Lake Diagnostic/Feasibility Study
($37,000). Again, the completion of the CIP will provide
additional information regarding capital expenditures. That
portion of the budget that is attributable to renewal and
replacement is approximately $28,875. That portion of the budget
that could be attributed to capital improvements and refinements is
approximately $75,500. Not included in the detail of this budget
is the $110,000 improvement providing for the construction of Water
Quality Pond J-67 at the southwest corner of Duckwood and Denmark.
Funds for that construction are available from the dedicated
revenues. The emphasis in budget has been placed on education and
community awareness as opposed to construction.
The second public policy question relates to a request by the
public that the City respond to street clean-up of erosion and
sediment that occurs as a direct result of development and building
operations. Since it is often difficult, if even possible, to
recover costs of street clean-up from any identifiable responsible
party, it is suggested that a $25 surcharge be placed on every
building permit issued for new, remodeled or expanded building
permit issuance. Given the number of building permits, this should
generate approximately $15,000 which would be used to cover the
contractual services expenditure established for street clean-up
services.
Operating costs are generally consistent with funds budgeted for
then public services provided by the City. Several larger cost
tems include $11,000 for mobile equipment repair parts (i.e.
treet sweeper), $30,000 for chemicals for general lake and pond
reatment for water quality and $12,000 to provide utility system
arts and supplies.
specific part of the 1991 budget relates to professional services
nd includes the following:
First televising of storm sewer system
($48,000 if @ $0.21/lf)
Water quality education educational programming
Media presentation development
Schwanz Lake Clean Water Partnership Matching
Grant Diagnostic/Feasibility and Study Phase II
1so included is engineering charges:
Water quality short-term monitoring
-Sample analysis -6 events @ $1,000/ea
Data assessment/modeling
3
- $10,080
- $ 5,000
- $37,000
$ 6,000
$ 3,500
Water quality runoff sampling
•Water sample analysis -6 events @ $500/ea - $ 3,000
•Data assessment/modeling - $ 2,500
Storm water drainage system
•Review and analysis - $15,000
Also included is testing services for water sample analysis of
fourteen lakes, 12 events per year @ $50/ea and miscellaneous spots
specific analysis, 16 events per year @ $100/ea for a total of
$10,000.
Other expenditures include the general printing and binding for
educational materials, utility system repair and larger
expenditures, including $35,000 for electricity for storm water
lift stations and $16,000 as contractual clean-up of erosion and
sediment in subdivisions and on streets or street sweeping, a
specific public policy addressed earlier in the memo.
A final consideration for examining and compiling the first storm
water drainage utility budget is the need for the acquisition of
capital equipment. There are a number of capital items ranging
from certain types of meters, samplers, rain gauges and data
loggers to a boat/motor/trailer and utility truck to conduct the
necessary field analysis of some 370 wetlands. The largest capital
items would include the utility truck, boat/motor/trailer and
oxygen meter probe. The total capital for the proposed storm water
drainage utility is $39,350.
Summary
In summary, the storm water drainage (storm sewer and water
quality) expenditures total $379,220, a cost that is offset by the
amount collected in revenues. An article appeared in a recent
brochure prepared by S.E.H. entitled, "Utility provides creative
surface water financing", that explains the purpose of storm water
utility user fees and why these fees are necessary. Please see the
attachment. Unlike other budgets, the storm water drainage utility
is a new budget, resulting from a transfer of street department
expenditures and new programming as a result of the newly
implemented storm water utility user fee. There are no previous
years for comparison.
City Administrator
Attachments
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91NI20 CITY OF EAGAN
1991 BUDGET WORKSHEET
PUBLIC UTILITY FUND
NET INCOME
NON-OPERATING REVENUE
Investment Interest
1,100,000
300,000
STREET
STORM
FUND
WATER
SEWER
LIGHT
DRAINAGE
TOTAL
REVENUE
-------
-------
-------
---------
----------
OPERATING REVENUE
165,600
Water Qual Cash Ded.
93,000 93,000
Service Charges
2,395,000
2,870,000
112,000
440,000
5,817,000
Connection Permits
10,500
10,500
21,000
Penalties
26,000
26,000
Water Supply & Storage
52,000
Sale of Meters
129,000
Service Charges
45,000
129,000
Other
22,300
200
375,000
15,000
37,500
Total Oper. Rev.
---------
2,582,800
---------
2,906,700
-------
112,000
--------
455,000
---------
6,056,500
NON-OPERATING REVENUE
Investment Interest
1,100,000
300,000
1,400,000
Spec. Asmt. Interest
44,000
44,000
MWCC Interest
20,200
20,200
Conn Chg - Sup. & Stor.
375,000
375,000
Conn Chg - W.T.P.
165,600
165,600
Water Qual Cash Ded.
93,000 93,000
Total Non-Oper. Rev.
---------
1,684,600
--------- -------
320,200 0
-------- ---------
93,000 2,097,800
GRAND TOTAL REVENUE
4,267,400
3,226,900 112,000
548,000 8,154,300
DEDICATED REVEIN-CE - NOT
AVAILABLE FOR OPERATIONS
Water Supply & Storage
Service Charges
45,000
45,000
Connection Charges
375,000
375,000
Water Treatment Plant
Service Charges - DS
714,150
714,150
Connection Charges
165,600
165,600
Water System
Service Charges - R&R
162,000
162,000
Sewer System
Service Charges - R&R
100,240
100,240
Storm Drainage
Service Charges - R&R
110,000 110,000
Service Charges - E&M
69,000 69,000
Water Qual Cash Ded
93,000 93,000
Interest Earnings
W.T.P. - DS
320,000
320,000
W.T.P - Const
360,000
360,000
Water R&R
135,000
135,000
Sewer R&R
140,000
140,000
Water Supply & Stor.
125,000
125,000
Capital Outlay
Service Charges
90,000
101,760
191,760
Total Dedicated Rev.
----------
2,491,750
--------- -------
342,000 0
-------- --------
272,000 3,105,750
REVENUE AVAILABLE FOR
OPERATIONS
1,775,650
2,884,900 112,000
276,000 5,048,550
91NI20
EXPENSES
OPERATING EXPENSES
Personal Services
Parts & Supplies
Services & Other Chgs
MWCC Service Chgs
Purchase of Meters
Total Oper. Exp.
Depreciation Expense
Total Oper, Exp.
Incl. Deprec.
CITY OF EAGAN
1991 BUDGET WORKSHEET
PUBLIC UTILITY FUND
NET INCOME
STREET STORM FUND
WATER SEWER LIGHT DRAINAGE TOTAL
------- ------- ------- --------- ----------
332,160 285,910 61,070 679,140
218,110 26,525 74,720 319,355
812,265 214,640 96,600 168,080 1,291,585
2,135,000 2,135,000
112,200 112,200
--------- --------- ------ ------- ---------
1,474,735 2,662,075 96,600 303,870 4,537,280
740,000 460,000 1,200,000
--------- ---------- ------ ------- ---------
2,214,735 3,122,075 96,600 303,870 5,737,280
NON-OPERATING EXPENSES
Debt Service
Principal 250,000 250,000
Interest 1,130,120 1,130,120
Capital Outlay 172,450 184,345 39,350 396,145
Inter -Fund Transfer 39,700 39,700 15,400 36,000 130,800
Total Non-Oper. Exp. 1,592,270 224,045 15.,400 75,350 1,907,065
TOTAL EXPEN, EXCL. DEFREC. 3,067,005 2,886,120 112,000 379,220 6,444,345
TOTAL EXPEN. INCL. DEPREC. 3,807,005 3,346,120 112,000 379,220 7,644,345
[ : Expansion & Modification
Ls Capital Improvements & Refinements
The pie charts
demonstrate the
difference a utititu can
make in generating
rerenuc.
Utility provides creative surface water financing
Paying for storm water (drainage) projects
has become more complex with increasing
demands on city general funds and court
challenges to special assessments.
While traditional funding sources are
becoming less viable, the costs related to
water quality management and wetland
protection continue to rise. With increasing
frequency, municipalities are turning to a
utility or user charge to finance Hater
management projects. The utility approach
is gaining recognition as the most equitable
way to finance surface water projects.
What is a utility?
A utility is a service charge based on a
property's contribution of grater to the
drainage system. A surface water
management utility is a method of financing
water quantity and quality projects. The
utility is based on the premise "users pay."
A quarterly fee is typically charged
against all developed parcels within a city.
The fee is based on hoxv much rain runs off
into streets, ditches, ponds and lakes rather
than soaking into the ground.
This consistent and dependable revenue
source provides the means to manage
surface water drainage and crater quality
without increasing property taxes or using
controversial assessments. The utility charge
is not associated with property value or
property taxes. All properties can be subject
to the utility charge, including tax-exempt
parcels and "city -owned" lands.
What are the benefits?
The utility benefits the community by
providing a dedicated fund for surface water
management activities, including planning
and inventories, capital expenditures,
personnel and equipment, and
administration of the utility. The utilitil
provides a continuous source of revenue for
surface water management without
competing with the general fund.
The benefits associated with surface water
management include the following:
• Flood control
• Improved lake water quality
• Wetland protection
• Erosion and sediment control
• Enhanced recreational opportunities
• Drainage system maintenance
• Community education
Administration of the utility involves
developing quarterly rates based on funding
needs; determining the means of billing and
collections. including software and
Churches.
Schools &
Gov. Biogs
Residential
Industrial
Ag
Comm.
General Taxes
Parks. Cemeteries
and GoffCourses
Utility Funding
equipment needs; determining responsible
parties to monitor program implementatioi
and soliciting comments from legal and
financial advisers.
How is a utility established?
The legal basis for the utility should be an
ordinance. The ordinance establishes the
utility and outlines calculation of storm
drainage fees; credit system and appeals;
exemptions; fee payment; city policy; and
supporting computations.
The utility concept will succeed if it has
public understanding and support. It is
important to recognize that development
adds to existing drainage problems. The
property owner on a hill has, by converting
natural ground cover into streets, concrete
and rooftops, increased storm eater runoff.
This increase contributes to the drainage
problem of neighbors in lo -vv -lying areas.
Because the property owner on the hill has
contributed to the drainage problem, he or
she should also contribute to the cost of
correcting the problem, A