HomeMy WebLinkAboutItem 07 DPW WW & SW User Fee Adoption FY 21-22AGENDA ITEM SUMMARY Meeting Date: 5/3/2021
Meeting Type: Regular Meeting
Staff Contact/Dept.: Matt Stouder/DPW
Staff Phone No: 541-736-1006
Estimated Time: 10 Minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Provide Financially
Responsible and
Innovative Government
Services
ITEM TITLE: SETTING LOCAL AND REGIONAL WASTEWATER AND STORMWATER
USER FEES EFFECTIVE JULY 1, 2021
ACTION
REQUESTED:
1) Conduct a public hearing on local and regional wastewater and local stormwater
user fees.
2) Adopt A RESOLUTION OF THE CITY OF SPRINGFIELD SETTING LOCAL
AND REGIONAL WASTEWATER (SEWER) USER FEES AND LOCAL
STORMWATER (DRAINAGE) USER FEES AS SET FORTH IN THE
SPRINGFIELD MUNICIPAL CODE.
ISSUE
STATEMENT:
Each year, the City Council reviews and establishes the rates for local wastewater and
stormwater user fees and adopts regional wastewater user fees set by the Metropolitan
Wastewater Management Commission. Council action is needed to establish user fees
for FY 2021-22 (FY 21-22).
ATTACHMENTS: 1. Resolution
DISCUSSION/
FINANCIAL
IMPACT:
Each year, the City Council reviews and establishes the rates for local wastewater and
stormwater user fees. Rates are established to provide adequate revenue to fund
operation and maintenance (O&M) of Springfield’s wastewater (sanitary sewer) and
stormwater systems, a portion of the Capital Improvement Program (CIP) for each
program, and various other program related activities. The Council also adopts the
user fees set by the Metropolitan Wastewater Management Commission (MWMC)
for the Regional Wastewater Program.
Guidance was provided to staff to prepare a resolution based on both wastewater and
stormwater services. Staff has provided a schedule of user charges for a public
hearing based on a 3.0% adjustment in the rates for local wastewater and a 2.5%
adjustment in stormwater user fees. In addition, the Council was informed that the
MWMC adopted a 3.5% adjustment in the regional wastewater user fees that also
needs to be incorporated into the schedule of user charges for FY 21-22.
Attachment 1, a resolution establishing the local and regional wastewater and local
stormwater user fees for FY 21-22, is provided for Council consideration. Staff
requests that the Council act on the resolution following the public hearing.
ATTACHMENT 1
Page 1 of 2
CITY OF SPRINGFIELD, OREGON
RESOLUTION NO. ___________
A RESOLUTION OF THE CITY OF SPRINGFIELD SETTING LOCAL AND REGIONAL
WASTEWATER (SEWER) USER FEES AND LOCAL STORMWATER (DRAINAGE) USER FEES AS
SET FORTH IN THE SPRINGFIELD MUNICIPAL CODE.
WHEREAS, the City of Springfield has established a system of wastewater and stormwater drainage
sewer systems; and
WHEREAS, under the Intergovernmental Agreement (IGA) entered into by the City of Springfield, the
City of Eugene and Lane County in February, 1977, and as subsequently amended, the Metropolitan
Wastewater Management Commission (MWMC) constructs, operates, and maintains the regional
sewerage facilities, as described in the IGA; and
WHEREAS, the costs related to operation, maintenance and certain capital improvements of the local
and regional wastewater sewer systems, and the local stormwater drainage systems are funded
through user fees; and
WHEREAS, Sections 4.206(3) and 4.208(2)(a)(i) and (ii) of the Springfield Municipal Code authorize
the setting of wastewater and stormwater charges by resolution of the Council; and
WHEREAS, the MWMC approved Resolution 21-03, adopting the Regional Wastewater Program
Budget and Capital Improvements Program for fiscal year (FY) 2021-2022, and Resolution 21-02,
adopting a schedule of user fees for FY 21-22 operations and capital programs, on April 9, 2021, after
reviewing the proposed Resolutions in a series of public meetings and/or public hearings; and
WHEREAS, Section 8(c) of the MWMC IGA obligates the City to “adopt user charges required by 40
CFR 35.929 in an amount not less than adopted by the Commission”; and
WHEREAS, the schedule of sewer user fees, attached as Exhibit “A,” and incorporated herein, is
needed to collect revenues necessary to fund the operations, maintenance and certain capital
improvements of the local and regional wastewater (sewer) system and the local stormwater drainage
system in FY 21-22.
NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD:
Section 1: The City of Springfield Schedule of Local and Regional Wastewater (Sanitary
Sewer) User and Local Stormwater (Drainage) Fees, which is attached as Exhibit “A,” is hereby adopted
and shall take effect with bills rendered on or after July 1, 2021.
Section 2: This Resolution shall take effect upon its adoption by the Council.
ADOPTED by the Common Council of the City of Springfield this _____ day of May, 2021, by a
vote of _____ for and _____ against.
ATTEST:
______________________________
City Recorder
M E M O R A N D U M City of Springfield
Date: 4/26/2021
To: Nancy Newton, City Manager COUNCIL
From: Matt Stouder, Environmental Services Division Director
Katherine Bishop, ESD Program Manager
BRIEFING
MEMORANDUM
Subject: Wastewater and Stormwater User Fees FY 2021-22
ISSUE:
User fees for local wastewater and stormwater services are reviewed annually by the Council as part of
the City’s budget development process. Staff is in the process of updating user fees for Council
consideration and adoption. A public hearing is scheduled for May 3, 2021. Additionally, the
Metropolitan Wastewater Management Commission (MWMC) approved a schedule of Fiscal Year
2021-22 (FY 21-21) regional wastewater user fees on April 9, 2021 and will forward them to the Cities
of Springfield and Eugene for implementation.
COUNCIL GOALS/
MANDATE:
Provide Financially Responsible and Innovative Government Services
To fund services associated with the City’s wastewater and stormwater programs and adopted Capital
Improvement Program (CIP), a revenue plan that includes an adjustment in user fees for FY 21-22 has
been prepared for Council consideration. Revenues generated from user fees fund ongoing system
maintenance, investments in capital improvements to replace existing infrastructure and accommodate
new development, meet revenue bond covenants, ensure environmental and regulatory permit
requirements are met, and maintain operating and capital reserves.
BACKGROUND:
As part of the budget development process, the City develops an annual CIP and operating budget for the
local wastewater and stormwater programs. These programs face many challenges, including fixed
operating and maintenance costs, capital project costs that often inflate at rates higher than the Consumer
Price Index, and costs to comply with Federal and State environmental mandates.
To meet these challenges, the City develops the CIP and operating budget, makes debt service payments
and sets reserve levels as established by the Council. This information is then used to determine annual
funding requirements. Primary funding sources include wastewater and stormwater user fees (for
operating and capital expenses), and system development charges (SDCs) for capital only expenses. In
addition to local fees, the MWMC establishes regional wastewater charges to fund the Regional
Wastewater Program.
The services the City provides are vital to economic development activity and the health and safety of the
City’s local waterways, and rank highly among Springfield residents. Survey results indicate that
promoting economic development and maintaining a healthy environment and overall water quality are a
very high priority. A brief description of the City’s local wastewater and stormwater programs is
discussed below:
Attachment 2, Page 1 of 5
Local Wastewater Program
The wastewater system serving the City of Springfield has two components: (1) a local wastewater
collection system owned and operated by the City, and; (2) a regional conveyance, treatment and disposal
system owned and operated by the MWMC. The local system is comprised of about 240 miles of
collection pipelines and 17 pump stations. Operations and maintenance of the local collection system is
funded entirely by revenue from local wastewater user fees. In addition, user fees are the primary source
of funding for the City’s CIP, which provides for system preservation, major rehabilitation, and expansion
to support growth and development. Through previous rate actions, revenues for this program are stable,
and current and projected CIP priorities have been programmed based upon moderate and incremental rate
adjustments.
Local Stormwater Program
Stormwater management services are an important part of the City’s effort to improve water quality,
protect aquatic habitat and recreational opportunities, and protect properties and infrastructure from
flooding. The City’s National Pollutant Discharge Elimination System (NPDES) Stormwater Permit and
Council adopted Stormwater Management Plan implement Federal and State water quality standards and
guide the delivery of stormwater services for the community. The City’s storm drainage system includes
about 190 miles of stormwater pipe, 6,520 catch basins, and over 30 public water quality facilities
(including the Mill Race Stormwater Facility), which require ongoing inspection, maintenance, and
vegetation control. In addition, street sweeping and leaf cleanup support surface stormwater quality
activities that address permit compliance. Stormwater operations and maintenance services are funded
entirely by revenue from the stormwater user fees. User fees are a primary source of funding for the
maintenance, rehabilitation and preservation of the City’s stormwater capital infrastructure assets. The
current and projected stormwater CIP program is based upon moderate and incremental rate adjustments.
CURRENTLY ADOPTED RATES
The table below provides a review of the FY 19-20 thru FY 20-21 rates adopted by Council.
PROPOSED LOCAL WASTEWATER AND STORMWATER USER FEE OPTIONS
Proposed FY 21-22 user fee options are discussed below for a residential monthly bill (assuming 6.684
units or 5,000 gallons of wastewater generated per month for comparison purposes). Note the average
Springfield residential customer uses approximately 4,300 gallons per month, however 5,000 gallons is
Ad opted Local Wastewater and Stormwater Rates
19-20 20-21
Adopted Adopted
Local Wastewater Services
Monthly Residential Bill 23.91$ 23.91$
Local Rate Adjustment 2.0% 0.0%
Monthly Residential Increase 0.47$ 0.00$
Stormwater Services
Monthly Residential Bill 15.24$ 15.24$
Local Rate Adjustment 2.0% 0.0%
Monthly Residential Increase 0.30$ 0.00$
Local Wastewater & Stormwater Combined
Monthly Residential Bill 39.15$ 39.15$
Local Rate Adjustment Combined 2.0% 0.0%
Local Monthly Increases 0.77$ 0.00$
Fiscal Year
Attachment 2, Page 2 of 5
used to normalize and compare with other communities. The following options are presented for
discussion and Council consideration.
Option 1: Combined Local Wastewater and Stormwater User Fee – 3.0% adjustment
The table below displays the proposed combined rate adjustment as a percentage (3.0%) and dollar
amount ($1.18) for a residential monthly bill. The level of projected rate change for future years is also
displayed.
Option 1 fully funds existing system operations, maintenance and regulatory obligations, as well as the
Council approved CIP. This option also provides a more responsive forecast to the continued and
projected decrease in wastewater volumes by users and positions the City to better mitigate revenue losses
when significant system users make major modifications to their business practices. Option 1 considers
the Engineering News-Record (ENR) Construction Cost Index (CCI) relative to inflation on construction
materials and labor cost increases, which increased by 3.6% over 2019 thru 2020. The ENR CCI rate of
inflation is generally higher than the CPI inflation index, most closely aligning with the City’s capital
construction project costs.
Lastly, this option positions the City to better meet new requirements related to environmental permitting,
including the new Phase II General Stormwater permit. It also allows for a greater transfer to capital
reserves over the 5-year period coinciding with the City’s 5-year CIP, which may allow for deferral of
future revenue bond issuance or loans that include financing interest expenses and additional cash reserve
requirements over a 20-year term.
Option 2 (Recommended): Combined Local Wastewater and Stormwater User Fee – 2.8% adjustment
The table below displays the recommended combined rate adjustment as a percentage (2.8%) and dollar
amount ($1.10) for a residential monthly bill. The recommended rate changes represent the lowest
responsible rate change, given the stormwater and wastewater permit renewals and regulatory
requirements, in addition to the ongoing operations and maintenance of the systems, and capital projects.
Combined Local Wastewater and Stormwater FY 21-22 Rates and Forecast - Option 1
Fis cal Year 21-22 22-23 23-24 24-25 25-26
Proposed Projection Projection Projection Projection
Local Wastewater Services
Monthly Residential Bill 24.63$ 25.49$ 26.51$ 27.57$ 28.81$
Local Rate Adjustment 3.0%3.5% 4.0% 4.0% 4.5%
Residential Increase 0.72$ 0.86$ 1.02$ 1.06$ 1.24$
Stormwater Services
Monthly Residential Bill 15.70$ 16.25$ 16.90$ 17.58$ 18.28$
Local Rate Adjustment 3.0%3.5% 4.0% 4.0% 4.0%
Residential Increase 0.46$ 0.55$ 0.65$ 0.68$ 0.70$
Local Wastewater & Stormwater Combined
Monthly Residential Bill 40.33$ 41.74$ 43.41$ 45.15$ 47.09$
Rate Adjustments Combined 3.0% 3.5% 4.0% 4.0% 4.3%
Residential Increases Combined 1.18$ 1.41$ 1.67$ 1.74$ 1.94$
Attachment 2, Page 3 of 5
REGIONAL WASTEWATER USER FEES:
At the March 12, 2021 MWMC meeting, staff presented the Preliminary FY 21-22 Regional Wastewater
Program Budget and Capital Improvement Program, and the proposed regional wastewater user fee rates.
Based on discussions and input provided by the Commission, staff returned to the Commission on April 9,
2021 for a public hearing where the Commission adopted resolutions recommending a 3.5% user fee
adjustment in FY 21-22, and the Regional FY 21-22 Budget for implementation by the cities of Eugene
and Springfield. The table below shows the adopted FY 21-22 regional wastewater user fees.
MWMC Regional Wastewater FY 21-22 Adopted Rates and Forecast
Fiscal Year 21-22 22-23 23-24 24-25 25-26
Adopted Projection Projection Projection Projection
Monthly Residential Bill (1) $ 27.97 $ 28.95 $ 29.96 $ 31.16 $ 32.56
Regional Rate Adjustment 3.5% 3.5% 3.5% 4.0% 4.5%
Residential Adjustment $ 0.95 $ 0.98 $ 1.01 $ 1.20 $ 1.40
(1) When applied to 6.684 billing units or 5,000 gallons
With the recommended Option 2 including a local wastewater rate adjustment of 3.0% ($0.72/month), a
proposed stormwater rate adjustment of 2.5% ($0.38/month), and the MWMC adopted regional
wastewater rate adjustment of 3.5% ($0.95/month), the residential bill (assuming 6.684 units or 5,000
gallons of wastewater generated) would increase by $2.05 monthly resulting in a combined overall
adjustment of 3.1%.
RECOMMENDED ACTION:
Staff has carefully considered the funding requirements associated with the proposed FY 21-22 budget
and recommends Council consider a local wastewater rate adjustment of 3.0% and a stormwater rate
adjustment of 2.5% (Option 2). If adopted, the proposed adjustments will provide sufficient revenues in
FY 21-22 to continue to defer the need for future financing, maintain adequate debt service coverage,
meet environmental regulations and permitting requirements, fund necessary capital improvements and
system maintenance obligations, and provide quality services to existing customers and new development.
Combined Local Wastewater and Stormwater FY 21-22 Rates and Forecast - Option 2
Fis cal Year 21-22 22-23 23-24 24-25 26-27
Proposed Projection Projection Projection Projection
Local Wastewater Services
Monthly Residential Bill 24.63$ 25.49$ 26.38$ 27.44$ 28.54$
Local Rate Adjustment 3.0%3.5% 3.5% 4.0% 4.0%
Residential Increase 0.72$ 0.86$ 0.89$ 1.06$ 1.10$
Stormwater Services
Monthly Residential Bill 15.62$ 16.17$ 16.74$ 17.41$ 18.11$
Local Rate Adjustment 2.5%3.5% 3.5% 4.0% 4.0%
Residential Increase 0.38$ 0.55$ 0.57$ 0.67$ 0.70$
Local Wastewater & Stormwater Combined
Monthly Residential Bill 40.25$ 41.66$ 43.12$ 44.85$ 46.65$
Rate Adjustments Combined 2.8% 3.5% 3.5% 4.0% 4.0%
Residential Increases Combined 1.10$ 1.41$ 1.46$ 1.73$ 1.80$
Attachment 2, Page 4 of 5
Staff requests Council’s consideration, comments and direction on the proposed rate changes. The
schedule of wastewater and stormwater fees, including the regional MWMC adopted rates for FY 21-22,
will be reviewed and considered at the public hearing currently scheduled for May 3, 2021.
Attachment 2, Page 5 of 5