Staff recommends that City Council conduct a public hearing and approve the proposed resolution setting storm sewer assessment rates for FY22.

Storm sewer assessments are set annually by resolution. Storm assessments are based on zoning and square footage to reflect the relative storm water runoff of various land uses.  The existing rates are not adequate to provide for the capital investment and operating costs necessary to continue providing service at the current level. The attached resolution specifies the proposed rates that will result in an estimated overall 3.9% increase for FY22. During the Public Works budget presentation to Council in May 2021, a 3.9% increase was proposed based on the elimination of storm assessments previously paid by the Airport and the April 2021 Construction Cost Index (CCI) of 3.1% which was the most recent CCI at the time. The CCI released in August 2021 was 9%. Thus, the revenues produced under the proposed rates will not generate enough revenue to keep up with inflationary levels if these high levels of inflation continue which will result in the need to cut or defer some planned construction projects utilizing storm funds that are in the approved FY22 - FY26 Capital Improvement Plan. 

Additionally, City Council adopted new zoning code on January 25, 2021, which overhauled the previous zoning code. Because the storm assessments are based on zoning, the assessment impacts to individual property owners are varied. Some property owners' assessments will increase more than 3.9% and some will increase less than 3.9%. However, the overall revenue increase for Public Works is calculated to be 3.9%.

The attached resolution specifies the proposed storm sewer assessment rates for FY22.

City Council must hold a public hearing and then may:

• Approve the recommended resolution
• Approve an amended resolution; or
• Not approve a resolution.  If Council does not approve a resolution, an amended resolution to establish storm sewer assessments will need to be considered at a future City Council meeting to establish rates for fiscal year 2022.

The proposed increase in the storm sewer assessment rates would increase an average 9,691 square foot residential lot that was previously zoned R-96 and is now zoned either N1, N2, or N3 by $6.39 from 46.81 per year to $53.20 per year and will generate approximately $183,000 for the storm sewer fund in FY22.