No formal action will be taken at this work session. Staff is seeking Council direction on whether to proceed with the proposed stormwater system development fee. If Council supports moving forward, Staff will bring the necessary action to establish the stormwater SDF to the October 26, 2026 regular business meeting for Council consideration.

As a follow-up to previous Council direction, Staff has developed a proposed stormwater system development fee (SDF) to provide a funding source for growth-related stormwater infrastructure. The proposed one-time fee is $967 per equivalent residential unit (ERU) for residential development. Recognizing the additional onsite stormwater infrastructure required of commercial development, the proposal includes a 47% credit, resulting in a fee of $513 per ERU for commercial development connected to the City storm drain network and $329 per ERU for commercial development without a connection to the City storm drain network.

The SDF Advisory Committee and Council Budget and Finance Committee support the proposed stormwater SDF and recommended advancing it to the full Council for discussion. No formal action will be taken at this work session. Staff is seeking Council direction on whether to proceed with formal consideration of the stormwater SDF at the October 26, 2026 regular business meeting.

As a follow-up to previous Council direction, Staff has developed a proposed stormwater system development fee (SDF) to help fund new stormwater infrastructure needed to serve growth. The City currently assesses SDFs on new development for water and wastewater infrastructure but does not assess an SDF for the stormwater system.  An SDF is a one-time fee assessed on new development to recover an appropriate share of the capital costs associated with providing infrastructure capacity for growth. For the stormwater system, the proposed fee is calculated by dividing eligible growth-related system costs by available system capacity, expressed in equivalent residential units (ERUs). Based on this methodology, the calculated stormwater SDF is $967 per ERU. If adopted, a new single-family residential property would therefore pay a one-time stormwater SDF of $967.

Based on the previous stormwater rate study and Resolution 26-11347, one ERU represents 3,751.22 square feet of impervious area, which is the measured mean impervious area of a residential lot. Single-family residential properties are assigned one ERU, while commercial properties are assigned ERUs based on the measured impervious area of the development.

Commercial development, however, is subject to different stormwater management requirements than residential development under the City's Stormwater Management Manual. These requirements generally result in commercial developments providing greater onsite stormwater storage and constructing more onsite stormwater infrastructure than would be required if the same property were developed residentially. Because these onsite improvements reduce the development's impact on the City's stormwater system, the SDF Advisory Committee and the Council Budget and Finance Committee (BFC) recommend applying a credit to commercial development.  Staff evaluated recent commercial developments to quantify the appropriate credit. Based on that analysis, a 47% credit is supported for commercial development that connects to the City's storm drain network. Applying the credit results in a proposed SDF of $513 per ERU for commercial development connected to the City storm drain network.

The SDF Advisory Committee also asked Staff to evaluate the system impact of commercial development that does not connect to the City's storm drain network. Because these developments place less demand on City stormwater infrastructure, Staff separately evaluated the costs attributable to this type of development. Based on that analysis, the proposed SDF for commercial development without a connection to the City storm drain network is $329 per ERU.

Throughout development of the proposed SDF, Staff worked with the City's rate consultant and reviewed the methodology and proposed fee structure with the SDF Advisory Committee. Staff subsequently presented the proposal to the Budget and Finance Committee on September 16, 2026. Both the SDF Advisory Committee and BFC supported the stormwater SDF concept and recommended advancing the proposal to the full Council for discussion.

Staff is presenting the proposed stormwater SDF at this work session to receive Council direction before proceeding with implementation and any necessary formal Council action.

This item is being presented for Council discussion and direction only; therefore, there are no immediate fiscal effects associated with this work session.

If Council subsequently adopts the proposed stormwater SDF at a regular business meeting, the fee is estimated to generate approximately $800,000 annually, based on anticipated development activity. Revenue generated by the SDF would provide a dedicated funding source for eligible stormwater capital improvements needed to serve growth.

The Council may:

• Direct staff to present the stormwater SDF at a future regular business meeting for a Council vote and adoption of the SDF, or;
• Direct staff to stop work on development of a stormwater SDF.