Consideration and Adoption of Ordinance No.  2020-14:  An ordinance of the City Council of the City of Flagstaff amending the Flagstaff City Code, Title 7 Health and Sanitation, Section 7-04-001-0010 Fees, Subsection I, by restructuring the Environmental Management Fee; providing for penalties, repeal of conflicting ordinances, severability, and establishing an effective date

The Environmental Management Fee is intended to correlate the environmental and natural resource impact and programming necessary to mitigate these impacts. In many cases, the fee is not distributed equitably among service addresses.    The proposed restructuring will result in greater equity in terms of paying a fair share of the cost of environmental and natural resource management. 

Staff recommends restructuring the current $4.00 monthly fee per municipal services bill to a consumption-based model that assesses fee of $0.035 on services provided from water, sewer, stormwater, trash, and recycling services (“core services”).  The goal is to maintain the same level of annual Environmental Management revenues for Citywide environmental and natural resource management programming. 

1. Adhere to the Regional Plan (2013)
2. Advance the Climate Adaptation and Action Plan (2018)

Council Goals:
High Performing Governance
Safe & Healthy Community
Sustainable, Innovative Infrastructure
Livable Community
 
Regional Plan:

• Policy E&C.2.2. Promote investments that strengthen climate resiliency.
• Policy E&C.3.2. Review and revise existing regulations, standards, and plans (codes, ordinances, etc.) to reduce the community’s vulnerability to climate change impacts.
• Policy E&C.3.3. Invest in forest health and watershed protection measures.
• Policy E&C.3.4. Increase the region’s preparedness for extreme climate events
• Policy E&C.4.1. Assess vulnerabilities and risks of Flagstaff’s natural resources.
• Policy E&C.6.1. Encourage public awareness that the region’s ponderosa pine forest is a fire-dependent ecosystem and strive to restore more natural and sustainable forest composition, structure, and processes.
• Policy E&C.6.3. Promote protection, conservation, and ecological restoration of the region’s diverse ecosystem types and associated animals.
• Policy E&C.6.4. Support collaborative efforts to return local native vegetation, channel structure and, where possible and applicable, preservation and restoration of in-stream flows to the region’s riparian ecosystem.
• Policy E&C.6.5. Preserve Flagstaff’s wetland areas and discourage inappropriate development that may adversely affect them and the ecosystem services they provide.
• Policy E&C.10.2 – Protect, conserve, and when possible, enhance and restore wildlife habitat on public land.

Yes.  At the Fiscal Year 2020-21 Budget Retreat on February 4, 2020, Council directed staff to pursue the recommendations presented.   In addition, staff presented to City Council at the May 4, 2020 work session to review the proposed fee structure.

1. Approve the Environmental Management Fee restructure.
2. Approve the Environmental Management Fee restructure with an increased or decreased fee and provide staff direction.
3. Reject the Environmental Management Fee restructure.

City Staff has completed a financial analysis of the proposed fee restructure.  The report is attached to this staff summary.  Based on this financial analysis we are providing some high level customer impacts below. 

Residential Customers: Based on a $0.035 rate, residential customers that consume 3,500 gallons of water monthly should see in a lower assessment ($2.03 versus $4.00).  Residential customers that consume 10,000 gallons of water monthly will see a higher assessment ($4.77 versus $4.00).

Commercial Customers: Based on a $0.035 rate, commercial customers that consume 3,500 gallons of water monthly should see in a higher assessment ($10.30 versus $4.00).  Commercial customers that consume 10,000 gallons of water monthly will see a higher assessment ($12.39 versus $4.00).

The Environmental Management Fees collected are used for protecting and enhancing the City's core services (water, wastewater, reclaimed water, stormwater, trash and recycling services). Additionally, customers will have some ability to reduce their monthly fee, by consuming less.