Town of Little Elm, Texas

Transcription

1 , Texas Storm Water Program Evaluation and Funding Report December 7, N. Market St. #500 Dallas, Texas LTE10296

2 TABLE OF CONTENTS 1. INTRODUCTION DESCRIPTION OF THE TOWN OF LITTLE ELM INFRASTRUCTURE INVENTORY AND OPERATIONAL AND MAINTENANCE ISSUES REVIEW OF TOWN S STORM WATER ORDINANCES AND REGULATORY COMPLIANCE OVERVIEW OF CAPITAL IMPROVEMENT PROJECTS FUNDING OPTIONS FOR STORM WATER PROGRAMS RECOMMENDATIONS COMPARISON OF NEIGHBORHOOD STORM WATER PROGRAMS STAFF EQUIPMENT STORM SYSTEM MAINTENANCE PROGRAM STORM WATER FUNDING STORM WATER PROGRAM POLICIES AND STANDARDS ELECTRONIC DATA CONCLUSIONS STORM WATER UTILITY LEGAL BASIS AND LIMITATIONS OF A STORM WATER UTILITY COST OF STORM WATER SERVICES REVENUE ASSESSMENT FEE OPTION UTILITY IMPLEMENTATION PUBLIC OUTREACH REFERENCES LIST OF TABLES Table 1.1 Summary of Project Area Rankings Table 1.2 TDEM Grants for Storm Water Projects Table 1.3 TWDB Grants for Storm Water Projects Table 2.1 Makeup of Storm Water Crews Table 2.2 Count of Equipment Used for Storm System Program Table 2.3 Percent of Equipment Cost Attributed to Storm Water Program Table 2.4 Items/Activities Paid with Revenue from the Storm Water Utility Table 2.5 Percent of Staff Positions Paid by Storm Water Utility Table 2.6 Storm Water Priorities ii

3 Table 2.7 Storm Water Priorities Table 3.1 Annual Cost Factors Table 3.2 Potential New Staff Table 3.3 Cost to Purchase Equipment Table 3.4 Monthly Rental Rates for Equipment Table 3.5 Operating Reserve per $10,000 of Operating Expenditures Table 3.6 Projected Annual Revenue (per $1.00 / month / ERU) by Exempt Eligible Property Type 3-12 Table 3.7 Rate Effect of Exemptions on Revenue-Neutral Storm Water Utility Table 3.8 Projected Annual Revenue per $1.00 per ERU per Month Table 3.9 Proposed Storm Water Utility Fee Rates per ERU Table 3.10 Storm Water Management Program Expenses Service Level Table 3.11 Storm Water Management Program Expenses in Monthly Rate per ERU Service Level Table 3.12 Storm Water Management Program Expenses Service Level Table 3.13 Storm Water Management Program Expenses in Monthly Rate per ERU Service Level Table 3.14 Storm Water Management Program Expenses Service Level Table 3.15 Storm Water Management Program Expenses in Monthly Rate per ERU Service Level LIST OF FIGURES Figure 1.1 Impervious Area by Property Type Figure 1.2 Storm Water Utility Fee Study Area Figure 1.3 Local Municipalities with Storm Water Utility Fees as of November Figure 3.1 Example of Impervious Area for Single-Family Residential Property Figure 3.2 Impervious Area Samples for Single-Family Residential Property Figure 3.3 Example of Impervious Area for Non-Single Family Residential Property Figure 3.4 Representative Residences for Equivalent Residential Unit (ERU) Impervious Area Determination Figure 3.5 Non-Single Family Residential Property Impervious Area iii

4 APPENDICES Appendix A Storm Water Utility: Project Screening (Drive-Around CIP) Appendix B Memorandum: Assessment of Storm Water Related Ordinances for the Town of Little Elm Appendix C Survey Responses Appendix D Texas Municipal Drainage Utility Systems Act (Local Government Code Section 552, LGC ) Appendix E Adopted Storm Water Utility and Fee Schedule Ordinance Appendix F Matched Non-Residential Parcels as of March 2011 Appendix G Public Outreach iv

5 1. INTRODUCTION The hired Freese and Nichols, Inc. (FNI) in June 2010 to evaluate the Town s storm water program and to identify the feasibility of a storm water utility as a funding option. FNI assessed the Town s storm water program, collected information regarding storm water programs of neighboring communities, and prepared information for a storm water utility. This report summarizes our findings Description of the Little Elm is located in Denton County, Texas on the northeast side of Lake Lewisville. FM 720 (Eldorado Parkway) runs essentially east-west across town. Little Elm encompasses approximately 18 square miles. Figure 1.2 shows the town limits for the. The 2009 U.S. Census population estimate for the Town is 25, The projected growth used in this report is based on the information provided in the Town s water and wastewater rate study 2. The Town is expected to grow at an average annual rate of 3.3 percent through Approximately 8,540 houses are located within the town limits. Little Elm has approximately 200 non-residential utility accounts according to the Town s utility billing records. The nonresidential accounts encompass about 1/3 of the impervious area (excluding roads) within the Town. Figure 1.1 shows the breakdown of impervious area by category, including the required and eligible exemptions. Figure 1.1 Impervious Area by Property Type Residential Commercial School District Town Tax Exempt Religious Institution Federal State (< 1%) County (<1%) 1-1

6 Town Limits 0 2,250 4,500 Feet 4055 International Plaza, Suite 200 Fort Worth, TX P: F: Storm Water Utility Fee!I Study Area, Texas FN JOB NO LTE10296 FILE SWUF_StudyArea.mxd DATE February, 2011 SCALE 1: DRAFTED RCT FIGURE 1.2

7 1.2. Infrastructure Inventory and Operational and Maintenance Issues FNI spoke with Town staff to obtain information on the elements of the storm water system and its maintenance. The Town has a Geographical Information System specialist on staff that maintains and improves the electronic information related to the storm water system. The Streets Department currently handles the operation and maintenance associated with the storm water system. Existing Data The has an extensive array of Geographical Information System data. The Town has two-foot topography, as well as the Federal Emergency Management Agency (FEMA) floodplain information indicating the floodway, 100-year floodplain, and 500-year floodplain. Town staff has indicated that they disagree with some of the FEMA designations. FNI recommends that the Town submit Letters of Map Revisions to FEMA to correct the FEMA maps. The Town s existing storm water infrastructure is mapped using a combination of as built drawings and Geographical Information System. The Town has a procedure in place to incorporate the drainage system improvements into Geographical Information System moving forward. FNI recommends that the Town incorporate the existing as built drawings into Geographical Information System in order to have all of the drainage system available electronically. The Town has 2009 aerial photography and 2010 Denton County Appraisal District parcel data. This data is useful in determining impervious area, which is the basis that FNI recommends in establishing the proposed storm water utility fee. No stream studies or storm water master plans have been prepared for Little Elm. FNI performed a cursory review of the Town s known flooding and drainage problems. The summary of this drive-around capital improvements projects evaluation is described in more detail in Section 1.4 and is included in Appendix A of this report. FNI recommends that the Town prepare a detailed storm water master plan, including modeling the streams within its jurisdiction. 1-3

8 Maintenance of Storm Water System The Town utilizes an online work order management system. Citizens can submit storm water complaints directly into the database via the Town s web site. The Streets Department addresses the complaints submitted through this system. In addition, the Streets Department submits maintenance and repairs to the storm water system to this same database. Little Elm does not have a formal storm water maintenance program. Town staff describes the current maintenance program as reactive. The Streets Department maintenance crew responds to drainage issues that are submitted through the database as quickly as they can. Town staff would like to have a proactive storm water maintenance program. Right now, the storm water system maintenance handled by the Streets Department includes street sweeping, culvert cleanouts, channel grading, and other storm water repairs. Most of the maintenance activities are reactionary based on complaints. Town staff works to maintain these facilities with the existing resources, but they would like to be more proactive in storm water management. Town staff would like to add a dedicated storm water team to maintain the existing system, perform small capital improvements projects, and oversee large projects. The storm water maintenance crew would be overseen by the Street Supervisor and would include one crew leader, one light equipment operator, and two maintenance workers. The storm water specialist would be hired after the implementation of the Phase II Municipal Separate Storm Sewer System permitting activities. The storm water specialist would likely be added two or three years after the Town becomes subject to Phase II Municipal Separate Storm Sewer System permit requirements. In addition to the known maintenance needs, the Town must add storm water debris separators to every subdivision within its jurisdiction. These separators are required by the U.S. Army Corps of Engineers as a measure to prevent debris from draining into Lake Lewisville. The separators, both existing and new, must be cleaned regularly. The storm water crew would be responsible for overseeing the installation of the new separators and cleaning these structures. FNI recommends that the Town establish a formal maintenance program for the storm water system. Additionally, FNI recommends that the Town dedicate staff to address the storm water system needs. Information on elements to include in such a program is provided in Appendix B. 1-4

9 Detention Ponds A number of detention ponds are located within Little Elm. These ponds are owned by homeowners associations or private property owners, who are responsible for the maintenance of these structures. Town staff indicated that these ponds are maintained but not to staff s level of satisfaction. FNI recommends that the Town educate homeowners associations owning such ponds about the homeowner associations responsibilities and the necessary financial commitments to maintain the ponds long-term. The Town might also consider establishing a matching grant program such that the homeowners associations and the Town each provide a percentage of the funding to accomplish pond maintenance activities to a preferred level of satisfaction. Comprehensive Storm Water Master Plan A comprehensive storm water master plan is recommended to identify and develop a plan to address existing and future expected drainage issues. The storm water master plan can be a powerful tool that helps define the direction of future development, the protection of natural resources, and the integration of public spaces such as parks in the Town Review of Town s Storm Water Ordinances and Regulatory Compliance FNI reviewed Little Elm s existing storm water ordinances: Part II Code of Ordinances Chapter 54 and Part II Code of Ordinances Appendix A. The memo detailing our findings is included in Appendix B of this report. FNI found that Part II Chapter 54 Article V was essentially duplicating Part II Appendix A. The existing storm water ordinances touch on the necessary elements for a good storm water program. FNI provided recommendations to add clarity to the ordinances. In the same memo, FNI compared the existing ordinances to regulatory policies, including Phase II Municipal Separate Storm Sewer System (MS4) Storm Water Quality Permitting, Hazard Mitigation Action Plan, National Pollutant Discharge Elimination System, and the National Floodplain Insurance Program Federal Emergency Management Agency floodplain management. FNI identified a number of regulatory policies as being either deficient or nonexistent. A summary of FNI s recommendations for each of these programs is provided below. Additional details are discussed in the attached memo. 1-5

10 In addition, FNI recommends that Little Elm develop a Storm Water Design Manual to assist developers and engineers in adhering to the drainage criteria established by the Town. Such a manual would support the Town s effort to comply with federal and state storm water regulations. Phase II Municipal Separate Storm Sewer System (MS4) Storm Water Quality Permitting While not currently subject to Phase II Municipal Separate Storm Sewer System, the Town of Little Elm expects that it will become required to implement this permit as a result of the 2010 Census. The municipal separate storm sewer system (MS4) permit is part of the Clean Water Act, which requires municipalities to develop programs to protect streams, lakes, and other water bodies from pollutants in storm water runoff. Phase II MS4 includes a requirement for an ordinance to prohibit illicit discharges to the storm system. The Phase II MS4 permit requirements encourage municipalities to adopt and implement best management practices to reduce the pollutants that are typically associated with urban runoff. Common best management practices include public education and outreach programs, field inspections of the storm water system, and training Town staff on water quality protection. Given that the Town s storm water system discharges into Lake Lewisville, Town staff and the community desire to minimize the pollutants that runoff into the lake from the Town s storm water system. Hazard Mitigation Action Plan (HMAP) The Hazard Mitigation Action Plan is a plan that communities develop to minimize potential damages from natural hazards, such as flooding and erosion, prior to the hazard occurring. Almost all grant programs that use Federal Emergency Management Agency (FEMA) funding for storm water related projects require that the applicant have a FEMA-approved hazard mitigation action plan (also called a local mitigation plan). The does not currently have a FEMA-approved hazard mitigation action plan. If Little Elm wants to pursue storm water grants, the Town will need to have a FEMAapproved Hazard Mitigation Action Plan. Denton County does not have a FEMA-approved Hazard Mitigation Action Plan. However, recent discussions with Texas Division of Emergency 1-6

11 Management indicate that the Denton County Hazard Mitigation Action Plan is expected to be approved by the Federal Emergency Management Agency in the near future. FNI recommends that the Town speak with Denton County and Texas Division of Emergency Management to determine whether or not the Town can adopt the FEMA-approved Denton County Hazard Mitigation Action Plan as its own. If Little Elm is required to develop its own plan, then FNI recommends that the Town pursue this endeavor. Developing a Hazard Mitigation Action Plan takes several years to complete. The plan will provide opportunities for the to apply for state and federal funding for its storm water projects. Federal Emergency Management Agency (FEMA) Floodplain Management The Federal Emergency Management Agency floodplain management program provides property owners and renters living in communities that comply with the FEMA floodplain management program the opportunity to purchase flood insurance. Little Elm s floodplain ordinance meets the minimum FEMA requirements, and the Town participates in the national flood insurance program. FNI recommends that the Town s Floodplain Administrator become a Certified Floodplain Manager. As a long-term consideration, FNI suggests that the Town research the number of flood insurance policies held within its jurisdiction. Pending this research, the Town could investigate the feasibility of participating in the Community Rating System, which could provide its residents with lower flood insurance rates Overview of Capital Improvement Projects In September 2010, FNI performed a site visit with Town staff of various storm water/drainage issues within the Town. Prior to this site visit, the Town provided information on areas of concern. FNI prepared field maps and a site assessment sheet for each site. A summary of our findings is provided below. The details of the site visit are included in Appendix A. Twelve project sites were evaluated and prioritized according to the ranking system described in the memo. Table 1.1 summarizes the project rankings. The ranking considered life safety, property damage, road flooding, and project cost. In all, these projects represent a roughly projected total cost range of $4 to $10 million. 1-7

12 The two highest ranking projects are Cottonwood Branch East and Sunrise Bay. The Cottonwood Branch East project is experiencing significant erosion. In August 2011, the Town completed a hydrologic and hydraulic study of the channel to predict future erosion and recommended a course of action. In the Sunrise Bay project, several bar ditches appear inadequate to carry design discharges. The bar ditches need to be regraded. Larger pipes, additional inlets, and outfalls with riprap also appear to be needed to transport the water to the lake. Additional projects will be identified by Town staff in the future and will be added to this preliminary range of costs. One such project occurs in various locations across the town where the road subgrade of curb and gutter streets fails due to poor soils or poor construction. Runoff pools in these low spots and is unable to drain properly. Road repairs are needed to eliminate the ponding water. Priority Rank Table 1.1 Project Number 1 Summary of Project Area Rankings Project Name Project Category 1 Area04 Cottonwood Branch East Design Needed 2 Area 08A Sunrise Bay Design Needed 2 Area 08B Shoreline Drive Maintenance 4 Area 06 King s Crossing Design Needed 4 Area 07 Highland Drive Design Needed 4 Area 09 Shell Beach Design Needed 7 Area 03A Hart s Branch Phase I Study Needed 7 Area 03B Hart s Branch Phase II Study Needed 9 Area 02 Eldorado Ponds Study Needed 9 Area 05 Cottonwood Branch West Study Needed 11 Area 01 Walker Detention Maintenance 11 Area 10 Douglas/Debbie Design Needed Note: 1 Figure 3 of Appendix A provides a map of the project areas. 1-8

13 1.5. Funding Options for Storm Water Programs Funding storm water programs can be a challenge; however, the storm water system must be maintained, and that work must be paid for through one or more funding mechanisms. Typically, many communities are concerned with and will fund the solutions to storm water problems only at the time they are experiencing flooding situations. When the weather dries up, normally so does the funding. Thus, the revenue for storm water projects fluctuates in a reactive manner. A good storm water program must have dependable, steady revenue in order to succeed. Typical funding sources for storm water programs include the community s general fund, bonds, grants, impact fees, and storm water utility fees. Some communities rely on just one of these funding sources. However, FNI recommends that a community consider using multiple funding mechanisms for its storm water program. General Fund The general fund is the traditional source of funding for storm water programs. Many communities use their general fund to pay for most of, if not all of, their storm water maintenance and projects. The general fund is supported by ad valorem property taxes, a percentage of the sales taxes, and other service fees. Currently, the pays for storm water-related maintenance and projects with the revenue available from the general fund. With decreasing property values in recent years, the general fund has suffered. Sales tax is maxed out at 8.25 percent in Little Elm. The growth in sales has countered the loss in property value, essentially leaving Little Elm with the same revenue for 2011 that it had in A growing community with growing needs must have increasing revenue to support the demands associated with the growth. Bonds Municipalities can sell bonds as a way to finance projects. The municipality sets aside money generated from taxes to pay back the principle and the interest to the bond holder. Two types of bonds are available to municipalities: general obligation bonds and certificate of obligation bonds. 1-9

14 A general obligation bond requires tax payer approval by way of a vote through the general election. Typically, general obligation bonds are used to pay for large capital improvements projects. A certificate of obligation bond requires Council s approval but does not require voter approval. These bonds are typically used for a short period of time. The certificates of obligation bonds are typically issued when the community needs funding prior to the sale of a general obligation bond. Typically, bonds are issued for specific projects, including equipment purchases and planning, design, and construction of capital improvements projects. Bonds cannot be used to pay for operation and maintenance activities for completed projects. Grants Federal and state grants are available to fund specific storm water projects. The most commonly used grants for such projects are managed at the state level by the Texas Water Development Board (TWDB) or the Texas Division of Emergency Management (TDEM). Each agency manages specific grants and each grant has specific requirements. All of these grants are competitive and can be challenging to obtain. The agencies receive more requests for funding than is available to award. Grants typically require the local community to provide a matching portion of the cost of the project. None of the grants can be used to pay for the operation and maintenance of a project. The Texas Division of Emergency Management manages three grants that can be used for storm water projects, which are summarized in Table 1.2. All three grants rely on federal funding. The Hazard Mitigation Grant Program would be appropriate for Little Elm to pursue funding for a capital improvements project that could be completed within two years. This funding is only available following a Presidential Disaster Declaration for Texas. Little Elm could pursue the Pre-Disaster Mitigation grant to prepare its Hazard Mitigation Action Plan if the Town is not covered by the Denton County Hazard Mitigation Action Plan. The Pre-Disaster Mitigation Grant is available annually. The Repetitive Flood Claims Grant is not likely to be something that Little Elm would use. 1-10

15 Table 1.2 TDEM Grants for Storm Water Projects Grant Name Available Requirements Cost Share Types of Projects Hazard Mitigation Grant Program (HMGP) Pre-Disaster Mitigation Grant Program (PDM) Repetitive Flood Claims Grant (RFC) Upon Presidential Disaster Declaration Annually Annually Participation in NFIP FEMA-approved HMAP Cost-beneficial project FEMA-approved HMAP Cost-beneficial project Properties on the NFIP repetitive loss list Cost-beneficial project 25% Local / 75% Federal 25% Local / 75% Federal 25% Local / 75% Federal Acquisition/demolition Structure elevation Dry flood-proofing Minor localized flood reduction projects Development of HMAP Acquisition/demolition Dry flood-proofing Development of HMAP Acquisition only The Texas Water Development Board manages four grants that can be used for storm water projects. Table 1.3 summarizes these grants. All of these grants are available annually. Little Elm could consider applying for the Flood Protection Planning Grant to prepare a watershed master plan. The Flood Mitigation Assistance Planning Grant is not likely to be useful to Little Elm unless the Town develops its own Hazard Mitigation Action Plan and chooses to seek funding for the flood hazard portion of the Hazard Mitigation Action Plan. Little Elm could pursue the Flood Mitigation Assistance Project Grant to complete a capital improvements project. Little Elm is unlikely to qualify for the Severe Repetitive Loss Grant. Table 1.3 TWDB Grants for Storm Water Projects Grant Name Available Requirements Cost Share Types of Projects Flood Protection Planning Grant (FPP) Flood Mitigation Assistance (FMA) Planning Grant Flood Mitigation Assistance (FMA) Project Grant Sever Repetitive Loss Grant (SRL) Annually Annually Annually Annually Participation in NFIP Participation in NFIP FEMA-approved HMAP Cost-beneficial project Participation in NFIP FEMA-approved HMAP Cost-beneficial project Properties on the NFIP with claims FEMA-approved HMAP Cost-beneficial project % Local / 50% State 25% Local / 75% Federal 25% Local / 75% Federal 10% Local / 90% Federal Watershed level studies Develop/update the flood hazard section of the HMAP Acquisition/relocation Structure elevation Dry flood-proofing Minor localized flood reduction projects Acquisition/relocation Elevation Mitigation reconstruction Dry flood-proofing Minor, localized flood reduction properties

16 Storm Water Impact Fee Local Government Code authorizes political subdivisions to implement storm water impact fees at the community s discretion. For storm water purposes, the impact fee can be collected within the municipal limits, as well as within the extraterritorial jurisdiction (ETJ). Impact fees are collected from development to cover a portion of the expense to expand the storm water system that is required because of the impact of the new development. Prior to adopting a storm water impact fee, the community must prepare an impact fee study. This study must include land use assumptions, a capital improvements plan, and the resulting impact fee for each watershed basin. The political subdivision must hold one public hearing to present the impact fee study and proposed ordinance prior to Council s adoption and implementation of said fee. The fee collected in one watershed within the jurisdiction must be spent within that same watershed boundary. Impact fees can be used to pay for studies, design, and construction of new projects required because of the development. Impact fees cannot be used to pay for the operation and maintenance of a project. Impact fees cannot be used to upgrade or expand existing facilities for existing customers. Impact fees must be spent within a certain period of collection. Otherwise, the political subdivision is at risk of having to refund said fee. FNI s experience is that storm water impact fees are more applicable to undeveloped areas that are expected to develop in the near future. Very few communities in Texas have storm water impact fees. Storm Water Utility Fee The storm water utility fee (or drainage utility fee) is authorized by State law through Local Government Code 552. Municipalities can establish a storm water utility fee. A storm water utility fee is a stale, reliable funding source that provides predictable revenues. Numerous cities in North Texas have storm water utility fees as shown in Figure 1.3. Establishing a storm water utility fee involves public participation, an assessment of storm water system services, establishment of the revenue structure, and addition to the billing system. A public hearing is required prior to the Council adopting a storm water utility fee. The storm 1-12

17 water utility fee must be based on cost of service, including staff, equipment, operation, maintenance, and capital improvements projects. The fee must be fair and equitable and can only be assessed on developed properties. The law provides mandatory and allowed exemptions. The fee is typically assessed as a line item on the utility bill. The revenue generated from this fee must be used on storm water related activities. Section 3 of this report provides a detailed analysis for a potential storm water utility fee for Little Elm. Figure 1.3 Local Municipalities with Storm Water Utility Fees as of November Recommendations After reviewing the Town s ordinances and appropriate storm water related regulations, FNI recommends the Town consider implementing the following recommendations: Submit Letters of Map Revisions to FEMA to correct the FEMA maps Incorporate the existing as built drawings into Geographical Information System in order to have all of the drainage system available electronically 1-13

18 Prepare a detailed storm water master plan, including modeling the streams within its jurisdiction Establish a formal maintenance program for the storm water system Dedicate staff to address the storm water system needs Educate homeowners associations owning such ponds about their responsibilities and the necessary financial commitments to maintain the ponds long-term Consider establishing a Town-funded grant program to assist homeowners associations in maintaining ponds to the Town s preferred level Develop a Storm Water Design Manual to assist developers and engineers in adhering to the drainage criteria established by the Town Clarify ordinances per details provided in Appendix B Although not currently required, the Town might also consider implementing the following strategies: Establish preferred strategies that could be implemented and documented when the Town becomes subject to the Phase II Municipal Separate Storm Sewer System permit Require the Floodplain Administrator to become a Certified Floodplain Manager Consider participating in the Community Rating System program at some point in the future Develop a Hazard Mitigation Action Plan (or find out if Town is covered by Denton County plan) if interested in pursuing storm water grants 1-14

19 2. COMPARISON OF NEIGHBORHOOD STORM WATER PROGRAMS One of the tasks for this study involved surveying neighboring communities regarding their storm water programs. FNI and Town staff agreed that the best approach to obtain feedback to this survey was to select several communities and meet with them in person. Little Elm staff selected six cities: Corinth, Frisco, Highland Village, McKinney, Plano, and Prosper. FNI was successful in obtaining survey responses from all six of these communities. The storm water survey covered six topics, including staff, maintenance, funding, storm water program, policies and standards, and available electronic data. The following summarizes the findings of the survey. A copy of the survey questions is included in Appendix C Staff Every community has unique staffing situations for its storm water program. However, these programs also have many similarities. Approximately two-thirds of the cities surveyed have staff that is completely dedicated to the storm water program. The remaining one-third shares its storm water staff with other departments within the city. No obvious correlations can be drawn as to what direction a city chooses to staff its storm water program based on its size or remaining growth. Corinth, Highland Village, and McKinney have one storm water crew, which is dedicated to storm water work. Plano has three storm water crews, which are shared with other departments. Frisco and Prosper currently do not have storm water crews but each plan to add one crew within the next year. Table 2.1 shows the makeup of each crew for each of the cities that currently have storm water crews. Each crew has one crew leader and one or more maintenance workers. Some of the crews include other positions as well. 2-1

20 Position Table 2.1 Makeup of Storm Water Crews Corinth Highland Village Supervisor 1 McKinney Crew Leader Foreman 1 1 Heavy Equipment Operator 2 1 Light Equipment Operator Maintenance Worker Plano 2.2. Equipment All six communities own equipment that is used in their storm water program. Each of the surveyed cities owns at least one pickup truck that is used for the storm water program. Almost all of them own a dump truck as well. Over half of the cities own a bobcat loader. None of the cities own a dozer, a water truck or a bucket truck. Table 2.2 shows the count of each type of equipment owned. Four of the cities use storm water funding to pay for almost 100 percent of the equipment. Table 2.3 lists the percentage of the storm water funding applied to cover the various types of storm water equipment. 2-2

21 Table 2.2 Equipment Corinth Frisco Count of Equipment Used for Storm System Program Highland Village McKinney Plano Prosper Pickup Truck Dump Truck Grader 1 2 Dozer Loader Chipper 1 Water Truck Street Sweeper 1 1 Bobcat Loader Vacuum Truck 1 Tractor 1 Hoe Bucket Truck Riding Mower 1 1 Push Mower 1 Track Hoe 1 Tractor with Mower *Note: Frisco is considering adding another pickup truck, a dump truck, and a Bobcat loader

22 Table 2.3 Percent of Equipment Cost Attributed to Storm Water Program Equipment Corinth Frisco Highland Village McKinney Plano Prosper Pickup Truck 100% 100% 100% 100% 33% Dump Truck 100% 100% 100% 100% 10% Grader 100% 100% Dozer Loader 100% 80% 20% Chipper 80% Water Truck Street Sweeper shared with streets Bobcat Loader 100% 100% 100% 20% Vacuum Truck 100% Tractor 100% Hoe Bucket Truck shared with streets 100% 20% Riding Mower 100% 20% Push Mower 20% Track Hoe 100% Tractor with Mower 100% Several communities rent equipment for special projects when needed. Typical equipment rented includes dozers, graders, water trucks, and street sweepers. In some cases, a city may contract with an equipment specialist for certain pieces of equipment needed Storm System Maintenance Program Storm system maintenance is an ongoing necessity that is common to every community. All six of the surveyed communities have a storm system maintenance program that is a combination of scheduled maintenance activities and complaint-based activities. At this time, all of these communities noted that their maintenance programs are primarily driven by complaints. Ideally, 2-4

23 most would like to move to a more scheduled maintenance program that would result in fewer complaints. All of the surveyed communities track citizen complaints regarding the storm system. Five of the cities use a database to track complaints and log the response and/or resolution to the issue. The cities mentioned City Works, Laserfish, and Navaline as software programs being used. The remaining community uses a telephone hot line to note complaints. Complaints are typically registered via telephone, , and the community s web site. The complaints are added to the database as work orders. In a couple of cases, the technology is being updated to allow citizens to register complaints directly to the work order database via the internet Storm Water Funding Cities have a limited number of options available to fund storm water programs. All six of the cities surveyed have a storm water utility. Half of those communities rely 100 percent on the revenue generate by the storm water utility to fund their storm water program. The other half use bonds to support some of their capital improvements projects associated with their storm system programs. These are the only two sources of funding used by the cities surveyed. The communities surveyed spend their storm water utility revenue is a variety of ways. Table 2.4 shows which elements of the storm water program are paid by the revenue generated by the storm water utility. All of these cities use the storm water utility funds to pay for staff, equipment and materials, operation and maintenance, and engineering. Only five of these cities are subject to MS4 permit regulations. All five of these communities use the storm water utility to fund a portion of their MS4 permit activities. 2-5

24 Table 2.4 Items/Activities Paid with Revenue from the Storm Water Utility Item/Activity Corinth Frisco Highland Village McKinney Plano Prosper* Staff X X X X X X Equipment and materials X X X X X X Street sweeping X X X X Household hazardous waste Operation and maintenance Capital improvements projects X X X X X X X X X X X MS4 compliance X X X X X Floodplain management Storm water engineering studies/planning Engineering design Other - Administrative X X X X X X X X X X X X X X X * Note: Prosper is not currently subject to Phase II MS4 permit requirements. The survey asked if certain storm water activities are paid by specific funds. The overwhelming response was that the cities typically sell bonds to pay for large capital improvements projects. They use the revenue generated by the storm water utility as the financial backing for these bonds. The storm water utility covers the rest of the costs associated with the storm water programs, including some small capital projects occasionally. Table 2.5 shows the percentage of staff positions paid by revenue generated from the storm water utility. All of the cities surveyed pay for some percentage of their storm water crew with the storm water utility. A few of the cities pay for other staff positions associated with storm water. 2-6

25 Table 2.5 Position Corinth Frisco City Manager 2% Utilities Director City Engineer City Secretary 2% Assistant City Manager Public Works Superintendent Percent of Staff Positions Paid by Storm Water Utility Highland Village McKinney Plano Prosper* 5% 100% 50% Crew Leader 100% 100% 100% 100% Foreman 100% 100% Heavy Equipment Operator Light Equipment Operator Maintenance Worker Utilities Supervisor 100% 100% 100% 100% 100% 33% 100% 100% 100% 100% 33% 100% 100% Engineer 100% 100% Engineering Technician Storm Water Program Administrator Storm Water Specialist Jr. Storm Water Specialist Street Superintendent Notes: 100% 100% 100% 100% 100% 50% 33% Highland Village does not exempt City-owned property. Their annual fee is $16,000 which is transferred to pay for all administrative overhead outside of the SWU. Frisco plans to pay 100% for the new crew leader, light equipment operator, and maintenance workers with the SWU. 2-7

26 2.5. Storm Water Program Each of the surveyed communities has unique storm water programs. A couple of these programs are on track with where the staff would like the program to be. Most of the storm water programs are in the early development stages and are not as far along as the staff would like to be, but they are making progress. Corinth is experiencing pressure to use the revenue generated by the utility to fund debt service associated with large storm water capital improvements projects instead of the regular staff, maintenance, and small projects. The rate in Corinth would have to increase to account for this additional cost. Every city has priorities that differ based on the unique makeup of each community. Table 2.6 shows the key storm water priorities for each of the surveyed cities. Four of the communities have issues with degraded infrastructure. Half of these communities have problems with undersized storm water infrastructure. Two of the communities have concerns about complying with the increasingly more stringent storm water standards. Half of the communities have issues with structures located in the flood zone. McKinney noted that erosion is a priority for them. Corinth and McKinney noted that one of their priorities is maintenance. McKinney noted that they have a priority matrix that they use to determine the priority ranking for each storm water project. Table 2.6 Priority Corinth Frisco Degraded infrastructure Undersized infrastructure Increased compliance requirements Storm Water Priorities 2-8 Highland Village McKinney Plano Prosper X X X X X X X X X Flood prone areas X X X Erosion Maintenance activities X Funds are limited, which requires each community to establish priorities. Thus, communities are typically unable to address all of their concerns at the same time. Table 2.7 shows the storm X X

27 water concerns that are not currently being addressed to the community s satisfaction. Most of the cities have concerns with degraded infrastructure and erosion that are not being addressed as quickly as they would like. McKinney was the only community that noted they are having difficulties getting contractors to comply with the storm water requirements. Degraded infrastructure Maintenance activities Table 2.7 Priority Corinth Frisco Storm Water Priorities Highland Village McKinney Plano Prosper X X X X Projects for erosion X X X X Increased compliance requirements Projects for flood prone areas Contractors not complying with requirements X X X X X X X 2.6. Policies and Standards The survey inquired about storm water ordinances and policies. All of the cities surveyed have drainage ordinances, which have been updated in 2005 or more recently. Corinth updated their storm water ordinances last year, and Prosper is in the process of completing an update to its storm water ordinances. As for drainage criteria manuals, the response was mixed. Corinth does not have such a manual. Highland Village and Plano last updated their drainage criteria manuals more than 10 years ago. McKinney and Prosper have updated their manuals within the last 10 years and Frisco is in the process of updating its manual now. FNI asked the communities whether or not their drainage ordinance required a downstream assessment for development. Frisco and Prosper do not require a downstream assessment. Highland Village requires that post development runoff be the same as predevelopment runoff. 2-9

28 Plano responded that the downstream assessment is considered by the City engineer on a caseby-case basis. Corinth and McKinney require a downstream assessment. Five of the six cities surveyed indicated that they require a construction storm water pollution prevention plan (SWPPP) for projects within their jurisdiction. Plano does not require a SWPPP because the State already requires a SWPPP for projects having one or more acres. Plano does review the erosion control plan. Frisco, Highland Village, McKinney, and Prosper have requirements similar to the State requirements for project sites of one or more acres. These cities require the same elements as the State and in some cases have additional requirements. Corinth requires the SWPP for projects that are five or more acres in size. The four communities encouraging best management practices are Corinth, Frisco, McKinney, and Plano. McKinney references the North Central Texas Council of Governments integrated Storm Water Management (iswm) program. The other communities provided examples of allowable practices. All of the communities prohibit the use of hay bales as a BMP. Plano also prohibits the use of inlet inserts Electronic Data With the move towards electronic program management, storm water programs are trending this direction. Communities are realizing the potential to have their storm water program information readily available in electronic formats. All of the communities surveyed have the floodplains, topography, waterways, and roads mapped electronically. 83 percent of these cities have their storm water system mapped electronically. 67 percent of the survey participants are mapping their problems areas or complaints. By mapping the locations of storm system complaints, these communities can quickly see the trouble spots. City staff can easily show the storm water crew the area to be addressed. Staff can also quickly explain to their Council the problem areas that need to be addressed when the solution requires more effort to resolve. Four of the six communities agreed with the recent FEMA flood maps. Several communities noted that they believe the maps are not very accurate. Some cities require properties located adjacent to the floodplain to perform a flood study. McKinney noted that many of its Letters of Map Changes (LOMCs) previously submitted to FEMA were not incorporated into the

29 maps. They have worked with FEMA to get these included. All communities stated that revisions to the FEMA maps are the responsibility of the property owner, not the city Conclusions Although unique in their makeup, the surveyed communities have many commonalities within their storm water programs. All of the communities have (or will soon have) at least one storm water crew. This crew may be dedicated to storm water or shared with another department, such as the streets department. The crews address storm water work using a combination of reported complaints and scheduled maintenance. All of the cities track the maintenance and repairs to their storm system. All of these cities have a storm water utility and half of the cities have a bond program that fund their storm water programs. The revenue generated from the storm water utilities pays for staff, equipment, maintenance, and engineering design. Five of the communities surveyed are subject to Phase II MS4 requirements and all of these communities use the storm water utility funding to pay for the required compliance activities. Due to funding limitations, the storm water programs can only address certain priorities. All six participants provided at least one area of concern that is not currently being addressed to the staff s desired level of satisfaction. All of the communities have drainage ordinances, and most have a drainage criteria manual. Because the State mandates the Storm Water Prevention Program (SWPP), most of the communities require the State standards be met. All of the cities review the SWPPs, typically for erosion control plans. The majority of the communities encourages or requires permanent best management practices (BMPs). All of the surveyed communities are moving towards an electronic format for storm water management. Some already have their storm system electronically mapped while others have pieces of their system mapped. The trend is to have an electronic mapping system. While most of the communities were comfortable with the 2009 FEMA maps, several of them noted concerns with regards to the accuracy of the floodplain. To address this concern, some of the communities require the property owner to complete a flood study prior to receiving approval 2-11

30 to develop a property. All of the communities have stated that any revisions to the FEMA maps are the responsibility of the property owner. 2-12

31 3. STORM WATER UTILITY 3.1. Legal Basis and Limitations of a Storm Water Utility The State of Texas provides municipalities the opportunity to establish a storm water utility, which is a legal mechanism used to generate revenue to finance a municipality s cost to provide and manage storm water services in the municipality. The Texas Municipal Drainage Utility Systems Act 4 [Local Government Code 552 Subchapter C] authorizes cities in Texas to establish a municipal storm water utility system to protect the public health and safety in municipalities from loss of life and property caused by surface water overflows, surface water stagnation, and pollution arising from non-point source runoff within the boundaries of the established service area [LGC (3)]. To provide these services, municipalities are authorized to assess fees to users of the storm water utility system. Appendix D includes LGC 552 and 580. The storm water utility fee is a service fee and must be based on the projected cost of providing storm water service within the Town s jurisdiction. Some storm water-related costs that are allowed by State law [LGC (2)] to be included in the development of the projected revenue needs for storm water service include the following: Property acquisition Service fees (architectural, engineering, legal, surveys, etc.) Capital (equipment, machinery, furniture, facilities, etc.) Funding and finance costs for construction projects Debt service Administration When developing the fee rate for users, classification of affected properties must be nondiscriminatory, equitable, and reasonable. Specific requirements and allowances to exempt certain property owners and property types, respectively, are established in the law. The statute [LGC (c)] and recent amendments [LGC ] 5 specifically restrict a municipality from assessing the storm water utility fee on certain types of property: Property with proper construction and maintenance of a wholly sufficient and privately owned drainage system [LGC (c)(1)] 3-1

32 Property held and maintained in its natural state, until such time that the property is developed and all of the public infrastructure constructed has been accepted by the municipality in which the property is located for maintenance [LGC (c)(2)] A subdivided lot, until a structure has been built on the lot and a certificate of occupancy has been issued by the municipality in which the property is located [LGC (c)(3)] A State agency or institution of higher education [LGC ] A municipality is also provided the opportunity to exempt certain properties from the storm water utility fee without regard to the properties impacts to or use of the storm system. The following property is allowed by law [LGC (a), (b), and (d)] to be exempted from the storm water utility fee: County property Municipal property School district property Property owned by a tax-exempt religious institution Revisions to the Texas statutes [LGC ] in June 2003 added State property to the list of required exemptions from the storm water utility fee. This revision overrides the exemption status of State property shown in LGC (b) from optional to mandatory. Developed property owned by State agencies and public institutions of higher education are considered to be State property. Private institutions of higher education are also required to be exempt from the storm water utility fee per the Texas Education Code (15) 6. The storm water utility service area consists of land areas that contribute overland flow into the watersheds in the municipality. The service area cannot extend farther than the municipality s jurisdiction. Storm Water Utility Policy This storm water utility section was developed to provide the with options for establishing a storm water utility fee that will help address the Town s storm water management needs for the next five years. Little Elm has a number of routine maintenance tasks to perform, such as creek debris clearing, inlet and pipe system cleanouts, and other limited storm water activities that help to maintain the storm water flow capacity needed to minimize flooding hazards. In addition, significant capital and management improvements to the overall 3-2

33 storm water system are needed to protect existing and expected development and to meet new regulatory requirements. The purpose of this section of the report is to identify a fair and equitable storm water utility fee and fee structure to finance each of these activities and improvements, as well as associated administration, service, equipment and other storm water-related costs. The study strives to identify an appropriate fee based on the projected cost of providing storm water services in the Town. To further protect rate payers from inequitable charges, a means to appeal the rates for any property is strongly recommended to be established. As stated above, exempted properties will not be required to pay storm water utility fees. The following general goals and policies have been established for the Town s storm water utility. The goals provide a basis for the purpose and intended benefit of the utility for the Town of Little Elm. Serve as the primary stable source of new storm water-related funding, except for major capital projects, which will be funded through alternative means, such as bonds or grants. Finance the following specific activities, as funds permit: Administration of the storm water utility district Activities to address localized flooding/drainage issues Upgrades to the storm system infrastructure Proactive maintenance of existing infrastructure Equipment for maintenance of the storm system Storm water system staff Capital improvements projects related to the storm system Finance other storm water-related activities Encourage development in the Town that minimizes adverse storm water impacts through better site design and proper management of the Town s storm water resources Provide a fair and equitable method to assess fees for developed properties impacts to the Town s storm system Allow for the issuance of bonds to finance storm water capital improvement projects 3-3

34 3.2. Cost of Storm Water Services The storm water utility fee is a common legal method to address a significant portion of the financial burden for storm water management. This section includes considerations and options for services the Town may finance with storm water utility revenues. A variety of options for staffing, equipment, and services to provide are made available for reference. The Town may choose to select from the provided list or additional options so long as the options are drainage related. Cost of Service Development Considerations FNI evaluated several options to determine an appropriate methodology for identifying the projected cost of providing storm water service in the Town. FNI determined and Town staff concurred that the following considerations would be incorporated into the assessment of the cost of storm water services for the purpose of determining the revenues necessary for the storm water utility: Identify expected drainage-related costs. This includes prorated costs for administration, equipment, and other expenses not dedicated to drainage activities. Evaluate a five-year period for projecting cost of service needs. Cost projections beyond five years are inherently less reliable and may not provide the Town the quality information desired for planning purposes. Establish and maintain a minimum of a 90-day operating balance in the storm water utility fund to account for contingencies. Consider prorated costs for items not solely associated with storm water but that have an application for storm water management. Examples include engineering staff, maintenance crews, and maintenance equipment. While considered and permitted by State law, the current five-year budget projections do not include prorated expenses. Address as much of the Town s storm water-related costs as practicable through the storm water utility fund. Cost of Service Assumptions For the purposes of the five-year plan, several assumptions were identified and incorporated into the planning process. Specifically, anticipated annual cost increases were identified and developed into cost factors, as shown in Table

35 Table 3.1 FYE 2012 Annual Cost Factors FYE 2013 FYE 2014 FYE 2015 FYE 2016 Expense Rate Inflation 3% 3% 3% 3% 3% General and Administrative Reimbursement Rate 6% 6% 6% 6% 6% The expense rate inflation remains constant over time. The general and administrative reimbursement rate is constant. At this time, no financed capital or debt is projected over the next five years. The general and administrative reimbursement rate is the percentage of annual storm water utility revenues that will be reimbursed to the General Fund, not including one-time reimbursements for specific expenditures such as the cost of developing this storm water utility study, to cover ancillary administrative costs for the storm system that are not specifically identified in the storm water utility budget. Example costs include effort of the utility billing administrator, town administration effort, and other related ancillary costs. Storm System Maintenance The Town plans to establish a program to conduct routine operations and maintenance activities throughout the storm water system to protect storm water quality, minimize flooding potential, minimize drainage problems, and reduce creek erosion. The Town plans to use the storm water utility to fund up to five new staff positions to conduct storm water operations and maintenance activities throughout the Town. A list of the staff positions, including salary and compensation with benefits for FYE 2013, is provided in Table 3.2. Rates for all positions shown assume 100 percent financing by the storm water utility. Prorated funding of any expense that is not fully dedicated to drainage-related services is necessary to be in accordance with applicable State law; however, the Town intends to add dedicated storm water staff that would focus solely on the Town s storm water program. As a result, no prorated expenses are identified in the five-year budget projections. The Town proposes to use the revenue generated from the utility to fund a new drainage crew, which would consist of one crew leader, one light equipment operator, and two maintenance workers. The new drainage crew would assume responsibility for routine storm sewer system maintenance activities such as storm water ditch cleanouts, inlet cleanouts, and drainage swale 3-5

36 maintenance. In addition, the new drainage crew would complete larger maintenance activities and some small capital projects within the crew s capabilities. These projects could include activities such as the installation of erosion control measures and driveway culverts in grasslined roadside ditches. Equipment necessary for the storm water maintenance crew to carry out its responsibilities was identified. The projected cost to purchase equipment for the storm system maintenance crew is provided in Table 3.3 and projected rental rates are shown in Table 3.4. The purchase price of the equipment is amortized over its expected service life to provide an annualized cost. Annual O&M costs include fuel and routine maintenance for purchased equipment but only fuel costs for rented equipment. In addition, the Town proposes to hire a storm water specialist to focus on storm water quality as part of the looming Phase II Municipal Separate Storm Sewer Systems compliance requirements. Little Elm is expected to become subject to Phase II Municipal Separate Storm Sewer Systems storm water quality requirements as a result of the 2010 Census. Protecting storm water quality is of great interest to the Town because of its proximity to Lake Lewisville. The Town desires to be proactive in addressing water quality concerns related to the drainage that flows into the lake. Labor Table 3.2 Description Potential New Staff Starting in FYE Annual Salary (FYE 2012) Annual Compensation With Benefits 3 (FYE 2012) Crew Leader 1 Drainage Crew 2013 $35,350 $51,258 Light Equipment Operator 1 Drainage Crew 2013 $28,387 $41,161 Maintenance Worker 1 Drainage Crew 2013 $25,816 $37,433 Storm Water Specialist 2 Notes: Drainage Engineering 2014 $61,800 $89,610 1 Staff rates provided by Town. 2 FNI rates are based on estimates for positions in North Texas. 3 Benefits include 35 percent for insurance, taxes, etc. plus 10 percent for the individual s materials and equipment. 3-6

37 Equipment Table 3.3 Capital Value (FYE 2012) Cost to Purchase Equipment Service Life (Years) Annualized Purchase Cost (FYE 2012) Annual O&M (FYE 2012) 3 Total Annual Cost (FYE 2012) Backhoe (with trailer) 1 $123,000 7 $17,657 $9,396 $27,053 Bobcat (and trailer) 1 $55,120 7 $7,874 $9,396 $17,270 Dump Truck, 6 CY 1 $53,500 7 $7,643 $9,396 $17,039 Dump Truck, 2 CY 1 $30,000 7 $4,286 $9,396 $13,682 4-Door pickup 2 $25,000 5 $5,000 $7,056 $12,056 Pickup Truck 2 $15,000 5 $3,000 $7,056 $10,056 Mower (riding) 2 $25, $2,500 $4,944 $7,444 Mower 2 $7,500 5 $1,500 $4,944 $6,444 Tractor 2 $15, $1,500 $4,944 $6,444 Vacuum Truck 2 $280,000 7 $40,000 $6,840 $46,840 Front End Loader 2 $80, $8,090 $9,120 $17,210 Notes: 1 Equipment costs provided by Town. 2 FNI costs are based on estimates for purchasing equipment. 3 O&M includes assumed costs for fuel, routine maintenance, and normal repairs assumed by FNI based on local costs for North Texas.. 3-7

38 Equipment Storm Water Studies Table 3.4 Monthly Rental Rates for Equipment Monthly Rental Rate (FYE 2012) 3-8 Cost of Fuel per Month (FYE 2012) Total Monthly Cost (FYE 2012) Grader $1,824 $124 $1,948 Dozer $1,164 $124 $1,288 Loader $1,236 $124 $1,360 Chipper $948 $62 $1,010 Water Truck $1,103 $237 $1,340 Street Sweeper $2,205 $237 $2,442 Trackhoe $6,180 $515 $6,695 Grade-All, 5/8 CY $6,850 $515 $7,365 Grade-All, 1 CY $8,292 $515 $8,807 Rental rates based on FNI representative rates. The consulting costs of the studies for the development of the storm water utility were initially funded through the General Fund. The fees are scheduled to be reimbursed by revenues from the storm water utility over the next five years. The total consulting cost of this study was $88,800. In addition, the study of Cottonwood Branch East is being funded through the general fund and can be reimbursed by the storm water utility over the next five years. The total cost of that study, including the potential Letter of Map Revision, is $71,048. Administration The storm water utility is classified as an enterprise fund. This type of fund is used to account for revenues from goods or services provided by the Town to the general public on a continuing basis. Enterprise funds are primarily financed through user fees. The successful operation of these funds requires the support and services of various Town departments, such as billing and customer service, to carry out regular functions.

39 For this reason, the storm water utility budget includes a general and administrative reimbursement cost in the overall cost of service to account for the rendering of these services. Revenue from the storm water utility fund will be used to reimburse the Town s General Fund for storm-water related administrative activities performed by individuals and departments not directly involved in storm water management. Administrative costs incurred for storm water related activities are determined as a percentage of the overall expenditures related to the storm water utility. This category also includes other operational overhead, such as maintaining water, sewer, electricity, and a building facility for the crew and supplies. The administrative reimbursement accounts for miscellaneous costs related to the storm water utility but not specifically itemized in the storm water utility budget. This includes time and effort of senior staffers and staff from other departments, such as the Finance Director. The yearto-year effort of these individuals and other operational overhead related to the storm water utility cannot be projected, but collectively, the effort is projected in this study to be six percent (6%) of total annual storm water utility operating expenditures. Operating Reserve Little Elm intends to maintain a 90-day operating reserve for the storm water utility fund to account for contingency expenses. The operating reserve accumulates funds annually for the first three years of the storm water utility until reaching the operating reserve goal at the end of FYE At that time, the fund balance will be managed to be maintained at approximately the projected costs of three months of continued operations. For the purpose of determining the proper operating reserve, operations expenses are considered to include annual expenses such as personnel, operations and maintenance costs, fuel, equipment repair, miscellaneous equipment, replacement fund deposits, and administration transfers to the General Fund. Table 3.5 represents the three-year development of the operating reserve and depicts the project fund balance each year. 3-9

40 Table 3.5 Operating Reserve per $10,000 of Operating Expenditures Description FYE 12 FYE 13 FYE 14 FYE 15 FYE 16 Balance (Days) Annual Contribution ($) $833 $833* $833 $0* $0* Reserve Balance ($) $833 $1,666 $2,499 $2,499 $2,499 *Actual annual contributions are typically slightly greater to account for cost increases from system growth and inflation Revenue Assessment Basis for Fee Calculation By law, the storm water utility fee rate must be set according to a basis that is directly related to storm water. As a result, fee rates should not be based solely on certain readily accessible information, such as property values or water usage rates. The Town s storm water utility rates are based on the amount of impervious area for each property. Impervious areas do not provide storm water significant opportunity for infiltration into the soil and therefore result in increased storm water runoff to the municipal storm sewer system. Property improvements that are considered to be impervious areas include buildings, paved parking lots, driveways, patios, and walkways. Gravel parking lots and driveways are also considered impervious area because of the low infiltration rate of storm water through their surface. Sidewalks within the Town easement or right-of way were not included in individual property impervious area calculations. The potential storm water impacts of impervious area to the storm system include the following: Increased total volume of water required to be managed by the municipal storm system Increased peak flows from storm events, potentially resulting in increased flood protection challenges and increased creek erosion Increased flow velocities resulting in increased erosive actions in creek channels and adjacent properties Increased pollutant loading resulting in degraded water quality Site-specific design and maintenance approaches may minimize one or more of these impacts. As noted in Section 3.5 (Appeals), the Town may determine to reduce the storm water utility fee 3-10

41 for a property by an equitable amount to account for the beneficial storm water impact of design and/or maintenance approaches by a property owner. Billing Method Fees for storm water utilities are collected in a variety of ways throughout the country, including as line-items on water bills, as yearly payments with property taxes, or as stand-alone bills. The most common method to assess storm water utility charges is through the municipal utility bill. FNI s analysis is based on Little Elm s water utility billing accounts. Little Elm provides water service to a portion of the Town. A local water supply corporation provides water supply to a portion of properties within the Town s limits. The Town plans to add a line item for the storm water utility (if adopted) to an existing utility bill. As part of the utility bill, the storm water utility fee would appear as a single line item with the monthly dollar amount for the property shown. Eligible improved property without a utility account would still be assessed a storm water fee. New utility accounts will be established for such properties. Property Exemptions Exemptions Mandated by State Law State law [LGC 552, LGC 580] requires mandatory exemptions from the storm water utility fee for certain properties as described in Section 3.1. Any property within the Town limits that meets one or more of the criteria for the mandatory exemptions cannot be assessed a storm water utility fee. If circumstances for the property change such that no mandatory exemption is met, then the property will be assessed an appropriate storm water fee from that point forward. Exemptions Allowed by State Law The State Code provides the Town the option to exempt specific properties from the storm water utility fee for non-storm water-related reasons. These additional exemption options are as follows: Counties [LGC (b)(2)] Municipalities [LGC (b)(3)] School districts [LGC (b)(4)] 3-11

42 Property owned by a tax-exempt religious organization [LGC (d)] At this time, Town staff recommends exempting all properties categorized by one of these four options in addition to those required by State law. Table 3.6 shows the impact that exempting optional properties would have on the annual revenue collected (based on $1 per ERU rate). Table 3.7 shows the rate that would have to be charged if exemptions are allowed and the Town wants to maintain the annual revenue. Table 3.6 Projected Annual Revenue (per $1.00 / month / ERU) by Exempt Eligible Property Type Category Annual Revenue School District $12,264 Town $3,984 Tax-Exempt Religious Institutions (Church) $1,212 County $24 Total $17,484 Table 3.7 Rate Effect of Exemptions on Revenue-Neutral Storm Water Utility Optional Exemptions Monthly Rate per ERU ($/month) No exemptions * $1.00 School District Exempt $1.09 Town Exempt $1.03 Church Exempt $1.01 School District and Town Exempt $1.12 School District and Church Exempt $1.10 Town and Church Exempt $1.04 School District, Town and Church Exempt $1.13 * The one County-owned property equates to two ERUs, which is negligible in this example of exemptions. Assumed rate is for rate effect demonstration purposes only. 3-12

43 Determination of Property Impact to Storm System By State law, undeveloped properties cannot be charged a storm water utility fee in Texas. (Undeveloped property is property that is held and maintained in its natural state.) Developed properties with impervious area increase the rate and/or volume of storm water runoff to the municipal storm system. Infrastructure improvements, ongoing maintenance, inspections, and evaluations are necessary to properly manage the increase in storm water discharge from impervious area. Impervious area includes rooftops, paved parking lots, paved driveways, gravel driveways, walkways, out buildings, and patios. Vegetated areas and swimming pools are not included in impervious area determinations. To determine the impact of each developed property to the storm system, FNI delineated the impervious area for each non-residential property and a sample of residential properties. The impervious area amount is associated with the specific parcel or group of parcels for the development. The parcel is associated with the appropriate utility billing accounts to allow for assessment of the proper storm water utility fee if implemented. Freese and Nichols evaluated the impervious area of a representative sample of approximately 100 single family residential properties in the Town. The resulting impervious area was identified as the equivalent residential unit (ERU) and is the basis fee for all developed properties. One ERU was determined to be 3,687 square feet impervious area based on the median value of the residential sample. Figure 3.1 is an example of the impervious area determination for a single family residential property. Figure 3.2 represents the impervious areas for each residential property with the average impervious area shown with the red line. Figure 3.3 is an example for a non-single family residential property. Figure 3.4 shows the representative sample of residential properties. Figure 3.5 shows the impervious area for non-single family residential properties. 3-13

44 Figure 3.1 Example of Impervious Area for Single-Family Residential Property Total Impervious Area: 3,687 ft 2 (Residential Median) 1 ERU 3-14

45 Figure 3.2 Impervious Area Samples for Single-Family Residential Property Count of Residential Properties Median: 3,687 Average: 5, > Impervious Area in Square Feet Figure 3.3 Example of Impervious Area for Non-Single Family Residential Property Total Impervious Area: 34,798 ft 2 10 ERUs 3-15

46 Town Limits Single-Family Residential Property 0 2,250 4,500 Feet 4055 International Plaza, Suite 200 Fort Worth, TX P: F: !I Representative Residences for Equivalent Residential Unit (ERU) Impervious Area Determination, Texas FN JOB NO LTE10296 FILE Residential_IA.mxd DATE February, 2011 SCALE 1: DRAFTED RCT FIGURE 3.4

47 Town Limits Impervious Area by Property Type Church Town School District Commercial County State Federal 0 2,250 4,500 Feet 4055 International Plaza, Suite 200 Fort Worth, TX P: F: Non-Single Family Residential Property!I Impervious Area, Texas FN JOB NO LTE10296 FILE Commercial_IA.mxd DATE February, 2011 SCALE 1: DRAFTED RCT FIGURE 3.5