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Agenda 02/13/2018 Item #9B02/13/2018 EXECUTIVE SUMMARY Recommendation to approve the Stormwater Utility rate study, that establishes a stormwater rate structure, billing methodology, level of service, rate study methodology for implementing a stormwater utility for Collier County, and approve a resolution to use the uniform method of collecting non-ad valorem special assessments levied within the unincorporated area of Collier County. OBJECTIVE: To provide an adequate, stable, transparent, and fair funding mechanism for the stormwater management program. CONSIDERATIONS: On November 18, 2014, the Board of County Commissioners (Board) approved Collier County Planning Commission’s recommendation to seek an alternate source of funding to adequately fund Stormwater Management related initiatives and operations (Item 9.A). On November 3, 2015, the Board of County Commissioners discussed initiating an analysis of development of a stormwater utility during the Integrated Water Resources Management Strategy Workshop. The purpose of a stormwater utility feasibility study is to take a detailed look at all current and future stormwater and surface water management needs and evaluate a mechanism that would create a dedicated restricted funding source that would support the stormwater program. On December 8, 2015, at a regular Board of County Commissioners meeting, the Board authorized staff to secure a consultant and begin Phase I of the stormwater utility review and analysis (Item 16.A.20). A notice to proceed was issued on April 19, 2016, for c onsultant Amec Foster Wheeler Environment & Infrastructure, Inc. to complete the Phase I portion of the project. On September 27, 2016, staff along with Amec Foster Wheeler Environment & Infrastructure, Inc. provided the Board of County Commissioners with an overview of a stormwater utility (Item 11.C). The Board directed the County Manager to proceed with a stormwater utility feasibility study, Phase II, that would evaluate an alternative dedicated funding source for ongoing and future Stormwater Management related initiatives and operations; and to bring the findings of the study back to the Board for future consideration on implementation. On June 27, 2017, the Board of County Commissioners directed the County Manager to proceed with Phase II of the analysis to develop and provide the necessary study and materials required to properly make major policy decisions regarding rate structure, billing methodology, levels of service, and rate study methodology for implementing a stormwater utility for Collier County. A notice to proceed was issued on July 17, 2017 for consultant Stantec Consulting Services, Inc. to complete the Phase II portion of the project. On October 10, 2017, Stantec Consulting Services, Inc., along with County Staff, presented an update presentation on the stormwater utility phase II rate study. Board of County Commissioners directed the County Manager to continue forward with the Phase II analysis (Item 11.B). On December 12, 2017, the Board of County Commissioners authorized the publication of the notice of intent, in the Naples Daily News, for four consecutive weeks, to fulfill the statutory requirements, in accordance with F.S. 197.3632(3)(a), as part of utilizing the uniform method of collecting. This item provides the Board of County Commissioners a full and complete rate study, including the basis for an Equivalent Residential Unit (ERU), and potential credits. The information gathered 9.B Packet Pg. 47 02/13/2018 through the Public Engagement Program, and a menu of options that allows the Board to set a specific Level of Service with a fee structure that is equitable and fair is also provided. This item will also establish the use of the uniform method of collecting non-ad valorem special assessments, levied within the unincorporated area of Collier County, for the provision of stormwater services, facilities, and programs. The following are upcoming key dates and milestones required as part of the Stormwater Utility process: April 2018: Amendment to Stormwater Utility Ordinance May 2018: Finalize and Adopt Stormwater Utility Ordinance July 2018: Accept the Master Account File (MAF) as the basis for sending stormwater utility billings August 2018: TRIM notices sent out to property owners September 2018: Final adoption of rate at first budget hearing September 15th, 2018: Certify the MAF for the Tax Collector November 1st, 2018: Stormwater Utility assessment included on the annual property tax bill Approval from the Board must be in place no later than March 1, 2018 in order to set collections for FY 2019. FISCAL IMPACT: FISCAL IMPACT: The Stormwater capital and maintenance activities have been traditionally supported by annual appropriations from General Fund (001) ad -valorem revenues. The past twenty years have focused heavily on improvements to the Lely Area Stormwater Improvement Program (LASIP) to benefit the general watershed, and thus funded appropriately with General Fund revenues. With LASIP in the close -out phase, there has been a focused shift to improving the stormwater system in other urban areas and rural areas of the county. A transfer of $4,267,900 in FY18 from the Unincorporated Area General Fund (111) comprised 54.3% of the total funding to the Stormwater Capital Improvement Program, and that percentage is expected to grow as projects continue to focus on areas outside of the general county watershed. The current level of funding from ad-valorem revenues is insufficient to fully support the needs of both maintaining and improving the stormwater system. The “pay-as-you-go” method of cash flowing the projects has become a detriment to the level of service demanded by our full -time and seasonal residents, and without the proposed assessment, debt service or a millage increase are the only options for adequate funding. By authorizing a Stormwater Utility assessment, a new and incremental revenue stream, there will be a sizeable offset to the burden on both the General Fund and Unincorporated Area General Fund, and allow for increased appropriations to other general governmental services which rely heavily, or solely, on those funding sources. Trading or fully/partially exchanging a reduction in the property tax levy (a recurring flexible revenue source) for a stormwater utility fee (a recurring restricted revenue source) is not recommend ed and is considered a high-risk change in policy and should be carefully evaluated to ensure cash flow is sufficient to support the growing needs of the Unincorporated Area general governmental services. If the Stormwater Utility is approved, a non-ad valorem special assessment would be levied within the Unincorporated Area and placed on the annual property tax bill as a separate line item for the provision of stormwater services, facilities, and programs. The level of service will determine the fee amount, which will be based on direction provided by the Board of County Commissioners. If approved, a revenue and expenditure plan will be developed for Board review as part of the FY 2019 budget process. 9.B Packet Pg. 48 02/13/2018 LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and legality, and requires majority vote for approval. -JAK GROWTH MANAGEMENT IMPACT: This item is in accordance with the goals, objectives, and policies of all applicable sections of the Stormwater Management and the Conservation and Coastal Management elements of the Growth Management Plan. RECOMMENDATION: To approve a full and complete rate study, that would establish a stormwater rate structure, billing methodology, level of service, and rate study meth odology for implementing a stormwater utility for Collier County, and establish the use of the uniform method of collecting non-ad valorem special assessments, levied within the unincorporated area of Collier County, for the provision of stormwater services, facilities, and programs. Prepared by: Gino Santabarbara, Principal Planner, Capital Project Planning, Impact Fees and Program Management Division ATTACHMENT(S) 1. [Linked] Collier County Stormwater Phase II Rate Study Report - Draft (PDF) 2. Resolution electing to use the uniform method of c (PDF) 3. Legal Ad - Agenda ID 4512 (PDF) 9.B Packet Pg. 49 02/13/2018 COLLIER COUNTY Board of County Commissioners Item Number: 9.B Doc ID: 4512 Item Summary: ***This item to be heard at 9:30 a.m.*** Recommendation to approve the Stormwater Utility rate study, that establishes a stormwater rate structure, billing methodology, level of service, rate study methodology for implementing a stormwater utility for Collier County, and approve a resolution to use the uniform method of collecting non-ad valorem special assessments levied within the unincorporated area of Collier County. (Thaddeus Cohen, Growth Management Department Head) Meeting Date: 02/13/2018 Prepared by: Title: Senior Grants and Housing Coordinator – Capital Project Planning, Impact Fees, and Program Management Name: Gino Santabarbara 01/16/2018 2:21 PM Submitted by: Title: Division Director - IF, CPP & PM – Capital Project Planning, Impact Fees, and Program Management Name: Amy Patterson 01/16/2018 2:21 PM Approved By: Review: Growth Management Department Judy Puig Level 1 Reviewer Completed 01/18/2018 12:07 PM Capital Project Planning, Impact Fees, and Program Management Amy Patterson Additional Reviewer Completed 01/19/2018 5:10 PM Growth Management Operations Support Allison Kearns Additional Reviewer Completed 01/23/2018 2:43 PM Growth Management Department Gene Shue Additional Reviewer Completed 01/24/2018 11:16 AM Growth Management Department Gino Santabarbara Deputy Department Head Review Skipped 01/18/2018 12:12 PM Growth Management Department Thaddeus Cohen Department Head Review Completed 01/26/2018 10:20 AM Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 01/26/2018 1:17 PM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 02/06/2018 7:32 AM Budget and Management Office Mark Isackson Additional Reviewer Completed 02/06/2018 10:14 AM County Manager's Office Nick Casalanguida Level 4 County Manager Review Completed 02/07/2018 11:48 AM Board of County Commissioners MaryJo Brock Meeting Pending 02/13/2018 9:00 AM 9.B Packet Pg. 50 9.B.2 Packet Pg. 51 Attachment: Resolution electing to use the uniform method of c (4512 : Stormwater Utility) 9.B.2 Packet Pg. 52 Attachment: Resolution electing to use the uniform method of c (4512 : Stormwater Utility) 9.B.2 Packet Pg. 53 Attachment: Resolution electing to use the uniform method of c (4512 : Stormwater Utility) 9.B.2 Packet Pg. 54 Attachment: Resolution electing to use the uniform method of c (4512 : Stormwater Utility) 9.B.3 Packet Pg. 55 Attachment: Legal Ad - Agenda ID 4512 (4512 : Stormwater Utility) 9.B.3 Packet Pg. 56 Attachment: Legal Ad - Agenda ID 4512 (4512 : Stormwater Utility) 9.B.3 Packet Pg. 57 Attachment: Legal Ad - Agenda ID 4512 (4512 : Stormwater Utility) 9.B.3 Packet Pg. 58 Attachment: Legal Ad - Agenda ID 4512 (4512 : Stormwater Utility) Collier County Stormwater Utility Program Phase II - Stormwater Utility Rate Study January 18, 2018 January 18, 2018 Mr. Gino Santabarbara Principal Planner, 2685 South Horseshoe Drive Suite 103 Naples, FL 34104 Re: Draft Report - Stormwater Utility Program Phase II - Stormwater Utility Rate Study Dear Mr. Santabarbara Stantec is pleased to present this Draft Report on the Stormwater Utility Program Phase II - Stormwater Water Utility Rate (Study) that we performed for the Collier County (County). The document represents the results of our analysis regarding the implementation of a stormwater utility within the County. Please distribute this Draft Report to the pertinent members of County staff for their review and reference. We appreciate the professional assistance provided by you and all of the members of the County’s staff who participated in the Study. It has been our distinct pleasure to work with and for Collier County. If you have any questions, please do not hesitate to call us at (202) 585-6391. We appreciate the opportunity to be of service to the County, and look forward to the possibility of doing so again in the near future. Sincerely, David A. Hyder Principal 1101 14th Street NW Suite 1200 Washington DC 20005 (202) 585-6391 david.hyder@stantec.com Enclosure TABLE OF CONTENTS Introduction ........................................................................................................................ 1 Background ................................................................................................................................................ 1 Study Objectives ........................................................................................................................................ 2 Overview of Existing Stormwater System and Management ...................................................................... 2 System Challenges and Goals for Stormwater Management ........................................ 6 Background ................................................................................................................................................ 6 Key Challenges .......................................................................................................................................... 7 Stormwater Utility Benefits ......................................................................................................................... 9 Recommended Goal and Objectives for a Stormwater Utility for Collier County ...................................... 12 Current and Projected Revenue Requirements ............................................................ 14 Background .............................................................................................................................................. 14 Historical and Current System Revenue Requirements ........................................................................... 14 Historical and Current Stormwater Funding ............................................................................................. 18 Revenue Requirement Projections ........................................................................................................... 19 Revenue Projections ................................................................................................................................ 22 Level of Service Analysis ............................................................................................... 23 Infrastructure Maintenance Level of Service Gap Analysis ...................................................................... 23 Stormwater Program Management .......................................................................................................... 26 level of Service Alternatives ..................................................................................................................... 28 Stormwater Fee Analysis ................................................................................................ 32 Stormwater Fee Overview ........................................................................................................................ 32 Fee Basis - Measure of Stormwater Contribution ..................................................................................... 33 Impervious Area Analysis ......................................................................................................................... 34 Stormwater Fee Structure ........................................................................................................................ 36 Calculated Stormwater Fees .................................................................................................................... 39 Stormwater Fee Comparison ................................................................................................................... 41 Billing and Collection Methodology .............................................................................. 42 Billing and Collection Alternatives ............................................................................................................ 42 Summary .................................................................................................................................................. 44 Billing and Collection Recommendations ................................................................................................. 45 Mitigation Credits and Utility Administration................................................................ 46 Stormwater Fee Mitigation Credits ........................................................................................................... 46 Utility Administration ................................................................................................................................. 50 Public Engagement ......................................................................................................... 51 Background .............................................................................................................................................. 51 Summary and Results of Engagement Activites ...................................................................................... 51 Conclusions and Recommendations ............................................................................ 54 Conclusions .............................................................................................................................................. 54 Recommendations ................................................................................................................................... 55 1. Introduction Collier County | Stormwater Utility Rate Study Stantec | 1 INTRODUCTION Stantec Consulting Services Inc. (Stantec) has conducted a Stormwater Utility Rate Study (Study) for Collier County (County), Florida. This report presents the results of the comprehensive Study, including background information, current stormwater system challenges and opportunities, revenue requirements, current and alternative levels of service, stormwater fee structure analysis, public engagement efforts, utility administration and conclusions and recommendations. BACKGROUND Collier County currently owns and operates an extensive stormwater management system that provides stormwater management services within the unincorporated areas of the County for the benefit of its residents. The management of the stormwater system includes essential planning, engineering, design, construction, operations, maintenance, inspection, permitting and enforcement activities that manage stormwater quantity and quality issues. All of these activities are critical to mitigate flooding, protect individual and personal property, manage the water quality of receiving waters, and comply with federal, state and local regulatory requirements. The County has historically funded the management of the stormwater system from the County’s General Fund via a dedicated millage. At various points over the past 20 years, the County has considered developing alternative funding sources for the stormwater system but determined in each instance to maintain the current funding approach. The funding for the stormwater system has decreased significantly since the recession in 2008 and has yet to recover to pre-recession levels. At the same time the County’s stormwater system is in need of additional funding to address aging infrastructure, increase system maintenance and keep pace with growth in the County. To address these challenges the Board of County Commissioners (Board) approved Collier County Planning Commission’s recommendation to seek an alternative source of funding to adequately fund stormwater management in the County. To initiate this effort the County engaged an outside consultant to examine the feasibility of the implementation of a stormwater utility within the County. The Phase I Study concluded that a stormwater utility would be a viable approach for funding stormwater management in the County. The results of the initial feasibility study were presented to the Board on September 27, 2016. Based on the Phase I Study the Board directed County staff to proceed with a second phase of the development of a stormwater utility which would include a comprehensive stormwater utility rate study. Stantec Consulting Services was engaged on July 17, 2017 to assist with this second phase of the study (Phase II Study) to complete stormwater utility rate study. 1. Introduction Collier County | Stormwater Utility Rate Study Stantec | 2 STUDY OBJECTIVES A number of key study objectives were identified in the scope of service for the stormwater utility rate study. The key objectives include the following: 1. Conduct a detailed analysis of stormwater utility rate alternatives with recommendations as to the most viable rate structure suitable for Collier County; 2. Review and evaluate all billing and collection methodologies and make appropriate recommendations; 3. Develop and establish a GIS Master Impervious Surface Data to Parcel Layer; 4. Conduct an initial survey of the community to determine the level of knowledge and acceptance of a stormwater utility system and develop a public information program strategy; 5. Develop preliminary system-wide cost and revenue projections for the County's stormwater utility program; and 6. Obtain consensus from the County regarding the rate study methodology, final rate structure, billing methodology, and level of service. OVERVIEW OF EXISTING STORMWATER SYSTEM AND MANAGEMENT The County manages a complex and diverse stormwater system that provides vital service within the County. The current stormwater management program has evolved over the years to serve and meet the needs of the community. The County’s current stormwater program obligations include: • Program Administration • Planning and Engineering • System Operations and Maintenance • Regulation and Enforcement • Review and Inspection • Capital Project Construction To meet these obligations, the County’s stormwater program has been organized around three primary program elements: • Stormwater Infrastructure Maintenance • Stormwater Regulatory Compliance, and • Stormwater Program Management 1. Introduction Collier County | Stormwater Utility Rate Study Stantec | 3 A summary of the responsibilities of each of these three program elements is described below. 1.3.1 Stormwater Infrastructure Maintenance Collier County manages an extensive stormwater system that is the result of significant investment over past 100 plus years. The stormwater system provides the essential infrastructure for stormwater drainage and flood protection for individuals and property located within the County. The system also serves to minimize the impacts of surface runoff on local receiving surface waters and the surrounding natural areas of the County. The primary components of the County’s current stormwater infrastructure system consists of: • Over 372 miles of storm sewer piping • Approximately 6,000 curb inlets and catch basins • Over 687 miles of roadside swales • 648 centerline curb miles of streets • 122 miles of County-maintained canals • 53 hydrodynamic separators • 65 stormwater control structures and weirs The Road Maintenance Division of the Growth Management Department of Collier County is currently responsible for the maintenance of the stormwater infrastructure. The primary maintenance activities include: • Storm sewer vacuuming • Curb inlet and catch basin cleaning • Roadside swale maintenance • Street sweeping • Aquatic plant maintenance within County managed canals including weed control, vegetation removal, weir maintenance and mowing 1.3.2 Stormwater Regulatory Compliance The County’s stormwater system discharges into surface waters. As such, it is subject to the Clean Water Act which requires the County to meet the requirements of the National Pollutant Discharge Elimination System (NPDES) program. The NPDES program is administered by the EPA Region 2 in Florida. The program requires regulated entities to comply with the Municipal Separate Storm Sewer System (MS4) General Permit. The MS4 Permit requires specific activities to be undertaken within the community to manage the stormwater system discharges. The 1. Introduction Collier County | Stormwater Utility Rate Study Stantec | 4 activities are typically referred to as the “six minimum control measures” and consist of the following: • Public Education and Outreach • Public Participation / Involvement • Illicit Discharge Detection and Elimination • Construction Site Runoff Control • Post-Construction Site Stormwater Runoff Control • Pollution Prevention / Good Housekeeping The County is currently in the fourth year of its current five-year permit period which ends in 2018. To comply with the permit the County is required to prepare a written Stormwater Management Plan (SWMP) that identifies how the County plans to address the stormwater control measures. The current plan was established in 2012 to cover the current permit period of 2013 to 2018. The NPDES permit is managed by the Pollution Control and Prevention Section of the Capital Project Planning and Program Management Division of the County’s Growth Management Department. This section ensures compliance with the permit requirements and submits compliance reports to the EPA. Many of the activities required as part of the County’s NPDES permit for pollution prevention and good housekeeping are accomplished as part of the stormwater infrastructure maintenance activities carried out by the Road Maintenance Division. Additionally, the County utilizes the Natural Resources Department to accomplish many of the control activities. 1.3.3 Stormwater Program Management The Stormwater Management Section of the Capital Project Planning and Program Management Division of the County’s Growth Management Department is responsible for the primary management and oversight of the stormwater program. The Section is responsible for administration of the stormwater program including all planning and engineering efforts and execution of stormwater capital improvements. All of these efforts are designed to ensure proper drainage and flood control within the County. The key activities and responsibilities of the Section include: • Overall stormwater program management, • GIS development and operations, • Conveyance and attenuation facilities mapping and inventories, and • Stormwater management master planning/basin planning. 1. Introduction Collier County | Stormwater Utility Rate Study Stantec | 5 The Stormwater Management Section is responsible for the development of one of the key planning documents for the stormwater system, the Annual Update and Inventory Report on Public Facilities (AUIR). The AUIR is presented to the Collier County Board of Commissioners on an annual basis to document operational and capital planning efforts for the subsequent five- year period. The document identifies the estimated revenues available to fund the program over the planning period. The AUIR is also used to document the inventory of the stormwater system and demonstrate the anticipated funding sources available for the stormwater program. 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 6 SYSTEM CHALLENGES AND GOALS FOR STORMWATER MANAGEMENT This chapter of the report outlines some of the key challenges facing the County’s stormwater system, how the implementation of a stormwater utility would help address many of the challenges and the recommended goals and objectives for a stormwater utility for Collier County should the County adopt a stormwater utility. BACKGROUND To understand the key challenges facing the County’s stormwater system and to identify the key goals and objectives for the stormwater utility it was first necessary to develop an understanding of the current operations, management strategies and overall approach to stormwater management. To gain this understanding, our project team conducted interviews with County staff from divisions that participate in stormwater management. Our team met with individuals from various divisions within the Growth Management Department including Pollution Control, Transportation, Road Maintenance, and Development Review. In addition, our project team has reviewed existing policy documents established by the County related to stormwater management, as well as prior studies that have been completed for the County related to treatment and management of stormwater. Based on the discussions and document review, the document that best outlines the County’s overall stormwater management goals and objectives is the Collier County Growth Management Plan. The Stormwater Management Sub-Element (Sub-Element) of the Collier County Growth Management Plan outlines the specific goal, objectives and policies for stormwater management in the County. The goal reads as follows: “To provide stormwater management facilities and services for drainage and flood protection for existing and future development, minimize the degradation of quality of receiving water and surrounding natural areas and protect the functions of natural groundwater aquifer recharge areas.” To facilitate this goal the Sub-Element identifies six key objectives summarized below. 1) Conduct facility planning and ongoing management of the stormwater system to achieve multiple objectives from other elements of the comprehensive plan, and sufficient to determine annual funding needs can for capital projects and continuing operations. 2) Maintain adopted drainage level of service standards by basin and sub-basin. 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 7 3) Maintain and annually update a five-year schedule of capital improvements for the stormwater system. 4) Develop and maintain policies and programs to correct existing deficiencies and to address future needs, including the consideration of multiple funding mechanisms and conducting a public awareness program. 5) Regulate land use and development in a manner that protects the functions of natural drainage features, the stormwater management network, and natural groundwater aquifer recharge areas. 6) Protect the functions of natural drainage features through the application of standards that address the quality and quantity of discharge from stormwater management systems. The stated goal and objectives outlined in the Sub-Element adopted by the Collier County Board of Commissioners are logical and consistent with industry best practice. KEY CHALLENGES We conducted interviews with County Staff and reviewed relevant documents to gain an understanding of: • Current stormwater management procedures and processes, • Key challenges and constraints impacting the provision of service, and • The ability of current processes to achieve the County’s stated goal and objectives for stormwater management. Based on the interviews and document review, our project team has identified a number of key challenges facing the current stormwater management program in the County. While the challenges identified below are not exhaustive, they represent the key challenges to meeting the goal and objectives for stormwater management in the County identified in the Stormwater Management Sub-Element. 2.2.1 Inadequate Level of Service Interviews with County staff and our document review revealed the fact that the County is currently not able to provide a sustainable level of service for the stormwater management system within Collier County. The current level of stormwater system maintenance and investment in capital projects will not allow the County to maintain a viable stormwater system in either the near or long-term. 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 8 Based on review of the current level of stormwater system maintenance provided in the County, it is evident that the County is not able to provide stormwater system maintenance for many aspects of the stormwater system at a frequency that is reasonable or sustainable. While the amount of maintenance that is completed with the current resources is impressive, at the current pace it will take multiple decades to provide maintenance to many components of the system. To address the current maintenance levels, significant additional resources will be required. In addition to managing maintenance needs, funding is not sufficient to address the aging stormwater system assets and to meet demands place on the system by growth. While the County has identified a five year capital plan within the AUIR, the projects represented in the AUIR are the basic minimal capital needs of the system. Prior studies completed for the County have identified significant additional investments that will be required over the coming years. 2.2.2 Funding Constraints The funding provided for stormwater management is obtained from a number of sources. The current program is funded from General Fund revenues, grants, gas taxes (support from the Road Maintenance Section), and from the Big Cypress Basin. Historically, the available funding for stormwater management has fluctuated based on available resources. Sometimes these fluctuations have reflected the changing needs of the system, but other times these fluctuations have reflected factors and constraints unrelated to stormwater management. The inconsistency in funding has made it challenging for the County to effectively maintain the stormwater management system. A lack of certainty regarding the availability of funding has limited the ability of the County to effectively develop and implement a long-term plan for capital investments, undertake ongoing and enhanced maintenance, and develop staff resources. In addition to inconsistent funding, the current stormwater management program is facing the challenge of managing a system with insufficient funds. While the stormwater system has continued to age, the demands for service in the County have continued to increase. The current lack of funding will not allow the County to keep pace with the demands being placed on the system and is ultimately not sustainable. Over time the County will experience an increase of stormwater system failures. The lack of funding has required the County to manage the system under a crisis and compliant based approach. The County is not able to proactively address potential system issues and therefore is typically “putting out fires” within the system. 2.2.3 Equity in Current Funding Approach The majority of funding for the County’s stormwater management program is provided by the General Fund from property taxes. As such, property owner contributions to the funding of the 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 9 stormwater system are effectively based on the taxable value of the individual’s property (i.e. properties with higher assessed values contribute more to stormwater management). In most instances the assessed value of a property does not directly correlate to the use of the stormwater system. For example, two one-acre parcels may have the exact same property value but a paved property will generate 26,000 gallons of stormwater during a 1” rainfall whereas an undeveloped property will generate 1,600 gallons. This example highlights the lack of equity associated with the County’s current approach to funding the stormwater system. As the County addresses the needs of the stormwater system, by increasing funding, this lack of equity may become more pronounced within the community as property owners recognize that their increasing contributions to stormwater management are not aligned with their use of the stormwater system. 2.2.4 Stormwater Management Structure The County’s current stormwater management program is decentralized, with functions and costs spread among multiple divisions within the County’s Growth Management Department. Stormwater management is currently managed within at least six different divisions, including personnel from thirteen different sections. This decentralization has occurred over time, as the County maintained a more centralized stormwater program in the past. This is not atypical, but it can create challenges in achieving overarching objectives and in operational efficiencies. The key challenge resulting from the current decentralized approach is that efforts to manage the system are not easily coordinated due to lack of a clear reporting and operational framework. Both operational and capital facility management are made significantly more difficult by the necessity of coordination among multiple organizational units, many of which balance multiple objectives beyond those related to stormwater. Based on our review of current stormwater management practices in Collier County, available resources are efficiently utilized by the County’s stormwater professionals for management of the stormwater system. However, staff will continue to be limited in meeting the goal and objectives identified for the stormwater system without changes to the organizational and funding structure. The challenges in Collier County are not unique, as many communities in Florida and around the United States have encountered increased demands on resources as communities face aging infrastructure, growth, changes to stormwater management regulations and objectives, and expected levels of service. STORMWATER UTILITY BENEFITS Many communities have decided that their historical approach to stormwater management will not empower them to meet current water quality and water quantity management objectives. To 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 10 address these needs, communities (including over 180 in the State of Florida) have adopted stormwater utilities. Some of these communities have maintained stormwater utilities for several decades, and they have proven to be an effective approach to enhancing organizational effectiveness and funding for stormwater management in a wide variety of circumstances. The potential creation of a stormwater utility for Collier County provides an opportunity to address the described challenges in current operations, as well as providing for numerous additional benefits to County residents and rate payers. Some specific examples of the benefits to the property owners resulting from the use of a stormwater utility include the following: • One of the primary benefits of a stormwater utility is providing a dedicated and stable revenue stream. The certainty in the annually funding would allow the County to make certain programmatic changes in the way it manages the system, ultimately allowing each dollar of investment in the system to go further. o Proactive System Maintenance - A dedicated funding stream allows for proactive management of the stormwater system as compared to reactive problem solving. The ability to proactively maintain an asset is always less costly than making reactive repairs. This proactive approach results in lower system costs and reduced costs to property owners. It also results in a better performing system which minimizes stormwater issues within the community. o Long-Term Perspective - Stormwater managers are empowered to adopt a longer view in planning for capital investments, undertaking maintenance enhancement, and developing staff since they are not operating in a year-to-year funding environment with no certainty of follow-on funding in successive years. This long- term perspective reduces the costs of management of the system over time as a result of coordinated planning and consistency of staffing. o Collaborative Funding - The dedicated funding source allows communities to take advantage of federal, state and local grants. The County staff are aware of matching funds available at this time that would reduce the cost of stormwater improvements to the community. The funding stream also allows the community to partner with other utilities (water, sewer, etc.) in a coordinated fashion to make improvements resulting in reduced costs and disruption (streets are only torn up once). o Ability to Finance Capital Projects - Stormwater capital improvements typically result in the construction of assets with long useful lives (20 to 60 years). As a 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 11 result, many communities with stormwater utilities use debt financing to fund the projects to better match the payment for the asset with the life of the asset. This approach also reduces the one-time impact on property owners to fund significant capital projects by spreading the costs out over time and can allow for large projects to be addressed without collecting the monies just in time. • Increased Equity - The stormwater bill for a property is based on the estimated stormwater generated on the parcel as result of the specific characteristics of the property (i.e. pavement vs. grass). This approach much more closely aligns the properties use of the stormwater system and the resulting stormwater bill as compared to the value of the property. • Resiliency - A stormwater utility serves as a resilient means of management stormwater within a community. As an enterprise fund, the stormwater utility is able to maintain emergency reserve funds that can be used to fund unexpected system expenditures. A resilient funding source is becoming increasingly important aspect of stormwater utilities due to aging infrastructure and the increase frequency of extreme weather events. • Full Participation - Unlike the use of property taxes, which excludes tax-exempt properties from contributing monetarily to stormwater management, a stormwater utility will include all properties that contribute runoff to the stormwater system. This results in a wider pool of contributing properties and thereby reducing stormwater management costs to all property owners. • Ability to Recognize Onsite Stormwater Management - Communities with stormwater utilities will typically offer mitigation credits (reductions in the fee) for properties that take steps to manage stormwater on their property. This provides value to the property owner as they have the ability to reduce their stormwater bill and it benefits the entire community by reducing stormwater contributions to the system. • Transparent - Property owner’s within communities with stormwater utilities benefit from the fact that every single dollar of their stormwater bill is used specifically and exclusively for the stormwater system. This provides transparency and accountability within the management of the stormwater system. 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 12 RECOMMENDED GOAL AND OBJECTIVES FOR A STORMWATER UTILITY FOR COLLIER COUNTY In light of the challenges facing the County’s stormwater program and the guidance and planning framework provided by the County’s Growth Management Plan, we worked with engaged individuals on staff at the County to develop a recommended overarching goal and set of objectives to provide a sound policy foundation for a stormwater utility for Collier County. We are recommending that the County reaffirm the existing overall stormwater management goal as the single primary goal directing the activities of the stormwater utility: Goal: To provide stormwater management facilities and services for drainage and flood protection for existing and future development, minimize the degradation of quality of receiving water and surrounding natural areas, and protect the functions of natural groundwater aquifer recharge areas. The County’s stormwater management goal clearly embraces both water quantity and water quality issues, and explicitly expresses that these objectives will be achieved through both operating services and capital facilities. It is both broad and inclusive, and unlikely to become dated in the foreseeable future. Any such broad goal must be supported by several key functional objectives. These recommended objectives appropriately differ from the objectives in the County’s comprehensive plan as this list is provided to establish operational guidance for the establishment and initiation of a stormwater utility. Supporting objectives for the stormwater utility: 1) The stormwater utility will conduct all stormwater management activities so as to allow the County to meet the stormwater management goal and objectives identified in the Growth Management Plan. 2) The stormwater utility will provide leadership and direction for all stormwater management activities within Collier County, even if some functions are administratively housed in other operating units of the County. 3) The stormwater utility will develop, manage, and utilize a dedicated and enhanced revenue stream for the exclusive purpose of stormwater management. a. Targeted revenue generation will reflect all needs of the system to achieve and sustain the primary goal and other objectives. 2. System Challenges and Goals for Stormwater Management Collier County | Stormwater Utility Rate Study Stantec | 13 b. The stormwater utility will utilize this dedicated revenue stream to transition from reactive to proactive system maintenance. c. The stormwater utility will allow the County to leverage the dedicated funding stream to partner with other entities (both inside and outside the County) and apply for grant funds as may be beneficial to the stormwater utility’s purposes. 4) Revenues to fund the stormwater programs will be generated equitably from residents and businesses making use of the system. a. Stormwater user charges will be based on a stormwater user fee that reflects use of the stormwater system (such as is indicated by impervious area, a mixture of total area and impervious area, or other cost allocation approaches). b. The stormwater fee will be established and managed to keep it as simple as is practicable to enhance community understanding and ease of administration. c. The stormwater fee will be assessed to all parcels in the unincorporated portion of the County that contribute stormwater to the system. d. The stormwater utility will create a system of stormwater “fee credits” to allow the user charge system to reflect some of the important differences in how different properties use the stormwater system, such as via onsite stormwater management facilities. The stated goal for stormwater management and supporting objectives for the stormwater utility were used as guideposts for the stormwater utility rate study and are reflected in the analysis and recommendations developed during the subsequent chapters of the report. 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 14 CURRENT AND PROJECTED REVENUE REQUIREMENTS This chapter of the report documents our project team’s review of the existing and projected budget for stormwater management within Collier County to provide an understanding of revenue requirements of the stormwater system based on the current level of service. The review is based on historical spending and projected budgets established by the County. An overview of the current funding mechanisms utilized by the County to fund stormwater management is also provided. The revenue requirements presented in this section of the report are representative of the current level of stormwater management service provided by the County. Section 4 of the report identifies and documents the revenue requirements for alternative levels of service. BACKGROUND The County’s current stormwater program is managed within the County’s Growth Management Department. The program is decentralized with resources and staff provided from multiple divisions and sections within Growth Management. The majority of stormwater activities are completed within the Road Maintenance Division, the Pollution Control and Prevention Division and the Stormwater Management Section of the Capital Planning and Program Management Division. These three divisions are responsible for managing the primary stormwater program elements which include infrastructure maintenance, regulatory compliance and stormwater program management, respectively. HISTORICAL AND CURRENT SYSTEM REVENUE REQUIREMENTS To initialize the review of the system revenue requirements, we obtained the County’s historical and budgeted financial information regarding the operation and maintenance of its stormwater system. As described above, the County’s current stormwater management program is decentralized, with functions and costs spread among multiple divisions and sections within the County’s Growth Management Department. As such, the consolidated system revenue requirements were developed by pulling budgetary information from various sources within the County to provide an accurate picture of the current revenue requirements of the stormwater system. 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 15 3.2.1 Stormwater Management Section The County accounts for the expenditures for the Stormwater Management Section within two separate funds which includes operating personnel related expenses (Fund 111) and capital related expenditures (Fund 325). Stormwater Management - Operating Expenditures (Fund 111, formerly Fund 324) To examine the revenue requirements within the Stormwater Management Section, our project team reviewed historical operating expenses from FY 2014 to FY 2016 and the budgetary expenses for FY 2017 and FY 2018. Table 3.1 presents the annual actual and budgetary operating personnel expenditures within the Stormwater Management Section. Table 3.1 - Stormwater Management Operating Expenditures and FTE’s (Fund 111) Function Actual FY 2014 Actual FY 2015 Actual FY 2016 Budget FY 2017 Budget FY 2018 Departmental Fiscal Support 238,947 181,264 110,920 82,200 54,277 NPDES/GIS 211,653 215,925 235,913 230,053 239,327 Stormwater Master Planning 133,408 135,829 137,379 307,932 321,877 Stormwater Capital Project Management 220,807 257,040 318,070 305,615 319,919 Construction Engineering & Inspection 104,533 110,168 20,002 - - Right-of-Way Acquisition 212,157 280,080 97,965 - - Transfers Out - - - - 57,000 Reserves for Contingences - - - 1,000 Total Annual Operating Expenses $1,121,505 $1,180,306 $920,249 $926,800 $992,400 Total FTEs Funded 10.5 10.5 5.0 7.0 7.0 As demonstrated in Table 3.1, there has been a reduction in the number of full time employees (FTE’s) funded within the Stormwater Management Section over the last few years and a resulting reduction in annual expenditures. It is important to note that the annual reductions in positions funded and expenditures is not due to reduced needs for stormwater management in the County but rather as a result of the availability of funding for the program. It is also worth noting that while Fund 111 includes expenditures related to NPDES permit management, the individual providing these services is located within Pollution Control and Prevention Section of the Growth Management Department. 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 16 Stormwater Management - Capital Expenditures (Fund 325) The expenditures identified within the Stormwater Management Capital budgets were examined over the same time period as the operating related expenses. The capital expenditures include design, permitting and construction of stormwater system improvements within the County. A summary of the annual actual and budgetary expenditures are provided in Table 3.2. Table 3.2 - Stormwater Management Capital Expenditures (Fund 325) Expenditure Type Actual FY 2014 Actual FY 2015 Actual FY 2016 Budget FY 2017 Budget FY 2018 Materials and Equipment 989,479 910,714 1,428,539 2,617,200 1,672,700 Capital Outlay 2,743,121 4,006,817 4,420,385 3,512,000 4,402,600 Reserves for Contingences - - - 2,000 - Total Annual Capital Expenses $3,732,600 $4,917,531 $5,848,924 $6,131,200 $6,075,300 The stormwater capital expenditures in the County have varied year over year based on the availability of funding and specific projects programmed for each year. Table 3.3 presents the annual total expenditures for the Stormwater Management Section. Table 3.3 - Total Stormwater Management Expenditures (Funds 111 and 325) Expenditure by Fund Actual FY 2014 Actual FY 2015 Actual FY 2016 Budget FY 2017 Budget FY 2018 Operating (111) 1,121,505 1,180,306 920,249 926,800 992,400 Capital (325) 3,732,600 4,917,531 5,848,924 6,131,200 6,075,300 Total Annual Stormwater Management Section Expenditures $4,854,105 $6,097,837 $6,769,173 $7,058,000 $7,067,700 As demonstrated in Table 3.3, the annual expenditures within the Stormwater Management Section has fluctuated year over year primarily based on the capital expenses and the projects that are funded in any particular year but on average, in recent years, expenditure have been in the range of $7 million per year. 3.2.2 Road Maintenance Division - Aquatic Plant Control Expenditures (Fund 101) The County accounts for the expenditures related to the maintenance of the stormwater system infrastructure within the Transportation Maintenance – Aquatic Plant Control Fund 101. As mentioned earlier, the Road Maintenance Division of the Growth Management Department 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 17 provides these maintenance services within the County. The historical actual and budgetary expenditures for these activities are presented in Table 3.4. Table 3.4 - Historical and Budgeted Stormwater System Maintenance (Fund 101) Expenditure Type Actual FY 2014 Actual FY 2015 Actual FY 2016 Budget FY 2017 Budget FY 2018 Personal Services 209,243 216,190 227,164 227,000 237,700 Additional Services (Road Maintenance) 858,600 870,300 871,100 871,500 - Operating Expenses 862,881 765,841 708,298 1,086,800 1,104,400 Capital Outlay 385,478 122,174 - - 5,000 Annual System Maintenance Expenses $2,316,203 $1,974,506 $1,806,562 $2,185,300 $1,347,100 The stormwater system infrastructure maintenance expenditures have typically been in the range of just over $2 million per year. As shown in the Table 3.4, the County has historically provided additional resources from the Road Maintenance Division to backfill the dedicated resources for stormwater system maintenance. As shown in the Table 3.4, the FY 2018 budget currently does not identify these additional resources and therefore the budget is abnormally low for FY 2018. However, for purposes of developing the current budgeted revenue requirements our analysis assumes that the Road Maintenance will provide additional services similar to historical levels, approximately $870k. This would bring the budget up to approximately $2.2 million and is reflected in the total system expenditures described in the next section. 3.2.3 Total System Expenditures The summation of the historical and budgeted expenditures are summarized in Table3.5. Table 3.5 - Total Historical Expenditures and Proposed Budget (Funds 111, 325, and 101) Expenditure Type Actual FY 2014 Actual FY 2015 Actual FY 2016 Budget FY 2017 Budget FY 2018 Stormwater Management Operating (111) 1,121,505 1,180,306 920,249 926,800 992,400 Stormwater Management Capital (325) 3,732,600 4,917,531 5,848,924 6,131,200 6,075,300 Stormwater System Maintenance (101) 2,316,202 1,974,505 1,806,562 2,185,300 2,217,100* Total Stormwater Expenditures $7,170,307 $8,072,342 $8,575,735 $9,243,300 $9,284,800 *FY 2018 includes the approximate $870,000 cost of the historical additional services provided by Road Maintenance 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 18 The County’s total stormwater system expenditures have grown slightly over the past three years and the County’s budgets for FY 2017 and 2018 demonstrate a continuation of this trend. HISTORICAL AND CURRENT STORMWATER FUNDING The County has historically funded stormwater management from a number of sources. The primary funding source has historically been from ad valorem property taxes. In 2004, the Board of County Commissioner’s approved a Stormwater Management Funding Policy which dedicated 0.15 mils of ad valorem solely to the funding of stormwater capital improvement projects. However, during the economic downturn following 2008, the funding levels were redefined by a resolution that would allow the County to fund “up to 0.15 mils per year.” As a result of this change in the funding policy, the level of funding for stormwater management in the County in subsequent years ended up being significantly reduced. Figure 3.1 demonstrates the historical funding from ad valorem for stormwater management in the County and shows the significant reduction in funding over the past decade. Figure 3.1 - Historical Ad Valorem Funding for Stormwater Management This funding policy still is in place today. The County determines, on an annual basis, the level of funding that will be made available for stormwater management, resulting in annual fluctuations. In addition to ad valorem property taxes, the County manages stormwater activities with funds received from the Big Cypress Basin (BCB) based on a cooperative agreement with the South Florida Water Management District (SFWMD). The current agreement, which was established in $0 $2 $4 $6 $8 $10 $12 $14 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017MILLIONS FISCAL YEAR 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 19 2004, provides the County with $1 million annually over a 20-year term (agreement sunsets in 2024). Over the years, the County has also received various grants that have been used to supplement these revenues. Based on a review of the historical revenue it is clear that stormwater funding has been inconsistent from year to year, providing limited certainty of the available revenues for stormwater management in the County. A summary of the annual stormwater funding is provided in Table 3.6. Table 3.6 - Total Historical and Budgeted Revenue Stormwater Revenues Expenditure Type Actual FY 2014 Actual FY 2015 Actual FY 2016 Budget FY 2017 Budget FY 2018 General Fund (001) Incorporated 4,939,343 4,843,790 1,776,764 2,752,000 1,865,800 General Fund (111) Unincorporated 1,300,000 1,050,000 4,011,800 4,172,000 4,267,900 Big Cypress Basin 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Interest/Miscellaneous 70,512 148,966 127,389 121,700 153,100 Gas Taxes (Road Maintenance) 858,600 870,300 871,100 871,500 870,000* Carry Forward 100,600 122,800 64,900 267,400 143,500 Total Annual Revenues $8,269,055 $8,035,856 $7,851,953 $9,184,600 $8,299,200 *Table assumes backfill from road maintenance in FY 2018 budget REVENUE REQUIREMENT PROJECTIONS Based on our review of the historical and budgetary stormwater system expenditures and planning documentation provided by the County, our project team developed a five-year forecast of system revenue requirements based on the current level of service provided within the County. The revenue requirement forecast was developed by populating our financial modeling system with the County’s historical and budgetary stormwater expenditures. The County also provided the 2017 AUIR which outlines the stormwater management capital expenditures (fund 325) for Fiscal Years 2018 to 2022. The following section provides our forecast of the stormwater system revenue requirements over the next five-years. 3.4.1 Operating Costs Forecast The projected operating costs for the County’s stormwater system include those identified within the personal expenses within Stormwater Management (111), non-personal related operating in Stormwater Management Capital (325) and those identified in Road Maintenance and Aquatics Control (101). To forecast the operating expenses in Funds 111 and 101, annual inflation factors were applied to the Fiscal Year 2018 budget on a line item level. The projected non-personal 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 20 related operating costs in Fund 325 were provided in the AUIR for through 2022. It should be noted that while the AUIR provides a forecast through 2022, our analysis extends out to 2023 in order to provide a five-year forecast. Our analysis assumes inflationary level increases in subsequent years. Table 3.7 presents the projects of operating costs over the five-year projection period by fund. Table 3.7 - Stormwater Operating Expenses Forecast Expenditure Type by Fund FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Stormwater Management (111) 935,400 967,495 991,682 1,016,474 1,041,886 Stormwater Management Non-Personal Operating (325) 750,000 800,000 850,000 850,000 871,250 Stormwater Maintenance (101) 2,115,111 2,137,413 2,160,161 2,183,364 2,207,032 Total Operating Expenses $3,800,511 $3,904,907 $4,001,843 $4,049,838 $4,120,168 The projected operating costs associated with the current level of service are anticipated to increases consistent with overall inflation over the next five years at between 2% to 3% per year. 3.4.2 Capital Costs Forecast The County’s stormwater capital improvements have been identified in the AUIR. The document lists the individual projects and the anticipated spending for each fiscal year. These planned capital projects are presented in Table 3.8. It should be noted that the most recent AUIR provided by the County identifies projects over a five year period beginning with FY2018. Since the rate study examines a five year projection period beginning in FY 2019, projects were estimated for FY 2023 based on average annual spending. Table 3.8 - Planned Capital Improvement Projects Capital Project FY 2019 FY 2020 FY 2021 FY 2022 FY 2023* GG City Outfall Replacements 2,000,000 2,000,000 2,000,000 2,000,000 - Pine Ridge Stormwater Improvements 150,000 150,000 150,000 150,000 - Immokalee Stormwater Improvements 1,500,000 1,000,000 2,000,000 4,500,000 4,500,000 Naples Park SW Improvement 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 W. Goodlette-Frank Area Stormwater Improvements 500,000 500,000 - - - Harbor Lane Brookside 500,000 500,000 - - - 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 21 Capital Project FY 2019 FY 2020 FY 2021 FY 2022 FY 2023* North Golden Gate Estates Flowway 100,000 100,000 200,000 200,000 - Upper Gordon River 1,000,000 1,000,000 1,000,000 1,000,000 - Griffin Road Area Stormwater Improvements 400,000 500,000 500,000 - - RESTORE - 500,000 1,000,000 1,000,000 - Weir Automation 100,000 250,000 250,000 250,000 - Total Planned Capital Spending $8,850,000 $9,100,000 $9,700,000 $11,700,000 $7,100,000 *FY 2023 is estimated, not included in AUIR The projected capital spending included in the AUIR consists primarily of three projects; Golden Gate (GG) City outfall replacements, Immokalee stormwater improvements and Naples Park stormwater improvements. The Immokalee and Naples Park improvements will take approximately 10 years to complete. These two projects include partnering with the County’s other utilities (primarily water and sewer) in an effort to coordinate upgrade and replace existing infrastructure. The County has historically funded stormwater capital improvement projects on a cash basis, as compared to using financing to fund the projects. It is important to note that the AUIR identifies that the planned capital spending is based on anticipated funding and not based on the capital needs of the County’s stormwater system. 3.4.3 Total Projected Revenue Requirements The combination of the projected operating and capital expenses results in the total system revenue requirements over the planning period. Table 3.9 presents the total annual revenue requirements over the next five years. Table 3.9 - Total Projected Revenue Requirements Expenditure Type FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Operating Expenses 3,800,511 3,904,907 4,001,843 4,049,838 4,120,168 Capital Improvement Projects 8,850,000 9,100,000 9,700,000 11,700,000 7,100,000 Total System Revenue Requirements $12,650,511 $13,004,907 $13,701,843 $15,749,838 $11,220,168 The total system revenue requirements shown in Table 3.9 are higher than the historical expenditure levels for the stormwater system. The primary reason for the increased expenditures is due to the level of capital spending identified in the AUIR. The impacts of a higher level of 3. Current and Projected Revenue Requirements Collier County | Stormwater Utility Rate Study Stantec | 22 capital spending is contemplated in the AUIR as it identifies an annual gap in funding available to meet the annual revenue requirements as discussed in the next section. REVENUE PROJECTIONS Stormwater management revenue projections were developed for the five-year planning period based on revenue identified in the AUIR and the assumption that other current funding sources (Big Cypress Basin agreement and Road Maintenance contribution) would remain available over the next five years. Table 3.10 presents the revenue projection over the planning period. Table 3.10 - Revenue Projections Expenditure Type by Fund FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 General Fund (001) Incorporated 1,627,000 2,000,000 2,000,000 2,000,000 2,000,000 General Fund (111) Unincorporated 4,268,000 4,268,000 4,268,000 4,268,000 4,268,000 Big Cypress Basin 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Interest/Miscellaneous 50,000 50,000 50,000 50,000 50,000 Gas Taxes (Road Maintenance) 870,000 870,000 870,000 870,000 870,000 BP/Restore Act 500,000 1,000,000 1,000,000 1,000,000 Total Annual Revenues $7,815,000 $8,688,000 $9,188,000 $9,188,000 $9,188,000 A comparison of the anticipated revenues and the projected revenue requirements in Table 3.11 reveals that system expenditures will significantly outpace the stormwater system revenues over the projection period. Table 3.11 - Expenditure and Revenue Comparison FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Total System Revenue Requirements 12,650,511 13,004,907 13,701,843 15,749,838 11,220,168 Total Annual Revenues 7,815,000 8,688,000 9,188,000 9,188,000 9,188,000 Annual Surplus / (Shortfall) ($4,835,511) ($4,316,907) ($4,513,843) ($6,561,838) ($2,032,168) Based on this analysis it clear that the existing funding identified for the stormwater management within the County will not be sufficient to meeting the existing level of service. The next section of the report examines what the County is able to accomplish with the current level of service and explores alternative levels of service. 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 23 LEVEL OF SERVICE ANALYSIS This chapter of the report examines the current level of service for stormwater system maintenance provided by the County and identifies alternative levels of service and the associated cost of providing each level of service. INFRASTRUCTURE MAINTENANCE LEVEL OF SERVICE GAP ANALYSIS The level of service provided for stormwater maintenance is typically one of the easiest stormwater program elements to quantify given the ability to measure the frequency of the specific maintenance activities. To examine the current level of service, our project team interviewed County staff within the Road Maintenance Division and reviewed maintenance records provided by the County. A listing of the current primary maintenance activities completed by the Road Maintenance Division is provided below: • Storm Sewer Vacuuming • Street Sweeping • Curb Inlet Cleaning • Spraying • Catch Basin Cleaning • Mowing • Hydro Dynamic Unit Cleaning • Outfall Ditches / Secondary System • Road Swale Cleaning • Pump, Equipment and Structure Maintenance • Tree/Vegetation Removal The current stormwater maintenance activities utilize 28 full time employees and equipment within the Road Maintenance Division. While the majority of the maintenance activities are completed in-house by County staff, spraying, mowing and most of the tree/vegetation removal are contracted out. 4.1.1 Stormwater Infrastructure Maintenance Current Level of Service Based on discussions with County staff and review of maintenance records the current frequency of stormwater activities were documented by maintenance activity type. The maintenance activities represent the current level of stormwater maintenance provided within the County. Table 4.1 provides a summary of the current staffing for each activity, the time required to complete the maintenance activity throughout the entire County system (current cycle) and typical industry standards maintenance cycles. 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 24 Table 4.1 - Stormwater Infrastructure Maintenance Current Level of Service Maintenance Activity Current Staffing (FTE’s) Current Level of Service Typical Industry Standard Storm Sewer Vacuuming 4 26.7 Year Cycle 5 to 10 Year Cycle Curb Inlet Cleaning 24.7 Year Cycle 4 to 5 Year Cycle Catch Basin Cleaning 37.2 Year Cycle 4 to 5 Year Cycle Hydro Dynamic Units Cleaning 1 Year Cycle Current Level Appropriate Roadside Swale Cleaning 14 56.5 Year Cycle 10 to 15 Year Cycle Street Sweeping 3 30 Day cycle for all streets, 2 week cycle for high volume 2 Week cycle for all primary streets Contract Spraying - Inspected Monthly, Spray as Required Current Level Appropriate Contract Mowing - 2 Week cycle and 20 day cycle Current Level Appropriate Tree/Vegetation Removal - As Required Current Level Appropriate Outfall Ditches / Secondary System 3 Defined 1, 5 and 10 year digging cycle Pump, Equipment and Structure Maintenance 4 Programmed Maintenance Current Level Appropriate A review of the current maintenance activity cycles and typical industry standards provides insight into the maintenance gaps within the current level of service. While the County Road Maintenance Division is currently operating at an extremely efficient level given its resources, the current maintenance cycles for several activities a dramatically below industry standards. A prime example would be roadside swale cleaning. Roadside swales are a vital component of the stormwater system as they convey stormwater away from roadways and property. Overtime roadside swales become filled with dirt and debris which significantly reduces the ability of the swale to convey stormwater. Cleaning out roadside swales consists primarily of digging out the swale and disposing of the dirt and debris. The effort typically requires a crew of 7 or 8 FTE’s and heavy equipment (excavator and dump trucks). Given the current resources within Road Maintenance Division (effectively two roadside swale crews), it will take nearly 60 years for all of the swales in the County to be cleaned. While the County may decide that the typical industry standard of 10 to 15 year maintenance cycle is too aggressive, the current approach is not sustainable, as overtime the swales may become completely ineffective. 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 25 While there are certain gaps in the current maintenance levels provided in the County, Table 4.1 demonstrates that there are areas where the County currently provides a level of maintenance service that meets industry standards. 4.1.2 Enhanced Level of Service – Stormwater Infrastructure Maintenance Based on the gaps in the current maintenance activities, our project team worked with County Road Maintenance staff to determine what resources would be required to reduce and/or eliminate the maintenance gaps. The resources were identified in a programmatic manner based on the staffing and equipment required to accomplish each of the maintenance activities. Table 4.2 summarizes the additional resources that would be needed to transition the maintenance cycle to the industry standard level. Table 4.2 - Stormwater Maintenance Enhanced Level of Service Maintenance Activity Additional Staffing (FTE’s) Categories of Additional FTE’s Annual Burdened Staffing Costs Capital Equipment Requirements Cost of Capital Equipment Storm Sewer Vacuuming 16 8 Maintenance, 8 Equipment Operators $664,000 8 Vac Trucks $4,160,000 Curb Inlet Cleaning Catch Basin Cleaning Roadside Swale Cleaning 40 5 Heavy Equipment Operators, 5 Crew Leaders, 15 Maintenance, 10 Equipment Operators $1,765,000 15 Dump Trucks, 5 Excavators $3,125,000 Street Sweeping 1 1 Equipment Operator $45,000 * Outfall Ditches / Secondary System 3 3 Heavy Equipment Operators $168,000 Alternative Excavator, Long Reach Excavator, Bull Dozer $1,020,000 Total 60 $2,642,000 $8,305,000 *The County has a street sweeper that is currently not utilized and therefore just additional staffing is required to enhance level of service. Table 4.2 demonstrates that the staffing resources and capital equipment required to address the maintenance gaps are substantial. The current budget for stormwater maintenance (within the Road Maintenance Division) totals just over $2 million. To address the maintenance gaps the 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 26 County would need to more than double the funding for stormwater maintenance and address the associated capital equipment needs. Given the resources required attempting to address the funding need in a single budget year would be unrealistic. In most instances it would be prudent for the County to consider a phased approach to enhancing the level of service over a period of time. This concept is discussed later in this chapter of the report. The bottom line is that the maintenance gaps do need to be addressed. The current approach is not sustainable and residents will increasingly experience stormwater related failures and issues throughout the County, including flooded streets and private property due to insufficient funding for maintenance of the stormwater system. STORMWATER PROGRAM MANAGEMENT Stormwater program management provides the primary oversight and management of the stormwater program in the County. The current level of service provided by stormwater program management can be defined by the current activities accomplished by the program and the level of stormwater capital projects that are executed. Table 4.4 shows the current stormwater program management activities. Table 4.4 - Current Stormwater Program Management Activities and Staffing Activity Current Staffing (FTEs) Primary Responsibilities Stormwater System Inventory (GIS) 1 Staff and equipment to maintain and update stormwater infrastructure inventory in Geographical Information System (GIS) database. Stormwater Master Planning 3 Lead long range planning efforts for the development future stormwater capital improvement program including the development of the AUIR. Stormwater Capital Project / Consultant Management 2 Management of stormwater planning and design efforts related to the completion of stormwater capital improvement projects. Based on discussions with County staff, the employee tasked with development of the stormwater system inventory in GIS is currently utilized by other departments within the County and therefore is not currently available to support the stormwater program management. This situation represents a gap within the current program, as the entire stormwater system has yet to be captured in a GIS database and will require ongoing updates and maintenance in the future. The level of staffing needs within Stormwater Program Management is partially dependent on the level of planned capital investment within the stormwater system. Based on our initial review of the current stormwater program management section there are gaps in the current program that should be addressed along with additional staffing to support an increased level of capital 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 27 investment. To provide a higher level of service stormwater program management could include the following additional resources to allow for effective management of the stormwater program. • Administration - A position could be created that would provide budget and financial accounting support to the stormwater program. The County will be required to account for the stormwater utility as an enterprise fund and which will require this staffing. Additionally, a position could be created that would serve as the central point for stormwater system customer service within the County. This position will be vitally important should the County move forward with the implementation of the stormwater utility. • Public Information - A public information specialist position could be created to coordinate all stormwater communications within the County. The individual would support the public information aspects of the NPDES permit. • Regulatory Review and Inspections - A senior inspector could be added to the program to provide a dedicated resource to provide regulatory review, inspections and compliance with stormwater design standards within the County. • Data Management - Senior operations analysis position could be funded to provide a dedicated resource for stormwater system data management within the County. The individual would maintain the stormwater system GIS and other pertinent data systems. • Capital Projects and Planning - A senior project manager and a project manager position could be funded to provide oversight and management of an enhanced capital improvement program and system planning. The additional staffing resources listed above would allow the County to improve its ability to manage the stormwater program and provide an enhanced level of service within the community. Table 4.5 presents the estimated funding needs associated with these additional resources. Table 4.5 - Enhanced Stormwater Program Management Management Activity Additional Staffing (FTEs) Categories of Additional FTEs Annual Burdened Costs Administration 2 Accounting / Budget Analyst, Customer Service 125,000 Inspections 1 Senior Inspector 90,000 Public Information 1 Community Liaison / PIO 90,000 Data Management 1 GIS Coordinator 90,000 Capital Projects Management and Planning 2 Senior Project Manager, Project Manager 200,000 Total 7 $595,000 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 28 LEVEL OF SERVICE ALTERNATIVES The prior sections have outlined the current and potential areas of enhanced level of service related to stormwater management in Collier County. The analysis allows for the development of a range of level of service alternatives that could be provided within the County. The following sections formulate specific levels of service (both maintenance and capital). 4.3.1 Maintenance Level of Service Based on our review of the current level of service and discussions with the County staff, it was determined that the level of service alternatives should focus primarily on stormwater infrastructure maintenance within the County. As documented in Table 4.1, the current frequency with which the County is able to maintain the stormwater infrastructure is dramatically below industry standards in a number of areas and as shown in Table 4.2, significant resources would be required to transition to industry standard levels of maintenance. The maintenance level of service alternatives have been developed based on options that would allow the County to transition to industry standards. Specifically, our project team has developed four level of service alternatives based on enhanced system maintenance. Figure 4.1 presents the level of service options in relation to the maintenance frequencies for each of the key stormwater maintenance activities. Figure 4.1 - Stormwater Maintenance Level of Service The figure demonstrates that for each level of service alternative, the maintenance frequency would be improved from the current level of service. It is important to note that the figure does 26.7 24.7 37.2 56.5 21.9 19.8 29.1 45.5 17.1 14.9 21.1 34.5 12.3 9.9 13.0 23.5 7.5 5.0 5.0 12.5 Storm Sewer Vaccuuming Curb Inlets Cleaned Catch Basin Cleaned Roadside Swale CleanedMaintenance Frequency (Years)Current LOS 1 LOS 2 LOS 3 Industry Standard 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 29 not demonstrate all stormwater maintenance activities, but is intended to demonstrate the key activities and the improvements for each level of service alternative. Additionally, it would be difficult for the County to transition immediately to providing the enhanced level of service. As a result, the annualized costs to provide the stormwater maintenance for each level of service assumes one to three year transition period depending on the level of service alternative (i.e. LOS 1 could realistically be reached after one year but an industry standard level of service would require a multi-year phase in). In addition to the maintenance expenditures, our analysis assumes that the County would be required to add resources to fund the stormwater program management activities outlined in Table 4.5. These resources will be required to support the program and address the capital investments required in the system, discussed in the next section. Table 4.6 presents the estimated annual maintenance and program management expenditures associated with each level of service. Table 4.6 - Level of Service Stormwater Maintenance and Program Management Expenditures Level of Service Annual Expenditures Current $2,800,000 Level of Service: 1 $5,600,000 Level of Service: 2 $6,100,000 Level of Service: 3 $7,300,000 Industry Standard $8,400,000 4.3.2 Capital Level of Service In addition to defining the maintenance level of service alternatives, it is necessary to define what level of capital investment will be funded at each level of service alternative. As mentioned earlier in the report, the Stormwater system AUIR identifies the essential capital projects for the stormwater system. The current AUIR identifies that the current funding for the defined projects is not sufficient to fund all of the projects within the AUIR. It is also important to note that the projects identified in the AUIR are not comprehensive in nature. Several near term projects have been identified similar to the Immokalee and Naples Park stormwater improvements for which the stormwater program would partner with the County’s water and sewer utilities department to coordinate infrastructure improvements in order to reduce costs and minimize disturbances within the community. These projects include the following: • Lely Neighborhood 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 30 • Naples Manor • West Goodlette Frank Road Area (Partnership with City of Naples) • Bonita Springs Area (Bonita Shores) Based on our review of the capital projects, we developed three primary categories of projects. The purpose of developing the categories of projects is to allow for incrementally funding each category at a specific level of service. The three categories of projects identified include the following: • AUIR projects with identified funding - Projects that are in the AUIR that are currently funded. It is assumed that since these projects are currently funded they would define the current level of capital investment provided by the County. • AUIR projects without identified funding - Projects that are in the AUIR but without identified funding. The funding of these projects would allow the County to provide an increase in the level of service. • Partnership project - An additional project in which the County would work in partnership with the water and sewer utility to replace existing stormwater infrastructure. For purposes of our analysis, it was assumed that one partnership project would be included (i.e. this category does not include all of the potential partnership projects discussed above). Table 4.7 presents each of the categories of the capital projects and the annual capital cost associated with each category. Table 4.7 - Categories of Capital Projects Project Type Annual Capital Cost AUIR Funded Projects $7,100,000 AUIR Unfunded Projects $3,000,000 Partnership Project $3,000,000 Total $13,100,000 4.3.3 Defined Level of Service Alternatives To develop the level of service alternatives, our project team layered each of these categories of capital projects into the level of service alternatives under the assumption that increased capital spending would result in a higher level of service. The following table presents the annualized maintenance costs and the layered in capital costs for each level of service alternative. 4. Level of Service Analysis Collier County | Stormwater Utility Rate Study Stantec | 31 Table 4.8 - Stormwater Level of Service Alternative Annual Expenditures Level of Service (LOS) Annual Maintenance Costs* Capital Projects Total Annual Expenditure by LOS AUIR Funded Projects AUIR Unfunded Projects Partnership Project Current $2,800,000 $7,100,000 - - $9,900,000 LOS: 1 $5,600,000 $7,100,000 - - $12,700,000 LOS: 2 $6,100,000 $7,100,000 $3,000,000 - $16,200,000 LOS: 3 $7,300,000 $7,100,000 $3,000,000 $3,000,000 $20,400,000 Industry Standard $8,400,000 $7,100,000 $3,000,000 $3,000,000 $21,500,000 *Annual operating costs are shown net of annual funding from Big Cypress Basin of $1 million The total annual expenditure by level of service alternative identified in Table 4.8 are a crucial component of the stormwater utility rate study. The “Expenditure by LOS” serves as the cost basis to develop the stormwater fee in the next section of the report. 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 32 STORMWATER FEE ANALYSIS This chapter of the report outlines our analysis of stormwater fees including examination of the basis for determining the fee, the stormwater fee structure, impervious area analysis and the calculated stormwater fees for each of the level of service alternatives. STORMWATER FEE OVERVIEW Stormwater fees are effective to create a dedicated funding source for a stormwater management program. As a fee for service rather than a tax, the structure of the stormwater fee is an important consideration. The stormwater fee should be designed to reflect the use of or contributions to the County’s stormwater system. The County currently uses this fee for service approach for the provision of water, sewer and solid waste service in the County. Unlike these other utility services provided by the County, measuring a parcels contribution or use of the stormwater system is not directly observable and therefore a proxy or estimate of system use must be developed. Prior to the development of the stormwater fee structures, our project team and County staff discussed the key goals and objectives that should be used to evaluate the structure of the stormwater fees. The goals and objectives for the stormwater fee structure include the following: • Revenue sufficiency – stormwater fees need to generate revenue sufficient to meet the stormwater management system requirements • Equity among customers – stormwater fees should be designed such that costs recovered from each customer are related directly to the way in which the customer demand characteristics cause the utility to incur costs • Simplicity – stormwater fees should be understandable by property owners within the community and easily explained by County staff and leadership • Administrative efficient – stormwater fees should be able to be easily administered by County staff • Defeasibility – stormwater fees must be developed in accordance with applicable legal requirements and should be designed according to standard industry practice Each of these goals and objectives serve as key guideposts for the selection of the fee structure and were used in our evaluation of various structures. Based on discussions with County staff, particular emphasis and weighting was given to designing stormwater fees that would be simple and easy to understand within the community. There are two key aspects of a stormwater fee that must be developed including: 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 33 1) Fee Basis - The basis provides the unit of measurement that will be utilized as a billing determinate. 2) Fee Structure - The structure provides the framework in which customer classes are identified and charged based upon their common characteristics. Each of these components are discussed in the following sections of the report. FEE BASIS - MEASURE OF STORMWATER CONTRIBUTION The collection of dedicated stormwater revenues can and is accomplished through the use of different fee basis. The fee basis is essentially the methodology used to measure the stormwater contribution from each property and to proportion the stormwater fee. The stormwater fee basis methodology is often driven by two key factors which include availability of data and the perceived equity associated with the basis. For example, while it would require limited information to bill each property owner in Collier County the same flat stormwater fee, this approach would certainly not recognize the manner in which different parcels contribute stormwater to the County’s system. Since the conversion of natural land to developed land with impervious area result in increased stormwater runoff, most communities with stormwater utilities use impervious area or some variation of impervious area as the basis for the stormwater fee. Impervious area is the permanent real characteristics of a parcel that impede the natural infiltration of stormwater into the ground. While there are many variations, the typical fee basis used by stormwater utilities across Florida and the country include: • Impervious area only • Impervious area plus gross area 5.2.1 Impervious Area Fee Basis The most common fee basis for stormwater fee develop is impervious area only. Numerous engineering and hydrologic studies have demonstrated that impervious area is the single most important factor contributing to the quantity and quality of stormwater runoff from a property. As a result, the use of impervious area only has been demonstrated to be a highly defensible basis standing up in numerous legal challenges in Florida and across the country. The use of impervious area is typically easily understood within the community, with the public understanding that “if you pave, you pay.” The use of impervious area requires information that delineates the impervious area on all parcels within the community, typically contained in a geographic information system (GIS) database. 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 34 There are some shortcoming to the use of impervious area only. The reality is that a public drainage system collects stormwater from both impervious and pervious area of a property, particularly during storm events. An impervious only fee basis does not account for these contributions and therefore does not incorporate a stormwater fee for vacant/undeveloped land. 5.2.2 Impervious Area plus Gross Area Fee Basis To address the fact that stormwater runoff is generated from both impervious area and pervious area on a parcel, some communities have adopted stormwater fee basis that account for impervious area and the gross area of the parcel. To recognize that the pervious area runoff contributions are significantly less than that generated from impervious area, stormwater fees using this basis will calculate a unit cost for pervious area separately from impervious area with the pervious area unit cost being significantly lower. While this approach addresses the fact that stormwater is generated from all parcels, developed and undeveloped, it is often more difficult for the members of the community to understand. The public can have a difficult time understanding why they have to pay for runoff from unimproved parcels or portions of their property. Additionally, the incentive to remove impervious area can be reduced. Finally, this approach includes charging vacant/undeveloped property a stormwater fee and therefore requires careful consideration to examine whether parcels are actually served by the stormwater system. Some communities, like Collier County, contain vacant/undeveloped property that is located well outside of the public drainage system. The use of impervious area plus gross area has been implemented by communities in Florida. Case law in the State has demonstrated that as along as sufficient scientific basis is used to calculate the appropriate runoff coefficient for impervious and pervious area to differentiate the unit cost of each, the approach is acceptable and defensible. 5.2.3 Recommended Fee Basis Based on our project team’s experience, discussion with County staff and the key goals and objectives for the stormwater fee structure in the County, we recommend that the County use impervious area only, as the basis for the stormwater fee. This approach meets each of the key goals and objectives and most importantly provides a simple, easy to understand approach that is defensible and provides an equitable allocation of costs within the County. IMPERVIOUS AREA ANALYSIS Collier County does not currently maintain an impervious area layer within its’ GIS database system. As a result, our project team was tasked with developing an impervious area database to facilitate the development of the stormwater fee. During the course of the study, numerous 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 35 data sources were reviewed to examine their viability for the development of the database. Ultimately, it was discovered the Collier County Property Appraiser maintains a planametric database that identifies the vast majority of impervious area in the County. Our project team reviewed the data with the County and determined that it would be a reasonable basis for the development of the impervious area layer for the study. 5.3.1 Impervious Area Statistical Analysis Using the Property Appraiser’s planametric database as a starting point, impervious data was next delineated and assigned to individual parcels, which created a parcel specific impervious database. Service area wide Stantec identified 836 million square feet of impervious area. This data set became the basis for analysis in order to understand the unique parcel configurations in Collier County and determine which fee structure options best suit the community. Specifically, parcels with like characteristics of development such as single-family residential parcels, lend themselves well to tiered fees. While non-single family parcels tend to be best charged according to actual measured impervious area. Tiered fees when applicable allow for great increases in administrative efficiency to be achieved with only a small decrease in the accuracy of the fee applied to an individual parcel. This analysis identified single family homes in the service area and performed a statistical analysis on them to determine the applicableness of tiers. Figure 5.1 shows a histogram of the distribution of the amount of impervious area on 82,674 single family homes identified in Collier County. The distribution shows that the majority of single family properties in the County have between 2,000 and 6,000 square feet of impervious. The statistical median impervious area is 3,900 square feet. Of particular note is the long tail on the distribution which demonstrates that there are a significant number of single family parcels with substantial amounts of impervious area, well outside the median. Figure 5.1 - Single Family Residential Impervious Area Distribution - 200 400 600 800 1,000 1,200 1,400 Single Family Residential PropertiesImpervious Area (Square Feet) 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 36 STORMWATER FEE STRUCTURE Upon selecting a basis for the stormwater fee structure the next step in the process is two-fold. First it is necessary to consider how the County might group similar parcel types, effectively creating customer classes for stormwater billing. Second, the way in which each customer class is charged a fee must be given significant consideration as to insure the fee structure is easy to understand, equitable and administratively efficient. 5.4.1 Customer Classes Collier County, like most communities, consists of a wide variety of land uses and parcel configurations that make up its property base. Grouping like properties into customer classes is appropriate in many cases in order to streamline the fee structure, enhance customer understanding, and insure administrative efficiency. To develop the stormwater fee customer classes for the County, our project team examined the property use distribution and parcels configurations in the County in order to determine the most appropriate customer classifications. The stormwater fee customer classes developed during the study include the following: • Single Family Residential - Single family homes on a single parcel • Non-Single Family Residential - Multi-Family Residential, Commercial, Government, Institutional, Nonprofit • Exempt - Public roads and right-of-ways, vacant parcels, railroad tracks, and parcels with less than 400 square feet of impervious The three customer classes were developed to provide simplicity and easy of understanding within the stormwater rate structure. The three customer classes are common among communities with stormwater utility as they recognize the common parcel characteristics that exist on single family residential parcel. The exempt customer class include those parcel that should be exempt from the stormwater fee. The basis for the categories of parcel included in the exempt customer class include the follow: • Public roads and right-of-ways: These properties serve as key components of the stormwater system. • Vacant parcels: The impervious area only approach would exclude vacant/undeveloped properties. • Less than 400 square feet of impervious: These properties are exempt to simplify the stormwater fee rate structure and to recognize the practical limitations of capturing all impervious area in the County. 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 37 The properties included in the exempt customer class are customarily considered exempt from stormwater fee by most communities with stormwater utilities across the country for the reasons listed above. 5.4.2 Fee Structure Options Upon selecting the customer classes, our project team next considered the appropriate mechanism for charging parcels within each class to arrive at a recommended stormwater fee structure. There are three typical approach used to develop fee structures on a customer class level. These approaches include the following: • Flat Fee - All parcels within a customer class are charged a flat fee based on the average impervious area for the class. This approach is often used for single family residential parcels within communities that do not have measurements of impervious area for these parcel or when the community contains a very homogenous distribution of impervious area among single family residential properties. • Tiered - Properties are placed into tiers of impervious based on the actual impervious area on the individual parcel and charged a stormwater fee based on the associated tier. This approach is commonly used for single family residential parcels within communities with a wider distribution of impervious area and the data to support the structure. Tiered rates are a way in which a fee structure can capture these dynamics in an administratively efficient way and insure cost recovery is equitable with in the residential customer class. • Parcel Specific - Parcels are charged a stormwater fee based on the actual measured impervious area on the individual parcel. While there are communities that have implemented stormwater fee structures that are based on actual impervious area for all customer classes, this structure is typically applied to non-single family residential parcels. The significant variation in impervious area on these parcels precludes the use of averages or flat fee structures. 5.4.3 Fee Structure Recommendation The selection of the appropriate fee structure for each class can be viewed in the light of the goals and objectives described earlier. One could argue that a parcel specific fee structure would be the most equitable approach for the County, but at the same time this approach would potentially result in significant administrative effort and complexity concerns within the County. As demonstrated in the prior section, there is a significant amount of variation in the impervious area 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 38 on single family parcels within the County. For these reasons we recommend that the County utilize the following fee structure for each class: • Single Family Residential - A tiered fee structure developed based on the statistical analysis of impervious area for single family parcels within the unincorporated area of the County for single family residential parcels with less than 9,300 square feet of impervious area. While it would more straightforward to place all single family properties into tiers the significantly wide distribution of impervious area among these properties make this approach problematic (i.e. a property with 10,000 square feet of impervious area would be charged the same stormwater fee as a property with 20,000 square feet). • Non-Single Family Residential - A parcel specific fee structure based on the actual measured impervious area on each non-single family residential parcel and single family residential parcels with impervious area over 9,300 square feet. To facilitate the stormwater fee structure for each customer class, we recommend that the County implement a common basis or unit of measure. It is common to develop an Equivalent Residential Unit (ERU) as a common unit of measure. The ERU is set at the statistical median impervious area on single family parcels, which is 3,900 square feet in the County. In this way the charge for one ERU can be assessed to a single parcel or applied with a multiplier to capture the relative difference in impervious area within the non-single family class. Once the ERU is established, the stormwater bill for each individual parcel is simply the stormwater fee times the number of ERU’s on the individual parcel. In the determination of the number of ERU’s, we recommend that the County round impervious area to the nearest 100 square feet given the level of accuracy of the impervious area database and for administrative simplicity. The recommended tiers for single family residential properties were constructed using statistically significant demarcations in the distribution of impervious area including the 16th, 68th and 90th percentile. The recommended tiers for the single family residential fee structure are presented in Table 5.1. Table 5.1 - Recommended Single Family Residential Tier Structure Tier Tier Size (square feet) Number of ERU’s Tier 1 400 to 2,900 0.6 Tier 2 2,900 to 5,400 1.0 Tier 3 5,400 to 9,300 1.6 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 39 The number of ERUs associated with each tier were developed based on the statistical midpoint of impervious area for each of the tiers in relation to the one ERU, which is 3,900 square feet. Table 5.2 presents the number of single family properties by each of the tiers and the total number that would fall outside the tier structure and be billed based on measured impervious area. Table 5.2 - Number of Single Family Properties in County by Tier Tier Number of Properties Percent of Total Tier 1 12,889 16% Tier 2 43,314 52% Tier 3 17,920 22% Over 9,300 square feet of impervious 8,551 10% Total 82,674 100% Figure 5.2 presents the distribution of impervious area within the single family residential customer class and the specific tiers. Figure 5.2 - Single Family Residential Tier Distribution CALCULATED STORMWATER FEES The selection of the stormwater fee structure allows for the determination of stormwater fee based on the level of service alternatives. Table 5.3 presents the calculated annual stormwater fees for - 200 400 600 800 1,000 1,200 1,400 Single Family Residential PropertiesImpervious Area (Square Feet) 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 40 each of the level of service alternatives. It should be noted that the fees shown in the table include an assumption for charges from the Property Appraiser for billing and collection (discussed in Chapter 6) of 8% of revenues and provide an allowance for mitigation credits (discussed in Chapter 7) of 10%. These adjustments are required to calculate stormwater fees that will generate the necessary revenues to fund each of the level of service alternatives. Table 5.3 - Annual Stormwater Fee by Level of Service Current LOS 1 LOS 2 LOS 3 Industry Standard Single Family Residential Tier 1 $35 $45 $57 $72 $76 Tier 2 $55 $71 $90 $114 $120 Tier 3 $89 $114 $146 $184 $194 Non-Single Family Residential and Single Family over 9,300 square feet of impervious Per ERU based on Measured Impervious Area $55 $71 $90 $114 $120 The following example is provided to demonstrate how the stormwater fee structure would apply to a parcel with more than 9,300. Figure 5.2 presents a sample commercial property located in the County. Figure 5.2 - Sample Commercial Property The commercial property in Figure 5.2 contains impervious area of 47,268 square feet (area highlighted in blue). This equates to approximately 12.1 ERUs (47,268/ 3,900). At the LOS 2 fee of $90 per ERU, the annual stormwater fee for this property would be $1,089 annually. 5. Stormwater Fee Analysis Collier County | Stormwater Utility Rate Study Stantec | 41 STORMWATER FEE COMPARISON There are currently an estimated 180 communities in Florida with stormwater utilities. To provide insight into how stormwater fees from comparable and local communities align with the fees calculated in this study, a benchmarking comparison was developed. Table 5.3 presents a summary of the comparison. Table 5.3 - Stormwater Fee Benchmarking Comparison Locality Annual Stormwater Fee per ERU Population Annual Revenues City of Naples $156.72 22,000 $5 Million Charlotte County $128.64 160,000 $5 Million Pinellas County $117.74 344,000 $20 Million Sarasota County $90.65 390,000 $17 Million The table shows that the stormwater fees calculated for the various level of service alternatives for Collier County are well within the range of the fees charged by the comparison communities. 6. Billing and Collection Methodology Collier County | Stormwater Utility Rate Study Stantec | 42 BILLING AND COLLECTION METHODOLOGY This chapter of the report documents the potential billing and collection alternatives that could be utilized by the County to assess a stormwater fee, outlines the advantages and disadvantages of using each approach and documents our recommendation for billing and collection of the stormwater fee. BILLING AND COLLECTION ALTERNATIVES There are three primary methods that the County could utilize to bill and collect a stormwater fee from parcels within the unincorporated portions of the County. The County could include the stormwater fee on the property tax bill, on the existing utility bill or generate a separate standalone stormwater bill. While there are variations on these approaches, these three are the most common methods utilized by communities with stormwater fees. When considering which approach is most appropriate, it is necessary to evaluate items such as the availability of data, administration and overall cost of the approach. Our project has had the opportunity to review various datasets within the County and discuss with County staff the various aspects of each approach. The following section outlines each approach, as well as the advantages and disadvantages of each. 6.1.1 Utility Bill One of the key selling points for a stormwater utility is that it organizes and funds stormwater management in a manner similar to other utilities within the community, such as water and sewer utilities. As a result, it is fairly common for a community to consider using an existing utility bill as the means for billing and collecting stormwater fees. This approach clearly conveys the message within the community that the stormwater fee is related to the provision of utility service. This approach often works well for communities that are largely built-out with existing utility service provided to the majority of parcels. However even when this is the case there are a number of challenges that exist. One of the key challenges is to correlate the parcel in the utility billing system with the parcel number maintained by the property appraiser. This process can be tedious and time-consuming because utilities are not billed according to parcel identification numbers. It is common for one parcel to have multiple utility accounts or conversely to not have utility service at all. Additionally, there are often multiple parcels that may be served by a single master meter. In addition to the challenges associated with aligning parcels with utility accounts, some communities have shied away from using the utility bill for stormwater fees due to concerns with the ability to enforce 6. Billing and Collection Methodology Collier County | Stormwater Utility Rate Study Stantec | 43 payment. While communities have enforced payment by “interlocking” the stormwater fee with water service and discontinuing water service for nonpayment, the legal and administrative aspects of this approach need to be closely examined. While the initial development of the stormwater billing database can be time consuming, using the utility bill to assess and collect the stormwater fee is generally a low cost approach. Outside of the initial setup, the costs associated with the utility bill approach would be for additional bills that would need to be billed and collected for parcels without existing utility service and the additional customer service activities resulting from the fee. The reality within Collier County is that there are a significant number of parcels that do not have existing utility service and as a result there is not an existing utility bill to use for stormwater billing. Additionally, many residents in the unincorporated portions of the County receive utility service from private or other public providers, further complicating this approach to billing. It is unlikely that the use of the utility bill would be a viable option for the County for the majority of properties in the County. 6.1.2 Property Tax Bill The most common approach for billing and collecting a stormwater fee within unincorporated areas, such as Collier County, is the use of the property tax bill. This approach is generally the most practical and effective manner given the fact that utility services are typically not universally provided throughout the community. However one of the primary disadvantages to this approach is that it goes counter to the concept that the stormwater fee is in fact a fee and not a tax. Some communities have found it difficult to manage these apparent misaligned messages within the public realm. Another disadvantage is the cost associated with using the tax bill. The Property Appraiser will charge a fee of 4% of the total revenues associated with the stormwater fee. Additionally, property owners receive a 4% discount if the tax bill is paid in November which further reduces stormwater revenues. These costs/reductions in revenues must be considered when evaluating billing and collection options. Additionally, the revenue generated from the stormwater fee on the tax bill will be “lumpy” in nature, rather than spread out throughout the year. Finally, the Florida State Statues preclude the use of the property tax bill as a means for billing and collecting non-Ad Valorem fees from governmental properties (i.e. school boards, etc). Some of the key advantages to using the property tax bill include a high collection rate, the fact that a robust database exists with the property appraiser and the limited administrative burden placed on the County associated with this billing approach. The use of the property tax bill is often the most straight forward and efficient means of billing and collecting stormwater fees. 6. Billing and Collection Methodology Collier County | Stormwater Utility Rate Study Stantec | 44 Finally, it should be noted that the County is currently using the property tax bill to bill and collect solid waste fees, which sets a precedent for this type of approach within the County. 6.1.3 Separate Stormwater Bill The third alternative billing and collection approach would include the development of a new standalone utility bill for stormwater services. This approach is often used within communities that do not have access to an existing utility bill (i.e. communities served by private water, sewer and electric utilities) and do not have the ability to or desire to place the stormwater fee on the tax bill. While the approach accomplishes the goal of communicating within the community that stormwater service is a utility, the approach is often too costly and time-consuming to manage. The establishment of a separate billing and collection mechanism, the lack of an ability to enforce payment and the associated administrative requirements make this approach one of the least common means of billing and collecting a stormwater fee. SUMMARY The advantages and disadvantages to each of the billing and collection approaches are summarized in Table 6.1. Table 6.1 - Stormwater Billing and Collection Alternatives - Advantages and Disadvantages Billing and Collection Alternative Advantages Disadvantages Utility Bill • Consistent with other utilities / consistent messaging • Low cost of approach after initial setup • Challenge of alignment of utility account and parcel • Significant number of parcels without County provided utility service • Collection rate Property Tax Bill • Existing database with PA • High collection rate • Ability to reach all parcels non-governmental properties • Administratively simple and efficient • Precedent set with solid waste fee • Inconsistent message of stormwater as a fee and not a tax • Cost / Impact on revenues • “Lumpy” cash flow • Can’t bill governmental parcels Separate Stormwater Bill • Consistent messaging, stormwater as a service • Ability to reach all parcels • Significant administrative effort and cost • Inability to enforce payment 6. Billing and Collection Methodology Collier County | Stormwater Utility Rate Study Stantec | 45 BILLING AND COLLECTION RECOMMENDATIONS Based on our review of the stormwater fee billing and collection alternatives in light of the characteristics of Collier County we developed the following recommendations: • We recommend that the County use the property tax bill to facilitate the billing and collection of the stormwater fee for all non-governmental properties. This approach will allow the County to effectively and efficiently bill and collect stormwater fees from parcels within the unincorporated portions of the County. The approach will mirror the way in which the County currently bills and collects for solid waste service within the County. • We recommend that the County use the utility bill to facilitate the billing and collection of the stormwater fee for all governmental properties. This approach complies with the Florida Statutes and will provide means for billing and collecting governmental properties. • We recommend that the financial forecasts developed for the stormwater utility account for the costs and revenue impacts associated with using the property tax bill. Financially planning efforts should also consider the lumpy nature of cash flows based on the use of the property tax bill. Finally, we recommend that the County carefully consider how the stormwater fee is communicated within the community given potential for inconsistent messaging associated with the use of the property tax bill and the concept of stormwater as a utility funded with a fee. The precedent set with solid waste billing should be used to help communicate how a fee can be placed on the tax bill. 7. Mitigation Credits and Utility Administration Collier County | Stormwater Utility Rate Study Stantec | 46 MITIGATION CREDITS AND UTILITY ADMINISTRATION This chapter of the report outlines the development of stormwater fee mitigation credits for the County’s consideration along with specific administrative processes that would need to be implemented if the County were to adopt a stormwater utility and fee. STORMWATER FEE MITIGATION CREDITS A properly-structured system of stormwater fee mitigation credits can address many of the issues and challenges of implementing stormwater fees. Providing mitigation credits towards stormwater bills can help to maintain equity for property owners with onsite stormwater management controls or those that contribute monetarily to offsite stormwater management controls that are privately maintained. The basis for providing stormwater mitigation credits is the recognition that certain activities reduce the burden on the stormwater system and as a result, reduce the County’s cost of maintaining the system. The majority of communities across the country that have implemented stormwater utilities include some form of a credit program. Some utilities maintain very simple programs to limit the administrative burden in managing a credit program and others maintain extremely complex programs that provide very specific credits. However, in any credit program, several key considerations must be addressed, including: • Who is eligible to receive a stormwater fee credit, all property owners or just nonresidential parcels? • What stormwater management control facilities / activities qualify for credits? • How much of a fee reduction is offered with each control activity? The way in which each of these considerations are addressed is largely dependent on local policies. As there is no one‐size fits all credit program, each program is going to reflect the unique nature of each municipality. The key components of a credit program for the County are discussed below. 7.1.1 Credit Eligibility The majority of credit programs around the country focus primarily on non‐residential land uses. The primary reason for this focus is that the economic benefits (reduction in fees) are outweighed by the requirements (time, effort and cost) associated with applying for and qualifying for the credits. In general, the costs associated with the credit application and maintenance requirements 7. Mitigation Credits and Utility Administration Collier County | Stormwater Utility Rate Study Stantec | 47 are typically significantly greater than the reduction in the stormwater fee that a residential parcel owner would experience. For example, it is not uncommon for a community to require that the credit application be completed by a registered professional engineer and a credit application fee be assessed. As a result, a parcel owner may need to spend up to $500 or more to achieve an annual reduction in the stormwater fee of $25 (25% of $100). The other primary reason why credits are typically not offered to residential parcels is that the administrative burden of managing the credit program imposes costs on the utility that are otherwise avoidable. There are utilities however, that offer credits to residential parcels to ensure that all parcels are treated the same. In these cases, since it is typically difficult for a residential parcel owner to significantly reduce their impact on the stormwater system (due to property size limitations), the credits that are most often available to residential parcel owners are fairly limited in magnitude (size of the reduction in the fee) to match the limited ability of these parcels to reduce their stormwater contributions. The primary exceptions to this is for properties that directly discharge stormwater outside of the stormwater system or for properties that contribute monetarily to privately owned stormwater control facilities. For utilities that do not offer credits to residential parcels, a number have implemented incentive programs to provide funds to residential parcel owners to incentivize the installation of stormwater management activities. Based on the credits that have been identified for the County, discussed in the next section, we recommend that the credit program be offered to all classes of parcels in the County. Given the credits that have been identified, we believe that the credits would not place a significant administrative burden on the County. 7.1.2 Mitigation Credits Three primary types of mitigation credits were developed and are discussed below. • Stormwater Control Credits - Properties within the County that maintain onsite stormwater management system or contribute monetarily to an offsite stormwater management system would be eligible for a mitigation credit. • Direct Discharge Credits - Properties within the County that directly discharge all or a portion of their stormwater runoff outside the County system would be eligible for a mitigation credit. The credit would recognize the fact that all or a portion of the runoff from the property is not managed by the County stormwater system. The credit should be based on portion of the impervious are that drains outside the system. • Agricultural Credits - Agricultural properties within the County that maintain permits or implement practices as outlined in the Florida Statutes Section 163.3162 (3) (c), would be eligible for a mitigation credit. 7. Mitigation Credits and Utility Administration Collier County | Stormwater Utility Rate Study Stantec | 48 To quantify the amount of the mitigation credit for each credit type, our project team examined the various cost of service components within the stormwater system. Examining the cost of service components allows for identification of those costs that are reduced and/or avoided as a result of the stormwater control activities or parcel characteristics. Table 7.1 presents the cost of service components based on the annual expenditure requirements for the industry standard level of service. The table includes identification of the type of expense, whether it is incurred to serve the entire system, to provide local service or a component of the backbone system. Table 7.1 - Stormwater Cost of Service Function Annual Cost* % of Total Type of Expenditure Customer Service / Admin 500,000 2.21% System-Wide Regulatory / Water Quality 300,000 1.20% System-Wide Engineering / System Planning 1,200,000 5.72% System-Wide Pipes / Inlets / Catch Basins - O&M 1,900,000 8.59% Local Swales - O&M 3,100,000 14.32% Local Streets - O&M 200,000 0.76% Local Canals - O&M 1,200,000 5.53% Backbone Outfall Ditches/Secondary - O&M 900,000 3.93% Backbone Capital 12,500,000 57.74% Backbone Total $21,800,000 100.00% *Full annual costs, not including annual $1 million from Big Cypress Basin Based the functional costs of service it appears that approximately 25% of the overall system expenditures are associated with managing the local system. It is these costs that are typically reduced or avoided as the result of onsite stormwater management. When it comes to direct discharge outside the County system, we recommend that the County provide a mitigation credit of up to 50% based on the recognition that the property owner receives the benefit of stormwater management throughout the County, which allows for travel and protects the private and personal property of the property owner. Finally, based on the Florida Statutes an agricultural parcel that maintains a permit or implement practices as outlined in the Florida Statutes Section 163.3162 (3) (c), must be given a 100% credit. A summary of the credits is provided in Table 7.2. 7. Mitigation Credits and Utility Administration Collier County | Stormwater Utility Rate Study Stantec | 49 Table 7.2 - Stormwater Mitigation Credits Credit Type Eligibility Credit Amount Stormwater Control All parcels served by a qualifying stormwater management system Up to 25% Direct Discharge Any parcel that discharges directly outside the County stormwater system Up to 50% Agricultural Agricultural parcels that meet the Florida Statutes Section 163.3162 (3) (c) 100% It is important to note that the credit program, like any County program, can and will change over time to meet the needs of the community. The credit program described above will serve as an initial step in addressing equity concerns within the community related to the stormwater fee. In most communities that offer stormwater fee credits the number of property owners that participate in a credit program is typically fairly low at around 5% of all property owners. Some of the common reasons communities cite for low participation include the following: • Retrofitting a property for a credit is rarely cost effective • The property is managed by a property company located elsewhere (not in the community) and is not aware of availability of credits • Application process considerations (burdensome, costly, require professional assistance) • Credit programs require ongoing maintenance of stormwater controls (ongoing maintenance costs) 7.1.3 Management of Credit Program To manage an effective credit mitigation program it is necessary to develop a framework for how the credits will be offered and managed. This is most often accomplished through the establishment of a stormwater mitigation credit manual. The credit manual defines how a property owner goes about seeking a credit, (i.e. the application process), the requirements that must be met to receive the credit and what is required to continue to receive the credit in the future. A draft credit manual is provided in the appendix to this report. In terms of the initial roll out of the credit program we recommend that the County consider the following: • The initial stormwater billing should provide the Stormwater Control mitigation credit to all County parcels within subdivisions that are served by community owned stormwater management system. In other words these parcels would not have to apply for the credit. As part of the credit program, the County should require periodic reporting to the County by the entity responsible for the maintenance of the stormwater management system to 7. Mitigation Credits and Utility Administration Collier County | Stormwater Utility Rate Study Stantec | 50 demonstrate proper maintenance of the stormwater management system. If the system does not meet the County requirements, the credit would be suspended until proper action is taken. • Similarly, the initial stormwater billing should provide the agricultural mitigation credit to all agricultural parcels in the County. The County should then require that during the first year, agricultural parcels be required to submit documentation that they meet the agricultural credit requirements. If appropriate documentation is not provided the property would be billed in the second annually billing. UTILITY ADMINISTRATION To successfully implement a stormwater utility specific administrative procedures will need to be developed and adopted by the County. Two of the primary procedures that need to be addressed include the handling of customer appeals and the management of the stormwater utility database. 7.2.1 Appeals Similar to any utility in the County (i.e. water, sewer, solid waste), from time to time customers will have concerns regarding their specific stormwater fee. The majority of these concerns are typically raised during the initial billing of the stormwater fee. While the County will certainly be positioned to answer questions or concerns, the County will need a process to address customers that believe their stormwater fee is not correct. To effectively and efficiently manage these requests, most communities have adopted a process for submitting appeals. The appeals process should document what can be appealed (billing errors, miscalculation of the stormwater fee, incorrect impervious area or non-existent impervious area) and the process for submitting the appeal. Many communities have developed simple online forms to facilitate the appeals process. Developing an efficient appeals process can significantly reduce the administrative effort required to manage the stormwater utility. 7.2.2 Stormwater Utility Customer Database While the underlying data used to charge the stormwater fee is relatively static, a process will need to be developed to capture changes in impervious area over time. While the appeals process can assist in capturing the removal of impervious area, additions need to be captured to maintain an accurate utility database. This is most often accomplished by linking the building permit process with the stormwater utility database. A workflow can be developed that will ensure the capture of the majority of changes in impervious area in this manner. In addition to this process, most communities with stormwater utilities will complete a full review of impervious area periodically (i.e. every three to five years). 8. Public Engagement Collier County | Stormwater Utility Rate Study Stantec | 51 PUBLIC ENGAGEMENT This chapter of the report provides a summary of the public engagement effort that was executed our project team as part of the Phase II Study. BACKGROUND Understanding the significance of the impact stormwater has on the entire population of Collier County, a robust community engagement program was initiated by staff and led by our project team. The two key purposes of the community engagement program were to: a) accurately inform the residents of Collier County how the stormwater program is currently funded, the current level of service, and what a stormwater fee is b) provide an opportunity for all residents to express their thoughts and/or concerns, as well as ask any questions regarding stormwater level of service and funding There were three key components developed to ensure the public had opportunities to learn about the Stormwater Utility Study: • project dedicated website • public workshops • online survey These three key components provided for those desiring one on one interaction to attend one of the six public workshops; for those that chose to learn on their own and have a resource to go back to the project website that included both general information, survey link, video recorded public presentation, archive database of study items and materials, as well as a direct contact to the our project team; and lastly, the survey provided an opportunity for those not able to attend a workshop to provide input to share their own personal comments. SUMMARY AND RESULTS OF ENGAGEMENT ACTIVITES 8.2.1 Public Workshops A series of six public workshops were held during evening hours in various Collier County locations to provide a forum for residents and business owners to learn about Collier County’s stormwater program, stormwater utilities and how one could apply to Collier County. The six workshops were held on: • Wednesday, November 8, 2017 - North Collier Regional Park 8. Public Engagement Collier County | Stormwater Utility Rate Study Stantec | 52 • Thursday, November 9, 2017 - Golden Gate Community Center • Wednesday, December 6, 2017 - Naples Botanical Gardens • Monday, December 11, 2017 - South Regional Public Library • Wednesday, December 13, 2017 - UF/IFAS Southwest Florida Research & Education Center • Thursday, December 14, 2017 - Greater Naples Fire Rescue, Station 73 Public meetings were noticed by: project website, county staff e-blasts, Stantec updated community association e-blasts, Facebook, newspaper ad placements, facility posters, direct email notices, and telephone calls. Through the six workshops that were held, approximately 100 resident and business participants attended. While lower than desired, these accomplished two key items: 1. Provided an opportunity for those who wanted a face to face understanding about the existing program and potential stormwater utility program. 2. Indicated that while stormwater is a discussion topic by residents, a stormwater utility program is not a controversial topic. Typically, the greatest participation by residents or businesses during public workshops is if there is either a strong love or strong hate for a specific topic. In this case, it appears that there is a generally neutral to positive perspective based solely on workshop attendees. 8.2.2 Website The project website (collierstormwater.com) was intended to be a “go to” for all information that may have been necessary for residents to gain an educated understanding of the Collier County stormwater program. The information included on the website incorporated the following items: a) History b) Why there is stormwater management c) How Collier County manages stormwater d) Cost for maintenance, repair and replacement e) Stormwater challenges in Collier County f) Stormwater utility program overview g) Benefits of stormwater utility h) Conventional funding vs. utility funding i) Stormwater utility credits/incentives j) Stormwater fee structures k) Other communities and stormwater utility l) Recap m) Next Steps n) Calendar schedule o) Online presentation 8. Public Engagement Collier County | Stormwater Utility Rate Study Stantec | 53 The website had 745 individual users resulting in 924 sessions. The total number of pages views on the website totaled 1,952. The primary methods used to access the website included; direct to the project website, Facebook, Colliergov.com, search engine, Mailchimp (e-blast link). 8.2.3 Survey To help in identifying key answers from residents and businesses, a 16-question survey was created for use on any computer, tablet, or smart phone, and in just a few minutes time. The overall range of questions included a focus on various stormwater issues as they exist today, the direction of interest by participants on the importance of various stormwater and stormwater related issues, stormwater mitigation, and funding of stormwater. In total, 199 online surveys were completed. Based on a population of 357,325 in Collier County, a survey response of 199 equates to a 95% confidence level +/- 7% margin of error. 89% or 177 of the respondents are full time residents of Collier County. 8% or 15 of respondents were seasonal residents. 5% or 10 of the respondents were business owners. 5% or 9 of the respondents identified themselves as “other”. A summary of the results of the survey are provided in the Public Engagement Summary Results report. A few of the key findings from the survey summarized below. • Roadway flooding and property flooding are the two primary issues respondents mentioned that had actually experienced in Collier County. • Health, safety & welfare, water quality protection and equitable means of funding were provided as the top considerations for stormwater management in the County. • Approximately 50% of respondents understood that funding for stormwater currently comes from property taxes with the remaining respondents unaware of how the system is funded. • When asked what a fair fee for stormwater management would be approximately 37% selected $60 or less per year, 35% selected $60 to $120 per year, 21% selected $120 to $240 per year and about 5% selected over $240 per year. • The primary stormwater management issues that were identified as “very concerning” by the respondents included; flooding of dwelling structures, pollution of waterways, maintaining stormwater infrastructure, and preventing flooding of roads. 9. Conclusions and Recommendations Collier County | Stormwater Utility Rate Study Stantec | 54 CONCLUSIONS AND RECOMMENDATIONS The following conclusions and recommendations were developed during the course of the stormwater utility rate study for Collier County. CONCLUSIONS The following conclusions were developed during the course of the stormwater utility rate study. • The County’s stormwater management system is currently facing several key challenges including: o Inadequate level of service - The current level of stormwater system maintenance and investment in capital projects will not allow the County to maintain a viable stormwater system in either the near or long-term. o Funding constraints - Historically, there has been a lack consistency in the funding made available for stormwater management. A lack of certainty regarding the availability of funding has limited the ability of the County to effectively develop and implement a long-term plan for capital investments, undertake ongoing and enhanced maintenance, and develop staff resources. o Lack of equity in current funding approach - The use of property tax revenues to fund the stormwater system does not align the property owners’ monetary contribution to the management of the stormwater system with their use of the stormwater system, resulting in a lack of equity among property owners. o Stormwater management structure - The County’s current stormwater management program is decentralized, with functions and costs spread among multiple divisions within the County’s Growth Management Department. This decentralized approach presents challenges as efforts to manage the system are not easily coordinated due to lack of a clear reporting, competing objectives, and operational framework. Both operational and capital facility management are made significantly more difficult by the necessity of coordination among multiple organizational units, many of which balance multiple objectives beyond those related to stormwater. • A review of the County’s historical and budgeted stormwater system revenue requirements identifies that there is inadequate funding to meet the current level of service. Specifically, the County has not identified funding for all of the capital projects within the AUIR. 9. Conclusions and Recommendations Collier County | Stormwater Utility Rate Study Stantec | 55 • A detailed analysis of the County’s current level of stormwater service revealed that the frequency of maintenance activities within the stormwater system are dramatically below industry standards. The current frequency of maintenance will impede the stormwater system from operating properly resulting in increased drainage challenges and issues within the County. Increases in the resources provided for stormwater maintenance would allow the County to transition to providing an improved level of service represented by increases in the frequency of maintenance. • The implementation of a stormwater utility and stormwater fee would allow Collier County to address the key challenges facing stormwater management within the County. A stormwater fee based on measured impervious area would provide a dedicated funding source that would equitably recover the cost of providing stormwater management in the County. RECOMMENDATIONS The following recommendations were developed during the course of the stormwater utility rate study. The specific recommendations are provided for each of the primary focus areas of the study. • Stormwater Utility: Given the challenges facing the stormwater system within Collier County, our project team recommends that Collier County adopt a stormwater utility and associated stormwater fee. The adoption of a utility will address many of the key challenges facing the County’s stormwater system by providing a dedicated, stable, resilient funding source that will be based on a defined level of service. The stormwater fee will equitably recover the cost of providing stormwater service in the County based on the contributions and use of the stormwater system. • Level of Service: The County should adopt a level of service that will provide enhanced system maintenance and provide funding for all of the capital projects identified in the AUIR. Based on the level of service alternatives developed during the study this would equate to level of service 2 or higher as presented Chapter 4 of the report. • Stormwater Fee Structure: The County should implement a stormwater fee that is based on the measured impervious area for developed properties in the unincorporated portions of Collier County. The stormwater fee should be charged in terms of Equivalent Runoff Units (ERUs) with one ERU being equal to 3,900 square feet of impervious area. The County should implement a stormwater fee structure for single-family residential properties with less than 9,300 square feet of impervious area that is based on tiers of impervious. Non-single family residential properties and single family residential 9. Conclusions and Recommendations Collier County | Stormwater Utility Rate Study Stantec | 56 properties should be charged stormwater fees based on the actual measured impervious area on the property. The recommended single family residential structure is presented in Table 9.1. Table 9.1 - Recommended Single Family Residential Tier Structure Tier Tier Size (square feet) Number of ERU’s Tier 1 400 to 2,900 0.6 Tier 2 2,900 to 5,400 1.0 Tier 3 5,400 to 9,300 1.7 • Stormwater Fees: The County should adopt the stormwater fees presented in Table 9.2 that correspond to the defined level of service selected by the County Board of Commissioners. Table 9.2 - Recommended Stormwater Fee by Level of Service LOS 2 LOS 3 Industry Standard Single Family Residential Tier 1 $57 $72 $76 Tier 2 $90 $114 $120 Tier 3 $146 $184 $194 Non-Single Family Residential (Single Family over 9,300 square feet of impervious) Per ERU based on Measured Impervious Area $90 $114 $120 • Billing and Collection Methodology: The County should use the property tax bill to facilitate the billing and collection of the stormwater fee for all non-governmental properties. The County should use the utility bill to facilitate the billing and collection of the stormwater fee for all governmental properties. • Credits and Administration: As part of the County the stormwater utility, the County should adopted a stormwater fee mitigation credits. The recommended stormwater mitigation credits are presented in Table 9.3. 9. Conclusions and Recommendations Collier County | Stormwater Utility Rate Study Stantec | 57 Table 9.3 - Recommended Stormwater Fee Mitigation Credits Credit Type Eligibility Credit Amount Stormwater Control Structure All parcels with qualifying stormwater control measures Up to 25% Direct Discharge Any parcel that discharges directly outside the County stormwater system Up to 50% Agricultural Agricultural parcels that meet the Florida Statutes Section 163.3162 (3) (c) 100% As part of the stormwater utility the County should adopt policies and procedures that serve to guide how the utility will function. This should include an appeals process that would allow for managing questions and concerns regarding the stormwater fee in an efficient and effective manner. The County should also develop specific workflows for the management of the stormwater utility billing database. Disclaimer Collier County | Stormwater Utility Rate Study Stantec | 58 Disclaimer This document was produced by Stantec Consulting Services, Inc. (“Stantec”) for Collier County, FL and is based on a specific scope agreed upon by both parties. In preparing this report, Stantec utilized information and data obtained from Collier County, FL or public and/or industry sources. Stantec has relied on the information and data without independent verification, except only to the extent such verification is expressly described in this document. Any projections of future conditions presented in the document are not intended as predictions, as there may be differences between forecasted and actual results, and those differences may be material. Additionally, the purpose of this document is to summarize Stantec’s analysis and findings related to this project, and it is not intended to address all aspects that may surround the subject area. Therefore, this document may have limitations, assumptions, or reliance on data that are not readily apparent on the face of it. Moreover, the reader should understand that Stantec was called on to provide judgments on a variety of critical factors which are incapable of precise measurement. As such, the use of this document and its findings by Collier County, FL should only occur after consultation with Stantec, and any use of this document and findings by any other person is done so entirely at their own risk.