Fund Development

Steps
To address the city's stormwater needs identified in the Watershed Management Plan, the City Council requested staff to look at potential revenue sources (general fund, ad valorem, utility fee) for a stormwater enterprise fund. In order to develop the fund the following 4 steps were taken:
  1. Define a program and associated costs. City Council and staff met on October 15, 2012, and November 13, 2012, in order to determine the basic components of a potential stormwater program and associated level of service. Throughout the process of developing an enterprise fund the expenditures can swell or shrink as they are balanced with budgetary obligations and community expectation. Notwithstanding, explicitly describing the expenditures and level of service associated with a target program allows participants to balance needs and costs in a real and meaningful manner.
  2. Determine revenue options. Aside from simply funding the program by allocating monies from the General Fund, two contrasting primary revenue options are available to the city in order to fund this program.
    • Raise revenues through a service district ("Ad Valorem taxes").
    • Instate a fee for stormwater usage based on impervious cover ("Utility Fees").
    Chapter 6 of the city's Watershed Management Plan outlines the general differences between these 2 options. Significantly, these differences are tied to rate payer equity and incentives:
    • Where taxes are based on real property value they may have a limited relationship to stormwater impact. In contrast, fees are intended to correlate to stormwater services received (i.e., the industry standard is to use impervious coverage as a proxy for amount of stormwater services received).
    • Utility fees allow the municipality to utilize discounts as incentives to mitigate stormwater impacts from individual properties (i.e., a property owner would pay less if the property removed impervious cover, or installed rain gardens or cisterns). As a result of ad valorem taxes being based on property value, such discounts are not available.
  3. Seek public input. The process for the development of an enterprise fund includes public input on how best address the needs identified in the Watershed Management Plan. The City Council identified at least 2 town hall meetings during the fiscal year 2014 budget process to gather input from the public. See the timeline provided.
  4. Commission an enterprise fund.