HomeMy WebLinkAboutItem 7: Ordinance on Wastewater and Stormwater Service
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Action: An Ordinance Concerning Wastewater and Stormwater Service and Amending
Sections 6.411 and 6.421 of the Eugene Code, 1971
Meeting Date: April 27, 2009 Agenda Item: 7
Department: Public Works Staff Contact: Kurt Corey
www.eugene-or.gov Contact Telephone Number: 682-8421
ISSUE STATEMENT
This is an opportunity for the council to discuss and adopt a proposed ordinance amending sections of
the Eugene City Code dealing with Wastewater and Stormwater Service. The proposed amendments
would allow the use of certain stormwater and wastewater utility fund resources for road operations,
maintenance, repair, preservation and reconstruction. More specifically, the ordinance would authorize
a one-time transfer of $500,000 from existing wastewater and stormwater utility fund reserves to be used
to continue to deliver street operations and maintenance (O & M) services in the upcoming fiscal year
beginning July 1, 2009. Approval of this one-time transfer from City-owned utilities would impose no
ongoing obligation on utility ratepayers. If the council adopts the ordinance amending the wastewater
and stormwater code provisions tonight, the FY10 Budget would move forward for council adoption in
June with provision for the one-time $500,000 transfer to the City’s Road Operations Fund from the
City utility funds.
BACKGROUND
On November 12, 2008, the City Manager provided the council with an update about the status of the
Road Fund as well as his intended interim funding strategies to keep these critical City services funded for
FY10 and beyond. At that meeting, individual councilors acknowledged that the Road Fund funding
shortfalls could not be found in service reductions alone and that the need to find new sources of City
revenue for transportation systems was great. On February 8, 2009, the council discussed two new
potential revenue sources for preserving existing street O&M services - a right-of-way use fee (similar to
a franchise fee) on City-owned utilities, and a transportation surcharge on solid waste (garbage) haulers.
Councilors discussed the need for two different sets of funding strategies, with the first being a one-time,
“stop gap” plan for fully funding these critical services in FY10. The second funding strategy set called
for was in the form of a comprehensive “road map” for solving the City’s overall transportation funding
problems in the long term. The council acknowledged that developing the longer-term solutions,
including a potential Street Utility Fee and a potential Street Lighting Fee, would need to involve more
public input and buy-in over the coming months.
On April 8, 2009, the council discussed the City Manager’s proposed one-time funding strategy to
maintain street O&M services through fiscal year 2010, which included as one of its elements a $500,000
transfer from existing reserves in City-owned wastewater and stormwater utilities, acknowledging that
City utilities derive a direct benefit from the use of the road right-of-way but, unlike other utility
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providers, have never paid a fee for the commercial use of the right-of way. After extended discussion, a
council majority voted to send forward for public hearing the proposed amendments to Eugene City Code
to expand the allowed uses of wastewater and stormwater user fees for road-related purposes and allow a
one-time transfer of $500,000 from existing City wastewater and stormwater fund reserves to the Road
Fund for FY10 (see Attachment A).
At the April 20 public hearing, one speaker offered testimony in support of these proposed code
amendments authorizing the one-time $500,000 fund transfer to the Road Fund.
Financial and/or Resource Considerations
Use of Wastewater and Stormwater Reserves – Nexus to Road Services and Ratepayer Impact - The City
has made a significant investment in the road right-of-way over the years and has historically charged a
variety of utility providers for the use of those right-of-ways. Fees for the commercial use of the right-of-
way are currently assessed by the City in the form of franchise fees, license fees and permits to privately-
owned utility providers. EWEB pays contributions-in-lieu-of-taxes (CILT) at a similar rate. The ROW
fees and CILT payments are currently receipted into the City’s General Fund and used to support general
municipal services. However, Eugene has never imposed right-of-way use fees on its own City-owned
wastewater and stormwater utilities. At least 15 cities in Oregon assess right-of-way or franchise fees on
utilities providing water, wastewater and/or stormwater services. For example, the City of Bend charges a
right-of-way franchise fee on the gross revenues of the City's Water and Water Reclamation Funds to help
fund a shortfall in Bend's transportation budget. The fee generates around $825,000 annually and costs the
average ratepayer in Bend an additional $2.88 per month.
Current Budget Outlook - Under the most current projections, the Road Fund is expected to generate a
$2.3 million annual operating deficit this current year (FY09), and with no new revenues that annual
deficit would grow to nearly $5 million in the out years of the six-year forecast. In the absence of
deliberate action, the fund will deplete all available fund resources and become insolvent sometime in the
fall of 2009. On the other hand, a set of $3.8 million ongoing revenue solutions implemented by July 1,
2009, would eliminate the projected future annual operating deficits throughout the forecast period and
As an alternative, a minimum of $2.8
restore the fund balance to the policy-recommended level.
million in one-time revenue would be needed for FY10
to fully fund the current operations of the Road
Fund for one year while the council continues to work on a comprehensive, sustainable funding strategy.
One-time Funding Strategy - Responding to council direction to bring back a one-time funding strategy to
maintain street O&M services through FY10, the City Manager is proposing a three-part funding package
as a FY10 stop-gap solution, comprised of the following three elements:
Redirect up to $1.4 million of the FY10 local motor vehicle fuel tax revenue
1) from capital
pavement preservation to critical street O&M services;
Authorize a transfer from stormwater/wastewater reserves
2)of a one-time $500,000 contribution
for FY10 from existing reserves in City-owned wastewater and stormwater utilities; and
Impose a 5% transportation surcharge on solid waste haulers.
3)
? It is the second element of the City Manager’s stop-gap funding strategy to keep the Road Fund
solvent through FY10 that is the subject of the council’s discussion and potential action.
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RELATED COUNCIL GOALS AND POLICIES
The goal of the council Transportation Initiative is to “Develop mechanisms to adequately fund Eugene’s
transportation system for cars, trucks, bikes and pedestrians, including maintenance and preservation and
capital reconstruction.”
COUNCIL OPTIONS
The two principal strategies available for balancing the FY10 Road Fund budget are 1) to reduce the
current service system to the level of existing resources, or 2) to increase the level of revenue, on at least a
short-term basis, to adequately fund the current street O&M service system through June 30, 2010.
The council has the following options before it with regard to this proposed ordinance:
Option 1: The council could choose to approve the proposed amendments to the Eugene Code to expand
the allowed uses of wastewater and stormwater user fees for road-related purpose and also
provide for a transfer of $500,000 from existing City wastewater and stormwater fund reserves
to be used to help keep the city’s Road Fund services intact for FY10; or
Option 2: The council could choose to not approve the proposed amendments to the Eugene Code and
decline to allow the use of wastewater and stormwater resources for road-related purposes,
requiring either $500,000 of street operations and maintenance service reductions for FY10 or
the need for replacement revenues from other sources.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends Option 1.
SUGGESTED MOTION
Move to adopt an ordinance concerning wastewater and stormwater service and amending sections 6.411
and 6.421 of the Eugene Code, 1971.
ATTACHMENTS
A. An Ordinance Concerning Wastewater and Stormwater Service and Amending Sections 6.411 and
6.421 of the Eugene Code, 1971
FOR MORE INFORMATION
Staff Contact: Kurt Corey
Telephone: 682-8421
Staff E-Mail: kurt.a.corey@ci.eugene.or.us
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ATTACHMENT A
ORDINANCE NO. _______
AN ORDINANCE CONCERNING WASTEWATER AND STORMWATER
SERVICE AND AMENDING SECTIONS 6.411 AND 6.421 OF THE
EUGENE CODE, 1971.
THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS:
Section 1.
Sections 6.411 and 6.421 of the Eugene Code, 1971, are amended to
provide as follows:
6.411 Ratemaking
.
(1)
Ratemaking procedure.
(a) Investigation of proposed charges. Before proposing to impose or
amend a charge for wastewater service, stormwater service or for
regional wastewater treatment service, the city manager shall
conduct an investigation of the revenue needs of the city in
conducting these operations. Based on that investigation, and
using the criteria set out in subsection 6.411(2), the city manager
shall develop proposed charges for these services.
(b) Notice. Prior to the imposition of any charge for wastewater
service, stormwater service or regional wastewater treatment
service, the city manager shall give notice of the proposed rate or
charge by:
1. Making copies of the notice of intended charges available to
the news media, to any person who has requested such
notice, to the mayor and city councilors, and to interested
governmental agencies (including the United States
Environmental Protection Agency, the Department of
Environmental Quality, the Metropolitan Wastewater
Management Commission, and the Eugene Water & Electric
Board).
2. Publishing notice of intended charges on two separate
occasions in a newspaper of general circulation within the
city.
3. Posting the notice at two locations at city hall.
(c) Contents of notice. The notice of intended charges shall state the
current and proposed charge, the results of the city manager's
investigation, and the time, place and manner in which interested
persons may present their views on the intended action.
(d) Public hearing and opportunity to comment. No earlier than ten
days after the first publication of notice of the intended charges,
the city manager or the manager's designee shall conduct a public
Ordinance - Page 1 of 5
hearing on the proposed charge. The city manager shall give
interested persons reasonable opportunity to submit data or views
in writing on the proposed charge.
(e) Decision. The city manager, on the basis of his or her
investigation and the comments of interested persons, shall
approve, modify, or disallow the proposed charge by order. The
order shall contain written findings and conclusions based on the
standards set forth in subsection 6.411(2). The city manager shall
mail copies of the decision to all persons who have submitted
written or oral comments on the charge or who have requested a
copy of the decision. The city manager shall also promptly deliver
copies of the decision to the mayor and city councilors. Unless
reviewed by the council, the decision is final on the eleventh day
after it is rendered.
(f) Review of decision. At the request of the city manager or a
majority of the members of the council, made within ten days of
the city manager's decision, the decision, or any part thereof, shall
be reviewed by the council. The council may conduct a public
hearing on the proposed charge or review the order solely on the
basis of the administrative record before the city manager. After
this review, the council shall approve, modify or disallow the
proposed charge by order. The order shall contain written
findings and conclusions based on the standards set forth in
subsection 6.411(2), and shall be mailed to all interested persons.
The order is final on the date rendered.
(2)
Standards. Unless the city manager determines in writing that one or
more of the following factors is irrelevant or inapplicable, the amount or
rate of any charge for wastewater service, stormwater service or
regional wastewater treatment service shall be based on the following:
(a) The amount charged for such service in the past;
(b) For regional wastewater treatment services the recommendation,
if any, of the Metropolitan Wastewater Management Commission,
or any successor agency;
(c) Applicable federal or state regulations or conditions imposed as
part of a federal or state grant or financial assistance agreement;
(d) The amounts charged or proposed to be charged by the city of
Springfield and other providers of stormwater or wastewater
services for comparable services;
(e) The revenue needed to pay for the direct and indirect expected
costs of constructing, operating, maintaining, and replacing local
and regional sewerage facilities based on the adopted budgets of
the city of Eugene and the Metropolitan Wastewater Management
Commission or its successor, the debt obligations of the city or
other entities for construction of the facilities, adopted capital
improvement plans of the council, the expected need for financial
reserves and contingencies, and other sources of revenue;
Ordinance - Page 2 of 5
(f) For an individual stormwater service customer that discharges
stormwater that requires extraordinary expense to the city, special
surcharge rates based on the type, concentration, quantity, quality
and frequency of the discharge.
(g) Other relevant adopted policies of the council;
(h) The terms of any applicable intergovernmental agreement relating
to wastewater or stormwater services or regional wastewater
treatment service; and
(li) The obtaining of equity between different classes of customers so
that one class of customers does not pay more than its
proportionate share of the expenses of providing sewer service;
and
(j) In addition to the forgoing considerations, in determining the
amounts or rates to be charged for stormwater and
wastewater service, the city manager shall consider the value
of the use and occupancy of the city’s right-of-way by the city
stormwater system and city wastewater system.
(3) If the city manager determines that one or more of the factors listed in
subsection (2) of this section is irrelevant or inapplicable, the manager
shall notify the mayor and council of that determination.
(4) Limitations. The following limitations apply to charges set by the city
manager for wastewater service, stormwater service and regional
wastewater treatment service:
(a) Charges shall be imposed on a monthly basis. Each
customer shall be notified, in at least one annual billing for
the service, of the rate or the amount of the charge and the
allocation of revenue expected from application of the
charge.
(b) The charges for regional wastewater treatment service shall
distinguish between the following classes of customers:
single dwelling units, duplexes, and general wastewater
customer use based on loading strengths.
(c) The charges for local wastewater service may, but need not,
distinguish between classes of customers.
(d) The monthly charge for wastewater service and regional
wastewater treatment service shall be a fixed fee together
with a fee based on volume of use of water (partial flow-
based rate).
(e) When the wastewater service rate is based on volume, the
volume shall be calculated by actual measurement of the
wastewater discharged (the costs of measurement to be
borne by the customer) or by an estimate based on the
wastewater customer's average monthly water consumption
during the previous December through April period, or, if no
water consumption figures are available for at least three full
months during this period, the consumption of other similar
Ordinance - Page 3 of 5
customers (for residential customers) or actual monthly
water consumption (for non-residential customers).
(f) The charges for stormwater service shall distinguish between the
following classes of customers: small residential, medium
residential and general stormwater customer, based upon the
actual number of equivalent service units for each developed
property or an average number of equivalent service units for a
specific class. Special surcharges for stormwater service
customers who receive extraordinary service shall be in addition
to the standard charges for the customer's classification.
6.421 Charges - Collection and Payment
. The Eugene Water & Electric Board is
directed to collect the charges provided for in sections 6.401 through 6.610.
Charges levied pursuant to sections 6.401 through 6.610 shall be determined
by the city manager or his/her designee and certified to the Eugene Water &
Electric Board and any other water utility obligated to collect such charges.
[All r]Revenue collected by the Eugene Water & Electric Board shall be paid
monthly to the city and shall be deposited in the appropriate fund for
wastewater operations or for stormwater operations for use in providing
sewer service including debt service and such other services as the council
may direct, except that revenue collected based on the criteria
contained in subsection (2)(j) of section 6.411 of this code shall be
deposited in the appropriate fund for road operations to be used for the
reconstruction, repair, maintenance, operation, and preservation of
city-owned roads and streets within the city, roads and streets which
the city is contractually or legally obligated to operate and maintain, or
roads and streets for which the city has accepted responsibility under
intergovernmental agreement. Revenue collected based on the criteria
contained in subsection (2)(j) of section 6.411 of this code may not be
used for capacity-enhancing street improvements.
Section 2.
The City Recorder, at the request of, or with the consent of the City
Attorney, is authorized to administratively correct any reference errors contained herein,
or in other provisions of the Eugene Code, 1971, to the provisions added, amended or
repealed herein.
Section 3.
Notwithstanding Section 6.421 of the Eugene Code, 1971,
$500,000.00 from the fund for stormwater operations and/or the fund for wastewater
operations may be used during FY 10 for the reconstruction, repair, maintenance,
operation, and preservation of city-owned roads and streets within the city, roads and
Ordinance - Page 4 of 5
streets which the city is contractually or legally obligated to operate and maintain, or
roads and streets for which the city has accepted responsibility under intergovernmental
agreement.
Passed by the City Council this Approved by the Mayor this
____ day of _____________, 2009 ____ day of ___________2009.
____________________________ _____________________________
City Recorder Mayor
00219907.DOC
Ordinance - Page 5 of 5