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HomeMy WebLinkAboutMINUTES - 05032011 - C.15RECOMMENDATION(S): ACCEPT the report regarding current Countywide efforts to raise additional funds Countywide to comply with the Municipal Regional Permit, pursuant to the National Pollutant Discharge Elimination System (NPDES) requirements of the Federal Clean Water Act. FISCAL IMPACT: Preparation of the reports to inform Contra Costa Clean Water Program (Program) managers regarding a decision to pursue additional funding will cost all Program participants $225,500 (paid for by the Stormwater Utility Assessments and other fees collected by Program participants). Contra Costa County’s share will be $35,945, which will be paid for by the Stormwater Utility Assessment (SUA) fees collected from parcels in unincorporated Contra Costa County (County). Implementation of a chosen election approach is estimated to cost all Program participants approximately $1.12 million (paid for by the SUA and other fees collected by Program participants). The County’s share is $177,500, which will be paid for by the SUA fees collected from parcels in unincorporated County. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 05/03/2011 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Gayle B. Uilkema, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Cece Sellgren (925) 313-2296 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: May 3, 2011 David J. Twa, County Administrator and Clerk of the Board of Supervisors By: Carrie Del Bonta, Deputy cc: J. Bueren, Public Works Director, M. Carlson, Flood Control, R. Lierly, Flood Control, C. Sellgren, Flood Control, C. Windham, Flood Control, T. Dalziel, Contra Costa Clean Water Program C. 15 To:Board of Supervisors From:Transportation, Water & Infrastructure Commit Date:May 3, 2011 Contra Costa County Subject:Accept Enclosed Report Regarding Countywide Stormwater Funding Initiative. (100% Stormwater Utility Assessment Fees) Project No. 7505-6F8198 FISCAL IMPACT: (CONT'D) The Contra Costa County Flood Control & Water Conservation District (FC District) is contributing $25,000 in staff time from FC District-wide funds towards the initiative. BACKGROUND: The County, the FC District, and the 19 cities within Contra Costa County are jointly working to explore options for raising additional funds to comply with the municipal NPDES permit. Western and Central Contra Costa County must comply with the Municipal Regional Permit (MRP) issued by the San Francisco Bay Regional Water Quality Control Board in October 2009. Eastern Contra Costa County must comply with a similar municipal NPDES permit issued by the Central Valley Regional Water Quality Control Board in 2010. Both five-year permits have substantially increased requirements and associated costs to comply with them. Existing revenue is not sufficient to finance the new NPDES requirements. The existing funding mechanism for the County and the cities (excluding Brentwood, Richmond, and the FC District) is the SUAs. Brentwood, Richmond, and the FC District do not have a dedicated revenue source for NPDES costs and must use other sources of revenue, such as sewer, water, general fund, and/or other sources to pay for NPDES compliance costs. The SUA is at its maximum rate in all 18 municipalities, with no means of adjustment for additional program requirements or even normal cost of living increases without going through a voter approved process. Anticipating the need to increase revenue, the Program set aside $1.35 million over the past several years to explore the possibility of conducting an election and/or consider other revenue mechanisms once the new NPDES permits were adopted. In August 2010, the Program entered into a contract with SCI Consulting Group to explore revenue options and (assuming an option is selected) to develop and implement a plan to move the option forward towards an election. The contract covers three phases: Phase I. Stormwater Funding Initiative Funding Report Phase II. Preparation of Engineer’s Report or Fee Report Phase III. Education and Outreach associated with the election process The first phase has five tasks to be completed no later than September 2011. A decision will need to be made by the Program members at the conclusion of Phase I to move forward with an election and/or implementation of other revenue mechanisms or abandon the fund-raising effort. The five tasks of Phase I are as follows: Task 1 — “Background Analysis and Research.” This phase was completed in October 2010. The memorandum summarizing the background analysis included examination of budgets, revenue, outreach efforts, program and permit requirements, and existing studies and surveys. This information was used to lay the groundwork for developing funding options. Task 2 —“Future Program/Municipalities Cost Analysis.” This task was completed at the end of March 2011. This task calculated in detail the actual costs to comply with the MRP and the current revenue sources used to comply with the permit. Table 1 (attached) summarizes the Countywide NPDES revenue and costs. The 21 co-permittees generate approximately $18 million per year, with expenses ranging from $27 to 34 million per year. This leaves an overall shortfall between $12 and 19 million each year. Unincorporated Contra Costa County generates $2.8 million per year, but NPDES costs continue to increase. This trend leaves a shortfall of $2.7 million in the next fiscal year, which will continue to increase each year without additional funding. Table 2 (attached) summarizes the unincorporated County NPDES revenues and expenses. The FC District does not directly receive any SUA funding. As such, the FC District is not required to contribute towards program costs, shared SUA costs, or pay Auditor assessment fees. A portion of SUA funds for unincorporated County can be used for “general drainage maintenance” within the unincorporated areas. The County uses this SUA money for general drainage maintenance within the unincorporated County. The FC District uses some of this money to pay for maintenance of FC District facilities WITHIN UNINCORPORATED COUNTY, including compliance with NPDES requirements. The remainder of NPDES costs, for FC District facilities within city limits, comes solely from Flood Control Zone tax revenue. This revenue is designated for the construction and maintenance of flood protection infrastructure. Increased NPDES requirements, however, are now a part of flood protection facility maintenance. These requirements are taking an ever increasing proportion of this revenue. Table 3 (attached) summarizes the FC District’s NPDES revenue and costs. Task 3 — “Potential Funding Sources Analysis.” This task was completed in March 2011. SCI Consulting Group has been exploring and evaluating a variety of additional funding mechanisms to determine their viability to generate revenue. Potential financial mechanisms include (but are not limited to): “Property Related Fees”: These fees are the most commonly used mechanism for stormwater programs. They are Proposition 218 compliant, utilize property owner balloting, and require a simple majority for approval. “Parcel Based Special Taxes”: These taxes are used by local governments for special needs funds that enjoy strong citizen support. They are Proposition 13 compliant, utilize property owner balloting, and require a 2/3 majority for approval. “Realignment of stormwater services to water, sewer, and/or refuse collection”: Realignment of stormwater services can provide an opportunity for local government to utilize existing sewer, water, and/or refuse collection mechanisms to capture some NPDES costs (for example, trash requirements). Water, sewer, and refuse services are Proposition 218 compliant — but only to the notice of public hearing requirement; they are exempt from the balloting requirement. It is important to note that each participating municipality will likely prefer to make independent decisions regarding which, if any, NPDES funding augmentation strategy will be pursued, based upon their unique situation. It is possible that some cities may choose not to raise additional NPDES funds, may choose to raise funds within their own municipality only, or may choose to work with nearby municipalities to pursue a subregional approach to raising NPDES funds. In addition, three Program participants (City of Brentwood, City of Richmond, and the FC District) currently have no separate NPDES funding source. This places unique pressures upon these jurisdictions. Task 4 — “Opinion Research and Survey.” This task will be completed by August 2011. In February 2011, SCI Consultant Group conducted 15-minute telephone surveys among 900 likely voters for both Proposition 218 and special tax scenarios to determine if it is feasible to move forward with an election. The preliminary results were favorable. Water quality and environmental issues were rated strongly by respondents. This support appears natural and durable. Different proposed fee amounts also appeared to be supported. The telephone survey was statistically significant on a Countywide level, but the sample size was inadequate to provide statistical significance at the local jurisdiction level. In April 2011, a mail ballot survey will be sent to 27,000 residential, business, apartment, and other property owners. The survey will look similar to a property related fee ballot. Respondents will have six weeks to return the survey. The survey will be sent out in two sets. The first set will go out to all cities and larger unincorporated communities. The ballot survey will have a uniform appearance throughout the County. It will use the Program logo, the same survey language, and the same proposed stormwater utility fee (currently estimated at $19/parcel) throughout all 19 cities and several unincorporated communities. Based on the results from this initial survey, a second set of surveys will be sent to six selected communities (cities and/or unincorporated communities) whose initial results were inconclusive. The second set of ballots (approximately 1,000 per city/community) will test elements of the proposed stormwater utility fee to better determine the threshold of success. Different elements that could be used in the second survey include: different assessment rates, a sunset clause, a consumer price index, and/or local branding (city/County logo instead of the Program logo). The results of the survey will help municipalities to obtain information regarding the likelihood of a successful election in their community. The large number of ballots will provide statistical accuracy for individual municipalities and unincorporated communities. An analysis of the survey results will be completed by August 2011. Task 5 — “Stormwater Funding Needs and Options Report.” This will be completed in September 2011. SCI Consulting Group will prepare a report summarizing the findings from Tasks 1 through 4 and provide recommendations on the most viable revenue option(s) to pursue. As part of the outreach effort for this funding initiative, staff from the Program has briefed key municipal groups. In February 2011, Program staff made a presentation to the Public Managers Association of Contra Costa County. In March 2011, the same presentation was given to the City/County Engineering Advisory Committee. Plans are currently being made to give a presentation to the Mayors Conference. Municipal staff is also being encouraged to brief their municipal managers, administrators, and elected officials. Issues Moving Forward The goal of the stormwater funding initiative is to give to voters or landowners the opportunity to vote on a new stormwater utility fee in Summer 2012. The contract with SCI Consulting Group includes two additional Phases to support Program participants in this goal: Phase II: Preparation of an Engineer’s Report or Fee Report (to be completed September 2011). Phase III: Implementation of the ballot and Educational Outreach (targeting a Summer 2012 election). There will be several options to consider once the first phase has been completed. The challenge will be to develop consensus among all 21 Program participants regarding the proper direction to take. The current decision-making process for the Program is a simple majority. THE DECISION IS BINDING ON ALL PARTICIPATING MUNICIPALITIES. It is possible that the Clean Water Program Management Committee will decide to allow different municipalities to pursue different financial augmentation mechanisms, either individually or regionally. Each phase of the stormwater funding initiative assumes only one report and one Countywide outreach effort. If the Program participants choose a variety of approaches to augment stormwater funding, the contract with SCI will likely need to be amended and some municipalities may need to provide additional funds to prepare the appropriate report and conduct needed outreach and educational efforts for their upcoming election. CONSEQUENCE OF NEGATIVE ACTION: Failure to receive this report will result in reduced information regarding stormwater financial needs and funding opportunities needed by the Board of Supervisors. CHILDREN'S IMPACT STATEMENT: Not applicable. ATTACHMENTS Table 1 Table 1 Table 2 Table 3