Sustainable Storm Water Funding Task Force — Portland, ME
Date: 2011-08-16

AGENDA
 Sustainable Storm Water Funding Task Force
 August 16, 2011
 City Hall, Room 209, 12:00 PM – 1:30 PM

1. Introductions of Task Force members and meeting attendees.

2. Review and approval of the SSWFTF minutes from July 19, 2011.

3. Presentation on roadmap, rate structure, and exemptions.

4. Discussion of storm water rate structure and discussion of exemptions.

5. Discussion of public outreach plan.

6. Confirm Date for Next Meeting: The next meeting is currently scheduled for September 20, 2011

7. Adjourn
 MINUTES
 Sustainable Storm Water Funding Task Force
 July 19, 2011
 City Hall, Room 209, 12:00 PM – 1:30 PM

1. Introductions of Task Force members and meeting attendees.

All members were in attendance except for Peter Gellerson, David E. Robinson, and John Cannell. Staff
present included Ian Houseal, Mike Bobinsky, Doug Roncarati, and Katherine Earley. There were five
members of the public in attendance.

2. Review and approval of the SSWFTF minutes from June 21, 2011.

Brooks made motion, Bohlin seconded with a correction to his name. Unanimously approved with the
correction.

3. Review of the Task Force draft work plan.

Houseal summarized the updated work plan for the Task Force to the end of their work in December
stating that this meeting would be about fees, the next about exemptions, and the third meeting about
credits. All of these aspects of a storm water fee would inform the other and the Task Force may need
to continue to discuss each item depending on the discussion of the Task Force.

There was discussion about the need to simplify the message that the Task Force could bring back to
their organizations. At this point, the Task Force needed to look at aspects of the options in detail.

There was discussion of the need to notify the public of what is going on. There is a need for public
outreach. Earley suggested reaching out to Bangor.

4. Summary of the outcomes from the last meeting including:
 a. Consensus to develop a storm water fee option in greater detail.
 b. Preliminary discussion of allocating combined sewer costs to a storm water fee.

Houseal summarized the outcomes of the last meeting: The update to continue to develop a storm
water fee option in greater detail was delivered to the Energy and Environmental Sustainability
Committee. The issue of allocating costs from combined sewers was presented but there was no
discussion on the issue.

5. Review of revised cost projections reflecting a fifteen year CSO Tier III construction schedule.

Houseal summarized the material provided to the Task Force reflecting the adjusted construction
schedule as it relates to the CSO Mater Plan proposed schedule.
6. Review of annualizing costs based on a five year average for the purposes of exploring and
 determining appropriate rate structures and rates.

Houseal summarized the spreadsheet stating that the annualized costs spreadsheet is intended to be
used to talk about cost allocations and represent the first five year average of the program costs. It is
understood that the costs would increase over time. Five years was chosen since it represented a short
term outlook. Other averages could be used, but for working purposes the Task Force needed to accept
or propose an alternative as a way to determine the working cost figure in regard to determining fee
structures and implications.

7. Review of the “Dow Jones” properties list.

Houseal stated that the “Dow Jones” is a way for the Task Force to see the impact of financial decisions
on a representative list of properties in the City and if the Task Force agreed, those would be the
representative list of properties to determine the outcomes of the rates.

8. Presentation of facts on impervious area in Portland.

Houseal summarized the information on the table stating that this information would be valuable to the
Task Force as they discuss next week: exemptions.

9. Recommendation and discussion of rate structures for further exploration from reports provided.
 a. Flat rate
 b. Tiered rate (ERU)
 c. Variable Rate (Impervious Area)
 d. Flat Rate + Variable Rate (Gross Area + Impervious Area)

Suslovic summarized the rate structures. It was requested that the Task Force familiarize themselves
with the New England Finance Center document on Storm Water Fee Rates, since this document would
encompass all the decisions the Task Force would be making before the next meeting. The Task Force
would have questions following up to this month’s meeting and would be given new material on
exemptions for next month’s meeting at the next meeting.

10. Confirm Date for Next Meeting: The next meeting is currently scheduled for August 16, 2011

11. Adjourn
Stormwater Utility Final Meetings Roadmap
 The purpose of this handout is to describe the objectives and roadmap for the
 remainder of the Sustainable Storm Water Funding Task Force meetings.

Objectives for Meetings
Based on feedback from the City Council and the Sustainable Storm Water Funding Task Force there is general
support for taking the next focused steps in development of a storm water fee recommendation for consideration
by the Council. That said there is a need to develop a basic framework for the fee structure by December. That
structure will need to have enough definition in terms of basic policies to allow both for City Council to authorize
initiation of implementation if recommended and if approved and for the potential to establish an enterprise fund
or special revenue fund within local government for fee implementation funding support purposes.
The eventual goal for the December timeframe is to allow the Council to authorize staff to begin the
implementation process. We anticipate that both Council and this Task Force will provide input on key decisions
and that Council will have several opportunities to recommend a change of course or to even decide to go
another direction all together once they begin implementation.

Meeting Roadmap
You might recall from a previous handout that there are a number of legal considerations in rate making best
done in a rational and logical order with decisions resulting from thoughtful consideration of options. In the time
remaining a recommended path that will provide key framework recommendations potentially allowing Council to
authorize forward movement has been laid out according to the Task Force Work Plan.
August Meeting - Rate Structure and Exemptions
 • Impervious and gross area options
 • Residential options
 • Handling of roads, public property, and undeveloped land.
September Meeting - Credits and Exemptions
 • Basis for and types of credits
 • Amount of credits
 • Exemptions
October Meeting - Rate and Program Pro Forma
 • Review of CSO cost allocation options and impacts
 • Program five-year plan, level of service and probable rate
 • Functional organization
 • Appeals process
November Meeting - Data and Billing and Rate Resolution
 • Billing
 • Customer service
 • Timing and scope
 • Public Involvement
December Meeting - Review of Final Recommendation and Implementation Steps/Cost




August 16, 2011 1
Stormwater Utility Rate Structure and Exemptions
 The purpose of this handout is to provide background information in
 consideration of a basic rate methodology with specific emphasis on the factors
 to use for fee calculation, residential charge simplification, and treatment of
 exemptions of public streets and public property.



Rate Structure Policy
When we bill for stormwater services, we are recognizing a property’s or a person’s use of the stormwater system
for the discharge of their property’s runoff. The stormwater system is a public system that carries away runoff
from both public and private properties – everyone pays because everyone contributes to runoff. The framework
that describes how much each property pays is called the “rate structure.”
The rate structure developed for a particular utility is divided into three modules:
 (1) the basic rate methodology;
 (2) modification factors, which can be applied to any of the rate concepts to enhance equity, reduce costs,
 and meet other objectives; and
 (3) secondary funding methods that can be adopted in concert with the service charges.
Typical modification factors might include: flat rates or tiers for single-family residences, fixed costs per account,
and a crediting mechanism. Secondary funding methods might include plans review fees, inspection fees, and
fees in lieu of detention but will not be discussed until and if implementation begins. There are a number of
policies that must be established, many of them based on strictly technical considerations. However, there are
several key and immediate policies that we want your input on which we will discuss together.

Criteria for Policy Evaluation
There are general evaluation criteria that rate makers use when they look at various policy options. These criteria
can help us as we look at all the additional policies. For each of the basic additional policy considerations we want
to think of them in terms of eight evaluation criteria:
 1. Equity – does this policy decision promote equity, or at least not violate equity (fairness) principles?
 2. Balance of rates with the level of service – does this policy decision tend to lead toward an intuitive
 balancing of the fees someone pays and the services they get?
 3. Data requirements and compatibility with data processing systems – does this policy decision work well
 with how we are doing billing?
 4. Cost of implementation and upkeep – does this policy decision have undue administrative burden?
 5. Consistency with other financing and rate policies – does this policy decision fit well with the overall rate
 structure?
 6. Revenue sufficiency – does this policy decision, if applicable, generate significant enough revenue to make
 it worthwhile?
 7. Revenue stability and sensitivity – does this policy decision impact the stability of the revenue stream or is
 it overly sensitive to outside factors?
 8. Flexibility – are there any flexibility concerns with this policy decision?



August 16, 2011 1
Credits vs. Rate Methodology
It should be noted that there are always several ways to arrive at outcomes that reflect a community’s desire to
bring about equity or certain policy emphases. Use of the rate methodology applies blanket rules to all properties
to which exceptions must be made where a blanket decision is clearly recognized as an “unintended
consequence.” For example, under a gross area methodology a very large public park may have a large
stormwater bill even though it is essentially an urban forest. Was that the intent?
One way of making such an exception or of doing the same thing a rate methodology does but doing it on a case
by case basis is through the use of credits. So, for example:
 • Impervious area that is not directly connected to the system has a very different runoff response than
 directly connected impervious area – should that be recognized in the rate methodology automatically, or
 by having a property owner apply for a special recognition?
 • Not all open space is created equal. Urban forests have a volume of runoff response that is one-tenth that
 of turf grass. If this is not recognized in a gross area methodology it might be recognized with a crediting
 mechanism.
 • Impervious area can be mitigated to some extent with stormwater control structures. Should such
 structures, properly designed and maintained, result in a reduced fee?
So as you consider the options for a basic rate methodology also consider whether a preferred treatment or
emphasis could be accomplished more easily in the rate structure (i.e. automatically) or through a crediting
mechanism (i.e. upon application).



Basic Rate Methodology
 Policy Question: Should Portland: (1) charge on the basis of impervious area only, (2) add a gross
 area charge too, or, alternately (3) recognize green space preservation?
The basic rate methodology defines what makes up the rate that users will be paying. The three main impacts of
urban development are increases in: peak flow, volume of discharge, and amount of pollution. All other impacts
can fit into these three basic categories. When we look at the primary cause for each of these three major impacts
in an urban setting (versus an agricultural one, for example) it is the conversion of forests and fields to impervious
area – pavement, roof tops, etc. It is this conversion to impervious area that causes the City to invest in the public
drainage system – and the costs are roughly proportional.
Therefore, all legally defensible stormwater utilities use some surrogate of impervious area in their rate
methodologies. A 2010 survey found that 55 percent of all stormwater utilities responding used impervious area
as the only factor that went into the rate calculation and 94 percent included some measure of impervious area in
their calculation.1
But there are other factors or ways to configure the rate methodology to emphasize certain other impacts or
encourage certain kinds of development. Many of these considerations are handled with a stormwater crediting
or secondary funding system, which we will discuss in another meeting. Some factors can best be handled in the
makeup of the basic rate methodology itself.


1
 Black and Veatch, 2010 Stormwater Utility Survey

August 16, 2011 2
Two in particular are commonly considered – though there are many variations:
 1. Some communities charge for gross parcel area in addition to impervious area, reasoning that stormwater
 runs off all parcels and thus, all should pay. In this concept the idea is that management of the total
 stormwater system is of concern, not simply handling the increases due to urban development.
 2. Other utilities want to encourage green space and set up charges based on an intensity of development
 factor – so that the same amount imperviousness would be charged less if it were located on a larger lot
 with more green space.
These latter two approaches are almost opposites of each other, and both have been used in other places. They
are ordinarily seen as mutually exclusive, although a rate methodology could be conceived that would incorporate
both of these additional considerations. The 2010 survey we cited above, which found that a majority (55%) of
stormwater utilities base charges on impervious area only, also found that of the remaining stormwater utilities:
 • 29% Charge based on gross area plus impervious area
 • 10% Recognize the benefits of green space through an intensity of development factor
 • 6% Use “other” basis for fees
This then sets up three basic rate methodology alternatives – though there are a million variations on these three
themes:
 Option 1. Charge on the basis of impervious area only
 Option 2. Charge on the basis of impervious area plus a lesser charge for total gross area. Note that under
 this charge, vacant land would be charged some amount – typically much less per unit area than
 impervious area.
 Option 3. Charge on the basis of intensity of development – thus recognizing green space with a reduced
 charge if the percent impervious is less than some standard percent.
Two examples using a commercial property will illustrate the differences among these options. We will use a
sample site that is 10 acres with 4 acres of impervious area and 6 acres of green space.
We will analyze the site as if it were two different parcels – a larger one of ten acres and a smaller one of 5 acres:
 (1) First we will analyze it using the whole 10 acres and determine the user fee under the three options.
 (2) Then we will take away 5 acres of gross area/green space and show what happens to the site’s charges
 under each of the three optional ways to look at the site.
We will discuss pros and cons of each of the methods in our meeting and arrive at a preferred option or at least
obtain your input on your concerns and preferences and suggestions to make the rate better reflect the cross
section of opinion represented by you.
We will make a simplifying assumption of a billing unit (called Equivalent Residential Unit) of 2,500 square feet
(see residential section below) though different units could be suggested (e.g. “per 1,000 square feet”).




August 16, 2011 3
Example of the Three Methodologies – 10 Acre Site
The figure shows a typical commercial property that is 10 acres in gross area including 4 acres impervious area (40%
impervious).


Option 1 – Impervious Area Only
ERU size = 2,500 sq ft (this is the billing unit)
Charge pre ERU = $5.00/month/ERU
The site has 4 acres of impervious area = 174,240 sq ft = 174,240/2,500
= 69.7 ERUs
Rounded up to 70 ERUs
Monthly charge (neglecting credits for now) = 70 * $5 = $350.00


Option 2 – Gross Area Too
Includes Option 1 plus a charge per gross area
 th
It has been determined that the charge per gross area ERU will be 1/20 of the impervious charge or $0.25 per ERU per
month
Gross area = 435,600 sq ft = 435,600/2,500 = 175 rounded ERUs
Charge for gross area = 0.25 * 175 = $43.75/mo
Total charge = $350.00 + $43.75 = $393.75


Option 3 – Intensity of Development
For this option we have set the “standard” impervious percent for commercial
property at between 60 and 70% impervious. Anything less than this gets a reduced
rate, more than this gets a higher rate.
To increase our ability to compare among the options we will charge on the basis of
measured impervious area and percent impervious (impervious/gross area).
Our property is 40% impervious and, thus, would pay in the 30-40% bracket =
$2.86/ERU/month
The site has 70 impervious area ERUs
Monthly charge (neglecting credits for now) = 70 * $2.86 = $200.20.




August 16, 2011 4
Example of the Three Methodologies – 5 Acre Site
In this case we have the same site but now it is only 5 acres in size. We
are imagining that much of the green space (5 acres) is not part of the
site. The figure shows a commercial property that is now 5 acres in gross
area including 4 acres impervious area (80% impervious).
Let’s look at how the charge changes based on keeping the identical
impervious area but reducing the overall site area by taking away 4 acres
of green space/gross area.


Option 1 – Impervious Area Only
ERU size = 2,500 sq ft (this is the billing unit)
Charge pre ERU = $5.00/month/ERU
The site has 4 acres of impervious area = 174,240 sq ft = 174,240/2,500 =
69.7 ERUs
Rounded up to 70 ERUs
Monthly charge (neglecting credits for now) = 70 * $5 = $350.00
The charge stays the same because it does not depend in any way on gross area or green space.


Option 2 – Gross Area Too
Includes Option 1 plus a charge per gross area
 th
It has been determined that the charge per gross area ERU will be 1/20 of the impervious charge or $0.25 per ERU per
month
Gross area = 217,800 sq ft = 217,800/2,500 = 88 rounded ERUs
Charge for gross area = 0.25 * 88 = $22.00/mo
Total charge = $350.00 + $22.00 = $372.00
The charge goes down, compared to Option 2 for the 10 acre site because the gross area charge is less


Option 3 – Intensity of Development
For this option we have set the “standard” impervious percent for commercial property
at between 60 and 70% impervious. Anything less than this gets a reduced rate, more
than this gets a higher rate.
To increase our ability to compare we will charge on the basis of measured impervious
area and percent impervious (impervious/gross area). Our property is exactly 80%
impervious and, thus, would pay in the 70-80% bracket = $5.71/ERU/month (note that
one more square foot of impervious area would raise the whole rate to $6.43/ERU).
The site has 4 acres of impervious area = 70 rounded ERUs
Monthly charge (neglecting credits for now) = 70 * $5.71 = $399.70.
This charge is higher than the 10 acres site due to the intensity of development.


August 16, 2011 5
Impact to the Dow Jones
The impact of switching to an impervious area/gross area (IA/GA) or intensity of development type of rate structure was
tested against the Dow Jones list and is shown in detail in the table on the next page. The absolute values of the changes are
dependent on the specifics of the policy but the direction of change and magnitude of change from an impervious only
charge are typical – and real world approaches from other places have been used herein. The figure below illustrates the
changes from the impervious only approach. In this illustration the total revenue was kept neutral. That is, a shift to a
different approach generated the exact same revenue from among the Dow Jones list – it is just generated differently.




In this figure the horizontal axis is the percent impervious of the property and the vertical axis is the percent change (increase
or decrease) from the impervious only charge. You will not several things about this figure:
 • Properties with little impervious area tend to pay more under the gross area approach whereas they pay nothing
 under the other two approaches.
 • Higher percent impervious properties pay little more under the gross area charge methodology since the gross area
 charge is a much smaller proportion of the total charge.
 • Under the intensity of development methodology properties are penalized for their percent of impervious cover and
 strongly rewarded for the preservation or creation of green space.
 • Do not let the steepness of the line unduly influence our thinking. The intensity of development line could be
 flattened through a different application of intensity factors making the reward and penalty much less. However, it
 was derived using annual volume of runoff considerations – and thus has a basis in science. There are other bases.


August 16, 2011 6
August 16, 2011 7
Residential Rate Policy
 Policy Question: Should Portland charge all single family residential properties a flat rate, several
 tiers, individually measured charges - or some hybrid idea?
In Portland there are about 20,504 parcels that will be billed, of which 15,463 (75.4%) are single family residential
(SFR) structures with impervious areas between 1,000 and 10,000 square feet. The figure below shows the
distribution of measured imperviousness for SFR parcels in this range. The median value is about 2,500 square
feet. The distribution of impervious areas is typical with a short tail on the left and a long tail on the right where




there are some very large residential properties. Because of some questions in the data the size has been
truncated at 10,000 square feet – though doubtless there are some larger single family residential properties.
Compared to non-SFR properties the variability of measured imperviousness is small. Most SFR properties are
similar. Cost of service analyses conducted in Cincinnati, Tulsa, and Louisville all indicate that the cost of
stormwater management services and facilities does not change appreciably based on the size of the parcel.
Because of this, the majority of cities and counties that have stormwater service fees employ a simplified charge
for single-family residences. The principal motivation for using a simplified residential rate is to reduce costs,
without sacrificing equity. The details of simplified residential rates vary from community to community. Many
use just one rate for all developed single-family residential properties, but several other approaches have been
adopted:
 • Some use a single, flat rate while others have two or more flat rate categories or classes of residential
 properties.
 • Several communities have a flat rate or two tiers but have a cutoff number above which all residences are
 charged as if they were commercial properties. This captures the imperviousness of the few very large
 properties in a more equitable way.


August 16, 2011 8
Preliminary investigation of the stormwater data in Portland suggest that there are several alternatives that do
not violate our eight criteria, described on page 1:
 1. A single flat rate charge for residences would not diminish the overall level of equity of a service fee if the
 larger homes are charged as commercial property.
 2. A two-tiered structure might enhance the equity compared to a flat rate given the many smaller homes in
 the housing stock. There does not seem to be a justification in going to more than two tiers, though that
 could also be done – and may be an option depending on the basic rate methodology chosen. Though any
 logical break might be chosen, it might be advisable to break the second tier at 4,200 square feet. The
 reason is that the median of the homes larger than this size is 5,056 square feet which is almost exactly
 double the overall median – justifying a charge of 2 ERUs for the high tier.
 3. If desired, multiple tiers could be chosen – one advantage is that the fee amount difference from one tier
 to the next is smaller. Another way more than two tiers is used is to recognize the very smallest single
 family residential properties such as mobile homes or condominiums. Some communities recognize the
 very largest properties with a “super high” tier.
 4. Investigation of the data for single family residences indicates that there is probably insufficient reason to
 make an individually measured calculation.
In all cases we can opt to charge the very largest homes on an individually measured basis as if they were
commercial properties. Depending on our recommendation for a basic rate methodology, there may also be other
options to consider in terms of how we handle lot size and green space.
For now let’s limit our consideration to the first three basic categories of choices above. We will generate and
discuss pros and cons in our meeting for two options and whether we wish to charge the largest homes as
commercial property.




August 16, 2011 9
Exemptions: Roads and Public Property
Roads and public property are two categories of impervious cover that are sometimes considered separately by
local governments with widely variable results from total exemption to total payment. The reasoning for this
variability has little to do with the actual physical impact of these properties and a lot to do with funds availability
and the fact that the dollars come from the same citizens but follow two different pathways – user fee basis or tax
basis. Because they may be handled in different ways they will be considered separately.

Public Roads
 Policy Question: Should Portland charge for public roads, and, if so, how should the City’s bill for
 those roads be handled?
It is important to place this decision within the context of current expenditures and revenue sources. The City
currently spends about $1.135 Million (m) on stormwater related management. The source of the funds is the
sewer fund. Projected future non-capital operational costs are about $620,000 annually. Future total stormwater
program costs including moderate capital construction costs are in the $4m per year range. So in summary in
fairly round numbers:
 • $1.135m Current sewer fund costs estimated to stormwater management
 • $0.620m Future non-capital operations.
 • $2.245m Future annual capital construction costs
Public roads (local, Maine Turnpike Authority, and Maine Department of Transportation (MDOT)) comprise some
55m square feet of impervious area of which 48m is City and private. Not exempting roadway impervious area
would equate to 33% of the total rate base, and the City and private portion is 29% of that total. So the decision
to include or not include roads in the calculation is a major one with the following key implications:
 • Pro: It will reduce the charge per billing unit (ERU) by 33%.
 • Pro: This charge allows you legally to charge for private roads.
 • Pro or Con: It will shift 29% of needed revenue from the stormwater user fee to other City funding -
 $1.16m per year – which must be paid from either the general fund or continue to be paid from the sewer
 fund. It should be noted that this value is almost the exact value now paid for the current stormwater
 program. That is, the City will need to continue to pay this amount of stormwater cost through the road
 charge either through the sewer rate or the tax rate. However, the sewer fund is about to be burdened
 with larger support demands for the long term combined sewer overflow (CSO) control plan and adding
 $1.16m from that revenue source may be problematic.
Options can be defined as:
Option #1 - Do Charge for Roads: Communities that charge for roads often do so as a means to retain current City
spending on stormwater and to keep the fees lower than they otherwise would be as well as creating an incentive
for the City to reduce its roadway impervious area burden and provide a mechanism to charge for private roads
and MDOT and Maine Turnpike roads.
Option #2 - Do Not Charge for Roads: Communities that do not charge for roads often argue that the City needs
the revenue for other pressing purposes. They state that roads are common property owned by all citizens and
are properly allocable on the basis of impervious area since the larger the impervious area of a property the more
use of roads they are likely to make.

August 16, 2011
10
Option #3 - Reduced Charge for Roads: Communities that charge a reduced fee for roads argue that a part of the
roadway is really a drainage system (e.g. Vermont uses 33%) plus an impervious system and only the non-drainage
portion should be charged.
There are a couple ancillary thoughts that should be considered in the above three options:
 • MDOT/Turnpike: Communities that do not charge the MDOT/Turnpike equivalent for their roads argue
 that MDOT/Turnpike must handle all city runoff through their system at great cost and vice versa – so the
 cost is about equal and no charge is applied. This argument, of course, opens up the local government for
 all sorts of properties claiming similar circumstances. Communities that do charge state and federal roads
 reason that it is consistent and fair and it will bring in a new source of revenue (though they may balk at
 payment) at 4% of total revenue or $160,000 per year.
 • Airports: Some local governments look at runways, taxi ways, and the like as public roads and provide an
 exemption. Some do not. This exemption combined with the normal kinds of runoff treatment often
 reduces airport payments significantly. The airport is 854 billing units and thus would generate about
 1.5% of the total revenue or about $60,000 per year.



Public Property
 Policy Question: Should Portland charge for public property, and, if so, how should the City’s bill
 for those properties be handled?
Public buildings comprise about 7.2% of the 56,814 ERUs and the annual fee would amount to about $288,000 in
new charges. Exempting these buildings would increase all other stormwater bills by 7.2%.
Option #1 - Do Charge for Public Property: Most communities charge public buildings and associated impervious
area the stormwater user fee just as they would any other building. One reason to do so is to allow for charging
state and federal buildings on a consistent basis. United States Senate bill 3481 in 2011 clarified that federal
facilities must pay stormwater user fees. But court cases have indicated that cities must typically bill themselves if
they wish to bill other governmental entities.
Option #2 - Do Not Charge for Public Property: Those communities that do not charge their public buildings do so
on the basis that they are “non-revenue producing” and thus have no way to raise or recover the fee amounts
except through the local budgeting process. Whether this is a coherent argument in the context of rate making is
unclear and has not been litigated to our knowledge. In this case local enterprise funds would pay the fee.
Option #3 - Reduced or No Charge for Certain Types of Public Property: There may be a thought process that
arrives at a reduced fee or a broader exemption, though we are not aware of such an approach.




August 16, 2011
11
Sustainable Stormwater Funding
Task Force
  August 16th, 2011
Presentation
 1. Roadmap
 2. Rate Structure
 – Overview
 – Basic Rate Methodology
 – Residential Rate Policy
 – Roads and Public Property
Presentation
 1. Roadmap
 2. Rate Structure
 – Overview
 – Basic Rate Methodology
 – Residential Rate Policy
 – Roads and Public Property
Roadmap
• August – Rate Structure • October – Cost/Program
  – Impervious and gross area – CSO cost allocation
 options – Program five-year plan
  – Residential options – Functional organization
  – Handling of roads, public – Appeals process
 property, and undeveloped • November - Billing
 land
 – Billing
• September - Credits – Customer service
  – Basis for and types of credits – Timing and scope
  – Amount of credits – Public Involvement
 • December- Final
 – Final Recommendation and
 – Implementation Steps/Cost
Presentation
 1. Roadmap
 2. Rate Structure
 – Overview
 – Basic Rate Methodology
 – Residential Rate Policy
 – Roads and Public Property
Fee Level Reminder
Overview
• Rate Structure (p.1) :
  – Basic methodology
  – Modifiers
  – Secondary Funding methods
• Criteria to Insure Equity/Effectiveness (p.1)
• Using Methodology vs. Using Credits (p.2)
  – Shotgun vs. rifle shot
Modification Factors
• Simplified • Floodplain
  Residential Service Surcharge
  Fees • Declining Block
• Credits (System and Rates
  Activity) • Water Quality
• Base Rate for Fixed Impact Factor
  Costs of Service • Development or
• Jurisdiction or Land Use Factor
  Basin-specific Rates • Level of Service
 Factor
Secondary Funding Methods
• Special Service Fees • In-lieu of
• Special Assessments Construction Fees
• System Development • Impact Fees
  Charges • Developer Extension /
• Sales and other Taxes Latecomer Fees
• Bonding • Federal and State
• Performance Bonds Funding
  and other Sureties • Others?

 We’re skipping this in these meetings
Presentation
 1. Roadmap
 2. Rate Structure
 – Overview
 – Basic Rate Methodology
 – Residential Rate Policy
 – Roads and Public Property
Popular Rate Methodologies

  • Impervious Area (55%)
  • Impervious Area and Gross Area (29%)
  • Gross Area/Intensity of Development
 (10%)
  • Others (6%)
 – water meter size, flat rates, zoning class
Policy Question: Should Portland charge
on the basis of :

(1) impervious area only

(2) impervious + gross area

(3) gross + intensity factor to recognize
green space preservation

(4) other basis
Pros and Cons (pp. 4-5)
• IA Only • Intensity of Dev.
  – Simple, intuitive – Total open space per
  – Court tested lot encouraged
  – Only deals with – Can create anomalies
 change not total runoff

• GA/IA • Other
  – Deals with total runoff – Distinguish pollutants,
  – Can create anomalies etc.
  – Undeveloped land – EHU method can
 requires special include soils in charge
 attention
Example (p.6)
More complex methods include:
• Allocation of charges according to program
  costs categories – rational nexus matching
• Allocation of cost according to pollution
  estimates – pollution modeling
• Allocation according to watershed or CSO
  and separate area
• Peak, volume and pollution charges
Ok, here’s the deal.

When we get too complex four
things happen:

1. its harder to explain
2. its costly to develop
3. its costly to maintain
4. its perceived accuracy is well
 beyond its actual accuracy
Don’t forget the local “flavor”
What seems important to Portland
Variations/Thoughts
• Not all open space is created equal
  – Trees have 1/10th annual volume runoff
 as turf grass
  – Clay soils much more runoff than sandy soils
• Must be able to be done using mapped
  data layers otherwise too expensive in
  rate methodology
  – But can be used in credit methodology
• Is there anything else that drives your
  cost you should include?
Question 1: Right now what is your
preference


 Some recognition IA Only Smaller GA charge or
 of “good” green “tree/grass” GA charge
 space preservation
 3 IA + GA
Intensity 2 4
 Of Dev.
 1 5



 6 Other or no vote
Presentation
 1. Roadmap
 2. Rate Structure
 – Overview
 – Basic Rate Methodology
 – Residential Rate Policy
 – Roads and Public Property
Balancing Act


One Flat Rate: Measure Each:
 Simplicity Equity
  Low Cost Higher Cost
 Few Errors Error Count
Residential Housing Stock


 1. Flat Rate
 2. Two Tiers
 3. More Tiers
 4. More Tiers + Cap
 5. Individual Charges
Residential Options You can also get a
 smaller jump by charging
 per 500 square feet or
1. Flat Rate – simple, low cost, few errors
 some other number, but
 you lose the intuitive
2. Two Tiers – more equity, slightly more
 residential tier ability then.

 cost, few errors
3. Multiple tiers – more equity, smaller jump
 to next tier, more costly, more errors
4. Multiple tiers + treat very large as
 commercial
5. Individual measurements – most
 equitable, most costly, depending on unit
 size may be many errors (e.g. Bangor)
Question 2: Your current preference for
SFR treatment
 3 or More tiers
 2 Tiers Tiers Plus Measure
 for Large SFRs
 3 Individual
Flat Rate 2 4 Measurement

 1 5


 Other or no vote
 6
Presentation
 1. Roadmap
 2. Rate Structure
 – Overview
 – Basic Rate Methodology
 – Residential Rate Policy
 – Roads and Public Property
Facts About Roads
• 33% of impervious • Pros to charge:
  area – Reduces charge 33%
  – $1.16m per year if to others
 billed – Can collect private and
  – 4% is state and federal state/federal roads (!)
 ($160,000/yr) • Cons to charge:
• Current City – Taxpayers must come
  Stormwater Costs up with the money:
  – $1.14m per year from new tax or budget
 sewer fund reductions
Question 3: Your current preference for
public roads charges
 Reduced Road Charge




 2 No Road Charge
 Charge

 1 3


 Other or no vote
 4
Facts About Public Buildings
• 7.2% of IA • Pros to charge:
  – $288,000/year – Consistent with rate
• Most do charge structure
 – Allows charges for
• Some do not charge state and federal
  – City departments are buildings
 non-revenue
 producing
 • Cons to charge:
  – Say it is a “wash” and – Taxpayers must come
 that budgeting new tax up with the money
 increases is a non-
 starter
Question 3: Your current preference for
public property charges
 Reduced Property Charge




 2 No Property Charge
 Charge

 1 3


 Other or no vote
 4
Policy Questions Conclusions:
 1. Fee Basis
 2. Single Family Residential
 Rate Structure
 3. Handling Public Roads
 4. Handling Public Property

MINUTES
 Sustainable Storm Water Funding Task Force
 August 16, 2011
 City Hall, Room 209, 12:00 PM – 1:30 PM

1. Introductions of Task Force members and meeting attendees.

All members were present except for Todd Dominski, David E. Robinson, Dennis Martin, Curtis Bohlen,
and John Cannell. Also in attendance was Randy Talbot, Matt Arco, Katherine Early, Doug Roncarati,
Zach Henderson, Sadie Lloyd, and Dan Bisson.

2. Review and approval of the SSWFTF minutes from July 19, 2011.

Veroneau said that he was not at the last meeting and the minutes should reflect that. Gellerson made
a motion to accept the minutes with the amendment that Veroneau was not in attendance. Brooks
seconded that motion. The minutes were unanimously accepted.

3. Presentation on roadmap, rate structure, and exemptions.

After review of the last meeting outcomes, the Task Force reviewed the “Roadmap.” Andy Reese stated
that this roadmap was structured to enable the group to get to the finish line: being able to recommend
a coherent and fairly complete framework to City Council by December. With such a framework the
Council can, if they wish, authorize the City to begin the process of establishing a stormwater user fee.

Reese then reminded the Task Force of the general rate levels for both the sewer rate and the
stormwater rate, and that it was a “zero sum game” in that if one rate decreased the other would go up.
He mentioned that near the end of the process the potential allocation of CSO costs to a stormwater fee
would be revisited.

4. Discussion of storm water rate structure and discussion of exemptions.

The three components of a rate structure were reviewed and a standard set of evaluation criteria noted.
Reese also explained the difference between using an overall rate methodology (sort of a shotgun
approach) for the rate structure versus using credits as sort of a rifle shot approach. You use the basic
rate methodology to get things about right and then credits and exemptions to adjust from there for
those who may outliers to the basic rate methodology.

The concept of a basic rate methodology was discussed and the differences between impervious area
(IA) and the use of gross area (GA) discussed. Three basic rate methods were outlined and then
variations on those suggested: IA only, GA+IA, and GA times an intensity factor. Pros and cons were
discussed. It was explained that gross area approaches may better reflect the total runoff from a
property while IA approaches reflected best the changes a property owner has done and benefits from.
The potential impact of the various methodology decisions on the “Dow Jones” properties was
illustrated and reference was made to the table in the handout. The basic difference is how GA is
handled – whether it is seen as a benefit or a liability in the basic rate methodology.

Significant discussion was had about the various options and each member was given a chance to
express their concerns and preferences and what Portland was trying to encourage in terms of
development.

Members were given a chance to vote along a
continuum of choices from GA being seen as
good to GA being penalized. There was a feeling
that Portland was generally a fairly densely
developed city and that recognition of open
space in the rate methodology was not
warranted. The weight of the voting centered on
the use of a simple IA approach to the rate
methodology but with there being an ability to
recognize, probably through crediting, green
space that had superior rainfall infiltration or
treatment capabilities. This might include: urban
forests versus simple turf cover, and the use disconnection of impervious areas versus directly
connected impervious areas.

The above figure was used to tally votes and to frame the discussion. The following voting was tallied:
Option 1 – 0 votes Option 4 – 2 votes
Option 2 – 4 votes Option 5 – 0 votes
Option 3 – 5 votes Option 6 – 0 votes

Preliminary Policy Recommendation #1: Portland should use an impervious area rate methodology as
the basis for its charge.
Preliminary Policy Recommendation #2: Private efforts and investments to reduce the impacts of
development on parcels such as the planned and engineered use of tree cover or disconnection of
impervious area should be recognized and rewarded.

Single family residential (SFR) charges were discussed and various options commonly used elsewhere
were detailed. The key options discussed began with a simple flat rate for all SFRs on one end of the
continuum to individually measured SFRs on the other.

  Flat Rate – simple, low cost, few errors
  Two Tiers – more equity, slightly more cost, few errors
  Multiple tiers – more equity, smaller jump to next tier, more costly, more errors
  Multiple tiers + treat very large as commercial
  Individual measurements – most equitable, most costly, depending on unit size may be many
 errors
The median housing IA (rounded) is often used as the unit of measure for billing purposes (the
Equivalent Residential Unit or ERU) and that number in Portland is about 2500 square feet. Such an
approach is common and helps residents understand their property when compared to the “norm”. The
group felt that such an approach was fine though it was discussed the billing “per 500 square feet” or
any other unit was appropriate. The smaller the billing unit the more chances your estimate for a given
property will be incorrect. The smaller the number of tiers the greater is the jump to the next tier – this
is more important as the fee grows in size.

After thorough discussion the group agreed that the use of at least 2 tiers (six votes) was warranted and
would support three tiers (or more) (five votes) if the housing stock or other good reason warranted its
use.

Preliminary Policy Recommendation #3: Portland should use a simplified charge for single family
residential charges consisting of two or three tiers of charges if the housing stock analysis warrants
more than two tiers.
The group discussed how public roads would be treated. Reese presented detailed information on the
rate implications of billing for roads, impacts on state and federal roads, the sources of funds to pay for
roads (general fund), current funding sources (sewer fund), and how others have done it.

Most stormwater user fee programs do not charge for roads, for a variety of reasons. However, it is legal
and can be done. Roads are a shared significant part of the total impervious area of the city (33%) and
the impacts of roads could logically be allocated across the rate base on the basis of impervious area if
the decision is made not to charge for roads explicitly.

One argument made was that, if charges for roads were levied (and paid through the general fund) that
tax exempt properties would then not participate in those charges forcing that 33% of the fee onto
property taxpayers. This was seen as inequitable by most. In addition in Maine there is no ability to levy
sales or other taxes so the thought was to conserve taxes and not spend them on stormwater where
another funding source was available.

The ability to charge for roads but at a reduced rate was mentioned and had some interest. In the end
the group felt that either no charge for roads (5 votes) or a greatly reduced charge (4 votes) was
warranted.

Preliminary Policy Recommendation #4: Portland should not charge itself for its roads or, if further
study warrants it, charge a greatly reduced fee for roadway surfaces.

The group ran out of time and deferred the discussion of exempting public buildings until the next
meeting.

5. Discussion of public outreach plan.

The group ran out of time and deferred this discussion until the next meeting.

6. Confirm Date for Next Meeting: The next meeting is currently scheduled for September 20, 2011
7. Adjourn