Sustainable Storm Water Funding Task Force — Portland, ME
Date: 2011-06-21

AGENDA
 Sustainable Storm Water Funding Task Force
 June 21, 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 May 17, 2011.

3. Brief summary of material covered in previous meetings.
 a. Introduction to Portland’s Storm Water Systems and Performance Obligations.
 b. Storm Water Funding: Current Organizational Structure, Cost of Services, and Sewer
 Rate Implications.

4. Submission of revised sewer usage figures and clarification of costs related to future storm water
 program costs.

5. Submission of addition national water and wastewater survey material by Portland Water District.

6. Storm water funding options and combined sewer cost allocations presentation and discussion.

7. Recommended Update to the Energy and Environmental Sustainability Committee.

8. Confirm Date for Next Meeting: The next meeting is currently scheduled for July 19, 2011

9. Adjourn
 MINUTES
 Sustainable Storm Water Funding Task Force
 May 17, 2011
 City Hall, Room 209, 12:00 PM – 1:30 PM

The Task Force introduced themselves. All members were present except for Peter Gellerson, Dennis
Martin, and John Cannell. Staff in attendance including Houseal, Bobinsky, Earley, Roncarati. Barry
Sheff of Woodard and Curran also in attendance.

Suslovic a meeting of interested parties related to snow hauling options. He suggested meeting after
this meeting to discuss. Suslovic also mentioned the sea level rise meeting.

1. Review and approval of the SSWFTF minutes from April 19, 2011

Payne made a motion to approve the minutes. Robinson seconded. Unanimously approved.

2. Presentation and discussion of Portland’s Waste Water and Storm Water Costs

Suslovic summarized the previous meeting. Bobinsky stated that there would be an informational
meeting on the Tier III plan for the business community on Friday.

Houseal presented the information on storm water costs to the Task Force. There were questions on the
Storm Water Operation Expenses slide. The question was raised whether the column titled “estimated
additional storm water expenses needed for a segregated storm water fund” were future storm water
operating costs. Houseal stated that the column did not represent future storm water operating costs.

Bohlen requested that the Task Force was shown now much the sewer fund would decrease if the storm
water operations were put into a separated storm water fund and how that might effect sewer rate
payers.

Payne pointed out that future storm water compliance costs and CSO program costs beyond Tier III are
unknown and represent a cost not presented. These costs would impact rates in the future.

3. Confirm Date for Next Meeting: The next meeting is currently scheduled for June 21, 2011

4. Adjourn
 Sewer Rate per Hundred Cubic Feet (HCF) of Volume
 3,500,000 $9.00
 $8.11
 $7.87
 $7.64 $8.00
 3,000,000 $7.35
 $6.93
 $7.00
 $6.36
 2,500,000
 $5.83
 $6.00




Hundred Cubic Feet (HCF)
 $5.40
 $5.07
 $4.88
 2,000,000


 Sewer Rate
 $5.00

 $3.99 $3.99
 $4.00
 1,500,000


 $3.00
 1,000,000

 $2.00

 500,000
 $1.00


 0 $-
 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

 Sewer Volume Surcharge Sewer Rate
 Storm Water Cost Allocation Considerations
 The purpose of this handout is to briefly describe rate structures, legal notions of fairness
 in ratemaking applicable to this storm water discussion, and an overview of allocation of
 combined sewer costs.



 Introduction
 Portland is facing significant cost increases in its three-prong wastewater program: sanitary sewer, storm water,
 and combined sewer. Currently all of these costs are charged as part of the sanitary sewer bill – and the basis of
 the cost is consumptive use of water.
 During the June 21, 2011 Task Force meeting we will discuss two topics:
 1. Does the Task Force consider a storm water user fee a potentially viable option that could help pay for
 increasing wastewater costs, and therefore merits further exploration and study?
 2. If such a storm water fee was to be established, should some portion of the combined sewer cost
 burden be allocated to this fee rather than to the sanitary sewer bill?



 1. Does the Task Force consider a storm water user fee a
 potentially viable option that could be used to pay for the
 estimated increase in wastewater costs, and therefore merits
 further exploration and study?

 Overview
 Municipalities and their subsidiary organizations employ a variety of “funding” methods, including service
 charges, several types of taxes, franchises and other fees, fines, and penalties. It is important to understand the
 three main ways of providing support to storm water programs: resources, money and revenue:

  ♦ Resources include all the non-cash ways that a local storm water program can be supported including: free
 resources available from the internet, shared costs with neighbors, transformation of current programs to
 better support storm water needs, volunteer programs, etc. Resources are not free in that they often
 require significant staff time to find, coordinate, and manage.
  ♦ Money includes all one-time infusions of funds. This includes Federal and state grants, loans, penalties,
 bonds, special sales taxes, one-time development related fees and payments, penalties, etc. Money is often
 targeted to a specific need or program activity. It may, or may not, be sufficient to cover that program but
 its key characteristic is that it is one-time.




Sustainable Stormwater Funding Task Force
June 21, 2011 1
  ♦ Revenue includes all ongoing flows of funds. For local governments this includes property and other ad
 valorem taxes, sales or gasoline taxes, franchise fees, user fees, etc. The key characteristic of this type of
 support is that it is ongoing.

 Each of these basic types of support has advantages and disadvantages and can be targeted toward different
 aspects of the storm water program. The Storm Water Management Functions Table later in this report depicts
 the key elements of a typical storm water program. As these elements are considered it is clear that the bulk of
 the cost of storm water programs must be borne by revenue producing support sources not “resources” or
 “money”. Since storm water cannot compete effectively for general fund tax dollars, most local governments find
 that only legally dedicated revenue will last the test of time and competing priorities.

 The various funding methods also have distinctive characteristics which separate them legally, technically, and in
 terms of public perceptions. Four major categories of municipal revenue generation methods are taxes, service
 charges, exactions, and assessments. Two of the four directly concern us: taxes and service charges (either
 sanitary or storm water).

  • Taxes are intended primarily as revenue generators, and with some exceptions (such as special local option
 sales or earmarked taxes), without any particular association with the activities or improvements that they
 fund. They can be used for the general purposes of local government. These include property tax, income
 tax, sales tax, etc.

  • Service charges are not established simply to generate revenue, but must be tied to the objectives of a
 specific program to which they are associated. For example, water and sewer service charges are
 structured to cover the cost of those programs, not to simply generate revenue which is used for other
 purposes as well. Thus the total revenue generated must be tied to the cost of providing services and
 facilities and the amount each rate payer is charged must be related to the impact or “use” of the system
 (rational nexus).

 A major source of funding for storm water management is in the form of a user fee system under the auspices of a
 storm water utility. This form of funding has several advantages over other competing forms of finance including
 its equitability, stability and adequacy. The user fee concept of a storm water utility based funding method is fast
 growing. In the early 1970's there were only one or two true storm water utilities in existence. By 2011 the
 number has grown to over 1,200. This number is expected to more than triple in the next decade as the financial
 impacts of storm water quality legislation reach the many small municipalities.

 A storm water utility falls primarily under the second of these funding categories: a service charge. It is based on
 the premise that the urban drainage system is a public system, similar to a wastewater or water supply system.
 When a demand is placed on either of these two later systems the user pays. In the same way when a forested or
 grassy area is paved a greater flow of water is placed on the drainage system. This is the demand. The greater
 the demand (i.e. the more the parcel of land is paved), the greater the user fee should be.

 A storm water user fee is fair because the cost is borne by the user on the basis of demand placed on the drainage
 system. It is a more stable funding source than taxes because it is not as dependent on the vagaries of the annual
 budgetary process. It is adequate because a typical storm water program can be financed with payments
 normally below the normal customer willingness to pay.



Sustainable Stormwater Funding Task Force
June 21, 2011 2
 How do storm water fees work?
 The basic rate methodology defines the basis for the rate that users will be paying. The three main impacts on
 surface water of urban development are increases in peak flow, volume of discharge, and amount of pollution. All
 impacts can fit into these three basic categories. The variable most positively associated with each of these three
 major impacts is the conversion of pervious areas (forests and fields) to impervious areas (pavement, roof tops,
 and other hard surfaces).

 Accommodating the runoff that occurs when pervious area that typically absorbs rainwater, is converted to
 impervious area requires Portland to invest in the public drainage system. Therefore, it is appropriate to use
 some measurement of impervious area or surrogate of impervious area in the rate methodologies. Most storm
 water programs in the United States have taken this approach and a 2010 survey found that over 75 percent of all
 storm water programs responding used impervious area as a factor for rate calculation1. While impervious area
 does not directly account for all of the storm water program costs, urbanization of land as reflected in intensity of
 development is, by far, the best measure of cost causation and provides a court-tested rational nexus for the fee
 amount on any property.

 There are, many ways to configure the rate methodology to emphasize certain other impacts or recognize the
 benefits of certain kinds of development practices. Many of these considerations are handled with a storm water
 crediting or secondary funding system, but some factors can also be handled in the makeup of the basic rate
 methodology itself. Two factors commonly considered are:

 • Some communities charge for gross parcel area in addition to impervious area, reasoning that storm
 water runs off all parcels and thus, all should pay.
 • Some communities want to encourage green space and set up charges based on an intensity of
 development factor – so that the same amount of imperviousness would be charged less if it were
 located on a larger lot with more green space.



 Pros and Cons for a Storm water User Fee
 How do our three revenue producing options compare to each other? Below is a very brief list of pros and cons for
 each of them from the standpoint of fairness, revenue capacity and ease of implementation. Table 1 lists typical
 “pros” and “cons” for each of the three alternative approaches for funding the combined sewer system costs and
 storm water system costs.
 As you consider whether a new storm water fee is a fair and smart way to pay for the storm water program, or at
 least better than either a tax increase or adding it to the sanitary fee, consider the list of typical pros and cons in
 Table 1. This same table will be used when we consider how to pay for combined sewer costs under question #2.




 1
 “Storm water Utility Survey”, Black and Veatch, Kansas City, 2010.

Sustainable Stormwater Funding Task Force
June 21, 2011 3
 Table 1: Pros and Cons for New Storm water Fee
 Pros Cons
 Tax Increase
  Politically costly
  Taxes are unrelated to the costs
  Technically easy and cheap to do
  Some do not pay their fair share, or any
  Lots of revenue capacity share
 “If we coulda done that we already
 woulda”
 Sanitary Fee Increase
 Sanitary fees are unrelated to “pure”
  Technically easy to do
 storm water cost causation
  Storm water is normally small compared
  You may need the “headroom” for
 to sanitary + combined sewer costs
 sanitary/combined sewer demands
  Its “all water anyway”
  No way to incentivize good behavior
 New Storm water Fee
  Individual fee and impact are related
  Very flexible rate structures
 May be considered a new “tax”
  Ability to incentivize good behavior
  More costly to set up initially
  Fees relatively low for “pure” storm
  Collection rate may be lower
 water
  Stable and adequate funding source




 2. Should some portion of the combined sewer cost burden be
 allocated to a storm water fee rather than the sanitary sewer
 bill?

 Portland Facts
 Portland’s combine sewer costs are expected to grow. Currently all combined sewer costs are allocated to citizens
 of Portland on the basis of water consumption. If a storm water fee were put in place, the basis of the cost being
 some measure of land development (i.e. impervious area), should some of this combined sewer cost be allocated
 on that same basis? What would be most fair – all things considered?

Sustainable Stormwater Funding Task Force
June 21, 2011 4
 Fairness Concepts: Taxes and User Fees
 We all have concepts of what is “fair,” fair to me and fair to others. In ratemaking the idea of fairness is called
 “equity” and the courts have, over the years, developed some basic tests of equity. The goal is to design a user fee
 structure that reflects the character and desires of the community and has the following general characteristics:
 • Equitable and reasonable – a reasonable person would be able to look at this rate structure and feel a sense
 of fairness about it.
 • Not illegally discriminatory or confiscatory – the rate tracks cost causation; is not unfairly discriminatory; and
 is not so onerous as to deny reasonable use of the property due to the charge.
 • Costs that are substantially related to provision of facilities and services – the total program cost to be paid
 for is all related to the general purpose for which the fee is charged.
 • Rational nexus – a fee is charged that is related to demand/use of the storm water systems and services for
 each individual property, though engineering exactitude is not required.
 • Legal – the rate structure reflects the authority inherent in state law and local authority.
 On top of these tests local organizations also prefer a rate structure that has inherent simplicity such that the
 development and maintenance of the database is not overly expensive, and the rate and charge are relatively
 easy to explain to a customer.
 When we consider whither funding storm water and maybe part of the combined sewer system with a storm water
 user fee is a good idea our primary consideration has to do with “cost causation”. That is: what private activities or
 property characteristics cause me to spend money in a particular program and how can I best bill that money back to
 the ones who cause me to spend it?
 We are basically pondering at the question: knowing that we need to fund more expenses on the three wastewater-
 related programs which of these three approaches make the most sense to me in funding the major part of the
 increase for combined sewer and for storm water?



 How Have Others Done It?
 As noted above, very few cities that have combined sewer costs allocate any combined sewer costs to their storm
 water fee. The reasons have as much to do with history than a rational assessment for equity. Most wanted the new
 storm water fee to be small to assure its passage in council. Historically, meeting the operating, maintenance and
 capital costs requirements of combined sewer systems was not that onerous and was easily handled under the
 sanitary program. There was no reason to change that configuration. Philadelphia is the main exception, and
 considers its combined sewer program an extension of its storm water program rather than an extension of its
 sanitary program.
 Today a number of cities are looking at large and looming combined sewer costs and rethinking the allocation
 methodology for those combined sewer costs:
 • Are combined sewer costs really about wastewater getting into a storm water system, and thus should be
 borne by wastewater dischargers on the basis of sanitary fee allocation – consumption of water?
 • Are combined sewer costs really about storm water getting into a wastewater system, and thus should be
 borne by storm water dischargers on the basis of storm water fee allocation – parcel impervious area?

Sustainable Stormwater Funding Task Force
June 21, 2011 5
 Analysis Summary
 To help you think about these ideas an analysis was performed where combined sewer costs were switched from
 sanitary fee allocation to storm water fee allocation by looking at a set of individual properties (the “Dow Jones”).

 Figure 1 shows the changes in example property’s individual monthly fee as the allocation shifts from a water
 consumption basis to an impervious area basis. Make special note of the kinds of properties that show a great
 increase in their monthly fee as this shift (reallocation) is done, and those that show a decrease. Generally properties
 with large impervious areas but little water use will show a dramatic fee increase on reallocation.
 For example, a parking lot’s fee
 will go up $480% for a 100%
 reallocation of COMBINED
 SEWER costs to an impervious
 area basis. On the other hand, a
 typical apartment complex will
 show an 80% decrease in their
 monthly fee with such a shift.
 Intermediate shifts can be
 calculated for any increment
 simply by multiplying the
 number shown in Figure 6 by
 the chosen percentage. For
 example, for a 25% shift the
 parking lot would go up 0.25 *
 480% = 120%.
 Relief might also be possible in
 the form of storm water
 credits, exemptions, incentives, Figure 1: "Dow Jones" Reallocation Impacts
 or rate change capping.




Sustainable Stormwater Funding Task Force
June 21, 2011 6
 STORM WATER:
 FUNDING OPTIONS
 SUSTAINABLE STORM WATER FUNDING
 TASK FORCE

 AMEC Briefing
 Andy Reese




 Reese - 1
© 2011 AMEC E&I all rights reserved
 Consider two questions:
 1. Does the task force consider a storm
 water user fee a potentially viable
 option to help pay for the estimated
 increase in wastewater costs, and
 therefore merits further consideration?
 2. If so, should a portion of the combined
 sewer cost burden be allocated to the
 storm water user fee rather than to the
 sanitary sewer bill?

© 2011 AMEC E&I all rights reserved Reese - 2
 1. There are about
 125 “funding”
 methods and
 variations for local
 governments… some
 better than others…
 2. There is a
 big difference
 between “resources”,
 “money” and “revenue”
© 2011 AMEC E&I all rights reserved
 Resources, Money & Revenue

  Resources – free, non-monetary,
 donated, volunteer, goods and
 services
  Money – one-time, unpredictable,
 undependable, episodic, limited
  Revenue – regular, predictable,
 money, budgeted, cash flow


© 2011 AMEC E&I all rights reserved Reese - 4
 You need REVENUE
 to be successful in stormwater
 And revenue for this sort of
 thing comes in three flavors:

 1. Tax Increase
 2. Sanitary Fee Increase
 3. Stormwater User Fee



© 2011 AMEC E&I all rights reserved Reese - 5
 Taxes

  Pros  Cons
  Technically easy  Politically costly
 and cheap to do  Taxes are unrelated
  Lots of revenue to the costs
 capacity  Some do not pay
 their fair share, or
 any share
  “If we coulda done
 that we already
 woulda”

© 2011 AMEC E&I all rights reserved Reese - 6
 Sanitary Fee
  Pros  Cons
  Technically easy to  Sanitary fees are
 do unrelated to “pure”
  Stormwater is stormwater cost
 normally small causation
 compared to sanitary  You may need the
 + CSO costs “headroom” for
  Its “all water sanitary/CSO
 anyway” demands
  No way to
 incentivize good
 behavior
 Reese - 7
© 2011 AMEC E&I all rights reserved
 Stormwater User Fee
  Pros  Cons
  Individual fee and  A new “rain tax”
 impact are related  More costly to set
  Very flexible rate up initially
 structures  Collection rate may
  Ability to incentivize be lower
 good behavior
  Fees relatively low for
 “pure” stormwater
  Stable and adequate
 funding source

 Reese - 8
© 2011 AMEC E&I all rights reserved
 Growth of Storm Water Utilities
 1200




 600




 1
 1975 1988 1999 2005 2010

 Reese - 9
© 2011 AMEC E&I all rights reserved
 What Led to SW Utility
 Popularity?
  Expansion of urban city’s roles
  Shift away from general taxes to
 fees and demand-based funding
  Other prevailing priorities -
 police, schools, solid waste
  Proliferation of other enterprise
 funds - solid waste, waste water
  Changing stormwater programs
  Superior equity, stability,
 adequacy
  Failure of other methods
 Reese - 10
© 2011 AMEC E&I all rights reserved
How a Fee can be Calculated
  “the more you pave the more you pay”

 = say a typical
 house pays
 $6.00/mo

 = 30 * $6.00/mo
 minus credit
 © 2011 AMEC E&I all rights reserved Reese - 11
 Monthly fee for typical residence
 for larger municipalities

A stormwater fee to pay for the projected
Portland stormwater program ($3.8M)
would be about $6.41/mo




 © 2011 AMEC E&I all rights reserved Reese - 12
 Typical Properties
 $6.41/month/unit charge




 Residential
 $6.41/mo
Steakhouse
17,000 sq ft 210,000 sq ft auto dealer
$44.87/mo $544.85/mo
 less credit less credit

 Reese - 13
 A question of “due diligence”

 Establishing a 1. Governance
 successful 2. Program
 stormwater 3. Public and
 utility requires political
 that you pay
 4. Financial policies
 attention to five
 key areas of 5. Database &
 due diligence: customer service

 Reese - 14
© 2011 AMEC E&I all rights reserved
 Bottom Line Summary
  Question #1 - Fee
  Stormwater fees are
 common, equitable and
 adequate
  The fee estimate for
 the SW program is
 within the norms of
 other places
  A new fee must be
 established carefully
 for legal and public
 reasons
 Reese - 15
© 2011 AMEC E&I all rights reserved
 Consider two questions:
 1. Does the task force consider a storm
 water user fee a potentially viable
 option to help pay for the estimated
 increase in wastewater costs, and
 therefore merits further consideration?
 2. If so, should a portion of the combined
 sewer cost burden be allocated to the
 storm water user fee rather than to the
 sanitary sewer bill?

© 2011 AMEC E&I all rights reserved Reese - 16
 Combined Sewer Costs have
 grown since then…
  Future 5-Year
 Annualized Costs
 (FY 2013-FY 2018):
  $18.5M Combined
 Sewer
  $8.9M sanitary
  $3.8M storm
  What is the basis of
 the allocation?
  What is “fair”
 Reese - 17
© 2011 AMEC E&I all rights reserved
 A “user fee” must be…
  Fair and reasonable
  Fee based loosely on
 demand
  Not illegally
 discriminatory
  Total costs substantially
 related to provision of
 facilities and services
  A reduction provision –
 i.e. credits

 Two thoughts to help with relative perspective…
© 2011 AMEC E&I all rights reserved Reese - 18
 Allocation Methods Overview
  Combined Sewer costs are a grey zone
  We will have Combined Sewer costs to
 allocate – what is “fair”, what is smart?




 Reese - 19
© 2011 AMEC E&I all rights reserved
 Are Combined Sewer costs…

  Stormwater  Sanitary
 Related Related
  “Your  “Your sewage
 stormwater is is in my
 in my sanitary stormwater
 pipe – get it pipe – get it
 out” out”



© 2011 AMEC E&I all rights reserved Reese - 20
 How Most People Do It
  ≈ 95% allocate 100% of Combined Sewer to
 the sanitary charge
  They did it that way because:
  they wanted new SW fee small to pass council
  people were paying all along for Combined Sewer
 under sanitary charge
  the Combined Sewer program was relatively
 small and not a big deal
  Many will be rethinking this allocation in the
 next ten years

© 2011 AMEC E&I all rights reserved Reese - 21
© 2011 AMEC E&I all rights reserved Reese - 22
  The “Dow Jones”
  As we reallocate we create large monthly
  charge changes – what is “fair” ?


  High Sanitary Relatively High Stormwater
 Charges Neutral Charges




 Reese - 23
© 2011 AMEC E&I all rights reserved
 The “Dow Jones” List
 % change in total sanitary/storm fee
 combined sewer cost reallocation from
 all sanitary to all stormwater


Relatively big Relatively big
 paved areas water users
 Bottom Line
  Question #1 - Fee  Question #2 – Allocation
  Stormwater fees are  CS costs big, growing,
 common, equitable unavoidable
 and adequate  Different opinions on “cost
  The fee estimate is causation” - No “wrong”
 within the norms of answers
 other places  Sister cities not made
  A new fee must be reallocation… yet
 established carefully  Are some big individual
 for legal and public fee changes if you
 reasons reallocate current costs
  Credits/incentives may
 help
 Reese - 25
© 2011 AMEC E&I all rights reserved
 Ok, its
 your turn




 Reese - 26
© 2011 AMEC E&I all rights reserved
 Question 1: Is a storm water fee a potential
 viable option that could help pay for
 increasing storm water costs and therefore
 merits further exploration and study?

 Reluctant
 Will not ok Support
 oppose
 3
 Nope 2 4 Strongly
 Support
 1 5



 6 Other or no vote
 Reese - 27
© 2011 AMEC E&I all rights reserved
 Question 2: Based on your gut
 feeling how would you vote today
 on reallocation proportion?

 50:50
 25% SW 75% SW
 3
 All to 2 4
 All to
 CSO 1 5 SW



 6 Other or no vote

 Reese - 28
© 2011 AMEC E&I all rights reserved

MINUTES
 Sustainable Storm Water Funding Task Force
 June 21, 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 Robinson, Bohlen, and Cannell. Cathy Ramsdell from Casco
Bay Keepers came in place of Joe Payne. Also in attendance: Robin Sanders, Rich Niles, Andy Reese,
Mike Bobinsky, Zach Henderson, Doug Roncarati, Barry Sheff, Kathi Early, and Ralph Carmona.

2. Review and approval of the SSWFTF minutes from May 17, 2011.

Motion made by Gellerson, Dillon. Minutes approved unanimously.

3. Brief summary of material covered in previous meetings.
 a. Introduction to Portland’s Storm Water Systems and Performance Obligations.
 b. Storm Water Funding: Current Organizational Structure, Cost of Services, and Sewer
 Rate Implications.

Houseal summarized material covered in previous meeting and where to find the meeting material on
the City website.

4. Submission of revised sewer usage figures and clarification of costs related to future storm water
 program costs.

Houseal summarized amendments. Houseal stated that the sewer usage figures were amended and the
amendments were provided. Houseal stated that the program costs were reviewed, but were within a
reasonable estimate of future costs. Any amendment was not required at this time.

5. Submission of addition national water and wastewater survey material by Portland Water District.

Miller summarized survey material.

6. Storm water funding options and combined sewer cost allocations presentation and discussion.

Reese presented on storm water funding options. The presentation covered discussion of revenue and
other sources of funding such as grants and resources. Three options were presented for revenue
including sewer rate, storm water rate, and property tax.

Dillon asked if the storm water utility option would reduce the sewer rate. Reese responded that this
sometimes occurred.
Connolly asked what happens in the situation where revenue needs are fixed and someone gets a credit,
but costs go up anyway? Reese stated that is depended on how the rate system was structured.

Gellerson asked if Reese has seen the commercial sector try to not add waste water to the system and if
how credits valued would affect commercial properties to undertake work?

Dillon asked if costs include urban impaired stream restoration. Houseal responded that they do not.
Impaired stream restoration is listed as unknown in the last presentation.

7. Recommended Update to the Energy and Environmental Sustainability Committee.

Suslovic began the discussion by asking if property taxes were a viable option. He asked if there was a
consensus that property taxes should be removed from the discussion because it was unlikely that
revenue could come from this source.

Martin stated that he thought property taxes should be left out of the equation. The burden was
already heavy on homeowners and for‐profit corporations. The task force should try to redistribute the
burden not increase the inequity of payment.

There was a consensus that property taxes were not a viable option that the task force would pursue or
recommend at this time.

Suslovic asked if the Task Force wanted to continue to explore the option of a new way of charging for
storm water as distinguished from the current way of paying for storm water through water usage.

Gellerson stated that he was interested in keeping things the same for political reasons. He felt that a
new charge would not be received well by residents.

Dillon stated that he was interested in exploring a storm water fee because it was a more equitable and
fair way of paying for the costs. He felt that such a fee would be borne by the users of the system rather
than an arbitrary way of billing based on water usage.

Suslovic stated that he was interested in seeing how a storm water fund was received in other
communities. He wanted to know if there were communities where a storm water fee was not well
received.

Connolly stated that if we were today to show where we stood, he strongly supported the storm water
fee because the Hospital has made a lot of effort to reduce their storm water impact and would like to
see a considerable repayment for what is being done in the future or what has already been done. From
the Hospital’s two sites, one has made a considerable effort to reduce its storm water impact, and the
other has not. This is likely repeated by other organizations in town.
Ramsdell stated that she strongly supports the storm water fee as a way to incentivize runoff reduction.
Runoff reduction is really important to the environment as well as reducing costs for the City. Public
outreach and education are two areas that are also not to be forgotten. There needs to be a lot of
public outreach surrounding this issue.

Kidder stated that maintaining storm water systems and reducing pollution from storm water should be
common place. She stated that the fee is about accountability.

Suslovic asked if since most storm water utilities are regional should not Portland be considering a
regional model as well. Bobinsky responded that the regional option was explored five years ago, but no
traction was gained. The thought at this point is that other communities are watching how Portland will
proceed and other will follow suit.

Martin stated that the Task Force needs to be cognizant of the effect on businesses as it relates to
economic competitiveness. He stated that we should be concerned that businesses may leave.

Suslovic stated that the Task Force needs to be also considering the effects that the storm water utility
could have on sprawl.

Dillon stated that Long Creek was a good example of businesses leaving not occurring. The Long Creek
area is the Maine Mall area and businesses have not been leaving there.

Miller stated that the Task Force should be concerned about not doing anything and having the rate go
up and as people conserve water the rate will go up even higher. The City could be facing a high rate as
compared to other cities if the City does not develop a storm water fee.

Connolly stated that it didn’t seem to be a question of paying or not. A company might move, but it was
likely that they would have to pay for storm water costs in a new building on a green field, so
competitiveness didn’t really seem to be the issue. The issue really seemed to be what mechanism do
we want to pay for the costs under.

Ramsdell asked if there were regional examples of storm water programs. Reese stated that
Mechlanburg County in North Carolina was an example and there are other examples, but his
recommendations would not be to wait on the region. It would be better to get it done. A regional
option might be for practical purposes, be seven years out if at all.

Suslovic was interested in a briefing on Long Creek as an example of how storm water is being dealt with
locally and through a user fee. He said he was also interested in seeing how we are already requiring
storm water improvements through site review.

Reese stated that to undertake a storm water fund process there were number decisions that need to
be met to have the storm water fund be legally defensible, politically feasible, meet some of the CSO
costs, and is equitable.
Suslovic stated that there are some things we do know as is presented in the DIMS Study, but there is
much we don’t know and how to tailor a storm water fee to Portland’s unique needs is necessary. The
issues will always need to be brought back to the question of equity. There will always be the
alternative of paying for costs the way they are currently paid for, but the other viable option needs to
be fleshed out and that needs the Task Force to want to move in that direction.

Suslovic asked if the Task Force could take a moment to gauge where they stand on exploring the option
of a storm water fee in more detail. There was a consensus that the Task Force would explore the
option of a storm water fee in more detail.

8. Confirm Date for Next Meeting: The next meeting is currently scheduled for July 19, 2011

9. Adjourn