Sustainable Storm Water Funding Task Force — Portland, ME
Date: 2011-11-15

AGENDA
 Sustainable Storm Water Funding Task Force
 November 15, 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 October 18, 2011.

3. Continued discussion of allocating combined sewer costs to the stormwater use charge and sewer
 use charge.
 a. 0%
 b. 25%
 c. 50%
 d. other

4. Continued discussion of capping credits
 a. 25%
 b. 50%
 c. other

5. Review draft Task Force Recommendations

6. Confirm date for next meeting: The next meeting is scheduled for December 13, 2011.

7. Adjourn
 MINUTES
 Sustainable Storm Water Funding Task Force
 October 18, 2011
 City Hall, Room 209, 12:00 PM – 2:00 PM

1. Introductions of Task Force members and meeting attendees.

All members were present except for Ron Miller, David E. Robinson, Dennis Martin, and John Cannell.
Staff present included: Doug Roncarati. Zach Henderson, Andy Reese, and Corey Sensis were also in
attendance.

2. Review and approval of the SSWFTF minutes from September 20, 2011.

Gellerson motion, Veroneau seconded, all in favor of accepting the minutes.

3. Review Task Force Tentative Policy Recommendations

Reese provided an update of the tentative policy recommendations of the Task Force to date.
 a. Portland should use an impervious area rate methodology and charge on the basis of
 impervious area only.
 b. Private efforts and investments to reduce the impact of development on parcels such as
 the planned and engineered use of disconnection of impervious area should be
 recognized and rewarded.
 c. Portland should use a simplified charge for single family residential properties consisting
 of two to three tiers.
 d. Portland should exempt roads from the stormwater fee and should allocate those costs
 across the rate base on the same basis as the rate methodology employed in
 development of individual changes.
 e. Portland should not exempt public property from the stormwater fee.
 f. Portland should tie credits to existing design standards and develop a credit program
 that is simple for property owners and the City.
 g. Portland should offer credits for stormwater education if it makes sense from the
 perspective of the current education program.
 h. Portland should offer minimal or no credits to flat‐rate residential properties, but rather
 focus on one‐time incentives for activities that support the City’s stormwater program
 objectives.
 i. Portland should cap credits at somewhere between 25%‐50% based on balancing
 considerations of equity, impact of credits, and actual ability to reduce impacts.

4. Continued Discussion of Credits

Reese reviewed recommended credit types and the overall structure. He summarized a two part credit
methodology one for water quality and one for flood control. He stressed the overall concept that would
relate criteria to program cost to credit types and amounts.

Houseal stated that as with all the recommendations it is fair to revisit anyone of the recommendations.
The Credit recommendation would be highly dependent on the outcome of the cost allocation from
combined sewer to stormwater and the Task Force may want to revisit the credit allocation again after
discussing the combined sewer allocation question.

A Task Force member asked about the potential process for application. Houseal responded that the
proposed process would be development review to meet the standard and permits issued upon
completion. Application and receipt of credit based on demonstrated receipt of applicable permits. No
credit would be issued for waiver or exemptions from the standard.
Houseal described the potential impact of the credit approach on revenue reviewing potential credit
applicants based on known sites with credit‐qualifying structures and site that might qualify with
additional site improvements. The following facts were given:
  Potentially 16 parcels currently qualifying for a credit: Worst case: no cap, 100% allocation:
 $116,000 annual credit value. Mid Case: 50% cap, 50% allocation: $34,000 annual credit value
  Additional 44 parcels that might qualify for a credit with additional site improvements. The cost
 of these improvements are unknown: Worst case: no cap, 100% allocation: $124,000 annual
 credit value. Mid Case: 50% cap, 50% allocation: $36,000 annual credit value.

Connolly asked about the impact on cost of tiering the credits. Houseal responded that the analysis that
was done was not able to determine which projects would get which credits, therefore it was assumed
the most costly credit effects (i.e. the worst case scenario and the Mid Case scenario. With a tiered
credit, the impact would be lesser still then either scenario.

Dillon asked if the costs represented in the analysis were city costs or builder costs. Reese responded
that the costs were the city costs.

Brooks stated that she was still only comfortable with the 0%‐25% credit amount.

With a growth rate of 2‐6 projects per year it is not anticipated that credit‐based revenue loss will be a
significant issue, though it was noted that all rate payers make up the difference in revenue given away
by credits. It was stressed that the City did not incur an immediate program cost reduction because
someone built a BMP or pond but that the City was investing in a better future over time.

Dillon asked if those required to construct BMPs or ponds should get a credit at all. Reese stated that
one theme in all the policy decisions was that similarly situated properties should be treated in a
consistent manner. No matter the reason a structure is built it should be treated the same way.
However this does not prohibit creating a separate standard for voluntary retrofit that was easier to
attain to encourage beneficiary stormwater detention or treatment.

A review of the incentive of a developer was done with Reese stating that BMPs cost in the range of
$100,000 per treated impervious acre. A spreadsheet model for the estimation of return on investment
was demonstrated showing that the credit capping and allocation decisions together determined the
break‐even cost for construction of BMPs on a site. The higher the fee the more credits mattered, and
the closer to a positive ROI a developer could come.

Gellerson asked if existing properties could be given a further incentive to reduce. Suslovic responded
that it was important to distinguish between credits and incentives and there was a need to balance
both with revenue loss. Suslovic stressed the importance of an incentive program.

5. Discussion of Allocating Combined Sewer Costs to the Stormwater Fee.
Reese presented the various aspects to consider when making a decision about allocation of CSO costs
to stormwater fee. The following seven topics were discussed: science and rate making, political and
affordability realities, impacts on property types, parcel analysis, the “shock and awe” of sudden change,
return on investment, distributions of costs between those that would be most negatively affected.

In current rate‐making practice there is no set way of doing this allocation. In fact, the vast majority of
municipalities do not allocate any CSO cost to stormwater – but this is based on the facts that they have
not begun to face high CSO costs, the wastewater organization does not have or control a stormwater
utility, or it was felt to be far easier just to call it a sewer cost rather than attempt to charge a
stormwater fee above national stormwater fee norms.

Thinking on the subject can sway from one extreme (“your stormwater is in my wastewater pipe and
you need to pay”) to another (“your wastewater is in my stormwater pipe and is causing pollution – you
need to pay.”). Also in the mix is potential stormwater program cost increases due to mandated
watershed planning. Reese stated that all these considerations probably mean a middle ground based
on some technical reasoning and practical assessment.

Some key points made include:
  Allocation creates “winners and losers” in the sense that a large allocation of CSO cost to
 stormwater would cause parcels with large impervious areas but little water use to have a
 higher fee, and vice versa.

  The existing sewer fee charge is $8.11 per HCF thus placing it in the middle of the range it would
 end up at if allocation varied from 0% (around $11) to 100% (around $3.50). Thus an allocation
 of over 50% to stormwater would actually reduce the current sewer rate. Does the City really
 want to decrease people’s sewer rates?

  Also, the stormwater program’s future costs for watershed planning and restoration are
 currently unknown and not figured into this analysis. But they may be large. In addition, growing
 stormwater infrastructure maintenance costs and anticipated future regulatory requirements
 could also increase the cost of the program. So a shift to stormwater fee allocation would
 reduce the perceived “headroom” for further increases in the future.

  The stormwater rate curve (see figure) is relatively steep so it reacts more to an allocation, and
 it starts at ZERO – that is, any stormwater fee is new, not an adjustment. Counterbalancing this
 is the fact that while a residence would typically have one ERU it might have a number of HCF
 charges – so an allocation to sewer, while relatively flat would have more units per month.

  An analysis of 13,800 parcels for which both sewer and impervious area data was available
 showed that a 50% allocation would impact properties the least in terms of the numbers of
 winners and losers and average change from current sewer bill. For zero percent allocation
 every parcel would experience a higher fee, though the average change would be less. For 50%
 allocation far fewer parcels would experience an increase but there would be more with a
 higher increase – that is, the burden of increased costs would fall on fewer parcels.

  There are ways to reduce the impact on a few of those properties most effected through
 capping the annual increase, extending the ramp up in their fees, or targeting incentives and
 credits. All of these methods simply spread the program costs to others in the interim. It might
 be, since analysis concentrated on five year averages that the program ramp up and the fee
 ramp up would match to some extent.

As discussed by the Task Force, reasons for a lower allocation to stormwater included: the ability to
write off water use as a business expense and the ability to better control that use, and thus the fee, a
lower fee might be easier to pass, a lower stormwater fee compares better to national norms, it can be
argued that the overflow problem is a wastewater problem.

As discussed by the Task Force, reasons for a higher allocation to stormwater included: the value of the
higher fee in break even and return‐on‐investment analysis to better incentivize the use of green
infrastructure, the overflow problem could be argued to be a stormwater problem, fewer would face a
higher total cost and the ability to reduce the impact on the fewer most affected is attractive, we might
not go through all the trouble for a small stormwater allocation – not worth the pain of a new fee, the
concept that we start to get “winners” is attractive.

The average of the voting was 36.2% allocation to stormwater and the voting tally is:
12.5% ‐ 2 votes
25% ‐ 2 votes
37.5% ‐ 2 votes
50% ‐ 3 votes
60% ‐ 1 vote

It was agreed to reconsider the overall set of recommendations at the next meeting.

6. Discussion of public outreach plan.

The public outreach plan would be prepared by the December 7 for the Task Force to digest.

7. Discussion of the Date for Next Meeting.

The next meeting is scheduled for November 15, 2011. It was discussed that there would be no
December meeting, but reconvene in January to digest the public outreach plan based on some initial
public comment, but if a December meeting was needed the Task Force would meet then.

8. Adjourn
 Sewer Fund Costs
 $70 $20


 $18
 $60
 $16




 Dollars per Hundred Cubic Feet of Sewer Volume
 $50 $14

 Five Year Average



Millions of Dollars
 $12
 $40

 $10

 $30
 $8


 $20 $6


 $4
 $10
 $2


 $‐ $0

 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 FY 2036 FY 2037 FY 2038 FY 2039 FY 2040


 Total Debt Service (including Existing Debt and CSO Tier II and Tier III)
 PWD Assessment
 Total Capital Renewal and Backlog (1.5% inflation rate applied to capital renewal and 30 yr construction @ 5.5% interest with 20 yr terms applied to backlog)
 Total Operating Expenses (1.5% inflation rate)
 Sewer Rate ($/HCF)
 DRAFT
 Five Year Average Annualized Costs (FY 2013 - FY2018)

 Capital PWD
 Operations Construction Debt Total
 Renewal Backlog Assessment
 Combined Sewer $ 3,212,855 $ 1,568,865 $ 395,200 $ 8,910,398 $ 5,625,240 CSO $ 19,712,559
 Sewer $ 1,546,036 $ 1,249,863 $ 65,157 $ 4,287,711 $ 1,988,748 Existing Debt $ 9,137,514
 Storm Water $ 1,835,572 $ 2,063,581 $ 117,476 $ 4,016,629
 Total $ 6,594,463 $ 4,882,309 $ 577,833 $ 13,198,109 $ 7,613,988 $ 32,866,702

 Notes:
 ‐ Operations ‐ 68% of sewer and combined sewer operating costs allocated to combined sewer based on total
 miles of sewer and combined sewer pipe.
 ‐ Operations ‐ 1.5% inflation rate applied
 ‐ Capital Renewal ‐ 1.5% inflation rate applied
 ‐ Backlog ‐ 30 year construction schedule @ 5.5% interest rate over 20 yr terms
 ‐ PWD Assessment ‐ 68% of Portland Water District costs allocated to combined sewer based on total miles of
 sewer and combined sewer pipe.




Sustainable Storm Water Funding Task Force Working Document 1 of 3 October 18, 2011
 DRAFT Rate Options Calculator


 Annual Rates based on Combined Sewer Allocation to Storm Water
 Sewer Only
 Units 0% 25% 50% 75% 100%
 Tiered Impervious Sewer Rate $/HCF/yr 12.54 $ 11.00 $ 9.12 $ 7.24 $ 5.37 $ 3.49
 Rates Tiered Rate $/ERU/yr $ 70.70 $ 157.44 $ 244.18 $ 330.92 $ 417.66

 Notes:
 ‐ units below in square feet unless otherwise noted.
 ‐ Roadways not included in fee calculations.
 ‐ Parcels of property less then 400 square feet no included in parcel count.
 ‐ Equivalent Residential Unit (ERU) equals 2,500 square feet.

 420,630,805 Gross Area (Parcels) 109,992,020 Impervious Area (Parcels) 2,621,930 total sewer volume (HCF)
 89,547,257 Gross Area (Roads) 55,048,171 Impervious Area (Roads) 27,842 parcels of property
 510,178,062 Gross Area (Total) 165,085,613 Impervious Area (Total) 56,814 ERUs




Sustainable Storm Water Funding Task Force Working Document 2 of 3 October 18, 2011
 DRAFT "Dow Jones" Rate Implications


 Total Sewer and Stormwater Cost
 Water Impervious Sewer Fee 0% CSO to 25% CSO to 50% CSO to 75% CSO to 100% CSO to
 Type
 (HCF/yr) Area (sf) Only Storm Water Storm Water Storm Water Storm Water Storm Water
 Airport 6,312 2,135,000 $ 79,123 $ 129,829 $ 192,043 $ 254,256 $ 316,517 $ 378,683
 Roadways ‐ 68,643 $ ‐ $ 1,980 $ 4,408 $ 6,837 $ 9,266 $ 11,695
 Apartments 12,828 37,806 $ 160,803 $ 142,282 $ 119,559 $ 96,836 $ 74,209 $ 51,389
 Auto dealer 1,536 211,130 $ 19,254 $ 22,910 $ 27,396 $ 31,882 $ 36,380 $ 40,854
 Industrial factory 110,376 379,094 $ 1,383,597 $ 1,225,254 $ 1,030,978 $ 836,702 $ 643,255 $ 448,149
 Industrial shop 120 584 $ 1,504 $ 1,391 $ 1,252 $ 1,113 $ 976 $ 836
 Industrial warehouse 156 55,007 $ 1,956 $ 3,343 $ 5,044 $ 6,746 $ 8,449 $ 10,150
 Residential 60 2,456 $ 752 $ 731 $ 705 $ 679 $ 653 $ 627
 Residential 108 5,412 $ 1,354 $ 1,400 $ 1,458 $ 1,515 $ 1,573 $ 1,629
 Residential 156 2,414 $ 1,956 $ 1,787 $ 1,581 $ 1,374 $ 1,169 $ 961
 Small business 420 5,106 $ 5,265 $ 4,834 $ 4,304 $ 3,775 $ 3,249 $ 2,717
 Charity 312 108,716 $ 3,911 $ 6,544 $ 9,774 $ 13,004 $ 16,237 $ 19,465
 City Services 192 72,882 $ 2,407 $ 4,234 $ 6,475 $ 8,716 $ 10,959 $ 13,199
 Condominium 2,124 138,689 $ 26,625 $ 27,330 $ 28,196 $ 29,061 $ 29,942 $ 30,791
 Fast food restaurant 1,092 46,162 $ 13,689 $ 13,359 $ 12,955 $ 12,550 $ 12,154 $ 11,741
 Government 828 25,141 $ 10,379 $ 9,888 $ 9,286 $ 8,684 $ 8,088 $ 7,480
 Healthcare facility 63,480 214,784 $ 795,741 $ 704,574 $ 592,718 $ 480,862 $ 369,483 $ 257,149
 Hotel 14,232 46,486 $ 178,403 $ 157,943 $ 132,841 $ 107,739 $ 82,744 $ 57,535
 Light manufacturing 84 52,739 $ 1,053 $ 2,480 $ 4,230 $ 5,980 $ 7,732 $ 9,481
 Office building 12,228 289,315 $ 153,282 $ 142,750 $ 129,829 $ 116,907 $ 104,078 $ 91,064
 Parking lot ‐ 136,614 $ ‐ $ 3,888 $ 8,659 $ 13,430 $ 18,201 $ 22,972
 Religious 228 59,512 $ 2,858 $ 4,206 $ 5,859 $ 7,512 $ 9,167 $ 10,819
 Restaurant 324 17,333 $ 4,061 $ 4,060 $ 4,058 $ 4,056 $ 4,057 $ 4,053
 School 1,452 170,404 $ 18,201 $ 20,855 $ 24,111 $ 27,367 $ 30,634 $ 33,879
 Shopping center 480 245,587 $ 6,017 $ 12,281 $ 19,966 $ 27,651 $ 35,340 $ 43,022
 Transit 708 116,383 $ 8,875 $ 11,113 $ 13,859 $ 16,605 $ 19,357 $ 22,098
 Undeveloped ‐ 43,728 $ ‐ $ 1,273 $ 2,834 $ 4,395 $ 5,957 $ 7,518
 University 5,532 268,896 $ 69,345 $ 68,506 $ 67,476 $ 66,446 $ 65,458 $ 64,387
 Utility 684 279,033 $ 8,574 $ 15,444 $ 23,874 $ 32,303 $ 40,738 $ 49,162
 Vacant ‐ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
 Vacant industrial ‐ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐




Sustainable Storm Water Funding Task Force Working Document 3 of 3 October 18, 2011
Different Parcels Impacted Differently

 The more we allocate to stormwater the greater
 the fiscal impact to parcels with large paved lots
 and low water use and vice-versa.
Parcel Analysis




• 13,800 parcels
• Various measures of change
Developer Investment
Most Impacted Rate Payers


 O% allocation means more negatively financial effects
 50% allocation means fewer but greater financial effects
Sustainable Stormwater Funding
Task Force
  November 15th, 2011
Agenda
 1. Preliminaries – Intro and Minutes
 2. Review Allocation of CSO Costs
 3. Review Credits Cap
 4. Review Overall Recommendations
 5. Schedule Next Meeting
Agenda
 1. Preliminaries – Intro and Minutes
 2. Review Allocation of CSO Costs
 3. Review Credits Cap
 4. Review Overall Recommendations
 5. Schedule Next Meeting
Agenda
 1. Preliminaries – Intro and Minutes
 2. Review Allocation of CSO Costs
 3. Review Credits Cap
 4. Review Overall Recommendations
 5. Schedule Next Meeting
QUICK REVIEW
This is complex
We are looking for your gut feel
We will balance:
• Science and rate making
• Political and affordability realities
• Impacts on property types
• Parcel Analysis
• The “shock and awe” of sudden change
• Return on investment
• Loser distributions
How much CSO Cost is “Stormwater”
• No standard • Cost drivers include:
  analysis yet – you pipe construction and
 maintenance,
  are breaking ground
 wastewater treatment,
• Wide flexibility storage tunnel
  – “Your sewage is in my • In the end we balance
 stormwater pipe” science, affordability,
  – “Your stormwater is in rate structure details
 my sewage pipe” and the impacts of
 change
Different Parcels Impacted Differently


 The more we allocate to stormwater the
 worse it is for large paved lots with low water use
 and vice-versa.
 Gut Check
 – don’t forget future watershed costs




Monthly Fee

 Existing Charge




 Allocation
Parcel Analysis




• 13,800 parcels
• Various measures of change
Losers in the Change




 O% allocation means a lot more losers overall
 50% allocation means many fewer but bigger losers
Comparison 0% and 50%
0% CSO Allocation 50% CSO Allocation
• Less shock for a new • Less average impact on
  fee – may be an easier the totality of the
  sell ratepayers
• Keeps fee within • Reflects the reality of a
  national norms wet weather cost
• Leaves some room for causation
  future watershed costs • Allows for higher
• Is the way 99% of cities credits and thus a
  do it now higher ROI
• Everyone is a small • 200 big losers and a lot
  loser of winners
Policy Question: What does your
integrated brain tell you?

 25% Allocation 50% Allocation

 2 3
0% Allocation
 75% Allocation
 1 4

 5
 Other or no vote
Should we help those most impacted?
If so, how?
 • Capping the change per year
 – i.e. <10% change/yr
 • Extending the change for some years
 – i.e. 5 year phase in
 • Providing special incentives for credit
 construction
 – i.e. Grants to construct retrofit BMPs for
 credits
Capping place holder slide –
finishing up analysis tonight on
providing relief on big swings
Capping Balance



Cost to parcels Cost to City




 What can businesses afford, How might we
 combine this with incentives and credits?
Policy Question: Should we provide relief
on the large rate swing – if so how much?

 20% Increase 30% Increase

 2 3
10% Increase
 40% Increase
 1 4

 5
 Other or no vote
Policy Question: What does your
integrated brain tell you?

 25% Allocation 50% Allocation

 2 3
0% Allocation
 75% Allocation
 1 4

 5
 Other or no vote
Agenda
 1. Preliminaries – Intro and Minutes
 2. Review Allocation of CSO Costs
 3. Review Credits Cap
 4. Review Overall Recommendations
 5. Schedule Next Meeting
Fiscal Impact and Capping
• City Side • Developer Side
• Current 16 parcels – BMP cost ≈ $100,000/acre
 from Long Creek data
 – Worst case: no cap, 100%
 though some costs go
 allocation: $116,000
 much higher and Long
 – Mid Case: 50% cap, 50% Creek is NOT downtown
 allocation: $34,000 Portland
• Potential 44 parcels • ROI, NPV, BE Analyses
 – Worst case: no cap, 100%
 allocation: $124,000
 – Mid Case: 50% cap, 50%
 allocation: $36,000


 Hold that thought till allocation
Developer Investment
Policy Question: Credit Amount Available


 75% Credit 50% Credit

 2 3
100% Credit
 25% Credit
 1 4

 5
 Other or no vote



 If we look at incentives for largest losers…?
Agenda
 1. Preliminaries – Intro and Minutes
 2. Review Allocation of CSO Costs
 3. Review Credits Cap
 4. Review Overall Recommendations
 5. Schedule Next Meeting
Basic Rate Methodology

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
disconnection of impervious area should be
recognized and rewarded.
Residential Charges & Roads
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.

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.
Public Buildings
Preliminary Policy Recommendation #5:
Portland should charge a stormwater fee for public
buildings and property.
Credits
Preliminary Policy Recommendation #6: Portland should match
credits to design criteria and develop a program for administration of
the credit system that is simple for property owners and the City.

Preliminary Policy Recommendation #7: Portland should offer
credits for stormwater education and stormwater activities that
reduce the City’s maintenance burden if they make sense given
current programs.

Preliminary Policy Recommendation #8: Portland should offer one-
time incentives rather than credits to residential properties for
activities that support the City’s stormwater program objectives.

Preliminary Policy Recommendation #9: Portland should cap credits
somewhere between 25% and 50%, pending further evaluation of
revenue impacts for properties that may qualify.
Proposing: Two Credits
• Flooding • Water Quality
  – Up to 50% of available – Up to 75% of available
 credit credit
  – Partial credit for legacy – Matches General WQ
 systems criteria
  – Must apply and have – Basic, Phosphorous
 system meeting and Urban Impaired
 criteria (past or are non-structural or
 present) rarely used
  – No credit if waived – Some flexibility
 with consideration for – No credit if waived
 coastal
 Questions?
Agenda
 1. Preliminaries – Intro and Minutes
 2. Review Allocation of CSO Costs
 3. Review Credits Cap
 4. Review Overall Recommendations
 5. Schedule Next Meeting

MINUTES
 Sustainable Storm Water Funding Task Force
 November 15, 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 David E. Robinson, Curtis Bohlen, and John Cannell. Staff present
included: Doug Roncarati, Katherine Earley. Also in attendance were Conrad Welzel, Rich Niles, and
Andy Reese.

2. Review and approval of the SSWFTF minutes from October 18, 2011.

Gellerson motion, Brooks seconded, all in favor for accepting minutes.

3. Continued discussion of allocating combined sewer costs to the stormwater use charge and sewer
 use charge.

Reese presented updated cost information for the allocation of combined sewer costs to stormwater
and illustrated the impacts to residential rate payers and other property types. Impacts to sewer and
stormwater fees were presented based on % CSO allocations of 0%, 25%, 50%, 75% and 100%.

The Task Force was asked to think about the allocation of CSO costs based on the numbers presented, as
well as their subjective “gut” reaction when they think about what is reasonable and fair. Reese
reminded the group that the allocation of CSO costs to a stormwater fee is not always an exact science
and arguments can be made either way. The following comments and key points were discussed:

  Those most financially affected should receive some kind of rate relief. Capping the rate
 increase is one method.
  The analysis of impacted properties does not include all properties; only those with a water bill.
 Therefore, all of the greatest impacted properties may not be captured. Ian Houseal noted that
 the analysis was for approximately 15,000 parcels that matched water billing addresses to parcel
 data. Therefore, the analysis does not include properties that do not receive a water bill or
 those addresses that didn’t match between the two databases. For example, parcels may have
 multiple billing addresses for water billing purposes and may have different nomenclature for
 addresses.
  Reese noted that approximately 1/3 of the total impervious area was accounted for in the
 analysis used to develop the analysis of properties. Members questioned whether the analysis
 was representative of the total properties and whether additional data work should be
 performed to capture all impacted properties.
  Properties in the Long Creek watershed were used by Veroneau as a sample impact to the
 business community. Although comparing this program to the City’s is like comparing “apples to
 oranges,” it is helpful to consider the financial impact to commercial properties. Properties in
 the Long Creek watershed are charged $3,000/IA/year, which is roughly equivalent to
 $14.25/2500 SF IA/month. This seemed to be manageable for most properties in the Long Creek
 watershed. Based on a CSO allocation of 50% or greater, many properties will have an annual
 bill greater than $7,300, which is almost $35/2500 SF IA/month. This cost is not sustainable for
 most businesses and the CSO allocation should be closer to 25%.
  Suslovic noted that some part of the CSO cost is stormwater; therefore, some part of the
 program should be billed as stormwater.
  Brooks noted that the residential sewer bill does not change significantly under the 0‐25% CSO
 cost allocation scenario and this may be appealing to residents. Reese noted that under a 0‐25%
 scenario, sewer bills for most rate payers go up only slightly and the residential stormwater fee
 is about $8‐9 per month. From a psychological standpoint, the residential monthly cost is still in
 the single digits and may seem “ok” to most people who are already used to slight increases in
 utility fees.

A straw poll was taken to gauge what people were thinking for % CSO allocation. The question was
asked “How many people think the CSO allocation should be greater than 35%?” 3 members responded
in support and the following key points were made by various members:

  From the perspective of residents, you could argue for an allocation of 40‐50% since the cost
 goes down for residential properties as % allocation increases.
  50% of the rate payers have carried most of the current share of CSO costs, so the CSO
 allocation should stay closer to 50%. This seems more equitable.
  One resident commented that the CSO allocation should be less than 25% to help businesses. In
 the end, the impact to businesses is felt by residents since it increases the costs of local goods
 and services.
  It is difficult to isolate the cost allocations since you can provide the rationale for various
 allocations. The Task Force seems to feel that the CSO cost allocation to stormwater is
 somewhere between 20% and 50%.
  Several members felt that more detailed analysis was needed for individual property impacts to
 better determine the most appropriate CSO allocation. Members requested a revised “Dow
 Jones” analysis using real properties and fewer numbers/types to focus on the most impacted
 properties.

Preliminary Policy Recommendation #10: Portland should allocate somewhere between 20% and 50% of
the combined sewer overflow costs to the stormwater fee.

4. Continued discussion of capping credits

This item was tabled until the next meeting.

5. Review draft Task Force Recommendations

The Task Force reviewed the draft recommendations memo (dated 11/15/2011) during the meeting to
solicit comments and discuss any recommendations that required further review and consideration. In
general, the members of the Task Force agreed with the understanding and background information
provided in the memo. Additionally, the majority of the recommendations appeared to be consistent
with the information and recommendations discussed at previous meetings. However, the following
items were identified as requiring further review:
Item 14. Funding 50% of Portland’s combined sewer costs through a stormwater use charge and 50% of
Portland’s combined sewer costs through the sewer use charge.

  Based on the results of the discussion for the allocation of combined sewer costs to a
 stormwater fee, it appears that further review of the recommended allocation is needed and it
 is in the range of 20% to 50%.
  The group wants to review example properties and their impacts under various allocation
 scenarios to consider the most appropriate and fair allocation of costs.

Item 21. The Task Force examined multiple rate structures for single family residential properties
including a single tier for residential properties, two tiers, multiple tiers and a fully variable rate. The
Task Force believes that Portland should use a simplified charge for single family residential properties
consisting of two to three tiers. Commercial properties should be roughly approximate to the residential
tiers set at 2500 square feet of impervious area.

  Up to 4 units should be considered a residential property and residential properties that have
 greater than 10,000 square feet of impervious area should be treated (billed) as commercial
 properties.
  This recommendation should be revised to: “Portland should use 2‐3 tiers for residential
 properties”.

Item 24. The Task Force considered a credit system for properties to reduce their total stormwater use
charge in addition to properties being able to reduce their charge by reducing their impervious area. The
Task Force believes that credits should be tied to existing City development standards. Credits should be
capped at 50% on the grounds that the majority of stormwater costs are unavoidable and due to
maintenance and individual properties private action would not reduce the impact on the system above
that level.

  The cap of credits at 50% requires further review based on the information discussed previously.
 Some suggested that the cap be revisited during the next meeting based on the results of
 individual property impacts from the pending CSO cost allocation scenarios and the ability of
 affected property owners to seek a credit.

Item 27. The Task Force believes that to reduce the impact on those properties that are most impacted,
the total rate increase should be limited to some amount per year.

  The limit on the amount of the rate increase should be more clearly defined based on the
 pending CSO cost allocation scenarios and the most impacted properties.

6. Confirm date for next meeting: The next meeting is scheduled for December 13, 2011.

7. Adjourn