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4.2 The Basics of Rate Structures A sound stormwater utility rate structure is developed around two major themes. The first is the "user pay" concept. As presented above, this principle asserts that the fairest structure is one that recovers costs incurred by the jurisdiction from the properties that burden the system. The more service provided the larger the bill. The service rendered by the jurisdiction, as also discussed earlier, is the management of stormwater runoff generated by a given parcel where such runoff passes to a jurisdictional stormwater system. The greater the runoff, the more the burden (and cost) imposed on the jurisdiction; hence, the greater the bill to the property. The second theme involves the balance between simplicity and equity. The fairest rate structure would be one that addressed every conceivable factor which might be found on a parcel and which influenced the rate, quality or quantity of runoff generated by that parcel. However, such a design would be expensive to administer due to the data management requirements. The key is to strike a balance so that enough factors are considered so as to be fair, but so that the structure is simple enough to be explained easily and to be administered cost-efficiently. Developing a rate structure is a two-stepped process. Step one asks the question, "Which group of properties should pay for what services?" This step is called the "cost apportionment" step. This step identifies exactly what program costs found in the jurisdiction's stormwater budget are to be recovered by the special assessment and over what geographic service area the charge is to be imposed. The second step is called the "parcel apportionment" step. Here the rate structure is concerned with defining on what basis the costs identified in step one are to be allocated to each parcel of property within the identified geographic area. 4.2.1 Step One - Cost Apportionment Cost apportionment addresses two fundamental questions: (1) Who pays? and (2) For what services? The latter question is geographic as well as a programmatic in nature. Benefit Area Boundary - The "Map And Crayon" Drill Stormwater utilities provide services within a defined area. It is very important that the area benefited by the service or services rendered by the utility be carefully enumerated geographically. The stormwater utility service area should include all parcels and portions of parcels within the jurisdiction that are hydrologically tied to the existing stormwater management system (or any facility under construction or soon to be under construction). The jurisdiction's stormwater system should benefit all hydrologically connected property within the jurisdiction by addressing ponding and flooding and the pollution of lakes, ponds and waterways. Should a specific parcel not benefit because it does not pass any stormwater to the jurisdiction's system under any reasonably anticipated storm event, the billing data system must be able to exclude that parcel from the billing process. Defining the benefit or service area is a geographically precise process. Using the hydrologic connection test, the design team must sit around a parcel map of the community and mark, at the parcel level of detail, which parcels are served by the utility and which are not. Layered Benefit Areas Stormwater utilities can offer a wide range of services depending on the size of the jurisdiction and the nature of the stormwater management problems it is confronting. Not all of these services have the same service area boundary. It is important that the "map and crayon" analysis look carefully at the specific service being rendered by the utility. For most small to medium municipalities the service area will coincide with the city boundary. Large cities, cities with large undeveloped
areas and counties face a more complicated picture. Often there are
simply no facilities in the more remote areas of counties or in the
undeveloped portion of cities. Parcels in these areas receive no operations
and maintenance service and must be excluded from charges for maintenance.
However, they may well be extensively monitored at substantial cost
for NPDES purposes. In this case, two benefit or service areas might
be created, one for operations and maintenance services and a second
for NPDES costs. Where the two overlap, customers would pay both. Where
only one exists, only that charge is remitted. Finally, some areas may
be outside either benefit area. Recoverable Costs A full range of stormwater management services provided by a full service utility could include (see Chapter 1 for more detailed discussion):
Determining which services will be included in the utility is a design step of major strategic importance. The focus should be toward what stormwater management program the community needs, rather than merely on what it has had in the past. As indicated above, the geographic range of each program component must be carefully evaluated. Some components should not be funded from user charges -- for example, in general, development review services are best captured through building permit and review fees. Programmatic options should be developed with detailed program level budget projections in a spreadsheet format for a multi-year period. Based on stormwater master plans prepared by professional engineers, levels of service for each activity or project for both capital and operations should be carefully defined for each program option. Once the program content has been agreed upon, what revenue source will be used to fund each program component must be identified. It is not necessary that the user charge fund all program activities; the council or commission may elect to devote the user charge revenues to new capital projects or for enhanced maintenance, and continue to fund the existing program from historical sources. (This is discussed in more detail below.) What is critical is that the amount of revenue needed from the user charge and where it is to be spent is explicitly determined. This revenue amount, when divided by the number of billing units in the service area, yields the necessary rate. Operations and Maintenance Cost Apportionment Service charges may be imposed to recover up to 100% of the jurisdiction's operating and maintenance costs. These operating costs (e.g., engineering, planning, data management, billing, property appraiser fees if any, operations and maintenance) are spread across the stormwater service area on a billing unit basis. All or a substantial portion of the street sweeping program may be included in the service charge (aggressive street sweeping is generally the single most effective step a jurisdiction can take to improve the quality of stormwater runoff). The rate should be set to cover operating costs such that it would not be expected to change dramatically for at least three years (most lending agencies require at least two years of revenue experience before they will begin to consider revenue bond options). Who Pays For Road Related Stormwater Maintenance? Road maintenance typically includes a large portion of costs devoted to maintaining the drainage functionality of the roadway. Those costs, under certain circumstances, may be included in the service charge, should the jurisdiction so elect. However, several legal issues emerge with the inclusion of road related costs in the "cost apportionment pot." Stormwater management costs associated with roadway stormwater systems are themselves of two types. A large portion of the road drainage system is designed to handle the stormwater runoff that the road surface itself generates. In addition, the roadway system collects and transmits stormwater passed to it by adjacent parcels and from upstream conveyance systems that tie into the roadway system. The maintenance associated with that part of the road drainage system that is not related to the road surface may itself be recovered from the user charge. Due to latent legal issues, costs associated with the maintenance of runoff generated directly by the road surface are best financed from sources other than the user charge. (The issue here not that such road surface related costs can not be recovered through a user charge, but rather whether the typical basis for charging - impervious area - is a defensible way to apportion road surface costs to parcels where the point of the maintenance is to keep the road open during storm events. Impervious area has little if anything to do with determining a "fair share" of road usage; a more equitable basis for apportioning road related maintenance costs would be trip generation. However, this leads to a two-component rate model with an impervious area component for non-road related costs, and a trip generation component for road related costs. Such a model is generally viewed as too complex for general acceptance.) Anecdotal analysis (engineering reviews of typical road sections in specific communities) indicates that from 60 to 90%, of the aggregate runoff carried by road related stormwater systems, is directly attributable to runoff not generated by the road surface. If the typical amount for a given jurisdiction were determined to be 65%, then 65% of the stormwater maintenance costs incurred by the Road Division may be recovered through the user charge. What About Repair and Replacement Maintenance? Both routine and "extraordinary" maintenance is often needed to attain the operating goals of the utility. Extraordinary maintenance is that maintenance which is primarily intended to repair or restore the service of existing stormwater facilities to an original design level. Typically it involves replacing major facilities or devices such as inlets, filter traps and culverts. Both routine and extraordinary maintenance costs may be recovered through a user charge. Extraordinary maintenance might be a primary programmatic focus to bring the existing system back to the design performance level after years of reduced maintenance. Capital Improvement "Benefit Areas" Large jurisdictions with complex basin structures should give careful consideration to the creation of capital improvement "benefit areas" for funding capital improvements programs. A capital improvement benefit area is defined as that geographic area resulting from an aggregation of those parcels that are directly benefited by a given stormwater capital project or set of projects. While operation and maintenance costs may be recaptured on a service area wide basis, a large community may choose to not recapture capital costs on a service area-wide basis because specific improvements will most likely not provide a benefit to the entire service area. Substantial untested legal issues lurk in the question of whether capital charges must follow basin lines. (The Supreme Court raised the issue itself in its own deliberations during arguments for Church of Christ vs. Sarasota County, but left it unaddressed. On the other hand, one could easily make the argument that sewer utilities typically do not follow gravity based topographical delineations in their capital charges.) To be legally conservative until this issue is more defined by the courts, a jurisdiction might plan to recover the cost of stormwater related capital improvements within the hydrologic area in which they are installed. For example, only those parcels within the basin pay for the facilities installed within that basin unless the entire community clearly shares a common, explicitly defined level of service. Most large jurisdictions or communities that are not largely built out will struggle to meet this test, and should consider the basin approach. Applying a conservative hydrologic connection or "rubber ducky" test to capital projects can result in a small benefit area containing few billing units. This can pose difficult political problems where only a few parcels are faced with paying for large capital projects. An alternative approach, based on a Level of Service concept, may provide a way to expand the capital improvements benefit area in a legally defensible manner. In this approach, the service area includes those parcels within a hydrologically defined area such as a basin where the jurisdiction implements a comprehensive capital projects program to correct existing deficiencies with respect to a common, defined level of service. (The level of service may vary from benefit area to benefit area as would the capital assessment associated with the area.) Examples of level of service statements are found in Chapter 7. Parcels impacted by a particular project
need not be contiguous to be classified into the same benefit area for
that project. A capital benefit area might be made up of groups of similar
areas in different parts of the jurisdiction if the project package
reaches these areas. Two tests would need to be met:
This approach allows for a simplification of the rate structure. An example of this approach would be to group many small retrofit projects into one benefit area (made up of pockets or zones scattered about the jurisdiction) and impose one assessment for all the aggregate retrofit projects. This approach is distinguished from the alternative approach of establishing a specific, individual neighborhood or sub-basin benefit area for each project. Precisely how many "benefit areas"
will need to be created is a question of fact that can only be addressed
after an analysis of needs is complete. Rates may be set at the same
dollar value across all benefit areas. Alternatively, they may vary
from benefit area to benefit area based upon the number of billing units,
the capital costs and the funding mechanics (bonds, short term borrowing
or "pay as you go") utilized in each benefit area. However,
how much project each rate will "buy" in each benefit area
will vary according to the number of the billing units found within
the benefit area Minimum Billing Charge Many water/sewer, electric and telephone utilities employ a minimum charge per bill. A minimum billing charge may be incorporated to recover general fixed costs (typically administrative costs such as billing costs, data base maintenance costs, etc.) as long as the costs and benefited parcels can be logically tied. As a matter of practice in Florida, minimum charges are not extensively used. 4.2.2 Step Two - Parcel Apportionment Parcel apportionment focuses on the question, "how is each parcel's share of recoverable costs to be determined?" Parcel apportionment focuses on developing a standard billing unit that can be applied to all parcels of property (for assessment based systems) or to each residence (for piggybacked fee-based approaches). Appropriate classifications of parcels into rate classes may be used to simplify the rate structure.. The Concept of Runoff and Its Role in The Rate Structure The purpose of the rate structure is to simply but fairly estimate the runoff generated by any given parcel and passed to a jurisdictional stormwater system. What exactly is runoff? Under undeveloped conditions, a great deal of stormwater percolates into the soil mantle (depending on the nature of the soil and the amount of moisture it contains). Subsequently, it is recycled back into the atmosphere in the form of evapo-transpiration (primarily through leaves) or evaporation from lakes, ponds, wetlands and other surface bodies of water. Whenever the rainfall exceeds the interception by vegetation and infiltration into the soil, water accumulates and flows overland for some distance, filling surface depressions along the way, before concentrating in small channels and ultimately discharging to the receiving water body (rivers, lakes, etc.). Under developed conditions, an increase in the amount of impervious surface area (streets, roofs, parking areas, etc.) will increase the amount of stormwater runoff. Runoff is therefore defined as rainfall that leaves a parcel of land, onto which it falls, by traveling over the ground surface. Not all rainfall becomes runoff. How much becomes runoff is largely determined by such actual site conditions as:
Runoff has three aspects of concern to stormwater managers:
Fortunately, these factors can all be addressed in a relatively simple manner in the rate structure so that an adequate balance between simplicity and equity is maintained. This is accomplished by assigning fundamental runoff characteristics to the base billing unit, such that, in those rare instances where a parcel significantly differs from the base billing unit parameters, adjustments for those differences can be made which bring the parcel into line with all other parcels. This is a "management by exception" strategy; only those parcels with significant deviations are handled individually, all others are handled as standard parcels and assigned billing values as a "default" condition. Factors Which Determine Runoff While many factors can impact the rate, volume, and quality of runoff generated by a given parcel, only a few factors emerge as consistently important in Florida. These are:
Of these factors, impervious area is by far the most significant factor for most of Florida. On occasion, the amount of "directly connected impervious area" can have substantial impact on the generation of runoff. The direction of slope will determine whether stormwater runoff flows into a community facility or not. These factors can be readily accommodated in a basic rate structure and are discussed in detail below. All of the other factors are typically assumed to be homogeneous throughout the service area or are overwhelmed by the importance of impervious area and are deemed irrelevant. However, each jurisdiction must review its own hydrologic circumstances to assure that "assuming away" non-addressed factors is consistent with local reality. Where they are deemed relevant to the fair determination of relative runoff, they too can be readily incorporated into the rate structure. Impervious and Pervious Area To stormwater engineers, ground surface is one of two types: impervious area is "hard surface" area that does not allow the infiltration of water. Pervious area, on the other hand, is "soft surface" area; area characterized by lawns, forest, pasture, and cropland. Pervious surfaces can generate stormwater runoff once they become saturated from either rain or irrigation. On an annual basis, however, pervious surfaces contribute substantially less runoff, generally only 5 to 15% of that contributed by impervious surfaces. However, while the impact per square foot of surface is much smaller, there is typically far more pervious area in a community than impervious. The impact can quickly add up.
While the inclusion of pervious area in the rate structure is sound from an engineering science standpoint, implementation requires the accumulation of considerably more data for billing purposes. Not only must all pervious area on each parcel in the service area be estimated, it must be weighted according to the nature of its capacity to generate runoff. Inclusion of the pervious area component also requires the consideration of such factors as the parcel's soil group, the amount of area on a parcel in lakes, ponds, and/or wetlands, and to where the parcel's pervious area drains. While all of the factors are manageable, from a billing technology standpoint, they require substantial time to gather and evaluate. In the interest of simplicity, where virtually no facilities exist in the jurisdiction that serve to drain large areas of primarily pervious surface, only impervious area should be included in the calculation of relative runoff. A pervious component may be added to the structure at a future time, for example, should the jurisdiction undertake a substantial quality management program or extend service to substantial agricultural or other highly pervious properties or where political issues of perceived equity require consideration of a pervious model. The 1997 FASU stormwater utility survey indicates that 83% of respondents employ an "impervious area only" approach to their rate methodology, while 10% adds a pervious component to the model. There are several techniques, which can be used to estimate the impervious area found on a parcel. These include:
Data needs and recommended procedures are detailed in Chapter 5. The Base Billing Unit Parcel apportionment is accomplished through the development of a base billing unit, variously called an Equivalent Runoff Unit or Equivalent Residential Unit ("ERU") or an Equivalent Stormwater Unit ("ESU"). An ESU is a measure that serves as a common index to compare runoff generated by different sized properties with different stormwater generation characteristics. It is the stormwater utility billing equivalent of a kilowatt-hour. At least five different ways (with endless variations) have been used across the country to define a standard billing unit for stormwater. All are built around the measurement of impervious surface area. These are described as follows. Per 1,000 Square Feet of Impervious Area In this approach, one billing unit is assigned per 1,000 square feet of impervious area. While simple to understand and administer, it provides no intuitive basis for a ratepayer to comprehend the bill he or she pays relative to a neighbor. Likewise, it is more difficult to incorporate credits and adjustments into the structure since there is no "on the ground" baseline unit as in other approaches. Average Impervious Area for Single-Family Residences Here the base billing unit is defined as the runoff generated by the "typical" single-family residence in the community. This is usually measured in terms of mean or median square feet of impervious area. Measurement is usually accomplished through field sampling or through use of Property Appraisal records (See Chapter 5 for a discussion of data issues). Typically, most single-family units are billed for one billing unit regardless of size (large jurisdictions often use three or four rate tiers for single family residences based on amount of impervious area, rather than one). The advantages of this approach are several. Most rate payers intuitively relate to the runoff generated by a typical single family home; other engineering based stormwater attributes can be determined for the median parcel which greatly improves the quality of a credits and adjustments program (see discussion below). Grouping into large, but relatively homogenous groups for residential accounts simplifies the rate structure and reduces meaningful data error management to those residences at the margins of the rate tiers. Average Impervious Area for All Residential Units This approach is similar to the one above except that rather than limiting the universe to just single family residences, the base billing unit is derived from all residential accounts, including apartments, condominiums, mobile homes, duplexes, and so forth. Two advantages accrue to this approach. It reduces the number of rate classes (rate classes for apartments, condominiums, mobile homes, duplexes and so forth are not needed), hence the amount of detailed data needed to support billing. In addition, it typically leads to a smaller base billing unit that the single family approach, since the other residential accounts are often somewhat smaller on average than single-family residences. A smaller base billing unit shifts more revenue burden to non-residential accounts. The disadvantage with this approach is one of perceived equity: analysis of runoff characteristics of each of the residential groups listed above can show substantial deviation from single-family residences. Where the data exist, classes perhaps should stand on their own unique characteristics rather than be swept into a large billing pot. Effective Impervious Area for Single-Family Residences This approach is identical to the second approach discussed above except that the effect of pervious area is factored into the median. This is accomplished by multiplying the pervious area associated with a parcel by a coefficient that represents the runoff generated by the pervious area relative to an impervious surface, then adding that product to the impervious area. Effective Impervious Area for All Residential Units Similar to the one above, this approach adds the effect of pervious area to the approach for "Average Impervious Area for All Residential Units."
Of these approaches, two are most commonly used in Florida. The first method is to base the standard billing unit on runoff generated by a typical single-family residence in the jurisdiction. The second approach bases the billing unit on a weighted average of runoff generated by all types of residential parcels - single family, apartment, condominium and mobile home units. In both cases, the base billing unit is typically calculated in square feet of impervious area. The average billing value of all respondents to the 1997 FASU survey was 2,592 square feet of impervious area.
Rate Calculation Mechanics In a simple world, all parcels would be billed on exactly the same basis, so that only one rate algorithm would be necessary. The real world, however, calls for the use of rate classes. Rate classes allow for simplification across like parcels (like parcels are treated as a billing group), yet allow for distinctions among classes where one algorithm simply does not readily fit all cases or where characteristics of available data require different handling. How many rate classes are called for in any given design is determined by the political characteristics of the community which will use the structure (where to strike the balance between simplicity and equity) and the nature of the data fields available for billing purposes. The following outlines how rates might be determined for each class of a set of rate classes. Additional examples of rate classes and how bills for each class are determined are found in Chapter 5. General Class - The Basic Billing Model As described above, in concept, bills are based on two factors:
Parcels whose billing units are determined in this manner are termed "General Class" parcels. This algorithm is the default for all parcels; parcels handled as classes are subtracted from this universe; unless so isolated into a specific rate class, the general class algorithm will be used to determine billing units. Mathematically, general parcels can be billed as follows: # ESUs = (Impervious Area )/Base Billing value) x Mitigation Factor x Drain to/DCIA factor Where:
If the jurisdiction elects to add pervious area to the rate structure at a future date, the basic formula should be modified as follows: # ESUs = ((Impervious Area + weighted pervious area)/ESU value) x Mitigation Factor x Drain To/DCIA factor Where: "Weighted pervious area" is the pervious area of the parcel multiplied by a weighting coefficient to reflect the runoff generated by pervious surface relative to impervious surface. To simplify the rate structure, only three to five pervious cover classes should be incorporated. These classes should be established based on a careful review of the major pervious cover groups found in the jurisdiction. The impervious area of any parcel added to the weighted pervious area for that parcel is termed the "effective impervious area." Other Rate Classes As discussed above, one rate design objective is to use only as many rate classes as necessary to preserve the balance between simplicity and equity that best fits a specific community. Many jurisdictions make do with no more than three to five rate classes. The following outlines how ESUs can be determined for parcels other than general class parcels. Single-Family Residences (SFR) Non-Tiered Approach Each single residential family parcel is assigned one billing unit, regardless of amount of impervious area on the parcel. Like all classes, this class is eligible for mitigation credits and adjustments as relevant. Single-Family Residences (SFR) Tiered Approach Single-family residential parcels can be categorized into one of several (here, four) residential billing tiers based on the estimated amount of impervious area associated with each parcel. (Stand-alone mobile homes can be treated as single-family residences, categorized by amount of impervious area.) Residential tiers can be set as follows:
Single-family residential parcels greater than five acres in size should reflect adjustment for a typical substantial reduction in direct connectivity to the community conveyance system. (See DCIA discussion below.) Duplexes Billed as two single-family residential units (total impervious area is divided by two, the resulting value used to determine which residential tier is relevant. Bills are rendered at the relevant tier value.) Note: data for this category varies widely from community to community. Check with the Property Appraiser to ascertain how records are kept, especially with respect to one owner of both sides verses separate owners for each side. Residential Condominiums Billed by total ESUs in the condominium complex (all impervious are for the complex is aggregated, then divided by the base billing value) divided by the number of dwelling units in that complex. Non-residential Condominiums Billed by total ESUs in the complex (see above) divided by the percentage of floor area attributable to each office as compared to the aggregate area of office units in that complex. Mobile Home Parks Billed at a fixed ESU rate per mobile home pad where the fixed ESU rate is defined as the median impervious area of a sample of park pads. (Pervious pads will need to be adjusted for typical seasonal occupancy rate - multiply the number of pads by average percent annual occupancy.) Multi-family Residential Three units and over treated as a general parcel (not a class). Governmental Billed as general class parcel. Note: most Property Appraiser's files do not reflect impervious areas for governmental parcels; the jurisdiction will need to collect impervious area data for those parcels. Agricultural and Vacant Properties Billed as general parcels (like all general parcels, only impervious area is included in the calculation of billing units). All Other Parcels Billed as general parcels. Note that where the utility piggybacks an existing utility billing system such as water and sewer utility, additional data work will be required where non-residential accounts have master meters for one parcel. This issue is discussed more thoroughly in Chapter 5 and in Chapter 6. Alternative approaches to constructing and billing rate classes are also discussed in Chapter 5. Exemptions Any property which receives service from the utility can be charged (with the statutory exception of special assessments for school properties -- see Chapter 2). However, some communities wish to exempt certain properties for political or equity reasons. Exemptions from a stormwater user charge require special scrutiny to assure that applicable legal test are met. The creation of an exemption must be founded upon a legitimate public purpose, and may not trammel state or federal constitutional concepts of equal protection and constitutional prohibitions against the establishment of religion or the use of the public treasury directly or indirectly to aid religious institutions. Furthermore, to ensure public acceptance, any exemption must make common sense and be fundamentally fair. However, a decision not to exempt governmentally owned property, for example, poses significant issues in the area of collection. Finally, the impact of any proposed exemption should be evaluated in terms of its magnitude and fiscal consequences on other available stormwater revenue. Exemptions, where they occur, are typically of two types in Florida. Property tax exempt institutional properties are the most common exemption. These include churches (a major political force in pressing for exemptions in many communities), schools, other governmental properties, and not-for-profit organizations. Much more rarely, low-income exemptions are provided based on income qualifications. Typically this is only employed where there is already precedence in the community for such relief. For "impervious area only" models, another form of exemption is one based solely on a practicality position. Because it is reasonable to expect parcels with very small amounts of impervious area to generate virtually negligible amounts of stormwater (or perhaps to reflect measurement errors in the data base), it is advisable to define the "developed" parcel to which the charge applies as one with more than 100 square feet of impervious area. Particular care should be taken with special assessments. When crafting an exemption, the fair apportionment test established by Florida case law prohibits the shifting of the fiscal effects of any special assessment from exempt property to non-exempt property. Consequently, a special assessment exemption must be funded from another revenue source and not special assessment proceeds. Funding for a stormwater special assessment exemption cannot come from the proceeds derived from the imposition of special assessments for stormwater services and facilities. Because an exemption must be funded by an external (non-assessment) funding source, the grant of an exemption will not impact the stormwater special assessment imposed upon other, non-exempt parcels. Expanding the Basic Model The basic model presented above where impervious area on a given parcel is divided by a constant base billing value to determine a number of billing on that parcel is appealing in its simplicity. Unfortunately, stormwater runoff is often not such a simple phenomenon. This complexity is not lost on the sophisticated rate payer, who, when handed a bill for services based solely on impervious area, is likely to raise to the legislative body such fundamental equity questions as: "We have our own private stormwater system which cost a lot of money to build to your code; it is not fair that we should have to pay the same as those without facilities!" "But what about agriculture; they pollute, why shouldn't they have to pay (or pay more)?" "My greenhouse sits in the middle of 10 acres, little if any runoff reaches your system; why should I pay?" To allow structured flexibility to the jurisdiction in equitably addressing these and a large number of related issues, two factors are added to the rate structure. They are the "mitigation credit" and the "drain to/DCIA" adjustment factors. Mitigation Credit Concept Mitigation credits apply to parcels that have provided on-site, man-made stormwater management facilities. Argument can be made that credits should be given only to such facilities that are privately maintained and meet design standards in terms of performance. This argument is based on the fact that the City or County will incur the full cost of maintenance of those facilities dedicated to the jurisdiction, just as if it were a publicly built facility. Where capital charges are separated from operations charges, credit could be separated depending upon whether the facilities were privately maintained or not. (Natural lakes that handle stormwater can be addressed through the "drain-to/DCIA" adjustment factor discussed below.) Mitigation credits reflect the fact that given two identically situated parcels with identical improvements, the parcel with on-site private stormwater treatment facilities will generate less volume of runoff, will generate runoff at a slower rate and/or less polluted runoff than the parcel without comparable facilities. The base billing unit is typically deemed not to be tied to any privately maintained mitigating facilities. Where the jurisdiction incurs the cost of maintenance of the on-site facilities, the parcel owner is not entitled to a credit. However, where the responsibility for maintenance and upkeep falls on the owner, the burden incurred by the jurisdiction is substantially reduced. A credit is in order. The mechanics of calculating a precise amount of credit due each eligible parcel lies within the expertise of professional stormwater engineering. A credit process must be based on sound engineering principles and must be so codified as to be consistently applied across time and by various qualified individuals. The amount of credit granted must be based on more than a considered guess; it must be well founded on solid engineering concepts. One more sophisticated but well-defined approach is to develop three sets of "credit curves," one each for quality, rate and quantity design requirements. The higher the storm event designed for in each category, the more the credit. The jurisdiction assigns relative weights to each of the three factors, depending on how substantial the factor is to that jurisdiction. Indeed, these weightings can vary from basin to basin depending on the nature of the challenge (quality in a tidal estuary basin, volume in a closed basin) posed in any given basin. This approach is illustrated in the graphic below.
Currently, according to the 1997 FASU Survey, 45% of responding utilities provide credits for private retention/detention facilities. Typically, so as to assign credits to eligible parcels in an inexpensive manner when setting up the utility database, a single credit value is calculated for each stormwater design code, which has been in effect in the jurisdiction. All parcels developed under that code are assigned the same credit value. (Property Appraisal records often keep pretty good track of when a structure was built. Alternatively, Plat logs can be checked and cross-referenced with subdivision parcel number codes.) Often, a jurisdiction will only have adopted two or three substantially different design codes over the "life" of the jurisdiction (often these are the water management district design codes in effect for that district). This approach is illustrated below. "Drain To"/ Directly Connected Impervious Area (DCIA) Adjustment Concept The "Drain to"/DCIA Adjustment factor is a simple multiplicative factor which allows a jurisdiction to deal directly with those parcels which have a unique stormwater site attribute or set of attributes that cause impervious area to not fairly measure the relative runoff generated by that parcel. It is intended as an "escape valve" so that adjustments can be made on a case by case basis as necessitated by facts of the situation, rather than forcing the parcel into an estimated load which is simply inaccurate and, consequently, inequitable. The intent is to preclude both legal and political challenges to the rate structure.
It should be recalled that all parcels in the community are being measured or calibrated in terms of the runoff generated by the "typical" residential parcel in the community. It was also noted that in certain cases impervious area simply did not adequately capture the complexities of factors at work to determine relative runoff from a given parcel. The adjustment factor allows for a considered fine-tuning in the determination of billing units for those parcels where variation from the residential standard in factors other than impervious area leads to gross misrepresentation of billing units where only impervious area is applied to the calculation. This factor should be applied on an exception
basis only; it is intended for use where failure to apply the adjustment
leads to obvious, material inequity. It might be applied by staff in
setting up the utility data base to small sets of parcels with certain
common characteristics, or used to address legitimate concerns in case
by case reviews initiated by the property owner. Some parcels have topography such that a
portion of the parcel drains to the community system, while other material
portions do not. The "Drain to" portion of the factor deals
with that portion of a parcel of substantial size which, due to the
topography of the parcel, does not flow into a jurisdiction drainage
facility at any point in its discharge from the parcel. Where only impervious
area is being considered in this rate structure, the "drain to"
factor is relevant only as to how and where runoff from impervious area
leaves the parcel. That is, what portion is connected to the discharge
system and what is not connected (buffered by pervious surface in route
to the discharge point Some parcels have topography such that a portion of the parcel drains to the community system, while other material portions do not. The "Drain to" portion of the factor deals with that portion of a parcel of substantial size which, due to the topography of the parcel, does not flow into a jurisdiction drainage facility at any point in its discharge from the parcel. Where only impervious area is being considered in this rate structure, the "drain to" factor is relevant only as to how and where runoff from impervious area leaves the parcel. That is, the portion that is connected to the discharge system and the portion that is not connected (buffered by pervious surface in route to the discharge point). As discussed earlier, DCIA itself can have substantial impact on the generation of runoff. In one study, the volume of runoff reaching the conveyance system varied tenfold based solely on the placement of the structure on the site and how the impervious area was tied to the community conveyance system. The key to handling variations in DCIA lies with the base billing unit. By determining an explicit DCIA for the base billing unit, just as the median impervious area was calculated for the billing unit, material deviations from the standard in either direction can be readily addressed. Based on empirical evidence, the median base billing unit might be assigned a DCIA of .5 (50% of the impervious area is said to be directly connected to a stormwater facility) for a given community. This value is normalized to 1.0 for rate model calculation purposes. To simplify administration, only parcels greater than, say, five acres in size might be eligible to apply for an adjustment for DCIA. Single-family residential and agricultural parcels greater than five acres could be assigned a 0.25 DCIA factor. The initial default value for each parcel is set at 1.0. A factor other than the default factor is applied only upon application for review according to provisions of the review process. Note that a factor greater than 1 can be assigned to parcels such as commercial or office, which typically have impervious coverage coefficients (impervious area divided by gross parcel area) greater than single family residential. By inference, these parcels will have a substantially greater connectivity and, consequently, proportionately greater relative runoff than the same area in single family parcels. Review Procedures Any parcel should be subject to administrative review for proper classification or accuracy of relevant billing data. This review process is both a legal and political "escape valve" which allows owners who feel they are not being fairly billed to present their evidence to the jurisdiction without having to go to court to challenge the entire structure to gain relief. Data errors can be corrected in the billing database. Fact based adjustments can be made through the adjustment factor as relevant. Review provisions should be included in the enabling ordinance or rate resolution. Review can be initiated by either jurisdictional staff or by the parcel owner. Review procedures should be clearly enumerated in writing and should address what is subject to review, what documentation is required to substantiate a change in the database and who is to pay for the generation of the documentation. It should clearly define who has final determinative administrative authority (City or County Manager, Council or Commission, etc.). The Land Use Model Alternative There is an alternative rate model to the engineering based model outlined above; it is called the "land use model." While both models are built around impervious area, the land use model uses the land use of a parcel as the basis to estimate impervious area rather than requiring a precise measure of impervious area as employed in the "engineering model". The process is sketched as follows:
The land use approach is particularly useful in small communities where there is little or no data concerning the amount of impervious area on each parcel (where, for example, property appraisal data are of dubious quality or such fields are non-existent in the data records.) and where the community does not have the resources to measure the impervious area of each parcel. 4.2.3 Summary Mechanical design of a rate structure as presented in this section follows the following seven basic questions:
The final section of this chapter briefly outlines the relationship between the rate structure and a financial strategy for the utility.
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