(A) Acronyms list.
BMP | Best Management Practice |
COS | Cost of Service |
ERU | Equivalent Residential Unit |
GIS | Geographic Information System |
KDOW | Kentucky Division of Water |
LOS | Level of Service |
MS4 | Municipal Separate Storm Sewer System |
NPDES | National Pollutant Discharge Elimination System |
POTW | Public Owned Treatment Works |
PVA | Property Valuation Administration |
PY | Permit Year |
SFR | Single-Family Residential |
sMS4 | Small Municipal Separate Storm Sewer System |
(B) Demonstration of need for user fee.
(1) There is a growing nationwide concern regarding preservation of waters of the United States, the related management of stormwater and the associated cost of doing so. These concerns have prompted many communities to seek dedicated funding mechanisms for the high cost of improving storm drainage systems, managing flooding issues and controlling stormwater pollution. By recognizing that storm drainage systems are infrastructure that requires ongoing management, a water quality utility can provide a source of funding for that purpose.
(2) Currently, the city is responding to public concerns and regulatory demands to address an increasing level of water quality management needs.
(3) Public concerns and regulatory demands for increased water quality management services can be separated into two major categories: stormwater quantity (flooding and property protection) and stormwater quality (health and pollution management). The city is implementing activities to comply with the unfunded federal/state mandated National Pollutant Discharge Elimination System (NPDES) Municipal Separate Storm Sewer (MS4) Phase II “Stormwater Quality” Permit Program. This program, which started November 4, 2003, includes activities that the city must perform over a five-year permit term. It is expected that the permit will be indefinitely renewed and modified in five-year periods, and the increased cost to be borne by the city for this new long-term program is a primary driver in developing new revenue.
(4) As these issues continue to intensify, there is an increased need to generate revenue to support the identified (and yet to be identified) unresolved water quantity and quality problems. The program mission statement shall be as follows: The city will implement a cost-effective water quality management program to address citizen expectations and regulatory demands for drainage system maintenance and flood control, to benefit the quality of local water resources, and to comply with environmental regulations.
(C) State enabling authority. Pursuant to state law, the city will establish a Water Quality Drainage System Ordinance that will include user fees for stormwater management activities.
(D) Organization structure. Through its Mayor-Council form of government, the city will support and administer a water quality management utility. The following entities will be responsible for the associated activities.
(1) City.
(a) Review of proposed construction plans and zoning changes that impact stormwater quality, including construction site pollution and post-construction/long-term water quality management;
(b) Oversight of inspection of private construction referred in division (D)(1)(a) above;
(c) Development of plans for capital improvement projects needed to meet the LOS;
(d) Oversight of inspection, as deemed necessary, of private post-construction/long-term water quality management;
(e) Performance of construction inspections as required by the MS4 program including KDOW mandated monthly inspection report summaries;
(f) Development and maintenance of a water quality infrastructure inventory in a digital format to include size, condition, construction materials and other related data;
(g) Coordination with the Oldham County PVA for the tracking of new properties;
(h) Update impervious areas as necessary;
(i) Collection of plan review and inspection fees;
(j) Assistance and coordination to maintain the drainage and flood control system on a level that can be achieved with typical street maintenance equipment; and
(k) Coordination and/or implementation of KPDES and MS4 program including:
1. Assessment of effectiveness of the program activities;
2. Coordination of community complaints related to stormwater drainage quantity or quality;
3. Development of related reporting documents including annual compliance demonstration;
4. Ongoing development and implementation of a public awareness and involvement program;
5. Ongoing development and implementation of an illicit discharge detection and elimination program;
6. Compilation and quality assurance of the monthly report to KDOW for construction inspection;
7. Compilation and quality assurance of municipal operations related to stormwater quality management at publicly operated facilities;
8. Coordination with other entities that may be involved with permit implementation;
9. Development and administration of grants the city applies for related to stormwater quality; and
10. Coordination of inspection of commercial properties for the maintenance of the water quality treatment systems and tracking of impervious area changes for the billing system.
(2) Highway Department.
(a) The KYTC is a co-permittee;
(b) Maintenance of the drainage and flood control system on a level that can be achieved with accessible equipment and man-power;
(c) Street sweeping, catch basin cleaning, ditch and drainage channel clearing, culvert and cross-drain repair and the like necessary to maintain the MS4 to meet the expectations and KDOW water quality requirements;
(d) Quantification and documentation the amount of debris and materials collected from street sweeping, catch basin cleaning, ditch and drainage channel clearing and the like; and
(e) Management and coordination of capital improvement projects under the guidance of the city.
(3) Oldham County PVA.
(a) Coordinate the tracking of new properties, as needed to account for new impervious area and related billing system issues, with the city; and
(b) Coordinate with the necessary entities to maintain data associated with stormwater user fee billing including hard copy, database and GIS data.
(E) Level and cost of service. The city’s overall goal is to implement a user fee that is fair, equitable and legally defensible. A principal aspect of achieving this goal is to ensure that the revenues generated are less than or equal to the cost of service required to implement the selected and/or desired level of service. In essence, the city can collect up to, but no more than, the amount needed to perform the activities associated with stormwater quantity and water quality management. The city understands that for the water quality management utility user fee to be successful in the long-term, efforts must be made to clearly and frequently communicate the level of service. This is necessary from initial user fee development, through long-term implementation, to ensure public, elected official and town staff expectations are balanced and consistent.
(1) The water quality management user fee will provide fiscal support (in part or in total) to:
(a) KPDES MS4 ‘Phase II’ Permit. The activities as presented in the Stormwater Quality Management Plan (SWQMP) Stormwater Permit. This includes programmatic activities, education, outreach, illicit discharge identification and elimination, construction site management, post-construction management, municipal good housekeeping and other related activities.
(b) System and facilities maintenance. The repair and replacement, rehabilitation and otherwise general response maintenance of the stormwater conveyance and/or treatment systems within the public right-of-way.
(c) Capital Improvement Projects (CIP). The construction of facilities, conveyance or treatment systems within a public right-of-way or easement.
(d) Revitalization. The preventative maintenance activities associated with drainage infrastructure improvements needed to achieve a desired average life cycle.
(e) Elected official, stakeholder and general public education. The activities needed to communicate progress and key issues to manage/maintain service expectations and make certain that demands for service do not exceed the available resources.
(f) Billing system administration and expenses. The costs incurred by the administration, production and mailing of the bill/invoice for water quality management fees.
(2) It is anticipated that the user fee will not provide fiscal support to:
(a) Work in easements unless it is the judgment of the city that the improvement will directly benefit or protect the system in the adjacent public right-of-way;
(b) Stormwater system improvements outside of the public right-of-way unless it is the judgment of the city that the improvement will directly benefit or protect the system in the adjacent public right-of-way;
(c) Mowing or other maintenance activities of systems not within a public right-of-way; and
(d) Mowing or other maintenance activities of public drainage beyond that of a frequency and extent proportionately given to similar portions of the city’s system.
(3) The revenue generated by stormwater management user fees can only be used to support stormwater management activities. The General Fund may be used to augment water quality management user fee revenue, but the water quality management user fee shall not be used to augment the city’s General Fund, nor any other activities that are unrelated to water quality management.
(F) Utility user fee; rate.
(1) Initial rate. An impervious area based user fee rate of $3 per equivalent residential unit (ERU) per month will become effective July 1, 2009. This rate is estimated to generate revenue that is not greater than the LOS/COS defined in division (E) above.
(2) Increases in rate. The city recognizes that the user fee rate may, in time, need to be raised to account for a number of factors including:
(a) Increases in services for gradually building a new program/service;
(b) Increases in costs due to inflation;
(c) Increases in costs due to inflation effects on labor, equipment and supplies;
(d) Expanded service area;
(e) Increases in citizens’ expectations for services;
(f) Expanded services mandated by state and/or federal regulations; and
(g) At the discretion of the city, the user fee rate may be increased to provide funding for issues presented above. The increase may only be submitted for City Council approval provided that it can be demonstrated that the new revenue to be generated is not more than the services provided.
(3) Fund balance and debt.
(a) The revenue generated by the user fee is to be managed in a way to minimize reliance on debt products such as bonds and loans. The revenue is to be kept on-hand until it grows to sufficient levels to support program services. This will necessitate that some fiscal years will have more revenue than expenditures to account for anticipated liabilities/expenses that are beyond the fiscal year. However, the revenue reserves will be managed as not to accumulate monies for expenses/liabilities that are more than 15 years away. The revenue from this program will be managed with a net positive or null balance unless the negative balance is offset by debt products or subsidies from the General Fund made at the discretion of the city.
(b) Infrequent large/expensive projects benefitting many property owners supported by debt products may be utilized with the city’s discretion. The goal is to keep debt service payments to a small percentage and sustainable of the total revenue collected annually.
(G) Utility user fee billing mechanism.
(1) The city will coordinate administration of the stormwater utility user fee billing. Water quality management user fees will be paid first as the last service/enterprise fund in the case of partial payments by the user. This provides that in the event that a partial or no payment is made by the user then the city has the authority to apply enforcement measures already prescribed by higher listed services.
(2) Data used to support the billing system will be maintained by the city in coordination with outside contractors.
(H) Utility user fee rate structure.
(1) Eligible properties.
(a) All properties that are expected to participate in other existing utilities (drinking water and wastewater) are expected to participate to an equitable level in the water quality management utility user fee. This includes:
1. Privately owned property (including residential, commercial and industrial);
2. Local state and federal governmental facilities;
3. Institutional properties (including not for profit entities such as churches, schools and the like); and
4. Publicly owned properties (except for roadways as noted in division (H)(10) below).
(b) Vacant properties that are provided exemption under other statutes/regulations/ordinances shall not be applied for an exemption of water quality user fees. As every property owner impacts water quality in some manner, there are no total exemptions for the user fee. However, public roadways and rights-of-way are not classified as eligible user fee properties as described in division (H)(8) below.
(2) Rate structure approach.
(a) The city is utilizing an impervious area rate structure to serve as the basis for the user fee. The intent is to mimic the equitability found in other utilities. For example, the fee for drinking water is calculated by estimating the cost of treating and conveying the amount of drinking water measured by a meter. Nationally, the most accepted equivalent measure for stormwater runoff is estimation and calculation of impervious area, which correlates to the relative stormwater impact from the property. It is not intended to measure the specific amount of stormwater runoff that drains off of a piece of property, but, it provides a quantifiable measure to compare the wide variety of property types and sizes. In essence, properties with more impervious area (resulting in more stormwater runoff than other properties) will pay a higher user fee. While all properties pay at the same rate, their user fee varies depending on how many “impervious area units” (explained in more detail in division (H)(3) below) the property has.
(b) In example, a residential property will have one impervious area unit and will pay a flat rate (times one). In contrast, a commercial property with a large parking lot and building totaling five times more impervious area (thus having five impervious area units) will pay five times that of the residential property.
(c) An Equivalent Residential Unit (ERU) is a calculation/average from a statistical sampling of all single-family residence (SFR) properties. The impervious area (rooftops, driveways and the like) is measured for each of the sample properties using digital orthogonally rectified aerial photography. ERU’s have been calculated throughout the country, ranging from 1,500 to 4,000 square feet, with many ERU calculations at or around 2,500 square feet. The city has decided to adopt an ERU based on a statistical sampling of residential properties in the city of 6,700 square feet, consistent with similar area utilities.
(d) The ERU may be changed at any time the City Council suspects that new development trends have substantively altered the average or the user fee rate structure is to be altered in such a way to necessitate change. Any change in ERU will be based on impervious area calculations of a new statistical sampling of residential properties in the city, or on a national average ERU.
(3) Property classification.
(a) Each residential property shall be assumed to have a single impervious area unit. That unit shall be referred to as the ERU (as defined in division (H)(2) above) and shall include land use codes indicated as residential in the table below. Vacant properties, as indicated in the table below, shall not be assessed. All other eligible properties that are indicated as non-residential properties in the table below will be individually assessed a billing unit based on a measured estimate of impervious area.
Property Classification by Land Use | |||
Property Class Code | Property Class | Billing Type | Billing Rate (ERUs) |
Property Classification by Land Use | |||
Property Class Code | Property Class | Billing Type | Billing Rate (ERUs) |
1XX | Agriculture | N | Calculated |
2XX | Mineral | N | Calculated |
3XX | Industrial | N | Calculated |
4XX | Commercial | N | Calculated |
50X | Residential Vacant | V | Normally Not Billed |
51X | Residential - One-Family | R | One |
52X | Residential - Two-Family | R | One |
53X | Residential - Three-Family | N | Calculated |
54X | Residential -Mobile/Manufactured Home | R | One |
55X | Residential - Condominium | N | Calculated |
56X | Residential - Townhouse | N | Calculated |
59X | Residential - Other | N | Calculated |
6XX | Exempt | N | Calculated |
8XX | Utility | N | Calculated |
N = Non-resident; R = Resident; W = Non-Residential Vacant; V = Residential Vacant | |||
(b) The impervious area calculation shall include area estimates for:
1. Rooftops of houses and permanent or semi-permanent buildings;
2. Asphalt, concrete and stone;
3. Sidewalks and paths;
4. Driveways;
5. Parking lots;
6. Recreational areas such as tennis courts, basketball courts and the like;
7. Motor homes and trailers;
8. Permanent and/or semi-permanent covers such as greenhouses; and
9. Areas that appear to have been compacted or modified to prevent infiltration to the level of the surrounding area as determined by the city.
(c) The impervious area units for non-residential/SFR properties will not be assessed by an average as explained for residential properties above. The impervious area and billing units for non-SFR properties will be individually calculated using digital orthogonally rectified aerial photography. The ERU will be applied as a factor to the individually calculated impervious areas of non-SFR properties to determine the user fee. The individually calculated factor will indicate the number of times more impervious area that a non-SFR property has. This will be used to calculate the corresponding fee.
(d) For example, if a non-SFR property (corner drug store) has an impervious area that is four times larger than the ERU/average SFR, then it will pay a user fee that is four times higher than the residential properties. The number of ERUs for a non-SFR property will be rounded to the nearest whole number.
(e) In the case of institutional or local, state or federal government properties that are used for residential purposes, the property will be billed as residential (one ERU) if the property otherwise meets the criteria for an SFR (i.e., up to two-family dwellings). Otherwise, the property will be billed as non-SFR and will be individually assessed based on ERU.
(f) The city will determine the impervious area for existing developments as of January 1, 2009. The city is responsible for determining the impervious area of new development. After this point; the impervious area will be determined by as-built plans that have been submitted and approved by the Planning Commission.
(4) Off-site owner properties. For parcels that are utilized as rental or lease tenant property, the billing will be sent to the property owner’s address rather than the property address, as provided/determined/maintained by the county PVA office. However, the city has the discretion, but not the requirement, as determined appropriate by the county PVA, to send the bill to the property address for residential property.
(5) Property transfers. In the event that a property title is transferred during the course of a billing year, the buyer and seller will each pay a prorated stormwater fee based on the recorded date of transfer.
(6) Contiguous parcels. Through the long-term history of development and redevelopment in the city, multiple contiguous parcels have been consolidated through use, but not through county PVA and other land management policies. Stormwater user fee charges for multiple parcels may be consolidated into a single stormwater user fee account provided that the following criteria are met:
(a) The parcels are contiguous - as verified by the city;
(b) The parcels have the same specific land use;
(c) The parcels have the same owner who is also the user fee charge recipient; and
(d) The owner has completed the certification form in Appendix A.
(7) Multiple user/tenant properties. Non-SFR properties that are utilized by two or more companies, persons or other entities shall be billed to a single property owner/designated operator regardless of how many sub-parcels or other utility segregating mechanisms such as water meters it contains. A single property that has multiple tenants or other segregations may not be given multiple bills unless the property has been subdivided and each parcel has a separate owner(s).
(8) Condominium properties.
(a) Single-level residential condominium properties shall be billed as non-SFR. However, if requested in writing using the form in Appendix B, the city may at its discretion apply all charges to a single common property manager/owner. Multi-level residential condominium properties shall be billed as non-SFR.
(b) Common areas including, but not limited to, pools, outbuildings, recreation courts and other related impervious area will be charged to the condominium association operating the properties. If such an association does not exist, then the individual properties will be evenly assessed the additional impervious area.
(9) Mobile home parks. Mobile home parks will be categorized as non-SFR properties and billing sent to the property owner. The billing units/ERUs will be calculated based on the currently available digital orthogonally rectified aerial photography. If in the city’s opinion, the property has expanded or is being utilized to a significantly higher level as to require a reassessment, then the ERUs to be assigned to the property may be estimated by using one of the following techniques:
(a) Field survey;
(b) Use of updated digital orthogonally rectified aerial photography; and
(c) Use of the “old” digital orthogonally rectified aerial photography supplemented by a hand count of occupied trailer lots and the size of the type of trailer units as estimates from the “old” digital orthogonally rectified aerial photography.
(10) Public roadways and rights-of-way. Public roadways and rights-of-way collect and convey a significant portion of stormwater runoff, as well as provide a substantive element of the conveyance system. In this capacity and as commonly assumed in other water quality management user fees across the country, these areas will not be assessed a stormwater user fee.
(11) Private roadways and rights-of-way. Private roadways and rights-of-way are a substantive element of the conveyance system. In this capacity and as commonly assumed in other water quality management user fees across the country, these areas will not be assessed a water quality user fee.
(12) Assumption of partial stormwater bills. On certain parcels of property, impervious areas were built on the parcel for the exclusive use of another entity. Examples are pump stations, transmission towers, electrical substations that may be built on utility easements and private roads that cross property lines. The entity who built the structure may accept responsibility for the part of the water quality bill that applies to the structure. An agreement must be made whereby the entity who built the structure/road agrees to pay the water quality bill for the impervious area even though it is on the parcel owner’s property using the form found in Appendix C.
(13) Vacant properties. For stormwater, a VACANT PROPERTY is defined as a property without impervious area. A vacant property will normally not get a water quality bill. The exception to this case is when contiguous parcels (division (H)(6) above) include both residential and residential vacant parcels. In this case the water quality bill may be sent to either the residential or residential vacant parcel but not to both.
(14) Agricultural properties. For this document, AGRICULTURAL PROPERTIES will be defined as a property that classified as agricultural by the county PVA. Agricultural properties will be assessed in the same manner as non-SFR properties.
(15) Properties under construction. The water quality fee for properties under construction will be billed to the owner of record as of January 1 of the billing year. The builder or developer is responsible for stormwater charges until such time as the property is sold or transferred, at which point the buyer and seller will be responsible for prorated charges based on the date of transfer.
(16) Annexation. In the event that a property is annexed into an incorporated portion of the city during the billing year, the property will be charged a prorated stormwater fee for the year based on the date of annexation.
(17) Initial billing errors. During the water quality billing system development process, errors will be made and not discovered until after billing begins. Depending on the type of error that was made, adjustments will need to be made to a customer’s water quality bill. In the case of a billing error, the property owner shall have the option to pay the current bill and to have the corrected water quality charges and any adjustment appear on the next water quality bill. The threshold for retroactive billing adjustments is six months.
(18) Appeals and accountability process.
(a) Any non-SFR property may appeal the number of billing units/ERUs assessed. Any expense necessary for development of data or other materials shall be borne by the appealing entity/property owner and not borne by the city. The appeal will be accepted and evaluated by the city. The appeal must contain the impervious square footage as estimated by one of the following ways:
1. Field survey utilizing total station or GPS data certified by a land surveyor licensed in the Commonwealth of Kentucky;
2. Other survey using digital orthogonally rectified aerial photography utilized by a land surveyor licensed in the Commonwealth of Kentucky; and
3. As-built plans certified by a land surveyor licensed in the Commonwealth of Kentucky to be representatively accurate of all “new” construction and a whole and accurate representation of all “previously constructed” impervious area on the property.
(b) Construction design plans are not acceptable for this estimation.
(c) In the event that the appeal is accepted by the city as demonstrating a more accurate estimate, albeit of greater or lesser impervious area, then it will be applied to future billing. If a credit to the property owner is due, credit will be applied for the difference in the user fee for the lesser of:
1. One-hundred eighty days;
2. One billing cycle; and
3. The date of property ownership transfer.
(d) In the event that the appeal is denied by the city to be a less accurate estimate, then the property owner has the option to take the matter before the city for final acceptance or denial. The property owner and the land surveyor licensed in the Commonwealth of Kentucky who certified the calculations shall appear before the city to argue for final appeal. The decision of the city will be final and not to be reconsidered until a time the property owner can submit other suitable data.
(Ord. 2009-2, passed 6-1-2009)