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HomeMy WebLinkAbout250-19 RESOLUTION113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 250-19 File Number: 2019-0596 JACOBS ENGINEERING, INC. AMENDMENT NO. 2: A RESOLUTION TO ACCEPT AND ADOPT THE STORMWATER STUDY FOR FLOOD MANAGEMENT AND WATER QUALITY FUNDING, TO APPROVE AMENDMENT NO. 2 TO THE PROFESSIONAL SERVICES AGREEMENT WITH JACOBS ENGINEERING, INC. IN AN AMOUNT NOT TO EXCEED $150,200.00 FOR ADDITIONAL SERVICES RELATED TO THE DEVELOPMENT OF FINAL RECOMMENDATIONS FOR THE CREATION OF A STORMWATER UTILITY, AND TO APPROVE A BUDGET ADJUSTMENT WHEREAS, on August 15, 2017, the City Council passed Resolution No. 175-17 expressing the City Council's intent to fund a study to evaluate the feasibility of creating a stormwater utility program and authorizing City staff to move forward with the selection of a professional consultant to complete the study; and WHEREAS, on June 5, 2018 the City Council passed Resolution 131-18 authorizing a contract with CH2M Hill Engineers, Inc. for the feasibility study; and WHEREAS, the feasibility study has been completed and is being presented to the City Council for final acceptance and adoption of the findings and recommendations; and WHEREAS, if the study is accepted and adopted, staff also recommends the approval of Amendment No. 2 to the contract for Jacobs Engineering, Inc., the parent company of and successor in interest to CH2M Hill Engineers, Inc., to develop final recommendations for the creation of a stormwater utility in the City of Fayetteville. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF Page 1 Printed on 1116119 File Number.' 2019-0596 Resolution 250-19 FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby accepts and adopts the Stormwater Study for Flood Management and Water Quality Funding, a copy of which is attached to this Resolution. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves Amendment No. 2 to the Professional Services Agreement with Jacobs Engineering, Inc., a copy of which is attached to this Resolution, in the amount not to exceed $150,200.00 for additional services related to the development of final recommendations for the creation of a stormwater utility. Section 3: That the City Council of the City of Fayetteville, Arkansas hereby approves a budget adjustment, a copy of which is attached to this Resolution. PASSED and APPROVED on 11/5/2019 `�����t � r t rrr►rri ��'� . •• .'p �i Attest: S. Ci.* CITyp.�J.� Lisa Branson, Deputy City CleN.,' j 1ru�0 Page 2 Printed on 1116119 City of Fayetteville, Arkansas 113 West Mountain Street - Fayetteville, AR 72701 (479) 575-8323 Text File File Number: 2019-0596 Agenda Date: 11/5/2019 Version: 1 Status: Passed In Control: City Council Meeting File Type: Resolution Agenda Number: C. 3 JACOBS ENGINEERING, INC. AMENDMENT NO. 2: A RESOLUTION TO ACCEPT AND ADOPT THE STORMWATER STUDY FOR FLOOD MANAGEMENT AND WATER QUALITY FUNDING, TO APPROVE AMENDMENT NO. 2 TO THE PROFESSIONAL SERVICES AGREEMENT WITH JACOBS ENGINEERING, INC. IN AN AMOUNT NOT TO EXCEED $150,200.00 FOR ADDITIONAL SERVICES RELATED TO THE DEVELOPMENT OF FINAL RECOMMENDATIONS FOR THE CREATION OF A STORMWATER UTILITY, AND TO APPROVE A BUDGET ADJUSTMENT WHEREAS, on August 15, 2017, the City Council passed Resolution No. 175-17 expressing the City Council's intent to fund a study to evaluate the feasibility of creating a stormwater utility program and authorizing City staff to move forward with the selection of a professional consultant to complete the study; and WHEREAS, on June 5, 2018 the City Council passed Resolution 131-18 authorizing a contract with CH2M Hill Engineers, Inc. for the feasibility study; and WHEREAS, the feasibility study has been completed and is being presented to the City Council for final acceptance and adoption of the findings and recommendations; and WHEREAS, if the study is accepted and adopted, staff also recommends the approval of Amendment No. 2 to the contract for Jacobs Engineering, Inc., the parent company of and successor in interest to CH2M Hill Engineers, Inc., to develop final recommendations for the creation of a stormwater utility in the City of Fayetteville. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby accepts and adopts the Stormwater Study for Flood Management and Water Quality Funding, a copy of which is attached to this Resolution. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves Amendment No. 2 to the Professional Services Agreement with Jacobs Engineering, Inc., a copy of which is attached to this City of Fayetteville, Arkansas Page 1 Printed on 111612019 File Number: 2019-0596 Resolution, in the amount not to exceed $150,200.00 for additional services related to the development of final recommendations for the creation of a stormwater utility. Section 3: That the City Council of the City of Fayetteville, Arkansas hereby approves a budget adjustment, a copy of which is attached to this Resolution. City of Fayetteville, Arkansas Page 2 Printed on 111612019 Chris Brown City of Fayetteville Staff Review Form 2019-0596 Legistar File ID 11/5/2019 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 10/17/2019 ENGINEERING (621) Submitted By Submitted Date Division / Department Action Recommendation: Approval of the Flood Management and Water Quality Funding Study recommendations as well as contract amendment 2 with Jacobs, formerly CH2M Hill, in an amount not to exceed $150,200 (total contract amount $383,282) for additional services and approval of a budget adjustment Budget Impact: 4470.621.8810-5817.00 Sales Tax Capital Improvement Account Number 17008.1 Project Number Fund Stormwater Utility Feasibility Study Budgeted Item? Yes Current Budget Funds Obligated Current Balance Does item have a cost? Yes Item Cost Budget Adjustment Attached? Yes Budget Adjustment Remaining Budget Project Title $ 233,082.00 $ 233,082.00 $ -7 $ 150,200.00 $ 150,200.00 $ - V20180321 Purchase Order Number: Previous Ordinance or Resolution # 131-18 Change Order Number: Original Contract Number: Comments: Approval Date: CITY OF FAYETTEVILLE r4ff ARKANSAS MEETING OF NOVEMBER 5, 2019 TO: Mayor and City Council THRU: Don Marr, Chief of Staff Garner Stoll, Development Services Director Chris Brown, City Engineer FROM: Alan Pugh, Staff Engineer DATE: October 16, 2019 CITY COUNCIL MEMO SUBJECT: Approval of the Flood Management and Water Quality Funding Study recommendations as well as contract amendment 2 with Jacobs, formerly CH2M Hill, in an amount not to exceed $150,200 (total contract amount $383,282) for additional services and approval of a budget adjustment. RECOMMENDATION: Staff recommends approval of the Flood Management and Water Quality Funding Study recommendations as well as contract amendment 2 with Jacobs, formerly CH2M Hill, in an amount not to exceed $150,200 (total contract amount $383,282) for additional services and approval of a budget adjustment. The contract amendment would further refine the stormwater utility framework by developing final recommendations for the extent and level of service with associated rates, investigating and developing the credit program, investigating the necessary ordnance revisions associated with the program and other services. BACKGROUND: Like many cities throughout the state and nation, the City of Fayetteville experiences issues with stormwater runoff. These issues stem from many sources including, but not limited to, aging infrastructure, maintenance of system capacity, manpower to perform systematic inspections and the lack of formal drainage systems in many older areas of the City. In order to address these concerns, the City has historically funded maintenance and new projects directly from the Sales Tax Capital Improvement Program (CIP). However, there are many needs within the City that require funding from the CIP and, at least in recent years, the funding for stormwater has been inadequate to comprehensively address stormwater issues. To develop a comprehensive solution, funding is required for manpower and equipment as well as multiple capital projects, some of which will require more than $1 million dollars for each project. Given the current funding levels, it would take many years to address just one of those projects. The City Council recognized these needs and approved moving forward with a feasibility study on June 5, 2018 via resolution 131-18 Mailing Address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 DISCUSSION: The Flood Management and Water Quality Funding Study final draft is attached for review. However, in general it finds that the most equitable way to fund the Stormwater needs into the future is with a fee for service based on the customer's impact to the system. Impervious area was selected as the basis for the fee as it is directly related to the customer's impact to the system. Impervious area causes an increase in the amount of water entering the drainage system which can then increase the chance of flooding, stream bank erosion and sedimentation. Runoff from impervious area also carries pollutants that can impact water quality. These include, among others, sediment, herbicides and pesticides, meals and bacteria from things such as pet waste. For these reasons, impervious area is an equitable basis for the fee because larger developments, businesses and homes generate a greater need for Stormwater services because of the greater amount of runoff they generate. Given the feedback from stakeholders, residents and the council committee, Option A/B was selected as it provides an adequate level of service, extends services to areas of town not currently served and provides additional services not currently in the stormwater program. It includes a 20 -year capital program schedule and routine maintenance. This maintenance would include cleaning/inspecting approximately 20% of the overall drainage system annually (approximately 400,000 LF), replacing 2.5% of the drainage system annually (approximately 8,500 LF), performing maintenance on residential detention basins (approximately 110 total) and providing for approximately $1.1 million annually for capital projects. Table ES -2. Tiered Rate Structure A tiered system based on impervious area was CONTRACT AMENDMENT SUMMARY: r—F . selected as the most equitable way to distribute the The contract amendment with Jacobs will include Propased . cost of the program based on the items noted Tier 2 (2,000 and 3,500) Montt►iy Fee above. The proposed tiers can be found below, and Tier Range (SF of Currerrt additional information can be found within the Impervious Area)'., Furt�t)t y attached study. y Tier 1(0 and 2,000) $2.31 CONTRACT AMENDMENT SUMMARY: The contract amendment with Jacobs will include Tier 2 (2,000 and 3,500) $5.09 several of the recommended additional tasks based on the outcome of the feasibility study and feedback Tier 3 (3,500 and 5,000) $7.86 received during the public outreach efforts. These Tier 4 (5,000 and 6,500) $10.64 tasks include additional stakeholder engagement and education, final stormwater program definition Tier 5 (6,500 and 8,000) $13.41 and rate analysis, refinement of stormwater customer billing database, development of a Tier 6 (over 8,000) $1.85/1,000 SF sustainable credit system, fee -in -lieu -of program a. if there is an onsite storm water m an ogemen t assessment, review or ordinances and facility, there could be a reducedfee basd on a intergovernmental agreements and overall project sustainable credit program established by the City and quality management. • Stakeholder Engagement and Education: this item will include additional stakeholder engagement through workshops, public meetings, etc... in order to further educate the public and targeted stakeholders of the need for a sustainable stormwater program. • Stormwater program definition and rate analysis: this item will include final definition of the stormwater program extent and level of service as well as a final rate analysis. This will include a review of an alternate rate structure using percentage of impervious area to lot size rather than an absolute rate based on public feedback. • Stormwater Customer Billing Database: while the majority of this task will be handled by staff, Jacobs will provide support where necessary as guidance. The billing database will not be finalized until such time that a final decision is made on the billing mechanism and implementation. • Sustainable Credit System: the next phase of the contract will begin to define further the credit system and how it will apply to the various tiers shown in the current proposal • Fee -in -lieu -of Program Assessment: assessment of the potential for a fee -in -lieu -of improvement in instances where the project site may be limited and there is potential for the City or other parties to make regional improvements. • Ordinances and Intergovernmental Agreements: review ordinances to include all aspects of water quality and water quantity. This will include an analysis of the current exemptions of 1 and 2 family from the grading and drainage permit requirements as well as development of agreements with certain entities that would be included in the stormwater program. • Overall project quality and management: this item will include the overall project and quality management associated with the continuation of the project. BUDGET/STAFF IMPACT: The overall cost proposed amendment is $150,200 which includes additional tasks outlined above as well as those listed in more detail on the attached contract amendment. This would bring the total of all services to $383,282. A budget adjustment is proposed to move funding from two existing drainage projects into the stormwater utility study project. The overall cost of the additional services, if approved, would include additional staff and consultant time as well as additional consultant expenses. If approved, it is anticipated that these additional tasks could take up to one year, at which point an ordinance to establish the utility could be presented to the Council. An additional period would then be required to finalize the billing database and begin collecting the fee from users. Attachments: Final Draft Stormwater Study for Flood Management and Water Quality Funding Contract Amendment 2 to the Stormwater Feasibility Contract Stormwater Flood Management ,,Rnd Water Funding A6 Executive Summary • To further protect the public (safety), public roads, and private property from flooding, • For watershed improvements to continue protecting the quality of the Beaver Lake, the City's drinking water source • To proactively maintain current drainage systems while starting to retrofit and replace, as needed, aging infrastructure • To continue complying with increasing NPDES Phase II MS4 permit requirements • To encourage the use of green infrastructure and other sustainable development practices to help mitigate stormwater runoff and flooding The City of Fayetteville (the City) needs additional funding for drainage, flood management, and water quality improvements. The City continues to attract new residents, with corresponding new development, while its existing stormwater system continues to age. At the same time, recent flooding demonstrated the need to proactively plan for storms of increasing intensity and frequency. A combination of more high-intensity rainfall and growth of hard surfaces has contributed to flooded streets and properties, among other drainage issues, which can ultimately impact the quality of the City's drinking water source, Beaver Lake. Other stormwater-related funding needs are driven by the need for compliance with more stringent National Pollutant Discharge Elimination System (NPDES) Municipal Separate Storm Sewer System (MS4) regulations. In response, the City initiated this Flood Management and Water Quality Funding Study (Funding Study) to identify the most equitable way to fund these needs going forward. The key findings of the Funding Study are summarized in Table ES -1. STAKEHOLDER ENGAGEMENT AND EDUCATION Over a dozen workshops and meetings were held with City staff, Council, and Stakeholders between June 2018 and August 2019 to educate Stakeholders about Fayetteville's drainage needs and secure input on how to fund these needs. Stakeholders were further engaged via a dedicated website, factsheets, and two Speak Up Fayetteville Surveys. Survey #1 found that a majority (82%) of the 166 surveyed individuals think that drainage issues are either a major or minor problem in their area. Figure ES -1 notes what type of drainage issues Stakeholders are experiencing. Flooding in streets, roads, or private drives; flooding on their property; and trash/debris in streams or drainage ditches each received over 75 responses. Figure ES -1. Survey #1 Results 150 99 100 50 64 26 78 52 42 2s E 7 Question options: 0 Pollution in streams, ponds, or lakes Flooding in streets, roads, or private drives near your home or business Soil and/or stream bank erosion Flooding anywhere on your property • Other 0 Flooding inside your home or business 0 1 have not experienced any drainage issues Trash/debris in streams or drainage ditches OCTOBER 2019 ES -1 EXECUTIVE SUMMARY Table ES -1. Flood Management and Water Quality Funding Study—Key Findings Topic Findings Stakeholder 0 82% of survey respondents think drainage is a major or minor problem in the City. Engagement • 39% of those surveyed were willing to pay a Flood Management and Water Quality fee based on (Refer to Section 2 for IA, 35% said they were not, and 26% were undecided. more details.) . Additional Stakeholder education and engagement efforts would be conducted if the City proceeds with implementation. Current Stormwater The City currently spends approximately $1.5 million annually, of which $200,000 is on capital Program Costs projects. (Refer to Section 3.2.) . Drainage services are currently funded by the Street Fund, General Fund, Sales Tax Capital Improvements Fund, and the intermittent issuance of revenue bonds. Stormwater EOS 0 The recommended EOS was selected to make the City's current drainage services more (Refer to equitable for those older areas developed before public drainage easements were required. Section 3.3.1.) 0 It would include public roads, public detention ponds, and ROWs, and drainage features within existing dedicated public easements (excluding private commercial detention ponds). • The City would establish procedures for accepting public drainage easements from existing property owners and for assuming public maintenance responsibilities of private residential detention ponds. Stormwater LOS 0 The recommended LOS would address the backlog of drainage projects and meet Flood (Refer to Management and Water Quality goals in a 20 -year time frame. Section 3.3.2.) a Examples of the services included in this LOS include: - Cleaning/inspecting approximately 20% of the overall drainage system annually (400,000 LF). - Replacing 2.5% of drainage system annually (8,500 LF). - Performing maintenance on residential detention basins (110 total). Future Stormwater . Depending on the LOS option selected, the City would need $3.5 to $4.6 million annually to fund Program Costs Operation and Maintenance, Engineering and Planning, Regulatory Compliance, and (Refer to Administration (CIP costs described separately in Section 3.4). Section 3.3.3.) 0 Alternative funding sources such as additional taxes, special assessments, developer trust funds, impact fees and grants would not be equitable, provide adequate funding or allow for use across the City. Programmatic Capital . Depending on the option selected, total Future CIP needs range from $35 to $59 million over a Improvement Project 15 -to 20 -year time period, respectively. Costs • Excluding the $15 million of early action plan CIP projects funded by 2019 drainage bond (Refer to Section 3.4.) program, the City would need approximately $1 to $3 million annually to fund its CIP needs. • This would fund drainage improvements, floodplain buyouts/elevation projects, projects identified by drainage studies and watershed improvement/stream restoration projects. The higher level of CIP funding would also provide large-scale regional detention projects and some detention pond retrofits. CIP = Capital Improvements Program EOS = extent of service IA = impervious area LF = linear foot (feet) LOS = level of service ROW = right of way SF = square foot (feet) ES -2 OCTOBER 2019 EXECUTIVE SUMMARY Table ES -1. Flood Management and Water Quality Funding Study—Key Findings Topic Findings Financial Planning and . IA, using a billing unit of 1,000 SF, was selected as the basis of the fee in order to quantify the Rate Analysis approximate burden a property places on the City's drainage system. (Refer to Section 4.) . A six -tier, customer -neutral rate structure was selected as the most equitable and cost-effective option given the distribution of the City's IA. • The selected rate option would be phased in over a 5 -year period. • Future services would be funded from Tier Range (SF of IA) Year 5 Monthly Fee a stand-alone enterprise fund sourced from a new Flood Management and Tier 1 (0 and 2,000) $2.31 Water Quality Fee and the intermittent issuance of revenue Tier 2 (2,000 and 3,500) $5.09 bonds. • The City plans to evaluate two Tier 3 (3,500 and 5,000) $7.86 methods for billing property owners Tier 4 (5,000 and 6,500) $10.64 during implementation, either its existing, monthly utility system or Tier 5 (6,500 and 8,000) $13.41 Washington County's annual property tax system. Tier 6 (over 8,000) $1.85/1000 SF Stormwater Credit A sustainable credit system would be developed with additional Stakeholder input. and Incentive Programs 9Credits would be available to all customers and be based on the sizing criteria found in City's (Refer to Section 5.) drainage criteria manual with additional credits likely offered for green infrastructure practices, rain barrels and public education. • A stormwater rebate program and in lieu of fee program may also be considered as incentives during implementation. Policy and Legislative . Selection of IA as the billing unit established a "rational nexus" between the drainage services Considerations provided by the City and how they are funded. (Refer to Section 6.) • The Funding Study was structured to reflect the following "fee for service" policy considerations: - Unlike a tax, it is also important that all properties with impervious surfaces pay, there should be no exemptions, only credits for reducing a property's burden on the stormwater system. As a result, important City Stakeholders who have historically not paid impact fees for police and fire, will still be expected to contribute to the Flood Protection and Water Quality fee program. - The overall cost of the program would be reasonably related to the services being provided, - Revenue from the fee would be accounted for separately in an enterprise fund for use by the stormwater program, - The tiered rate structure would be proportional to a property's contribution to stormwater runoff. • At the State level, stormwater management, including the creation and operation of a stormwater utility, is authorized by the definition of the term "works" in Arkansas Code 14-235-201. • There are currently two communities in Arkansas with drainage fees: Bryant and Hot Springs. CIP = Capital Improvements Program EOS = extent of service IA = impervious area LF = linear foot (feet) LOS = level of service ROW = right of way SF = square foot (feet) OCTOBER 2019 ES -3 EXECUTIVE SUMMARY CURRENT STORMWATER SYSTEM AND COSTS The City currently provides stormwater services within the public rights of way (ROWS), on City -owned property, and in those areas with public drainage easements. The City spends approximately $1.S million annually on these services, of which $200,000 is for capital projects. Although the City does try to leverage grants and other funding sources, these activities are primarily supported by the Street Fund, General Fund, and Sales Tax Capital Improvements Fund. As such, these activities are competing for limited funds with the City's other transportation and operating needs on a year-to-year basis. FUTURE STORMWATER SERVICES AND COSTS A range of future service options was evaluated in the study. This included looking at different options for the EOS (where the City will work) and LOS options (what stormwater services the City would provide and at what frequency). Routine, proactive, and enhanced EOS/LOS options were studied to enable a comparison of benefits versus costs and consideration of how they relate to the City's financial capacity. Based on Stakeholder input, the City intends to pursue a future EOS option that makes the City's current drainage services more equitable by extending maintenance to older parts of Fayetteville while taking on public responsibility of select private infrastructure (residential detention ponds and private infrastructure connected to Public ROW) (Figure ES -2). ure is -2. Future txtent or 5tormwater Services PrW t0 CRY 8+.C6.H— t!4 , trse n f. • Dmwe a drwage eaawffK R.tn 11V CA HAve the Mwerty ++aOt W W CM0, IOU 60KOW PE to erase aA aiwRe *;0M kotiiwaxi W T* spedicabom W tca nitml Mann, Future Extent of Stormwater Servi I Public roads, public detention ponds and rights of way, and drainage teatufes within existing dedicated public easements (excluding private commercial detention ponds). 2 City would assume public maintenance of those private drainage features found within what would now be designated �� a public drainage easement but not for the age of the development Public maintenance would extend to the downstream end of the fast private infrastructure connected to the public Emig systemWJ __ 4 City would establish a process for accepting public maintenance responsibilities at private residential detention ponds. ES -4 OCTOBER 2019 EXECUTIVE SUMMARY A 20 -year capital program schedule and routine maintenance approach for the future LOS was selected to address the backlog of drainage projects and meet Flood Management and Water Quality Goals. This LOS option would provide for services such as: • Cleaning/inspecting approximately 20% of the overall drainage system annually (approximately 400,000 LF) • Replacing 2.5% of drainage system annually (approximately 8,500 LF) • Performing maintenance on residential detention basins (110 total) To do so, the City would spend $4.5 million annually in the future, of which $1.1 million would be on capital projects. FUTURE CAPITAL COSTS The 2018 Drainage Plan estimated that more than $15 million is needed to address the most urgent backlog of known capital projects (Figure ES -3). Because it can take several years for the City to save enough to complete a single drainage project at the current funding level, the 2019 Drainage Bond was passed as an Early Action Plan to start addressing these high priority capital projects. However, additional funds are also needed to fully evaluate the City's watersheds and drainage system to identify the full extent of issues and identify cost-effective, sustainable flood management and water quality solutions. After removing the projects funded by the Drainage Bond, future CIP needs total $34.6 million over a 20 -year period, or $1.1 million on an annual basis. This would fund drainage improvements, floodplain buyouts/elevation projects, projects identified by drainage studies and watershed improvement/stream restoration projects. Figure ES -3. Comparison of Current Stormwater Budget with Identified Future Needs COMPARISONOF CURRENT STORMWATER BUDGET WITH IDENTIFIED FUTURE NEEDS a Operation and Maintenance 0 Engineering and Planning a Regulatory Compliance StormwaterCIP Components a Administrative CURRENT FUTURE NEEOED OCTOBER 2019 ES -5 EXECUTIVE SUMMARY BASIS OF POTENTIAL FEE FOR FUTURE SERVICES Impervious Area, or surfaces that do not absorb stormwater such as rooftops, driveways, and parking, would be the basis of the Flood Protection and Water Quality Fee. RECOMMENDED FLOOD MANAGEMENT AND WATER QUALITY FEE STRUCTURE A range of fee estimates was examined with and without the continuation of current funding from the Street and General Funds. Ultimately, a stand-alone program for future services was recommended that discontinues reliance on these sources for the City's drainage program. It would instead be administered from an enterprise fund sourced from the new Flood Management and Water Quality fee and the intermittent issuance of revenue bonds. The proposed rate structure shaded yellow in Table ES -2 would be phased in over a 5 -year period to IA was selected as the basis of a potential Flood Management and Water Quality fee. It is the most common basis for stormwater-related fees nationwide because using this metric ensures that customers pay according to the demand their property places on the City's stormwater system. IA causes an increase in the amount of water entering the drainage system, which can then increase the chance of flooding, stream bank erosion, and sedimentation. Runoff from IA also carries pollutants that can impact water quality, such as sediment, herbicides and pesticides, metals, and bacteria from pet waste. Therefore, IA is an equitable basis for the fee because larger developments, businesses, and homes, with corresponding parking lots and driveways, generate a greater need for stormwater services because of the greater amount of runoff that they generate (Figure ES -4). A preliminary customer billing database was developed by the City's Geographic Information System (GIS) department to assess the funding potential of the 236 million SF of IA identified within its 25,690 parcels. A six -tier, customer -neutral rate structure based on IA was selected as the most equitable and cost-effective method of billing a Flood Management and Water Quality fee (Table ES -2). Table ES -2. Tiered Rate Structure Tier Range (SF of Impervious Area) Proposed Monthly Fee Without Monthly Fee Current with Current Funding 1 Funding' Tier 1 (0 and 2,000) $2.31 51.60 Tier 2 (2,000 and 3,500) $5.09 $3.52 Tier 3 (3,S00 and 5,000) $7.86 $S.44 Tier 4 (5,000 and 6,500) $10.64 $7.36 Tier 5 (6,500 and 8,000) $13.41 $9.28 Tier 6 (over 8,000) $1.85/1,000 SF $1.28/1,000 SF a. If there is an onsite stormwater management facility, there achieve these monthly rates in Year 5. This could be a reduced fee based on a sustainable credit program would result in an $5.09 monthly fee for a established by the City. 1,500 -SF home with a two -car garage, a $67 monthly fee for a typical fast food restaurant, and a $250 monthly fee for a 75 -unit apartment complex. ES -6 OCTOBER 2019 101 =11 A kTJ &IMA MA INIll SUSTAINABLE CREDIT PROGRAM A sustainable credit program would be developed with additional Stakeholder input if the City proceeds with implementation. A stormwater credit is an ongoing, renewable reduction in the Flood Management and Water Quality fee that is provided to property owners that implement practices onsite that reduce the stormwater runoff from their properties; all properties subject to the fee are eligible to apply for a fee credit. Credits would be offered to customers based on the sizing criteria found in City's drainage criteria manual with additional credits likely offered to property owners that implement green infrastructure practices on their properties or contribute substantially to public education related to the City's stormwater programs. Other incentives such as a stormwater rebate program and in lieu of fee program may also be considered during implementation. POLICY BASIS OF A POTENTIAL FEE SERVICE PROGRAM Development of this Funding Study was guided by establishing a "rational nexus" between the drainage services provided by the City and how the services are funded. User fees are based on the "polluter pays" principle; therefore, the size of the fee charged must be related to the burden a property places on the City's stormwater system. The Funding Study was structured to reflect the following "fee for service" policy considerations: • All properties with impervious surfaces would pay; unlike a tax, there would be no exemptions only appropriate appeals and credits would be allowed (NAFSMA, 2006). • The overall cost of the program would be reasonably related to the services being provided. • Revenue from the fee would be accounted for separately in an enterprise fund for use by the stormwater program. • The tiered rate structure would be proportional to a property's contribution to stormwater runoff. Unlike a tax, it is also important that all properties with impervious surfaces pay, there should be no exemptions, only credits for reducing a property's burden on the stormwater system. As a result, important City Stakeholders who have historically not paid impact fees for police and fire, will still be expected to contribute to the Flood Protection and Water Quality fee program. OCTOBER 2019 ES -7 Contents Section Page ExecutiveSummary.........................................................................................................................ES-1 Acronymsand Abbreviations............................................................................................................... v 1 Introduction and Background......................................................................................................... 1-1 1.1 Strategic Vision and Goals...............................................................................................1-1 1.2 Background......................................................................................................................1-2 1.2.1 2010 Stormwater Utility Feasibility Study..........................................................1-3 1.2.2 2018 Drainage Improvement Plan......................................................................1-3 1.2.3 2019 Bond Program............................................................................................1-4 2 Stakeholder Engagement and Education........................................................................................ 2-1 2.1 Stakeholders....................................................................................................................2-1 2.2 Funding Study Survey#1.................................................................................................. 2-3 2.3 Funding Study Survey#2.................................................................................................. 2-4 3 Stormwater Program Costs............................................................................................................ 3-1 3.1 Current Stormwater System and Services.......................................................................3-1 3.1.1 Current Stormwater Services..............................................................................3-2 3.2 Current Stormwater Program Costs................................................................................3-4 3.3 Extent of Service and Level of Service Analysis...............................................................3-5 3.3.1 Extent of Service.................................................................................................3-6 3.3.2 Level of Service.................................................................................................3-10 3.3.3 EOS/LOS Program Cost Estimates.....................................................................3-13 3.4 Programmatic Stormwater Capital Improvement Plan.................................................3-15 3.5 Final Future Program Costs by Option...........................................................................3-17 3.6 Preliminary Organizational Structure............................................................................3-18 4 Financial Planning and Rate Analysis.............................................................................................. 4-1 4.1 Alternative Funding Sources............................................................................................4-1 4.2 Basis of Proposed Fee Estimates.....................................................................................4-3 4.3 Financial Planning Assumptions.......................................................................................4-5 4.4 Recommended Fee Option..............................................................................................4-6 4.4.1 Flood Protection and Water Quality Fee Examples............................................4-7 5 Stormwater Credit and Incentive Programs.................................................................................... 5-1 5.1 Stormwater Credits..........................................................................................................5-1 5.2 Other Incentive Programs................................................................................................5-2 6 Policy and Legislative Considerations............................................................................................. 6-1 6.1 Existing Stormwater Management Regulations..............................................................6-1 6.2 Policy Considerations.......................................................................................................6-2 6.3 Legislative Implementation Steps....................................................................................6-3 6.4 Arkansas Authorizing Legislation and Fee Programs.......................................................6-3 7 Next Steps Towards Implementation............................................................................................. 7-1 8 References..................................................................................................................................... 8-1 OCTOBER 2019 1 CONTENTS Tables ES -1 Flood Management and Water Quality Funding Study—Key Findings ...................................... ES -2 ES -2 Tiered Rate Structure.................................................................................................................. ES -6 1-1 Drivers for Flood Management and Water Quality Funding........................................................1-2 ES -5 1-2 2018 Capital Budget Projects........................................................................................................1-4 ES -6 1-3 2019 Drainage Bond Phase I Projects...........................................................................................1-5 2-1 Key Stakeholders and Methods of Engagement...........................................................................2-2 3-1 City of Fayetteville Stormwater System........................................................................................3-1 3-2 Overview of Current City Drainage Levels of Service...................................................................3-2 3-3 Current Stormwater Program Costs.............................................................................................3-4 3-4 Overview of Initial Extent of Service and Level of Service Options..............................................3-5 3-5 Extent of Service Options..............................................................................................................3-6 3-6 Level of Service Options..............................................................................................................3-11 3-7 Programmatic Costs by EOS/LOS Option....................................................................................3-14 3-8 Stormwater CIP Program Elements by Option...........................................................................3-15 3-9 Initial Capital Improvement Program Costs by Option...............................................................3-15 3-10 Final Capital Improvement Program Total Costs by Option.......................................................3-16 3-11 Final Future Program Costs by Option........................................................................................3-17 4-1 Summary of Alternative Funding Sources....................................................................................4-2 4-2 Parcel Count and Impervious Area by Customer Class.................................................................4-3 4-3 Comparison of Billing Unit Distribution by Customer Class..........................................................4-4 4-4 Proposed Tier Structure (Applies to All Properties)......................................................................4-5 4-5 Monthly Fee Estimates by Tier and Scenario................................................................................4-6 4-6 Staging of Recommended Fee Structure under Scenario 2 ($/1,000 SF/month).........................4-6 4-7 Monthly Residential Fee Examples by Tier in Year 5....................................................................4-7 4-8 Fee Examples for Other Property Types.......................................................................................4-8 6-1 Surveyed Status of Billing and Collecting Stormwater Fees from Government Entities ..............6-2 6-2 Stormwater Fee Rates for Hot Springs, Arkansas.........................................................................6-4 7-1 Next Steps Towards Implementation...........................................................................................7-1 Figures ES -1 Survey #1 Results........................................................................................................................ ES -1 ES -2 Future Extent of Stormwater Services........................................................................................ ES -4 ES -3 Comparison of Current Stormwater Budget with Identified Future Needs ............................... ES -5 ES -4 Impervious Area.......................................................................................................................... ES -6 1-1 Historical Stakeholder Education Example...................................................................................1-2 1-2 2017 Flooding Service Requests...................................................................................................1-3 1-3 2019 Drainage Bond Phase I Projects...........................................................................................1-6 2-1 Funding Study Business Card........................................................................................................2-1 2-2 Funding Study included in the Beaver Water District Speaker Series..........................................2-3 2-3 Drainage Issues Identified in Survey#1........................................................................................2-3 2-4 Survey #1 Results..........................................................................................................................2-4 2-5 Survey #1, Willing to pay a fee for additional services?...............................................................2-4 3-1 Current Extent of Service..............................................................................................................3-7 3-2 Standard Extent of Service (Option A)..........................................................................................3-8 3-3 Proactive Extent of Service (Option A/B and B)............................................................................3-9 3-4 Enhanced Extent of Service (Option C).......................................................................................3-10 3-5 Final Future Program Costs by Option........................................................................................3-17 3-6 Potential Future Organizational Integration...............................................................................3-19 OCTOBER 2019 Section 4-1 4-2 4-3 5-1 Distribution of Parcel Count versus Impervious Area ................................................ Recommended Monthly Flood Management and Water Quality Fee Structure in Year 5 Example of a Residence that falls within Tier 2................................................................. 2014 Drainage Criteria Manual Sizing Criteria................................................................... OCTOBER 2019 CONTENTS Page Acronyms and Abbreviations ADEQ Arkansas Department of Environmental Quality BMP Best Management Practices CIP Capital Improvements Program CWA Clean Water Act DCM Drainage Criteria Manual EOS extent of service ERU equivalent residential unit GIS Geographic Information System IA impervious area ID Identification number LF linear foot (feet) LID low -impact development LOS level of service MCM Minimum Control Measures MS4 Municipal Separate Storm Sewer System NPDES National Pollutant Discharge Elimination System 0 & M operation and maintenance ROW right of way SF square foot (feet) SWMP Stormwater Management Plan USGS U.S. Geological Survey WCRC Watershed Conservation Resource Center OCTOBER 2019 v SECTION 1 Introduction and Background The City of Fayetteville (the City) needs additional funding for drainage, flood management, and water quality improvements. The City continues to attract new residents and corresponding new development, while its existing stormwater system continues to age. At the same time, recent flooding demonstrated the need to proactively plan for storms of increasing intensity and frequency. A combination of more high-intensity rainfall and growth of hard surfaces have contributed to flooded streets and properties, among other drainage issues, which can ultimately impact the quality of its drinking water source, Beaver Lake. Other stormwater-related funding needs are driven by the need for compliance with evolving National Pollutant Discharge Elimination System (NPDES) Municipal Separate Storm Sewer System (MS4) regulations and the inherent operation and maintenance (O & M) requirements of aging infrastructure. As a result, the City embarked on this Flood Management and Water Quality Funding Study (Funding Study) to assess what services are currently provided by our drainage program and to compare the cost of these services with the cost of a more proactive approach to reduce flooding and pollutants that impact water quality. 1.1 Strategic Vision and Goals The strategic vision for the Funding Study is taken from Fayetteville Vision 2050 (InVeritas, 2017), which seeks "to support the City's guiding principles of well-maintained infrastructure and facilities, a financially sustainable City government and ecosystem preservation to meet its future vision of a vibrant and welcoming city that encourages diversity, creativity, and innovation while providing our citizens the opportunity to thrive." In addition to the goals found in the City's MS4 Stormwater Management Plan (SWMP) (based on the City of Fayetteville 2015 Stormwater Management Program for Permit ARR 040010), the Council provided feedback at the beginning of the Funding Study on the six primary drivers for additional Flood Management and Water Quality Funding. The City Council clearly noted that its intent was to identify a funding source that is fair and equitable, that helps prevent flooding, and that addresses erosion while improving water quality (Table 1-1). These goals and the guiding principles from Vision 2050, listed as follows, were used to define the extent of service (EOS) and level of service (LOS) options: 1. A diverse growing local economy 2. A naturally beautiful city 3. Well-maintained city infrastructure 4. Greater ease of mobility — effective transportation system 5. Financially sustainable government 6. Quality public school system 7. Reputation as a safe community 8. A fun city in which to live 9. Pathways to prosperity 10. Education, research, and healthcare excellence 11. Ecosystem preservation EOS goals are defined as "what infrastructure" and "where" the City is responsible for managing stormwater. LOS goals are defined as "how well" and "how often" stormwater infrastructure is to be managed. OCTOBER 2019 1-1 SECTION 1— INTRODUCTION AND BACKGROUND Table 1-1. Drivers for Flood Management and Water Quality Funding Drivers MS4 SWMP Goals and Related Council Chartering Feedback Education and Engagement SWMP Goal: Educate citizens and businesses to understand the need to protect water quality Equity and Fairness 0 How to pay for it in a fair and legal way • Cost • Equitable to everyone Flood Management SWMP Goal: Protect citizens and property from flooding • Address topography, clogged ditches, and inadequate existing drainage • Prevent home flooding • "Get the water out' Proactive and Sustainable Look to the future and plan for it • Have clear long term, value-added solution • Fund and implement CIP projects in a shorter time frame Water Quality SWMP Goal: Improve the quality of surface and sub -surface drainage • Need to address erosion • Water quality Watershed Maintenance and SWMP Goal: Preserve and maintain surface waters, wetlands and riparian areas Preservation 0 Need to address erosion • Water quality CIP = Capital Improvements Program 1.2 Background The City has a long history of educating and engaging its Stakeholders on the importance of sustainable drainage practices in creative ways (Figure 1-1). On April 29, 2017, a large rain event occurred in Fayetteville, Arkansas, causing flooding in much of the City and surrounding areas. In response to this event, many citizens contacted the City to report damages to structures, roadways, streams, and other damages. The City recorded the customer service requests and has used this record to identify over 100 drainage improvement and maintenance projects ranging in size and complexity (Figure 1-2). The 2018 Drainage Improvement Plan (Fayetteville, 2018a), described further in the following section, estimated that the cost of drainage projects is between $1S to $20 million, excluding O & M costs and projects that require additional flood studies. 1 2 OCTOBER 2019 SECTION 1 — INTRODUCTION AND BACKGROUND Figure 1-2. 2017 Flooding Service Requests Source: 2018 Drainage Improvement Plan (Fayetteville, 2018a) 1.2.1 2010 Stormwater Utility Feasibility Study This Funding Study builds on the Stormwater Utility Feasibility Study completed by the City in 2010. It was developed in response to the funding needs identified in the Nutrient Reduction Plan to reduce the load of total phosphorus into Beaver Lake as part of a 2006 agreement between the City and the Beaver Water District (Geosyntec, 2009). It found that a utility funded by a user fee would be beneficial as the City continues to grow and develop. 1.2.2 2018 Drainage Improvement Plan To prioritize the many drainage projects within the City, a numeric ranking system was developed by City staff and approved by the City Council. The prioritization system ranks projects on a points system with scoring based on the number of structures flooded, the number of structures with water against or surrounding them, and other occurrences of property damage. The City prioritizes projects with flooding structures by giving a score of 5 points to each residence or commercial building with water intrusion. Water against or surrounding a structure is scored 2 points for each occurrence. Other property damage, such as damage to an outbuilding or fence, scores 1 point for each occurrence. For example, the ranking system would result in a score of 25 total points for a drainage project with two structures flooded (10 points), five structures with water against or surrounding them (10 points), and five other incidents of property damage (5 points). This sample drainage project would have a lower priority than projects that scored above 25 and a higher priority than projects with fewer than 25 points. OCTOBER 2019 1-3 SECTION 1 - INTRODUCTION AND BACKGROUND To begin planning for a capital improvement program, the City compiled a list of all potential improvement projects identified during the 2017 flooding incident. The cost of the projects, maintenance, and floodplain buyouts were combined with contingencies, contractor overhead and profit, and design fees to determine a total cost for the existing project demand. Table 1-2 summarizes the projects implemented as part of the 2018 capital budget of $500,000; some projects were ultimately delayed due to budget overruns. 1.2.3 2019 Bond Program Table 1-2. 2018 Caoital Budget Proiects Project Location Estimated Cost Status Eastern Avenue Interim $3,000 Complete Park Avenue/Wilson Park $33,000 Design Complete/ Transportation to Construct Ramsey $56,000 Design Complete/Bid 2020 Ferguson/Country Way $ 427,624 Under Construction Spyglass Hill $172,621 Complete Black Canyon $500 Complete South Emma Avenue $7,000 Complete The City proposed an "Early Action Plan" to address the most significant stormwater projects in early 2019 as part of a bond program for flood mitigation and drainage improvement projects identified from the April 2017 flooding event. Funding for these Drainage Improvement Projects, approved at a level not to exceed $15,840,000, was passed by voters on April 9, 2019. The 2019 Bond Program will be implemented in two phases, Phase 1 (2019 to 2022) and Phase II (2022 to 2025). Eleven projects have been identified for Phase I (Table 1-3 and Figure 1-3); Table 1-3 lists each of the Phase I projects' location, estimated cost, and rank. The rank total is calculated using a point scoring system to prioritize projects that will have the greatest impact. The scoring system used for the bond program projects is the same scoring system described in Section 1.2.1. The estimated construction cost of each of the 11 projects is a planning -level estimate and does not include contingencies, contractor overhead and profit, and design. Although the Drainage Bond projects are generally focused on improvements larger than $200,000, smaller system upgrades such as North Palmer Avenue, and floodplain buyout efforts (on Linda Jo Place, for example) are also,included. The drainage projects outlined in this section were identified as top priorities to kickstart improvement of the City's stormwater system. However, once these projects are completed, an ongoing and sustainable effort will be required to maintain a quality stormwater management system over time. This study for Flood Management and Water Quality Funding will evaluate the most equitable way to fund the remaining needs going forward. The total estimated cost of these drainage projects during Phase I is just under $9 million. With contingencies, contractors' overhead and profit, and the costs of design, the total cost of these Phase I and II projects will be much closer to the $15 million in capital funding from the proposed bond. 1 4 OCTOBER 2019 SECTION 1— INTRODUCTION AND BACKGROUND Table 1-3. 2019 Drainage Bond Phase I Projects Project Estimated Rank ID Project Location Cost Project Type Total 1 Missouri Creek/Rolling Hills Phase 1 $3,726,000 Large Drainage Improvement. To alleviate street 22 flooding, property damage, and flooding in structures throughout the drainage basin 2 Sunbridge Drive/North College $1,400,000 Large Drainage Improvement. Additional storm 16 Avenue Area Phase I drainage capacity in order to alleviate flooding the intersection and structures near/at the intersection 3 Fairlane, Elmhurst, and McClinton $247,500 Large Drainage Improvement. To alleviate flooding in 17 Street Area Phase I several structures in the area from drainage that flows from the north 4 Upper Scull Creek, Part 2 $700,000 Large Drainage Improvement. Continuation of the 10 Upper Scull Creek project to address neighborhood wide flooding of streets that is also causing damage to private property 5 South River Meadows Drive / $630,000 Drainage Improvements 8 Cherry Hills 6 Boxwood Addition Drainage $632,500 Large Drainage Improvement. To alleviate the flooding 15 Improvements of multiple structures and property damage by installation of new storm drain along Ashbrook Drive 7 Eastern Avenue, Part 2 $490,000 Large Drainage Improvement 25 8 Niokaska Creek Stream $350,000 Streambank Stabilization. Stream restoration project 4 Restoration that would address major erosion currently damaging private property 9 Scull Creek Stream Restoration $350,000 Streambank Stabilization. Stream restoration project 4 that would address major erosion currently damaging private property in the area 10 Homespun Drive $210,000 Large Drainage Improvement. Upgrades of the existing 10 storm drainage system to alleviate structure flooding 11 North Palmer Avenue $161,000 Drainage Improvement. Upgrades of the existing storm 5 drainage system to alleviate structure flooding near Hotz Park ID = identification number OCTOBER 2019 1-5 SECTION 1 — INTRODUCTION AND BACKGROUND re 1-3. 2019 Drainage Bond Phase I Proiects After the $15,000,000 drainage bond is considered, the 2018 Drainage Plan identified a known remaining CIP demand of just over $3,000,000, not counting the large-scale floodplain issues that require further study. Section 3.4 further describes the City's programmatic stormwater CIP. OCTOBER 2019 Phase 1 (First Bond Issue) Drainage Projects �^ 9/19-6/22 —Design —Construction Project ID Project:— Name 1 Missouri Creek 2 Sunhridge/Cc,11"e .: 3 Fairlane/Elmhurst/McClinton -• A Upper Scuil Creek Phase 2 - - S River Meadows Dr: 6 B.—ood Addition 7 Eastern Avenue r' _ 8 Nlokaska Creek Stream Restoration -- - •., .. __ ,' - ��` 9 Scull Creek Stream Restoration - 10 Homespun Drive 11 Palmer Avenue n.6J After the $15,000,000 drainage bond is considered, the 2018 Drainage Plan identified a known remaining CIP demand of just over $3,000,000, not counting the large-scale floodplain issues that require further study. Section 3.4 further describes the City's programmatic stormwater CIP. OCTOBER 2019 SECTION 2 Stakeholder Engagement and Education 2.1 Stakeholders The City was cognizant that input from its many Stakeholders, listed in Table 2-1, would be vital to the City Council making an informed decision of how to fund its Flood Management and Water Quality needs. As a result, the Funding Study, with extensive support from the City's Communication Department, used multiple methods of engaging its Stakeholders. These included developing a business card for City leadership to use at community gatherings to raise awareness and direct Stakeholders to the project website (Figure 2-1). The project website was populated with meeting presentations and other materials such as flyers and common acronyms (Appendix A), to keep Stakeholders up to date on the progress of the Funding Study. Speak Up Fayetteville, the City's new interactive engagement website, was also used to administer the two surveys described in this section as well as to allow Stakeholders to identify drainage issues that City staff might otherwise not be aware of. Figure 2-1. Funding Study Business Card City of Fayetteville Study for Flood Management & Water Quality Funding The City of Fayetteville faces many challenges when it comes to stormwater, both in quantity and quality, which require a sustainable funding source. The City is undertaking a study to discover the full cost of stormwater services that our citizens expect, and to identify sources of funding to provide those services. We encourage you to be a part of the process by voicing your opinion. Learn more at: fayetteville-ar gov/flood-management-study Due to the multiple studies and bond referendum activities that were ongoing concurrent with the Funding Study, additional Stakeholder engagement and education efforts are planned, should the City decide to proceed with implementation of the recommended option. OCTOBER 2019 2-1 SECTION 2 - STAKEHOLDER ENGAGEMENT AND EDUCATION Table 2-1. Key Stakeholders and Methods of Engagement Key Stakeholders Methods of Engagement Mayor and Council Members 1. Direct coordination via in-person meetings, presenting the program, and answering potential questions from their constituencies 2. Special Committee Meetings 3. Public Meetings and presence at Community Events City Staff: Representatives of 1. Direct coordination via in-person meetings, presenting the program, and answering Key Departments potential questions from their constituencies 2. Staff Technical Advisory Committee (STAC) General Public 1. Stormwater Public Meetings: • September 20, 2018 (Ozark Natural Foods) • September 22, 2018 (Fayetteville Farmers' Market) • January 9, 2019 (Fayetteville Public Library) • January 10, 2019 (Arkansas Research & Technology Park) • January 17, 2019 (Boys & Girls Club) 2. Funding Study materials at other community events 3. Dedicated Funding Study website with presentations, acronyms and definitions, and Factsheets #1 and #2 4. Speak Up Fayetteville with Survey #1 and Survey #2 as well as a mapping tool to identify drainage needs S. Direct mailing of outreach postcard to all residential utility account holders. Stakeholders (Known Service Citizens who contacted the City during the April 2017 storm event were provided direct Calls) notification of upcoming Funding Study events and opportunities to submit comments. Key Stakeholders Key Stakeholder such as the University of Arkansas, Residential Property Managers/Student Housing Providers, Chamber of Commerce members, and those holding business licenses were contacted using the following methods: 1. Direct notification of upcoming Funding Study events and opportunities to provide comment. 2. Additional e-mails to key Stakeholder groups as well as traditional mailings to reach those without e-mail/internet access. 3. Coordination via in-person meetings, presenting the program and answering potential questions. As outlined in Table A-1 in Appendix A and illustrated by the photograph on Figure 2-2, over a dozen workshops and meetings were held with City staff, Council, and Stakeholders between June 2018 and August 2019 to: • Establish a strategic vision and goals for the Funding Study • Review the City's current stormwater system and services • Identify future stormwater needs and the additional cost of providing these services • Present options related to where the City provides drainage services (EOS) and what services the City provides and their frequency (LOS) • Select impervious area (IA) by property as the basis for billing a six -tier, customer neutral rate structure as the most equitable method of linking a property's impact on the drainage system with the fee it is charged • Review a range of Flood Management and Water Quality fee estimates by program options • Review options for a sustainable credit program to reduce the fees of those owners willing to proactively manage their property's stormwater runoff 2 2 OCTOBER 2019 2.2 Funding Study Survey #1 Stakeholder Survey #1 was open from August 8, 2018 to April 7, 2019, during which 166 responses were logged. Of these, 157 responses were from survey takers that live in the City, with approximately 85% of these owning their residence and 1S% renting. During this time period, on average, there were: • 5S4 total visits to the website • A maximum of 49 visits per day • 64 engaged visitors, meaning they filled out a survey or dropped pins on the map • 196 informed visitors, meaning that they clicked on something, either viewing a page or downloading a document SECTION 2 - STAKEHOLDER ENGAGEMENT AND EDUCATION Overall, the majority (82%) think drainage issues are either a major or minor problem in their area. Figure 2-3 characterizes what type of drainage issues the Stakeholders are experiencing. Although Stakeholders could select more than one issue, flooding in streets, roads, or private drives; flooding on their property; and trash/debris in streams or drainage ditches each received over 75 responses. To gauge the extent to which the City is aware of its overall drainage needs, Survey #1 asked how many of those surveyed were affected by the April 2017 storm. Of the 166 respondents, 76 were affected; however, only 18 (23%) logged a service request with City staff. To determine whether the City would have legal access to fix drainage issues when a service request is filed, survey takers were asked whether there was an existing public drainage easement on their property. Figure 2-4 illustrates that 30% do have a drainage easement on their property while 39% did not know, indicating that additional Stakeholder education is needed on public easements. Almost half of those responding noted that drainage issues in their part of Fayetteville were a major issue while 33% thought they were a minor issue (Figure 2-4). OCTOBER 2019 2-3 SECTION 2 - STAKEHOLDER ENGAGEMENT AND EDUCATION Figure 2-4. Survey #1 Results Public Drainage Easement on Property? How serious are the drainage issues in your area of Fayetteville? 30(18.1 1111111111111M.- 4(2.4%) aa. 60(30.1%) 64(38.6% 81 (48.8%) 48(28.9%) 55(33.1%) Question options Question options Yes ) No 0 i don't know not apply r Major problem 0 Minor problem 0 Not a problem O r* at quest— ( t 66 re sporses, 0 sk pped) (166 responses, 0 skipped) Survey #1 also asked Stakeholders about their willingness to pay a Flood Management and Water Quality fee based on the amount of impervious surface (Figure 2-5). Sixty-five (39%) responded that they were willing to pay a fee while fifty-eight, 35%, said they were not, and 2S% were undecided. Survey #1 provided an open-ended question; a sample of these responses included the following: • Comments encouraging credits for low impact/green infrastructure measures, such as preservation of drainage onsite through bioswales, rain gardens, or rainwater collection for metered irrigation • Comments regarding affordability and equity • Willingness to pay for long-term, forward - thinking, sustainable solutions, not more ditches/culverts/higher curbs, and similar; instead, solutions such as more permeable surfaces, more native vegetation, and education 2.3 Funding Study Survey #2 Funding Study Survey #2 was posted on July 11, 2019 and will be open through the end of the September 2019. It solicits the City's businesses' and residents' opinions on the reasonableness of the proposed rates needed to proactively fund the management of flooding and water quality issues. 2-4 OCTOBER 2019 SECTION 3 Stormwater Program Costs This section summarizes the cost of the City's current stormwater program and the potential programmatic costs of future program options related to EOS, where the City will work, and LOS, what Stormwater services the City would provide and at what frequency. To do so, it first characterizes the City's current stormwater system and then describes the range of EOS/LOS options developed to allow the City to characterize potential tradeoffs between cost of these services and its financial capacity (Section 4). Understanding the required costs associated with stormwater program implementation is critical to identifying required revenue and the associated financial management strategy. 3.1 Current Stormwater System and Services Currently, the City focuses its limited stormwater management funding on complying with the City's MS4 NPDES permit and responding to emergency repairs. The City is only responsible for operating and maintaining the public portion of its municipal stormwater system. Maintenance of the City's stormwater assets is primarily done in response to an emergency or to customer calls complaining about a stormwater management issue (typically associated Table 3-1. City of Fayetteville Stormwater System with localized or nuisance flooding). The City relies on its Transportation Division to perform street sweeping and the cleaning out of curb inlets to remove sediment and debris that could potentially clog storm drains. They manage roadside ditches and continually clean and reshape the ditches to maintain positive drainage. Table 3-1 summarizes the City's stormwater assets and provides information on some relevant contributing aspects of the City, such as the rivers and creeks or streets. Various stormwater assets are tabulated based on type, and the responsibility for both City features and stormwater assets is included. The quantity of various assets and the responsibility for them affects both the current and future stormwater program costs (Sections 3.2 through 3.4). The City's stormwater assets also include: • 257 miles of conduit pipes, of which 167 miles are in drainage easements or ROWS • 11 miles of box culvert, of which 7 miles are in drainage easements or ROWs • 238 miles of channel, of which 114 miles are in drainage easements or ROWS • 7,921 inlets and 794 junctions, also within easements or ROWS OCTOBER 2019 3-1 Total Responsibility City % of Total Feature Count Miles City Private/ Other Area of City of Fayetteville 55 square miles Rivers and Creeks draining > 100 acres 101 Highways 91 X X City Streets 386 X Private Streets 110 X Bridges 5o -- X X -- Detention Ponds 286 12 274 4% Outfall 1,494 643 851 43% with localized or nuisance flooding). The City relies on its Transportation Division to perform street sweeping and the cleaning out of curb inlets to remove sediment and debris that could potentially clog storm drains. They manage roadside ditches and continually clean and reshape the ditches to maintain positive drainage. Table 3-1 summarizes the City's stormwater assets and provides information on some relevant contributing aspects of the City, such as the rivers and creeks or streets. Various stormwater assets are tabulated based on type, and the responsibility for both City features and stormwater assets is included. The quantity of various assets and the responsibility for them affects both the current and future stormwater program costs (Sections 3.2 through 3.4). The City's stormwater assets also include: • 257 miles of conduit pipes, of which 167 miles are in drainage easements or ROWS • 11 miles of box culvert, of which 7 miles are in drainage easements or ROWs • 238 miles of channel, of which 114 miles are in drainage easements or ROWS • 7,921 inlets and 794 junctions, also within easements or ROWS OCTOBER 2019 3-1 SECTION 3 -STORMWATER PROGRAM COSTS 3.1.1 Current Stormwater Services The City currently provides the stormwater services summarized by program area in Table 3-2 for the public assets listed in Table 3-1. As noted previously, the City is not responsible for the 110 miles of private streets and ROWS (which include drainage infrastructure), nor does it maintain the 274 private detention ponds that are not part of the public drainage system. Table 3-2. Overview of Current City Drainage Levels of Service Program Area Current City Services Maintenance of Public Drainage System The City is responsible for 43% of its outfalls (643 of 1,484 total), 48% of channels (Public Roads, ROWS, and Infrastructure (114 miles of 238 total) and 386 miles of streets/ROWs. with Easements) Maintenance of Private Drainage System Not applicable. There are approximately 110 miles of private streets in Fayetteville. (Private Roads and Infrastructure) Maintenance of BMPs Fayetteville is responsible for maintaining the 12 public (of 286 total) detention (Detention Ponds) ponds within the City. Maintenance of City Streamside Corridor There are currently no funding or corresponding public easements to allow the City to maintain most of its City Streamside Corridor. The City is currently inventorying and assessing the 100 miles of rivers and creeks draining more than 100 acres in Fayetteville as part of a multi-year project, as funding allows. Capital Improvement Program Projects Approximately $200,000 is currently budgeted annually for CIP projects. The 2019 Drainage Bond approved by voters provides for an Early Action Plan to address $15 million of the City's known $17.3 million backlog of projects. Program Administration Drainage/stormwater plan reviews and inspections are addressed by a mix of City (Plan Reviews and Inspections) staff located in multiple departments. These services are funded via multiple sources (impact fees and tax revenue). Stream Restoration and Stabilization As funding allows, the City has started inventorying and assessing streams on a Projects watershed basis to prioritize restoration and stabilization activities. NPDES MS4 Program Administration Phase II Small Community responsible for dry weather screening of all of the City's existing stormwater outfalls within a 5 -year period, monthly construction site stormwater runoff control (erosion and sediment control) inspections, post - construction stormwater plan reviews (DCM and similar), post -construction stormwater plan "as built" inspections, and municipal maintenance/good housekeeping inspections. Water Quality Monitoring The City currently funds two USGS Stations. BMP = Best Management Practice DCM = Drainage Criteria Manual USGS = U.S. Geological Society The City's Engineering Department is responsible for the following flood management and water quality - related functions and services: • NPDES MS4 permit compliance • Floodplain administration • Streamside protection • Stormwater quality and nutrient reduction • Design, bid, and construction management of drainage improvement projects 3-2 OCTOBER 2019 SECTION 3 — STORMWATER PROGRAM COSTS As an operator under the NPDES ARR040000 MS4 general permit, the City must comply with all permit conditions. Violation of any condition of the general permit constitutes a violation of the Arkansas Water and Air Pollution Control Act and subjects the discharger to the penalties specified therein. The Arkansas Department of Environmental Quality (ADEQ) issued a revised five-year permit, effective August 1, 2019, in order to renew general permit coverage for Phase II MS4s like Fayetteville. The level of effort and cost of ensuring compliance continues to increase with each subsequent permit renewal. For example, ADEQ has implemented a two-phase permit in order to be compliant with the federal general permit remand rule'. This makes the City's associated SWMP an integral and enforceable part of its permit, requiring public notice in the event of major modifications. As part of the recent MS4 permit renewal, ADEQ also made over 30 changes to the permit conditions that the City must integrate to ensure compliance going forward2. The City's NPDES MS4 permit conditions include six Minimum Control Measures (MCMs). The MCMs provide a framework for operators to design their programs to meet the three goals of reducing discharge of pollutants, protecting water quality, and satisfying the appropriate water quality requirements of the Clean Water Act (CWA). The six MCMs, or program elements, are as follows: • Public Education and Outreach on Stormwater Impacts • Public Involvement/Participation • Illicit Discharge Detection and Elimination • Construction Site Stormwater Runoff Control • Post -Construction Stormwater Management in New Development and Redevelopment • Pollution Prevention/Good Housekeeping for Municipal Operations Public education and outreach on stormwater impacts includes distributing educational materials and performing outreach to inform citizens about the impacts of polluted stormwater runoff on water quality. Public involvement/participation takes this a step farther by providing opportunities for citizens to participate in program development and implementation. Illicit discharge detection and elimination deals with both systematic and episodic discharges and includes public outreach as citizens should be informed of the hazards associated with illegal and improper disposal of waste. Construction site runoff control involves developing, implementing, and enforcing an erosion and sediment control program for construction activities that disturb 1 or more acres of land. Post -construction runoff control continues this process by implementing community -appropriate BMPs to reduce the impact of developments over their lifespan. Pollution prevention from municipal operations includes staff training on pollution prevention measures and it is the City's stated intention to "lead by example" and use this MCM to model excellent pollution control practices for Fayetteville citizens and businesses. The City is responsible for reviewing all new development plans for compliance with the City of Fayetteville Code of Ordinances and other applicable regulations. These regulations include, but are not limited to, the City of Fayetteville DCM and the flood damage prevention code. The City participates in the National Flood Insurance Program and has adopted a flood prevention ordinance in order to help protect residents and comply with the program. 1 For more information, see https://www.epa.gov/npdes/npdes-storniwater-final-ms4-general-permit-remand-rule for documents associated with the final MS4 general permit remand rule. 2 See,Section 1.10 of htti)s://www.adeg.state.ar.us/water/permits/npdes/stormwater/pdfs/ms4/arr04000O-final-fact-sheet-20190801.pdf. OCTOBER 2019 3-3 SECTION 3 — STORMWATER PROGRAM COSTS Streamside protection, stormwater quality, and nutrient reduction are also handled by the City's engineering department. A streamside protection ordinance is in effect and the City published a Streamside Protection BMP Manual to assist the public in complying with this ordinance. They also partner with the Watershed Conservation Resource Center (WCRC) and perform stream restoration projects. 3.2 Current Stormwater Program Costs The City currently spends approximately $1.3 million to $1.5 Table 3-3. Current Stormwater Program Costs million annually on water quality and flood management activities (Table 3- 3). Although the City does try to leverage grants and other sources, these activities are primarily funded by the Street Fund, General Fund, and Sales Tax Capital Improvements Fund. The Street Fund is used to maintain and repair City streets, ROWS, drainage, traffic control and maintenance, and City -owned sidewalks; portions are also allocated for public transit to Razorback and Ozark Transit systems. The Street Fund is primarily financed by turnback revenues received from the State of Arkansas and turnback monies received from the County Road Millage Tax, as well as a temporary gasoline tax levied by the State. The General Fund, the City's major operating fund, is sourced from over 10 different taxes, fees, and services. Over 80% of the revenue supporting the General Fund comes Department and Cost Center 2017 Engineering $460,000 Non -project -related labor (Floodplain Administration, Streamside Protection, and similar) $100,000 Stormwater Quality Management and Nutrient Reduction $160,000 Drainage Projects/Other $200,000 Parks & Recreation $25,000 Maintenance of public owned detention and stormwater quality features $25,000 Transportation Division $959,682 Drainage $697,101 Street Sweeping $262,581 Water & Sewer $13,759 Staffing - Inspections $1,207 Dam Inspection and Maintenance $12,552 Grand Total $1,458,441 from the City's Share of county sales Note: Drainage capital increased from $200,000 annually to $500,000 tax, the city sales tax, franchise fees, annually in 2018 for Engineering. and the property tax millage (Fayetteville, 2018b). The Sales Tax Capital Improvements Fund is sourced from the City's sales and use taxes and is used for acquisition and improvement projects as well as equipment additions and replacements that are included in the City's 5 -year CIP. Contributions to the stormwater program come from various departments including Engineering, Parks and Recreation, Transportation Division, and Water and Sewer. The current costs of the City's stormwater program, as of 2017, are summarized in Table 3-3. The City's Engineering Department is also responsible for the design, bid, and construction management of drainage improvement projects throughout the City. Projects are generally classified as small, medium, or large based on their cost. Small drainage projects are defined as less than $500,000; some examples include culvert replacement or size increase, curb or inlet construction, increasing inlet capacity, and creation of ditches or swales to divert runoff. Medium drainage projects are similar project types but are larger in scope and range from $500,000 to $1 million. Large drainage projects are those that would be 3-4 OCTOBER 2019 SECTION 3 — STORMWATER PROGRAM COSTS over $1 million and be implemented throughout entire watersheds. Projects this size have been considered previously but were deferred due to cost considerations. Maintenance is a combined effort between the City and the property owners. The Parks and Recreation Department maintains the 12 detention ponds as well as the parks in which many low -impact development (LID) features have been installed. However, the bulk of maintenance efforts for stormwater assets are addressed by the Transportation Services Department. The City maintains all public facilities, including above and below ground storm drainage. When needed, the City will address waterways located within the city limits by removing debris, sediments and other items that may inhibit effective conveyance of stormwater runoff. However, in many instances this maintenance activity dependent on the existence of a drainage easement surrounding the structures and waterways in question. If no drainage easement exists or if the portion of the storm drainage system is private, it becomes the responsibility of the property owner or owners to maintain that portion of the system. This is also applicable for stormwater detention basins as the maintenance responsibility is placed on the property owner or in some instances the Property Owner's Association. The Water and Sewer Department is responsible for inspections including dam inspection and maintenance on the three major lakes in Fayetteville (Lakes Fayetteville, Sequoyah, and Wilson). 3.3 Extent of Service and Level of Service Analysis Future stormwater program costs are based on a range of options for both EOS and LOS (Table 3-4). The EOS defines where the City will work or, in other words, what drainage infrastructure the City will be responsible for. The LOS defines what stormwater services the City would provide and at what frequency. These services generally fall into categories such as 0 & M, regulatory compliance, engineering and planning, and capital improvement planning. Three initial options were provided for both EOS and LOS—Routine, Proactive, and Enhanced—ranging from the least to the most involved. Having a range of potential EOS and LOS options will allow the City to characterize potential tradeoffs between the cost of these services and its financial capacity. Programmatic cost estimates are tabulated for these options in later sections while a blended option of Standard/Proactive was added later in the Funding Study. Table 3-4. Overview of Initial Extent of Service and Level of Service Options Likely Time Cost Option Frame' Purpose of Option Current Characterize existing conditions, that is, what drainage services the City provides and where for the current program costs $ Standard 20 years Characterize the cost to address unintended inequities in the City's current drainage services $$$ Proactive 10 years Characterize the cost of additional public responsibility of private infrastructure and to estimate the cost of additional unfunded regulatory compliance if the City continues to grow in population $$$$$ Enhanced S years Characterize the cost of additional public responsibility of private infrastructure. Estimate the cost of additional unfunded regulatory compliance if the City continues to grow in population ' Time frame to address backlog of drainage projects and meet Flood Management and Water Quality goals Financial planning and rate analysis, described in Section 4, follows an iterative process to help the City identify the right balance of stormwater services, given its financial capacity and Stakeholder priorities. OCTOBER 2019 1-5 SECTION 3 - STORMWATER PROGRAM COSTS 3.3.1 Extent of Service Although the current ECS has been implemented fairly consistently, some areas of the City do not have drainage easements simply due to the age of the development, while others are adjacent to larger waterways or drainage conveyances that are not realistic to maintain privately. Table 3-5 outlines the City service areas and dictates which service areas would be addressed by each ECS. Table 3-5. Extent of Service Options Service Area Current Standard (Option A) Proactive (Option A/B and B) Enhanced (Option C) Public Roads and ROW X X X X Private infrastructure connected to Public ROW' X X Drainage Easements Existing X X X X Assume Easements Equitably (City-wide) X X X Detention Pondsb Public X X X X Residential X X Non -Residential X City Streamside Corridor`- X a Public maintenance would extend to the downstream end of the first private infrastructure connected to the ROW. b. Donated easement and a brief report certified by a licensed Arkansas Professional Engineer demonstrating that all private drainage features are functioning according to the specifications of the City's DCM prior to being accepted by City. A corridor representing a 10 -foot buffer from the top of each waterway's banks downstream of the City's 100 -acre headwater for streamside protection areas. 3-6 OCTOBER 2019 SECTION 3-STORMWATER PROGRAM COSTS 3.3.1.1 Current Extent of Service Figure 3-1 illustrates existing conditions in which the City maintains public roads and ROWS as well as drainage features (excluding detention ponds) within dedicated easements. These dedicated public easements are generally found in the more recently developed areas of the City. Figure 3-1. Current Extent of Service 1. Public roans and rights of �,ay. and 3. Drainage features (excluding private detention ponds)Atthin dedicated public easements. 3. Currently public easements are required when greater than 4 private lots, approximately an acre. of a subdivision drain to a single point. Older developments may not have required easements. There dedicated pablic easements afo generaffy found in t17e more recently developed anaas ofthe Otty. Drew �Yfi �Ih VMM p o Study for Flood Management and Water Quafity Pundmi; L OCTOBER 2019 3-7 SECTION 3—STORMWATER PROGRAM COSTS 3.3.1.2 Standard Extent of Service (Option A) Current EOS plus public maintenance of those private drainage features found within what would now be designated a public drainage easement but not for the age of the development (Figure 3-2). Private property owners would be expected to: • Donate these new drainage easements to the City on an as needed basis • Provide a brief report certified by a licensed Arkansas Professional Engineer demonstrating that all private drainage features are functioning per the specifications of the City's drainage criteria manual prior to being accepted. Alternately, should the City decide to proceed with implementation, the City may assess the cost and legal implications of allowing City staff to perform these certifications for private property owners. Figure 3-2. Standard Extent of Service (Option A) Prior lin Cnv ac-N—,.Mo ,Wv. the ortyye 1 Narrate a IrAmr r eascanwitto V* oty as neeAcd, P'M-die a kv>et rewn uft4t*a W an AR-kcow £ r�Nesswnar Enga+ero z3Et Ung lt'ai a9 pma* aeatrsage bsV.l are "Tto" P& 1* srecft"ns t t. Public roads, public detention ponds and rights of wary. and 2 Drainage features (excluding private detention ponds) within dedicated public easements. 3. City would assume public maintenance of those private drainage features found within what would now be designated a public drainage easement but nut for pre age of the development 3-8 OCTOBER 2019 SECTION 3 — STORMWATER PROGRAM COSTS 3.3.1.3 Proactive Extent of Service (Option A/B and B) The proactive EOS alternative, referred to later as "Option A/B and B," includes the standard EOS plus the City would establish a process for accepting public maintenance responsibilities of private residential detention ponds as needed (Figure 3-3). Private property owners would be held to the same expectations as the standard EOS. re 3-3. Proactive Extent of Service (Option A/B and Poo* tri Cesv ace�sanu r�satnesNb{i3N, }$ryrc{7Y 15'Xttti IPFLL1[: • DsRRare � %F (,riYErtl4Nt iyp `ADg P lova 2 d �er repod i'N: lea v, an 06T4r4V%VV MM 0 arae dfVQ hrowtv to V* speaftailwa Of Uii8lki fit.YtU31. I Standard EOS, addi@onaRy public maintenance would extend to the downstream end of the first private Infrastructure connected to the public system H2 Drainage features (excluding private commercial detention ponds) Within dedicated public easements- 3 City would establish a process for accepting public maintenance responsibilities at private residential dolentron ponds. Study far flood Management and Water Quality funding ` OCTOBER 2019 3-9 SECTION 3-STORMWATER PROGRAM COSTS 3.3.1.4 Enhanced Extent of Service (Option C) Includes the proactive EOS described previously, plus public maintenance of commercial detention ponds and those waterways downstream of the City's 100 -acre headwater for streamside protection areas with public responsibility extending out approximately 10 feet from the top of the waterway's banks (Figure 3-4). Private property owners would be held to the same expectations as proactive EOS. Figure 3-4. Enhanced Extent of Service (Option C) P -Q, to t;+ty atone,,, ,t t ir}yntrt* ty, rhe cxtvate , xoem W • ironaDe a 3rae+x aa,enx�x to U* cny, as *e+ow, ; r',xwI- a bfxd �M cua4E11d b� .1,4R-Ksys�5 PE x$M Uawv Cel. a VwX3 *,aw 5 e r0xwes 3'A ` tAm,mr.; W Eh9 SwitT.lfom A t�e rut{5 d W Wge c.n." `1i W—Pp. 1, Proactive EOS, and 2 City would establish a process for accepting public maintenance responsibilities of private residential and commercial detention ponds. and Public maintenance of the approximately 100 miles of waten4ays downstream of the City's 100 acre headwater for streamsatfe WJJW protection areas, public responsibility would extend out approximately 10 feet from the torp of the waterway's Banks 3.3.2 Level of Service The LOS dictates what stormwater services would be provided by the City and at what frequency. These services, listed by option in Table 3-6, are generally distributed among four categories: O & M, regulatory compliance, engineering and planning, and stormwater CIP. After additional Stakeholder feedback, Option A/B was added to characterize the financial impacts of the Option B EOS with the Option A "standard" frequency of maintenance and time frame for CIP. 3.3.2.1 Current Level of Service Table 3-6 outlines the stormwater services provided for a current LOS. These are the services that are currently provided by the City. O & M services are primarily reactionary, drainage calls are responded to and resolved, and public detention ponds are inspected and maintained at a minimum level. The current LOS does not cover inspection and maintenance of private residential or commercial ponds. Regulatory compliance actions include administration of the NPDES MS4 program as well as water quality monitoring and inspections that meet regulatory minimums. Program elements related to engineering and planning are limited for the current LOS (Table 3-6). Dam safety studies are performed, as are a limited number of drainage studies, stream and watershed assessments, and floodplain studies. Low impact development retrofits are not addressed at this LOS. Capital improvement projects are limited by 3-10 OCTOBER 2019 SECTION 3—STORMWATER PROGRAM COSTS funding. At this LOS, a limited number of drainage improvements, watershed improvements, and dam safety upgrades are performed but many larger stormwater improvement projects are not feasible. Table 3-6. Level of Service Options OCTOBER 2019 3-11 Standard Proactive Enhanced Program Elements Current (Options A and A/B) (Option B) (Option C) Operations and Maintenance' Respond to Drainage Calls Xb. X X X Provide Resolution to Drainage Call Xb. 45 days 30 days 2 weeks (No Action, Routine Fix, CIP Fix, or Drainage Study) Inspection and Routine Maintenance of Public X` Annually Annually Annually Detention Ponds Inspection and Routine Maintenance of Private 1S% Annually 2S% Annually 50%Annually Residential Ponds Inspection and Routine Maintenance of Private 25% Annually Commercial Detention Ponds Inspection and Routine Maintenance of Public Reactive` 20% Annually 25% Annually 50%Annually Drainage System/MS4 Regulatory Compliance NPDES MS4 Program Administration Phase II Phase II Small Phase II Medium Phase II Medium Small Water Quality Monitoring Two USGS Two USGS Stations Four USGS Four USGS Stations Stationed Stations d. Dry Weather screening of existing stormwater 20% 20% Annually 50% Annually 100% Annually outfalls Annually (Compliance goal = Screen all outfalls every S years) Construction Site Stormwater Runoff Control Monthly Monthly Biweekly Biweekly (Erosion and Sedimentation Control) Inspections Post Construction Stormwater Plan Reviews (DCM X X X X and similar) Post Construction Stormwater Plan "As Built" X X X X Inspection Dam Safety Inspections X` X X X Municipal Maintenance/Good Housekeeping Annually` Annually Two per Year Two per Year Inspections OCTOBER 2019 3-11 SECTION 3 —STORMWATER PROGRAM COSTS Table 3-6. Level of Service Options a.O & M to address both the drainage and water quality criteria of the City DCM b. Where public drainage easements exist to legally allow the City to work on private property Meeting regulatory minimum, frequency limited by current City resources (funding and staff) d. Additional monitoring points may be required under a Phase II Medium permit and/or due to Total Maximum Daily Load monitoring of the Illinois River. e. After additional analysis of potential costs and input from City Stakeholders, the CIP completion rate was later increased modestly for Option B from 10 years to the 15 years 3-12 OCTOBER 2019 Standard Proactive Enhanced Program Elements Current (Options A and A/B) (Option B) (Option C) Engineering and Planning Drainage Studies Limited Prioritize basins, Prioritize basins, City-wide 10% of City studied 25% of City Drainage Study annually studied annually Stream and Watershed Assessments Limited Prioritize basins, Prioritize basins, City-wide 10% of City studied 25% of City Watershed annually studied annually Assessment, including Stream Condition Assessment Floodplain Studies Limited As Needed As Needed As Needed LID Retrofits Limited As Prioritize and Redevelopment implement Occurs retrofits based on Drainage Studies Dam Safety Studies X X X X Stormwater CIP Components 10 Year 5 Year CIP Project Completion Rate Limited 20 Year Potential CIP Project Types: Drainage Improvements/Retrofits Limited X X X (Pipe Replacements, Neighborhood Systems) Floodplain Buyouts or Improvement/Elevation X X X Projects Large-scale regional detention projects X X Watershed Improvement, that is, Stream Limited X X Restoration and Stabilization Projects Dam Safety Upgrades Limited X Detention Pond Retrofits X X a.O & M to address both the drainage and water quality criteria of the City DCM b. Where public drainage easements exist to legally allow the City to work on private property Meeting regulatory minimum, frequency limited by current City resources (funding and staff) d. Additional monitoring points may be required under a Phase II Medium permit and/or due to Total Maximum Daily Load monitoring of the Illinois River. e. After additional analysis of potential costs and input from City Stakeholders, the CIP completion rate was later increased modestly for Option B from 10 years to the 15 years 3-12 OCTOBER 2019 SECTION 3 - STORMWATER PROGRAM COSTS 3.3.2.2 Future Level of Service Options Three future LOS options were considered including Options A and A/B (standard), Option B (proactive), and Option C (enhanced). Each LOS alternative provides an increase to the baseline LOS currently provided, see Table 3-6. The frequency of several program elements would remain constant for each LOS. These include responding to drainage calls, post -construction plan reviews and "as built" inspections, and dam safety inspections and studies. However, the LOS options provide a framework for program elements to be transitioned from reactionary to scheduled. O & M activities could become more preventive in nature and greater numbers of water quality control efforts could be implemented. Table 3-6 illustrates that increases in LOS would allow the City's Engineering and Planning Departments to play a much larger role in the stormwater management program. Currently, studies of drainage, streams and watersheds, and floodplains are limited. The three new levels of service would allow for portions of the City, or even the City as a whole, to be studied with the added benefit that the new information facilitates appropriate use of future capital improvement funds. 3.3.3 EOS/LOS Program Cost Estimates Feedback on these three EOS/LOS options was solicited from Stakeholders and Council members through a series of meetings regarding what should be included in each option. The three alternatives for EOS and LOS have different associated costs, which increase over time. Programmatic cost estimates were generated and projected forward over a S -year time frame and are provided in Tables 3-7 and 3-8 or, with respect to capital improvement components, in Section 3.4. The programmatic costs for O & M are based on the services needed for the current stormwater system, as quantified in Table 3-1. Costs for responding to drainage calls and resolving them as well as inspecting and maintaining detention ponds are consistent for Option A, Option B, and Option C services. However, the 0 & M costs for Option A/B were adjusted to reflect the City taking care of private, residential detention ponds. 0 & M costs were estimated based on several factors including: quantity of various assets, frequency of maintenance, and the required time and personnel to complete maintenance. Salary schedules were used to obtain costs from the annual number of labor hours required for various maintenance levels. O & M costs also include construction materials such as new conduit and annual operating costs for equipment such as trucks, excavators, and trailers. Equipment operating costs were based on unit prices provided by the Transportation Division. Engineering and planning programmatic costs consist of staffing costs for inspection and engineering services as well as the cost of contracted studies. Inspection costs span various aspects of the program and include: • Dry Weather Screening • Construction Site Inspection • Building Safety EC Inspections • Inspection of MS4 Facilities • Illicit Discharge Detection • Inspection of Public and Private Detention Basins • Dame Safety Inspections • MS4 Reporting Each EOS/LOS involves an increased number of facilities requiring inspection and increased frequencies of inspection which are detailed in the previous sections. Engineering services include the costs for engineering work on drainage studies, stream and watershed assessments, and LID retrofits, as well as the cost of managing contracted studies in these areas. The cost of contracted studies varies between OCTOBER 2019 3-13 SECTION 3 — STORMWATER PROGRAM COSTS the LOS options depending on who is performing the work. The City would self -perform 5% of the prioritized studies for both a standard and proactive LOS. For a standard LOS, 5% of them would be contracted annually, and 20% would be contracted annually for a proactive LOS. The enhanced LOS involves City-wide studies, which would be 100% contracted. Approximate costs for contracted stream and watershed assessments were determined based on previous WCRC projects. The programmatic costs for Regulatory Compliance are based on the size of stormwater program. Section 3. 2 describes how the program is considered to be Phase II Small for the baseline and standard EOS/LOS. This is upgraded to Phase II Medium for the proactive and enhanced EOS/LOS to reflect the possibility of continued population growth. The MS4 permit cost and cost per USGS station were held constant for this cost estimate. The cost for the standard EOS/LOS was assumed to be the same as the Baseline. For the remaining sources of Regulatory Compliance cost, the costs were scaled up for each EOS/LOS. These sources include staff time charged to program administration, partnerships with the University of Arkansas Cooperative Extension Service, the Illinois River Watershed Partnership, and the Beaver Watershed Alliance for public outreach and education, and natural stream restoration maintenance through the WCRC. Table 3-7 provide 5 -year projections of cost of each EOS/LOS alternative; these projections assumed a 3% annual rate of increase. Table 3-7. Programmatic Costs by EOS/LOS Option Option A (Standard EOS/LOS) Year 1 Year 2 Year 3 Year 4 Year 5 Operation and Maintenance $1,630,000 $1,678,900 $1,729,267 $1,781,145 $1,834,579 Engineering and Planning $290,000 $298,700 $307,661 $316,891 $326,398 Regulatory Compliance $193,000 $198,790 $204,75 $210,896 $217,223 Option B (Proactive) Year 1 Year 2 Year 3 Year 4 Year 5 Operation and Maintenance $2,190,000 $2,255,700 $2,323,371 $2,393,072 $2,464,864 Engineering and Planning $799,000 $822,970 $847,659 $873,089 $899,282 Regulatory Compliance $333,000 $342,990 $3S3,280 $363,878 $374,794 Option C (Enhanced) Year 1 Year 2 Year 3 Year 4 Year S Operation and Maintenance $3,860,000 $3,975,800 $4,095,074 $4,217,926 $4,344,464 Engineering and Planning $2,250,000 $2,317,500 $2,387,025 $2,458,636 $2,532,395 Regulatory Compliance $333,000 $342,990 $353,280 $363,878 $374,794 Note: Refer to Section 3.4 for stormwater CIP components. 3-14 OCTOBER 2019 SECTION 3—STORMWATER PROGRAM COSTS 3.4 Programmatic Stormwater Capital Improvement Plan Historically, the City has budgeted $200,000 per year to address design and construction of drainage projects. As discussed in Section 1.2.2, the high demand for drainage projects revealed by the 2017 flooding prompted the City Council to approve an increase for the 2018 drainage improvement budget to $500,000. For 2018, the City has used this increased budget to address seven drainage improvements projects (listed in Table 3-8). These costs do not include labor costs for maintenance projects or the capital costs for projects that need additional flood studies. Section 1.2.3 describes the 2019 Bond Program, which funds a $15 million Early Action Plan of flood mitigation and drainage improvement projects (larger than $200,000). However, the increase in 2018 funds to $500,000 along with the $15 million bond are anticipated to be insufficient to address many of the stormwater improvements identified, particularly with respect to large-scale, City-wide studies and improvements. Table 3-8 summarizes the current and future CIP program elements considered for the Funding Study. Table 3-8. Stormwater CIP Program Elements by Option Program Elements Current Option A and A/B Option B Option C CIP Project Completion Rate Limited 20 Year 10 Year a. 5 Year Potential CIP Project Types: $9,844,000 Drainage Improvements/Retrofits (pipe replacements, neighborhood systems) Limited X X X Floodplain Buyouts or Improvement/Elevation Projects X X X Large-scale Regional Detention Projects X X Watershed Improvement, that is, Stream Restoration & Stabilization Projects Limited X X Dam Safety Upgrades Limited X Detention Pond Retrofits X X Note: a After additional analysis of potential costs and input from City Stakeholders, the CIP completion rate was later increased modestly for Option B from 10 years to the 15 years Table 3-8 was used to develop a budget for capital improvement projects for the EOS/LOS options. In addition to these program elements, the capital cost of equipment used for 0 & M and the cost of completion for projects identified by drainage studies were included in the budget for each option. Once the budgets were compiled, the total cost was annualized by the project completion rates listed previously to generate a yearly cost for each LOS (Table 3-9). Table 3-9. Initial Capital Improvement Program Costs by Option OCTOBER 2019 3-15 Option A and A/B (Standard) Option B (Proactive) Option C (Enhanced) Total Programmatic Cost $22,813,000 $46,046,000 $49,217,000 Annual Average Programmatic Cost $1,141,000 $4,60$,000 $9,844,000 OCTOBER 2019 3-15 SECTION 3-STORMWATER PROGRAM COSTS After additional analysis of potential costs and input from City Stakeholders, these options were narrowed to Options A/B and B. Concurrently, the CIP completion rate was increased modestly for Option B from 10 years to the 15 years noted in Table 3-10. Table 3-10 provides these final CIP costs by project type prior to excluding the $15 million budged for the Early Action Plan and funded by 2019 Drainage Bond. O & M costs are not eligible for Bond funding. Table 3-10. Final Capital Improvement Program Total Costs by Option 3-16 OCTOBER 2019 Option A/B (Standard) Option B (Proactive) CIP Project Completion Rate (years) 20 15 CIP Project Types Total Budget % of Total Total Budget % of Total Drainage Improvements $26,693,450 77% $26,693,450 4S% Flood Plain Buyouts/Elevation Projects $1,750,000 5% $ 2,500,000 4% Operation and Maintenance Equipment (startup) $1,654,000 5% $1,885,500 3% Projects identified by drainage studies $ 2,500,000 7% $5,000,000 8% Large-scale Regional Detention $15,000,000 25% Watershed Improvement/Stream Restoration $2,000,000 6% $ 2,500,000 4% Detention Pond Retrofits $ 5,500,000 9% Totals (rounded) $ 34,598,000 $59,079,000 Minus FY2018 Funding ($500,000) ($500,000) Minus 2019 Bond Funding ($15,000,000) ($15,000,000) Net Total CIP Needs (rounded) $19,100,000 $43,600,000 3-16 OCTOBER 2019 SECTION 3—STORMWATER PROGRAM COSTS 3.5 Final Future Program Costs by Option As discussed previously, program costs were developed for each option and refined for Option A/B and Option B. Table 3-11 and Figure 3-5 present these costs (in 2018 dollars) for each aspect of the program along with a total programmatic cost for each both EOS/LOS options. Table 3-11. Final Future Program Costs by Option Figure 3-5. Final Future Program Costs by Option $3,500,000 __ __._.. ......... $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Operation and Maintenance Engineering and Planning Regulatory Compliance Stormaater CIP Components ■ Current ■ Option A/B w Option B '1 Administrative - OCTOBER 2019 3-17 Current %of Total Option A/B (Standard) % of Total Option B (Proactive) %of Total Operation and Maintenance $998,441 68% $2,623,000 58% $2,982,000 38% Engineering and Planning $67,000 S% $201,000 4% $638,000 8% Regulatory Compliance $193,000 13% $351,000 8% $638,000 8% Stormwater CIP Components $200,000* 14% $954,900 24% $2,905,267 42% Administrative $286,000 6% $315,000 4% Total $1,458,441 $4,415,900 $7,478,267 Figure 3-5. Final Future Program Costs by Option $3,500,000 __ __._.. ......... $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Operation and Maintenance Engineering and Planning Regulatory Compliance Stormaater CIP Components ■ Current ■ Option A/B w Option B '1 Administrative - OCTOBER 2019 3-17 SECTION 3-STORMWATER PROGRAM COSTS 3.6 Preliminary Organizational Structure There are many ways that the City could integrate a Flood Management and Water Quality fee program into its current organization structure, ranging from a new stormwater organization to a matrixed organization that leverages existing resources and sharing of expertise between City departments. The City has indicated its preliminary interest in a matrixed approach (Figure 3-6), using existing departments and divisions. The Engineering Department, housed under Development Services, would lead the implementation of a Flood Management and Water Quality fee if the City decides to proceed. Engineering staff provide technical review and support for all private development including the technical review of compliance with the City's water, sanitary sewer, street design, grading, and stormwater runoff standards and ordinances. It also supports of the Planning Department and Planning Commission at the development review meetings. The Engineering Division is responsible for the following: • Providing design and project management for City infrastructure projects • Reviewing development proposals for compliance with city criteria such as water, sewer, streets, drainage, grading, and other technical requirements • Managing the planning, design, and permitting of trails projects and oversees construction of trails by the Transportation Division or private contractors. • Assisting in the acquisition and sale of City property, ROWS, easements, and similar • Managing miscellaneous stormwater and water quality initiatives • Ensuring compliance with the City's NPDES Stormwater Permit issued through ADEQ and its floodplain regulations 1 18 OCTOBER 2019 SECTION 3—STORMWATER PROGRAM COSTS Figure 3-6. Potential Future Organizational Integration Naar Employee Front tine Employee Fnt;(nrering ', Chri: brown _.i DeJNopnrnt & Stuim En yuim Consiruc;�on tk std ' lonstnm W � to rTE) Rwmwaler +*spM 19 fi ETEI Transponetwn Servkea � I no -n oo..aeam 1 ? VtiAty FtndncW7 5Elvict5 myraph'c Infor�nat•en '. r.n Creryl Pattaln n k iw.f[ Engnaw Lt en i Grey Rest Eieift OP ateona CFI MCvottt MU (05 Ffn GIS Fn lylt (0 FTS SYPem1ar r.LStU(Ma YrrY3YE 1 err t.aa.r lt�re;�ta�Ne Naar Employee Front tine Employee Fnt;(nrering ', Chri: brown _.i DeJNopnrnt & Stuim En yuim Consiruc;�on tk std ' lonstnm W � to rTE) Rwmwaler +*spM 19 fi ETEI Transponetwn Servkea � I no -n oo..aeam 1 f K 'th SA v Se.. Gtem k iw.f[ Engnaw Lt en i Eieift OP ateona (05 Ffn SYPem1ar Str� eec 5`weepinq. 1 err t.aa.r ..w 5t:Rf Eayinenr -r . 1 YiildU � f: i L Vnikenia]IO.S ifft OCTOBER 2019 3-19 SECTION 4 Financial Planning and Rate Analysis The Financial Planning and Rate Analysis followed an iterative process to help the City identify the right balance of stormwater services, given its financial capacity and Stakeholder priorities. Financial planning for developing a stormwater utility is typically an iterative process that includes both a "top down" and "bottom up" evaluation. The "top down" component focuses on what it would actually cost to deliver the anticipated LOS, and the "bottom up" component typically focuses on what customers are willing to pay. A sound financial planning process that considers all relevant revenue sources is critical to rate setting, because the level of revenues required from user fees should consider the projected revenues available from other revenue sources. This financial planning must support the correlation between the cost of service and the relative burden of an individual property on the stormwater system in order to develop a defensible recommended fee. Therefore, the financial planning activities are usually conducted in parallel with the development of the final LOS/EOS and rate structure evaluation to identify an overall fee and financial plan that supports the goals for improving stormwater management and is acceptable to key Stakeholders. 4.1 Alternative Funding Sources There are several types of funding sources that can be used for drainage services, which may include one or more ad valorem taxes, grants, loans, and/or user charges. Stormwater programs often depend on mix of other funding sources beyond a potential drainage fee or general fund sourced from tax revenue. For example, some capital projects may qualify for federal or State grant funding; as another example, plan review and inspection fees or other special fees may be used to cover some program - related activities. A number of utilities secure State revolving fund loans to pay for capital projects that merit such long-term funding. For the 2019 Drainage Bond, the City is using a revenue bond, which consist of municipal bonds secured by a specified revenue source. Use of these other funding sources can increase the LOSS offered by a stormwater program because the stormwater user fees are employed to pay the annual debt service rather than the upfront capital expenditure costs. The City's current drainage program is primarily funded by the Street Fund, General Fund, Sales Tax Capital Improvements Fund, and the intermittent issuance of revenue bonds. However, due to the increasing and competing demands for these limited funds, the City recognizes the need to identify other dedicated and equitable funding sources to sustainably support its future drainage needs. The City's 2010 Feasibility Study reviewed a series of alternative funding sources and generally eliminated additional funding from the following other long-term funding sources due to the reasons noted as follows and summarized in Table 4-1: • Millage from Property Taxes — Not equitable because tax exempt organizations do not pay for the management of the stormwater they generate. Not a stable, dedicated funding source. Sales Taxes — No direct relationship with the amount of stormwater management needed nor dedicated specifically to drainage needs. Taxes can also be politically difficult to increase and can vary from year to year. OCTORI R 2019 4-1 SECTION 4 — FINANCIAL PLANNING AND RATE ANALYSIS Similarly, the following supplemental funding sources were found to be inadequate for the City's future needs: • Special Assessments — Typically used to fund public works associated with specific properties and for a specific purpose, as opposed to the long-term O & M of a system. • Developer trust funds — Typically only successful when associated with a new development's desire to be annexed into a community. Because these funds cannot be retroactively applied to existing developments, these trust funds can raise the cost of new construction, while their revenue potential is limited to new development. • Impact Fees — Use of revenue from impact fees on new construction is limited to new facilities that serve those paying the fee and cannot be used to retrofit existing infrastructure unless it is redeveloped and must go through the City's permitting process. The amount of revenue from impact fees is directly related to the rate of new development and thus vary from year to year. • Low Interest Capital Funding — Sometimes offered by various agencies; however, these typically fund short-term capital projects and not long-term O & M needs. • Bond Financing of Capital Projects — Used for capital projects with the potential to generate new revenue. However, the revenue stream must first be established and proven prior to bonds being issued. • Grants — Offered by various agencies such as the U.S. Environmental Protection Agency and the U.S. Department of Agriculture. Although useful for specific projects, the grant amounts are typically not sufficient to fund long-term O & M needs, and the administrative requirements can be burdensome for local communities. Table 4-1. Summary of Alternative Funding Sources 4-2 OCTOBER 2019 Equitable Flexible Can provide adequate funds? Data/ Administrative Complexity Use of Funds Stormwater User Fee Yes Yes Yes High City-wide Millage from Property Taxes Yes Low City-wide Sales Taxes Yes Low City-wide Special Assessments Yes Medium Project -specific, not for O & M Developer trust funds Medium Project -specific, not for O & M Impact Fees Yes Medium Project -specific, not for O & M Low Interest Capital Funding Yes Project -specific, not for O & M Bond Financing of Capital Projects Yes High Project -specific, not for O & M Grants High Project -specific, not for O & M 4-2 OCTOBER 2019 SECTION 4 — FINANCIAL PLANNING AND RATE ANALYSIS 4.2 Basis of Proposed Fee Estimates IA was selected as the basis of the fee because it increases the amount of water entering the drainage system and waterways, which can then increase the chance of flooding, stream bank erosion, and sedimentation. Runoff from IA also carries pollutants that can impact water quality, such as sediment, sand, fuel from spills and leaks of vehicles, herbicides and pesticides, detergents, metals, and bacteria from pet waste. It is an equitable basis for a fee for services since larger, developed properties tend to have larger amounts of IA which generates a greater volume of runoff. More runoff requires more drainage infrastructure, which necessitates additional O & M as well as the long-term capital costs of repair and replacement. Put simply, larger developments and homes with corresponding parking and driveways create a greater need for stormwater services. To determine the revenue potential of a user fee program, accurate spatial data is needed to calculate individual user fees based on IA and property boundaries and to determine the number of billing units, while other attributes such as ownership, billing, and service addresses (if different) are needed to generate a customer billing database. The City's Geographic Information System (GIS) Department performed a preliminary spatial analysis of: • The number of properties within the City • The amount of imperviousness (buildings, driveways, and similar) by parcel/property • Their distribution by customer class The Funding Study team then reviewed of distribution of IA by parcel boundary and customer type (Table 4-2) to identify an equitable billing unit and whether a tiered rate structure would be appropriate. Due to the historical expense of mapping all the IA within a local governments service area, many entities adopted an "equivalent residential unit" (ERU) billing unit based on statistical sample of the median impervious area of single-family residential properties. For the City, the ERU based on all 18,974 single family parcels would be approximately 3,500 square feet (SF) of IA. Table 4-2. Parcel Count and Impervious Area by Customer Class Customer Class Parcel Count Total IA (SF) Average IA (SF) Median IA (SF) Maximum IA (SF) All Properties 25,690 235,940,932 9,184 3,425 2,325,502 Single -Family 18,974 76,451,588 4,029 3,466a 90,954 Multi -Family 3,059 36,724,982 12,006 3,734 521,127 Non -Residential 2,943 98,178,891 33,360 12,819 2,325,502 Public School 68 5,002,386 73,565 14,188 530,925 Religious 206 4,589,749 22,280 8,353 428,155 University 440 14,993,336 34,076 7,265 1,210,092 a Based on a preliminary GIS analysis by City staff; minimum mapping unit of data is 100 SF. Figure 4-1 illustrates this comparison and why IA serves as an equitable representation of the cost of providing these services. This avoids the multiple issues generated by using a flat rate based on customer or meter type. For example, if the City adopted a program similar to the City of Bryant, Arkansas (bills based a monthly flat fee of $3 for residential utility account holders and $6 for OCTOBER 2019 4-3 SECTION 4 — FINANCIAL PLANNING AND RATE ANALYSIS commercial and industrial accounts), which is closer to parcel count distribution on the left, there would be an inequitable "disconnect" between the cost of services and fee/charge paid by the customer for these services. Figure 4-1. Distribution of Parcel Count versus Impervious Area Number of Parcels II Impervious Area (sq. ft.) Public School. Religious -University moo. ,e. i 2% Publi University Religious 6% Customer billing equity was further assessed by comparing the percent distribution of billing units by customer class using an ERU method versus a tiered method to illustrates the distribution of potential costs (Table 4-3). It shows the potential for non-residential and multi -family residential properties (shaded light gray) to subsidize the cost of providing single family residential stormwater services under an ERU billing unit method. A six -tier billing unit method, using a rate expressed as cost per Table 4-3. Comparison of Billing Unit Distribution by Customer Class 1,000 SF of IA, was found to most closely equate to the distribution of actual IA and therefore could best serve to avoid inter -customer class subsidies. Therefore, a tiered rate structure, shown in Table 4-4, with no customer class distinction was selected to balance equity with ease of administration. Most properties pay based on tier assignments where the fee is based on middle value of the range divided by 1,000 SF. For example a property assigned to Tier 3 (more than 3,500 and less than or equal to 5,000 SF) pays based on 4.25 billing units (4,250/1,000). For those properties with imperviousness greater than 8,000 SF, the owner would pay based on actual impervious area divided by 1,000 SF. For example, a property with 10,000 SF pays based on 10 billing units (10,000/1,000). 4-4 M fORFR 7019 Parcels Total IA ERU Method (1 ERU = +/-3,500 SF of IA) Tier Method (1 Billing Unit = 1,000) Single -Family 74.6% 34.8% 34.8% Multi -Family 11.6% 15.6% 16.6% 15.6% Non -Residential 11.2% 39.2% 41.8% 39.2% Public School 0.2% 2.1% 2.3% 2.1% Religious 0.8% 1.9% 2.1% 1.9% University 1.6% 6.4% 6.8% 6.4% property assigned to Tier 3 (more than 3,500 and less than or equal to 5,000 SF) pays based on 4.25 billing units (4,250/1,000). For those properties with imperviousness greater than 8,000 SF, the owner would pay based on actual impervious area divided by 1,000 SF. For example, a property with 10,000 SF pays based on 10 billing units (10,000/1,000). 4-4 M fORFR 7019 4.3 Financial Planning Assumptions Using the tier structure presented in Table 4-4, the Funding Study then assessed a series of financial planning scenarios and narrowed them down to the following two based on feedback from the City: • Scenario 1 reflects rates with the continuation of current funding ($1.5 million) from the City budget. Scenario 2 represents a stand-alone program without the current funding from City budget. Assumptions include: • Staging over a 5 -year period to allow adequate time for the City to implement an enhanced program SECTION 4 — FINANCIAL PLANNING AND RATE ANALYSIS Table 4-4. Proposed Tier Structure (Applies to All Properties) Tier Tier Range (SF) Property Count Billing Units 1 52,000 2,196 2,745 2 >2,000 and 5 3,500 9,602 26,406 3 >3,500 and 5 5,000 6,491 27,587 4 >5,000 and 15 6,500 2,644 15,203 5 >6,500 and 15 8,000 1,093 7,924 6 >8,000 3,664 156,095 Total 25,690 235,960 • A reduction in CIP costs, reflecting an Early Action Plan of projects being funded by the 2019 Drainage Bond (http://www.fayetteville-ar.gov/3713/Drainage-Projects) • A baseline credit/rebate program to encourage BMPs that will modestly reduce potential revenue Assumptions do not yet include: • Reductions in revenue due to the potential for bad debt • Increases in revenue due to new/infill development As noted previously, Option A/B was added to characterize the financial impacts of the Option B EOS with the Option A "routine" frequency of maintenance and time frame for CIP. After additional Stakeholder feedback, the City chose to narrow the EOS/LOS options to those that could be realistically implemented by a reasonable rate structure (Options A/B and B). Table 4-5 presents the monthly Flood Management and Water Quality fee estimates for these two options by tier and scenario based on the assumptions stated previously. 0106ER 2019 4-5 SECTION 4 - FINANCIAL PLANNING AND RATE ANALYSIS Table 4-5. Monthly Fee Estimates by Tier and Scenario Scenario 1: With Current Funding from City Budget Tier Range A/B Monthly Fee (Standard) B Monthly Fee (Proactive) Tier 1 (0 and 2,000) $1.60 $3.23 Tier 2 (2,000 and 3,500) $3.52 $7.10 Tier 3 (3,500 and 5,000) $5.44 $10.97 Tier 4 (5,000 and 6,500) $7.36 $14.84 Tier 5 (6,500 and 8,000) $9.28 $18.71 Tier 6 (over 8,000) $1.28/1000 SF $2.58/1000 SF Scenario 2: Without Current Funding from City Budget Tier Range A/B Monthly Fee (Standard) B Monthly Fee (Proactive) Tier 1 (0 and 2,000) $2.31 $3.94 Tier 2 (2,000 and 3,500) $5.09 $8.66 Tier 3 (3,500 and 5,000) $7.86 $13.39 Tier 4 (5,000 and 6,500) $10.64 $18.11 Tier 5 (6,500 and 8,000) $13.41 $22.84 Tier 6 (over 8,000) $1.85/1000 SF $3.15/1000 SF Note: If there is an onsite stormwater management facility, there could be a reduced fee based on a sustainable credit program established by the City. 4.4 Recommended Fee Option The City is considering proceeding with the implementation of a stand- alone Flood Management and Water Quality Fee Program (that is, Scenario 2) with the Option A/B rates. A stand-alone program for future services was selected that discontinues current funding and is instead administered from an enterprise fund sourced from a Flood Management and Water Quality fee and the intermittent issuance of revenue bonds. Option A/B was selected because it would provide the funding needed for an equitable, sustainable drainage program while also addressing the ongoing challenges many homeowner associations in the City have with operating and maintaining their detention ponds. Further, more than half of those responding to Survey #2 as of August 2019 found the Option A/B rates to be reasonable. The selected rate option would be staged/ramped up over a 5 -year period (Table 4-6), to the monthly rates in Year 5, illustrated on Figure 4-2. Table 4-6. Staging of Recommended Fee Structure under Scenario 2 ($/1,000 SF/month) 4 6 OCTOBER 2019 Year 1 Year 2 Year 3 Year 4 Year 5 Option A/B $0.74 $0.93 $1.14 $1.35 $1.85 4 6 OCTOBER 2019 SECTION 4 — FINANCIAL PLANNING AND RATE ANALYSIS Figure 4-2. Recommended Monthly Flood Management and Water Quality Fee Structure in Year 5 I $35 $30 $25 $10 $5 EE © Year 5 Fee (without Credits) Tier 1(>0 and <= 2,000) $2.31 Tier 2 (>2,000 and <= 3,500) $5.09 Tier 3 (>3,500 and <= 5,000) $7.86 Tier 4 (>5,000 and <= 6,500) $10.64 Tier 5 (>6,500 and <= 8,000) $13.41 A�tua� IA Note: Base rate of $1.85/1,000 SF/month 4.4.1 Flood Protection and Water Quality Fee Examples This would result in an $5.09 monthly fee for a 1,500 -SF home (Table 4-7 and Figure 4-3) with a two -car garage, a $67 monthly fee for a typical fast food restaurant and a $250 monthly fee for a 75 -unit apartment complex (Table 4-8). Table 4-7. Monthly Residential Fee Examples by Tier in Year 5 Tier Range Option A/B Monthly Fee Example Residential Property Tier 1 (0 and 2,000) $2.31 1,000 SF home, no garage or carport Tier 2 (2,000 and 3,500) $5.09 1,500 SF home, attached two -car garage Tier 3 (3,500 and 5,000) $7.86 2,500 SF home, attached three -car garage Tier 4 (5,000 and 6,500) $10.64 3,500 SF home, attached three -car garage Tier 5 (6,500 and 8,000) $13.41 4500 SF home, attached three -car garage Tier 6 (over 8,000) $1.85/1000 SF Based on actual IA Note: If there is an onsite stormwater management facility, there could be a reduced fee based on a sustainable credit program established by the City. OCTOBER 2019 4-7 SECTION 4 — FINANCIAL PLANNING AND RATE ANALYSIS Table 4-8. Fee Examples for Other Property Types Note: If there is an onsite stormwater management facility, there could be a reduced fee based on a sustainable credit program established by the City. a. The average IA for the more than 2,900 commercial properties in the City is 33,360 SF. 4-8 OCTOBER 2019 Impervious Area (SF) Option A/B: Monthly Stand-alone Fast Food' 36,000 $67 Big Box Retailer/Commercial Center 300,000-750,000 $555-$1,388 Apartment (76 units) 135,000 $2SO Apartment with Clubhouse (306 units) 413,820 $766 Industrial/Manufacturing 780,000 $1,443 Industrial/Manufacturing 665,000 (floor area), 1,100,000 (total) $2,035 Note: If there is an onsite stormwater management facility, there could be a reduced fee based on a sustainable credit program established by the City. a. The average IA for the more than 2,900 commercial properties in the City is 33,360 SF. 4-8 OCTOBER 2019 SECTION 5 Stormwater Credit and Incentive Programs A stormwater credit is an ongoing, renewable reduction in the fee charged to a property for its contribution (measured via its amount of IA) of runoff to the stormwater system; all properties subject to the Flood Management and Water Quality fee would be eligible to apply. Credits would be offered for existing practices or facilities that reduce the water quality and quantity burden imposed on the City drainage system by runoff from a property. Other incentive programs such as a stormwater rebate program (for private investments to mitigate drainage from existing developments) and in lieu of fee program (for small development sites or areas where a regional solution is practical) would also be considered during implementation. 5.1 Stormwater Credits Basic credit programs typically mimic the requirements of a community's DCM (Figure 5-1), which helps support the City's compliance with its MS4 permit. To the extent that property owners mitigate the effects of stormwater runoff before it is discharged to the City of Fayetteville MS4 system (essentially pretreating their stormwater runoff), the burden placed on the City's system is somewhat less than if no such mitigation were in place. Therefore, the Flood Management and Water Quality fees for properties having certain stormwater management facilities or for owners performing approved stormwater educational activities will be reduced to recognize the public benefits of privately owned and managed facilities. It is recommended that full credits not be offered for undeveloped property or those treating 100% of stormwater onsite because all property owners benefit from the following City services: • Maintaining the public ROWS including, but not limited to, storm drain cleaning and street sweeping. • Maintaining regional Stormwater infrastructure that serves multiple property owners • Inspection of public and private stormwater facilities to ensure operating as designed Additional credits can be offered for green infrastructure practices, public education, and other activities important to a community. Credits are typically calculated based on the amount of IA and/or the volume of water managed onsite. For example, a property could earn a 40% credit for demonstrating that it meets all four sizing criteria illustrated in Figure 5-1, or a 10% credit for meeting each one individually. OCTOBER 2019 5-1 SECTION S - STORMWATER CREDIT AND INCENTIVE PROGRAMS Key characteristics of a sustainable credit program would include: • Customizing it to Fayetteville's unique mix of customers • Providing the opportunity to meaningfully mitigate a customer's fees • Keep it administratively simple • Establishing a cap on the credit offered to ensure adequate revenue A sustainable credit system will be developed with additional Stakeholder engagement on eligibility and technical guidelines; application, inspection, and verification procedures; and duration between renewals as part of implementation. It would be offered to customers based on the sizing criteria found in the City's DCM, with additional credits possibly offered for green infrastructure practices and public education. 5.2 Other Incentive Programs The City is also considering other inventive programs to encourage long-term, sustainable solutions both during and after construction, such as: Stormwater rebates could be offered to eligible property owners that are willing to retrofit existing or install new stormwater treatment facilities. Rebates would provide them with a mechanism to recoup some of the costs of installing approved DCM facilities up to the amount of the actual fee for a set period of time. A stormwater "in lieu of fee program could be offered, wherein an owner or developer may contribute via a fee to the construction of a regional or sub -regional detention site in lieu of constructing onsite detention. For example, Hot Springs offers an in -lieu fee program where the fee is calculated based on $10,000 per acre-foot of stormwater storage. However, no in -lieu contributions are allowed when existing flooding occurs downstream from the development, or if the development will cause downstream flooding. S-2 OCTOBER 2019 SECTION 6 Policy and Legislative Considerations This section provides an overview of the City's existing stormwater management regulations, key legal considerations for development of a Flood Management and Water Quality fee program, Arkansas' authorizing legislation for stormwater utilities, and potential legislative steps, should the City decide to proceed with implementation. 6.1 Existing stormwater Management Regulations Fayetteville is home to many streams and water bodies and is near the upstream end of two main watersheds, the Beaver Lake Watershed and the Illinois River Watershed. As a result, the City has a long history of implementing regulations that manage the volume and quality of stormwater. These efforts have included the adoption of a LID ordinance in 2010, a streamside protection ordinance in 2011, and a DCM in 2014 (Fayetteville, 2014). The DCM summarizes the regulations governing development and stormwater management, which include: • Chapter 161—Zoning Regulations • Chapter 166 — Development • Chapter 167 —Tree Preservation & Protection • Chapter 168 — Flood Damage Prevention Code • Chapter 169 — Physical Alteration of Land • Chapter 170—Stormwater Management, Drainage, & Erosion • Chapter 171—Streets and Sidewalks • Chapter 172 — Parking & Loading • Chapter 173 — Building Regulations • Chapter 177 — Landscape Regulations • Chapter 179 — Low Impact Development • City Plan 2030 • City of Fayetteville Drainage Criteria Manual, Appendix H Exhibits • City of Fayetteville Landscape Manual • City of Fayetteville Streamside Protection BMP Manual City of Fayetteville Minimum Street Standards • City of Fayetteville Water and Sewer Specifications OCTOBER 2019 6- 1 SECTION 6 - POLICY AND LEGISLATIVE CONSIDERATIONS 6.2 Policy Considerations To be equitable and legal, a fee for service program should be structured to reflect the following policy and rate -setting considerations: • The overall cost of the program must be reasonably related to the services being provided. • The funds raised must be segregated for use by the stormwater program. • The fee should be proportional to the property's contribution to stormwater runoff. • Participation in the program should allow appropriate exemptions and credits (NAFSWA, 2006). Development of this Funding Study was guided by establishing a "rational nexus" between the drainage services provided by the City and how they are funded. Selection of IA as the basis for funding these services was considered key to creating a legally defensible and equitable user fee program. These fees are based on the "polluter pays" principle and therefore the size of the fee charged must be related to the burden a property places on the City's stormwater system. Unlike a tax, it is also important that all properties with impervious surfaces pay, there should be no exemptions, only credits for reducing a property's burden on the stormwater system. As a result, important City Stakeholders such as the University of Arkansas, who have historically not paid impact fees for police and fire, will still be expected to contribute to the Flood Protection and Water Quality fee program. The question of whether sovereign immunity is applicable when stormwater fees are billed to federal and State properties typically hinges on the question of whether the CWA waives sovereign immunity about imposition of fees on these properties (SESWA, 2017). Although there are still challenges, an amendment to the CWA passed in January 2011, 33 United States Code § 1323(a), clarified that there is a federal responsibility for municipal stormwater charges. Additionally, many communities around the country have successfully billed and collected stormwater utility fees from Table 6-1. Surveyed Status of Billing and Collecting Stormwater Fees trom Government Entities Government Entity Exempt Bill and Collect Bill But Do Not Collect Not Billed Federal 4 63 8 2 • of Total 5% 8291. 10% 3% State 6 59 10 4 • of Total 8% 75% 13% 5% County 2 74 4 2 • of Total 2% 90% 5% 2% City 3 76 7 2 • of Total 3% 86% 8% 2% School District 6 66 3 0 % of Total 8% 88% 4% 0% Special District 1 45 0 3 % of Total 2% 92% 0% 6% State, federal, and local government Source: SESWA, 2017 properties, including school districts. In practice, the 2017 SESWA survey found that 82% of 77 communities responding to this question on the survey billed and collected from these public entities (Table 6-1). As a result, it is recommended that that no exemptions be provided and that the City instead integrate these entities in to a credit program, where possible. Similar to other utilities, it is important that revenue from stormwater fees be accounted for separately via an enterprise fund, instead of being added to the existing Street or General Funds. This helps ensure that these funds are only used for their intended purpose (that is, to provide stormwater services). 6-2 OCTOBER 2019 SECTION 6 — POLICY AND LEGISLATIVE CONSIDERATIONS 6.3 Legislative Implementation Steps Because each local and State government is unique, there are multiple legislative routes that can be taken to establish a stormwater fee program once a community has assessed the feasibility of developing a fee program and decided to move forward. Further, some utilities will develop a guidebook or other document (that is, cross-referenced in the legislation) detailing the step -wise processes used for administration of the fee program. This allows the enabling legislation to be more succinct while allowing the local government to make minor program adjustments without revisiting the original ordinance. As illustrated by the legislative examples provided in Appendix B, local governments have successfully adopted fee programs without some of the following key legal requirements. However, it is recommended that the City's ordinance(s) include these key elements at a minimum: • Establish a separate Enterprise Fund • Establish the City's Administrator for the Stormwater Program • Identify the scope of stormwater services (what will be funded) • Establish a Flood Protection and Water Quality fee • Note exemptions (limited) • Provide a mechanism for appeals • Provide a Credit Program 6.4 Arkansas Authorizing Legislation and Fee Programs At the State level, stormwater management, including the creation and operation of a stormwater utility, is authorized by the definition of the term "works" in Arkansas Code § 14-235-201. This statute provides for: 1. The structures and property as provided in Arkansas Code § 14-235-203 2. Stormwater management 3. The creation and operation of a stormwater utility 4. The creation and operation of a stormwater department 5. Other like organizational structures related to the disposal or treatment of stormwater by municipalities 3 3 2017 Arkansas Code, Title 14 - Local Government, Subtitle 14 - Solid Waste Disposal, Waterworks, And Sewers Generally, Chapter 235 - Municipal Sewage Systems, Subchapter 2 - Operation of Systems by Municipalities, § 14-235-201 - Definition. OCTOBER 2019 6 3 SECTION 6- POLICY AND LEGISLATIVE CONSIDERATIONS To date, two Arkansas communities have adopted stormwater fees: Hot Springs, Arkansas: Flat rate for residential and tiered rate for nonresidential based on the square footage of impervious surface (Ord. No. 6153, '1, 6-7-2016), as described in Table 6-2: Table 6-2. Stormwater Fee Rates for Hot Springs, Arkansas 2. Bryant, Arkansas: Monthly flat fee of $3 for residential utility account holders and $6 for commercial and industrial accounts (Ord. No. 2016-3, § 1, 2-23-2016). OCTOBER 2019 Cost Per Month Current June 2016 Jan. 2017 Jan. 2018 Jan. 2019 Jan.2020 Residential $3.00 $4.00 $4.00 $4.00 $4.25 $4.25 Commercial 0-9,999 $6.00 $8.00 $10.00 $12.00 $12.00 $12.00 10,000-49,999 $6.00 $10.00 $12.00 $21.60 $28.80 $36.00 50,000-99,999 $6.00 $12.00 $30.00 $54.00 $72.00 $90.00 100,000-249,999 $6.00 $28.00 $70.00 $126.00 $168.00 $210.00 250,000 -Above $6.00 $60.00 $150.00 $270.00 $360.00 $450.00 2. Bryant, Arkansas: Monthly flat fee of $3 for residential utility account holders and $6 for commercial and industrial accounts (Ord. No. 2016-3, § 1, 2-23-2016). OCTOBER 2019 SECTION 7 Next Steps Towards Implementation This section summarizes the additional activities that need to occur prior to a Flood Management and Water Quality fee being billed by the City. It is estimated that 1 to 2 years would be needed to complete these activities, with the bulk of the level of effort associated with developing a customer billing database that is compatible with the existing utility or the County property tax systems. The next steps towards implementation are detailed in Table 7-1. Table 7-1. Next Steps Towards Implementation Program Element Next Steps Stakeholder Engagement and 0 Additional Stakeholder involvement and education with a particular focus on the Education owners of rental property and key Stakeholders. • Educate Stakeholders on the findings of this Funding Study and the timeline for implementation • Engage Stakeholders on the development of a sustainable credit program. • Establish Intergovernmental Agreements with key Stakeholders. Stormwater Program Definition . Refine future program costs based on selected LOS/EOS options using updated stormwater system condition and needs. • Finalize preferred EOS option and publish it via legislation or other mechanism to ensure Stakeholders understand public versus private drainage responsibilities. Customer Billing Database Refine preliminary customer billing database to confirm impervious area by parcel,, property identification number, ownership, mailing address and existing utility account number, if applicable. • Establish method of billing property owners either within the existing utility billing system or on the County property tax bill. • Establish procedures for billing rental and multi -family properties as well as properties that do not have a utility account currently. • Establish procedures for adding new customers and capturing new impervious area as property is developed or redeveloped. Policy and Ordinance • Pass a resolution to accept the Funding Study, establish a new enterprise fund, the basis Development of fee and definition of the rate structure. • Pass ordinance with the final rate structure and fees, credit and appeal programs and other administrative requirements. • Develop process and procedures for obtaining public drainage easements in an iterative fashion for those portions of Fayetteville that developed prior to them being required. Stormwater Credit and Engage Stakeholders on the development of a sustainable credit program. Incentive Programs • Determine whether the City wants to pursue other incentives such as rebates and in lieu of fee programs. • Develop policies for eligibility and technical guidelines; application, inspection and verification procedures; and duration between renewal. Appeals and Administration Develop a robust customer service program that addresses appeals and ongoing administration of the fee program. • Proactively establish a process that allows customers to request a review of their fee should they think it was calculated incorrectly. OCTOBER 2019 7-1 SECTION 8 References InVeritas. 2017. Fayetteville Vision 2050: Strategic Planning Final Report. March. City of Fayetteville, Arkansas (Fayetteville). 2010. Stormwater Utility Fee Feasibility Study. City of Fayetteville, Arkansas (Fayetteville). 2014. Drainage Criteria Manual. July. City of Fayetteville, Arkansas (Fayetteville). 2018a. 2018 Drainage Improvement Plan. City of Fayetteville, Arkansas (Fayetteville). 2018b. 2019 Annual Budget and Work Program. November 20. https://www.fayetteville-ar.gov/ArchiveCenter/ViewFile/Item/1991. Geosyntec. 2009. Nutrient Reduction Plan. April. National Association of Flood and Stormwater Management Agencies (NAFSMA). 2006. Guidance for Municipal Stormwater Funding. Prepared under a grant provided by the U.S. Environmental Protection Agency. January. Southeast Stormwater Water Association (SESWA). 2017. 2017 Southeast Stormwater Utility Report. Prepared by CDM Smith, Dewberry. OCTOBER 2019 8-1 Appendix A Stakeholder Information APPENDIX A Stakeholder Information Table A.1. Funding Study Meetings and Topics Date Topics Full Council June 25, 2018 • Chartering • Study and Schedule Overview • Review Relevant Goals • Constituent Concerns Roundtable • Review Draft Stakeholder Engagement Strategy Special Council Committee July 31, 2018 . Chartering . Study and Schedule Overview . Review Relevant Goals . Constituent Concerns Roundtable with Ward Map • Review Draft Stakeholder Engagement Plan August 28, 2018 • Review Current Stormwater System, Regulatory Requirements and Costs • Stormwater Extent of Service Options . Stormwater Level of Service Options . Committee Feedback and Next Steps April 9, 2019 . Speak Up Fayetteville Results to Date • Program Costs and EOS/LOS Options Refresher • Review Draft Fee Estimates by Program Option . Policy Primer on Credit/Rebate Program Options . Next Steps July 30, 2019 . Final Extent of Service and Level of Service Option Refresher . Review Final Fee Estimates by Program Option and Scenario • Speak Up Fayetteville Survey #2 Results to Date . Staff Recommendations for Council Committee Consideration . Next Steps Staff Technical Advisory Committee (STAC) June 25, 2018 Chartering • Study and Schedule Overview • Review Relevant Goals • Review Draft Stakeholder Engagement Plan • STAC Homework Assignment for Stormwater Needs Analysis Meeting, OCTOBER 2019 A-1 APPENDIX A—STAKEHOLDER INFORMATION Table A.1. Funding Study Meetings and Topics Date Topics August 1, 2018 Review Baseline Stormwater Program Elements and Costs • Review Chartering Feedback and Completed Homework Assignments • Review Preliminary Extent and Level of Service Options • Stormwater Needs Prioritization Exercise December 10, 2018 o Study Update • Review Final Extent and Level of Service Options • Review Corresponding Future Program Costs • Next Steps Public September 30, 2018 . Study Purpose . What is the City's Role? . What are the funding needs? . What are the proposed solutions? . Speak Up Fayetteville! November 29, 2018 Study Background Beaver Water District Speaker 2017 Flooding Series . Review Current Stormwater System, Regulatory Requirements and Costs . Stormwater Extent of Service Options . Stormwater Level of Service Options . Proposed Solutions/Funding Options December 12, 2018 . Study Background AWWWEA NW District Meeting . 2017 Flooding . Review Current Stormwater System, Regulatory Requirements and Costs . Stormwater Extent of Service Options . Stormwater Level of Service Options . Proposed Solutions/Funding Options January 17, 2019 Study Update . Review Final Extent and Level of Service Options and Corresponding Future Program Costs . Review of National and Regional Average Stormwater Fees AWWWEA NW = Arkansas Water Works and Water Environment Association, Northwest District EOS = extent of service LOS = level of service A-2 OCTOBER 2019 APPENDIXA—STAKEHOLDER INFORMATION Figure A-1. Speak Up Fayetteville Factsheet City of Fayetteville Stormwater Study: Flood Management & Water Quality Funding Stormwater runoff is generated from rain and snowmelt events that flow over land or impervious surfaces, such as paved streets, parking lots, and rooftops, and does not soak into the ground. The runoff picks Lip pollutants like trash, chemicals, oils, and dirt/sediment that can harm our rivers, streams, and lakes. —US Environmental protection Agency Why Is the City Concerned about Stormwater? Flood Service Requests, April 2017 Fayetteville faces a growing backlog of drainage and stormwater manage- ment issues that can cause flooding of streets, structures, and the property — - of those who live here. Although customers can tell us where the west issues are, the City does not currently have the financial resources or legal access to fix them all. Recent storms have generated hundreds of service requests for the City, on top of stormwater management activities and water quality projects that are mandated, but not funded, by the Clean Water Act. The City is responsible for operating and maintaining the public portion of Fayetteville's municipal stormwater system. For example, approximately 65 percent of its roads and rights of way, 57 percent of the drainage pipes, and 43 percent of its outfalls are public. i our city's growing population, we gnize that there is an increasing need entity sustainable options for funding rnwater management. What are the Funding Needs? The City currently spends approximately $1.3 million annually on stormwater activities. This includes compliance with the Arkansas Department of Environmental Quality stormwater permit requirements, maintenance and repair of the public drainage system, as well as water quality and flood management activities. The City's 2018 Drainage Improvement Plan estimates that more than $15 million is needed to protect public safety by addressing our most urgent backlog of stormwater maintenance and capital projects. More funds are needed to identify issues that have not yet been documented. Undercurrent policy, it will take several years for the City to accrue enough funds to complete even one of these significant stormwater projects. What is the Proposed Solution? The City is proposing to develop an `Early Action Plan' to address the most significant stormwater projects, to be presented to voters in early 2019 as part of a bond program. To determine the best way to fund the remaining needs going forward, the City is conducting this Study for Flood Management & Water Quality Funding to evaluate a range of options. What Will the Study Do? The purpose of the study is to present options for sustainable funding for stormwater management, to reduce flooding, and protect water quality. The study has three phases 1. Review the City's existing stormwater system and program. 2. Collect input from the City Council, staff, and City residents regarding the current state, and the necessary/desired future state of the City's stormwater programs. 3. Assess the advantages and disadvantages of various means of funding the program. including ongoing intermittent bond referendums, additional General Fund or Capital Improvement Program resources, and/or a dedicated stormwater fee. AK We Need Your Input! Sob P"EInput collected from stakeholders on troth the program and funding options will be vital to the process in order for the City Council to make an informed decision early in 2019. To provide your FAYETTEVILLE input, visit Speak Up Fayetteville, the City's civic engagement portal, and complete our public input survey: fayetteville•ar.gov/speakup. OCTOBER 2019 A APPENDIX A -STAKEHOLDER INFORMATION Table A-2. Common Acronyms and Terms Acronym DeSCIIJAIOD Definition Arkar,SJS Department Gf Government agency responsible for prole cling human health and the ADEQ Environmental Quality natural environment in Arkansas. Permitting authority for stormwater I drainage ft /Mww ad eq state at W Activities, practices, procedures, and treatment processes utilities use to reduce or prevent pollutants from being released into streams, lakes, rims, and oceans Fayetteville -specific BMPs can be found in: BMP Best Management Practices https'1twwvY laveltevillo-2r ProtetUori-Best-Man Rg9peqLP _EDF The CIP for the City of Fayetteville examines the infrastructure and capital CIP Capital Improvement Plan needs of the City for the next Ne years, httris,Ywww fayettewR;­ Pian Capital Improvement Plan Projects arid their cumulative component areas totaling $10,000 or more CIP Projects Projects should be included in the CIP. Projects costing less than $5,000 are not considered capital and are funded through program operating budgets Federal Clean Water Act, i e. Federal measure to regulate pollutant discharge into streams, rivers, lakes, C W A Federal Water Pollution Control and oceans of the united States Act, 33 U.S.C. 1251 oulatiol Is'?"Ummary h1WSJ/wWw'ePJ_Wv/1aws-(e -clean-water-act City document that provides guidance on procedures arid design to control DCM City of Fayetteville 2014 stormwater Drarnage Catena Manual FOS Extent of Service Defines where the City will work, i.e drainage infrastructure for which the City will be responsible FEMA Federal Emergency Management Federal entity that handles disaster response in case the event is too Large Agency for state or local governments to effectively handle, A= foma oov Map created by the Federal government ftt shows areas that are at higher FIRM Flood Insurance Rate Map risk of floodirig. hftpslfwww fayeA�tevffle-ar gov/402fFloodplain-Manacement Study to evaluate sustainable funding options for the City's stormwateir Study for Rood Management and program, including a review of the existing program and additions needed FS Water Quality Funding to satisfy future regulatory and customer service needs- https4twww fayetteville-ar Qov133,28/Fbo-J- Man aqem erit -Study Monitoring stornmateroutfalls to detect illegal discharges including trash, IDDE Illicit Discharges Defection and yard waste, wastewater. oil, petroleum products, cleaning products, paint Elimination products, hazardous waste and sediment Mips YWWW fayetteVtlie-ar qov/49lfRepon-S!OrmNater-Poiiul*n What stormwarter services the City would provide and at what frequency, LOS Level of Service i -e_ regulatory compliance, operations and maintenance. and capital improvement planning, etc. A conveyance (e.g , storm drains, channels, pipes.) or system of conveyances that is owned by the City of Fayetteville that discharges to MS4 Municipal Separate Storm Sewer waters of the U.S and is designed or used to colect or convey slormwater System runoff nttps'ffwww Poa Phase I There are no Phase I Large MS4 permit holders in Arkansas, the City of Medium Medium municipal separate Little Rock and Arkansas DOT are the only Phase I Medium MS4 entities MS4 storm sewer systems ht1Lp51/ww4Ya(J-Q state ar Study for Flood Management and Water Quality Fundingil A-4 OCTOBER 2019 APPENDIX A —STAKEHOLDER INFORMATION Table A-2. Common Acronyms and Terms Acronym Description Definition Phase 11 Small municipal separate storm City of Fayetteville is a Phase 11 small M34 community covered under Small MS4 sewer systems ADEQs General Permit, 9 ARR040000. A permit program that regulates water pollution from distinct pipe, ditch, channel, tunnel, conduit, well, container, animal feeding operation, landfill, National Pollutant Discharge or floating vessel that discharges pollutants The Clean Water Act prohibits -pollutants* NPDES Elimination System anybody from discharging through apomt source into a 'water of the United States" unless they have an NPDES permit. The NPDES permit program addresses water pollution by regulating point sources that discharge pollutants to waters of the United States. Pollution from a combination of dispersed sources resulting from rainfall or NIPS Non -point Source Pollution snowfall moving over and through the ground during which it picks up and carries away natural and human -made pollutants, finally depositing them into lakes. rivers, wetlands, coastal waters and ground waters. Streams that chain at least 100 acres as identified on the Streamvd e Protected Streams Protection Map available on: litrps Itwovw fayetleville- ar Distinct pipe, ditch, channel, tunnel, conduit well, contaner, animal feeding PS Point Source Pollution operation, landfill, or floating vessel that discharges pollutants- This term does not include agricuttural slormwater runoff. Ram, once n lands on the ground, which can either evaporate, seep underground, or flow downhill into streams, rivers, lakes, and oceans In the SW Slormwater natural environment, stormwater is soaked up by the sod and some plants, however m developed places with more asphalt, concrete, and roofs where the rainwater can't seep into the soil or be absorbed by plants, it can accumulate on top of the ground and cause flooding I not managed. The City of Fayetteville's plan to ensure compkance with their slormwater SWMP City of Fayetteville 2015 Slorm permit, Water Management Program hnpsJANww faveft#Olk-ar.goyMocLtmeMCenterNW*1168(YStormw,*iter- Manacement Plan POF>bidt = Streamstde Protection Areas should be measured from the stream's top of bank as defined in: Streamside Protection Areas httDsV1www,favet1evrIIe-ar (ioviDocurnentCenterlView/1 556tStreamide- Proteclion-Best-Manwiement-Practices-ManuaJ-POF Document which consolidates all development -related activity including Zoning requirements, subdivision regulations, design and development UDC Unified Development Code standards, and review procedures within a local governmenrs jurisdiction, httVsJl1jbrarj munrcode of ordrnances')nod el(J=CD ORO TITXVUNr,)ECO USACE U S, Army Corps of Engineers Federal governing entity over waters of the United States, WC) Nater Ou341/ Desired condition (chemical, physical, or biological) of a water body. Standards of water quality are enacted to preserve environmental health. References: r,,,v,wfemar4oi,FayetteviDe,ARDCM,2014.UniveNtyotAikansasExtension. What IsWater C)uality? od 891 Study for Flood Management and Water Quality Fundingsig OCTOBER 2019 A-5 Appendix B Legislative Examples APPENDIX B Legislative Examples The following ordinances were provided to the City of Fayetteville as legislative examples: 1. City of Bryant, AR — Rates in ordinance. Exemption for seniors only. No appeals or credits offered in ordinance. 2. City of Hot Springs, AR — Rates in ordinance. No appeals or credits offered in ordinance. 3. City of San Antonio, TX — Provided due to its central -U.S. location. This drainage utility example covers all legal considerations and is an example of tiered rates in ordinance. 4. City of Charlotte, INC — Provided as an example because it: establishes rates by a separate resolution, includes the precedence in which fees will be applied to a utility bill and establishes a Stormwater Advisory Committee within the ordinance. S. City of Brookhaven, GA — This municipal example covers all legal considerations and is an example of rates established by Mayor and City Council outside of ordinance. 6. DeKalb County, GA —The ordinance for DeKalb County, Georgia is provided as an example of a single ordinance that establishes the enterprise fund and rate structures in one step. Like Hot Springs, this ordinance has withstood formal legal challenge since it was adopted in 2004. 7. Montgomery County, MD — Water Quality Protection charge with rates established by resolution. The ordinances for the cities of Bryant (2016) and Hot Springs (2008) are provided to demonstrate the legislation used for the two other stormwater fee programs in Arkansas. However, the consulting team recommends the following modifications to these two ordinances for the City of Fayetteville's purposes: • Removal of the actual fee/rate schedule from the ordinance, see later examples from the City of Brookhaven, GA and Montgomery County, MD for how this can be referenced outside of the legislation. Exemptions should only be specified for public right of ways, no discharge properties and select other subsets. • Add essential sections for appeals and a credit system. OCTOBER 2019 JACOBS October 17, 2019 Chris Brown, PE City of Fayetteville, Arkansas Subject: Flood Management and Water Quality Funding Program Implementation Dear Mr. Brown: Jacobs is pleased to submit this amendment to our existing agreement for the purposes of assisting the City of Fayetteville, Arkansas with consistency revisions to its Unified Development Code (related to storm drainage and tree preservation), assessing the use of a mitigation / fee -in -lieu of program for small, infill developments, and furthering elements of the Flood Management and Water Quality Funding Study (prepared under Resolution 131-18, File Number 2018-0267). The code revisions and program assessment activities represented in this proposal reflect the City being responsive to Stakeholder feedback on the Funding Study. While many of these activities will be completed internally by City staff, the Jacobs Team would assist, as needed, over the next year. The proposal attached provides the following information: • Article A. Purpose and Scope of Services • Article B. Schedule and Fee • Article C. Terms and Conditions We appreciate the opportunity to provide a proposal for these services and look forward to working with you and your staff on this important project. If you have any questions, please do not hesitate to contact us. Sincerely, Heather H. Dyke, AICP Kaitlin Tymrak Enclosure 10/17/2019 SCOPE CHANGE AUTHORIZATION Project: Amendment 2 to the Stormwater Date Prepared Feasibility Study Contract October 21, 2019 Jacobs Project No.: 705896CH Date Revised: Client: City of Fayetteville, AR Client Project No.: Project Manager: Heather H. Dyke Change No.: 2 1. The attached proposal for changes in the scope of the work are hereby authorized: 2. As an amendment to our existing agreement, Resolution 131-18, File Number 2018-0267. 3. The effect of these changes in scope is as follows: a. Fee (1) Change Labor: $142,000 + Travel: $8,200 = $150,200 (2) New Total $383,282 b. Schedule December 2019 to December 2020, or 12 months from NTP. c. Construction (1) Cost N/A (2) Schedule N/A d. Other N/A 4. The reason for these changes in the scope of the work are as follows: For the purposes of assisting the City of Fayetteville, Arkansas with consistency revisions to its Unified Development Code (related to storm drainage and tree preservation), assessing the use of a mitigation / fee -in -lieu of program for small, infill developments, and furthering elements of the Flood Management and Water Quality Funding Study. 4. Project Manager's comments: N/A Approved by Client: Date: Agreed to by JEG: Date: 10/18/2019 Carlos Giron, PG Jacobs Vice President I BIAF City of Fayettevi I le, Arkansas Flood Management and Water Quality Funding Program Implementation Article A. Purpose and Scope of Services This scope of work would provide the City of Fayetteville, Arkansas with additional analysis of the Flood Management and Water Quality Funding Study findings (prepared under Resolution 131-18, File Number 2018-0267). The Jacobs Team has a unique awareness of why additional future funding is needed: • To further protect the public (safety), public roads, and private property from flooding, • For watershed improvements to continue protecting the quality of the Beaver Lake, the City's drinking water source • To proactively maintain current drainage systems while starting to retrofit and replace, as needed, aging infrastructure • To continue complying with increasing NPDES Phase II MS4 permit requirements • To encourage the use of green infrastructure and other sustainable development practices to help mitigate stormwater runoff and flooding. This additional analysis will use the preliminary customer billing database and rate model from the Funding Study to revisit the fee structure in response to Stakeholder feedback. It will also assist City staff with consistency revisions to its Unified Development Code, related to storm drainage and tree preservation, and assess the use of a mitigation / fee -in -lieu of program for small, infill developments. The Project Team would continue to be led by Heather Dyke, AICP with support from Mike Matichich, Rick Brownlow and other Jacobs staff already familiar with the Funding Study. The following definitions will be used throughout this document. Term Description JACOBS Local and remote JACOBS staff. CITY City of Fayetteville's management and, or technical staff. Funding Study Flood Management and Water Quality Funding Study 10/17/2019 PAGE 2 OF 10 Scope of Services Project Understanding Table 7-1 of the Flood Management and Water Quality Funding Study summarized the additional activities that need to occur prior to a fee being billed by the City. Further, the City has received additional, valuable Stakeholder feedback and suggestions since the Funding Study was completed that is driving additional analysis of the rate structure and policy options. While many of these activities will be completed internally by City staff, the Jacobs Team would assist City staff with the following tasks over the next year: Support additional Stakeholder Engagement and Education activities (Task 1) Finalize the Stormwater Program Definition (ECS / LOS), perform an alternative rate structure analysis based on "intensity of development", i.e. percent of impervious cover / gross area of property and then perform a final rate analysis (Task 2) As needed support of City staff in their efforts to select a billing method and to finalize a Stormwater Customer Billing Database (Task 3) Develop a Sustainable Stormwater Credit and Incentive Program (Task 4) Assess the Feasibility of a Mitigation / Fee In Lieu of (FILO) Program including a Framework, Fee Structure and "Cookbook" of Water Quality, Flood, and Tree mitigation measures (Task 5) Consistency revisions to the City's existing Unified Development Code and development of Ordinances and Intergovernmental Agreements for potential Implementation (Task 6) Cost effectively manage the Project over a 12 -month time frame and document the results in a Program Summary Technical Memorandum (Task 7). Stakeholder Engagement and Education The Jacobs Team understands that Fayetteville's goal is to reach as many people as practical throughout the stakeholder engagement and education process. Our experience during the Funding Study gave us a unique perspective on the additional stakeholder education needed to ensure that property owners are aware the drivers for additional funding above and beyond the 2019 drainage bond. Task 1 will focus on raising awareness of these drivers, why additional future funding is needed as well as the availability of a sustainable credit program. Task 1 will support implementation of the Next Steps noted in the Funding Engage Stakeholders on the development of a sustainable credit program. Educate Stakeholders on the findings of this Funding Study and the timeline for implementation. Task 1.1 Stakeholder Engagement and Education Strategy The Jacobs Team will kick off this task by hosting a Stakeholder workshop with City staff, either in person or via conference call, to: Review lessons learned from the Funding Study Stakeholder activities, i.e. what worked well and what could be improved, as well as from the City's many other stakeholder efforts. Confirm internal and external stakeholder participants o Stakeholders (Internal) ■ Elected Officials (Mayor and Council) ■ Staff o Stakeholders (External) ■ General Public (neighborhood groups, homeowner's associations, civic groups) ■ Key Stakeholders (University of Arkansas, Fayetteville Public Schools, Top 20 Impervious Customers and Chamber of Commerce) ■ Targeted Stakeholders (Faith community, nonprofits, environmental groups, etc.) III. Confirm the City's preferred engagement and education methods, such as: o Meetings: ■ Special City Council Committee ■ Staff Technical Advisory Committee ■ Public Briefings (General Public) o SpeakUp Fayetteville tools: ■ One Stakeholder Survey ■ Frequently Asked Questions (Fee Basics and Credits and Incentives) o Traditional mailers IV. Identify appropriate technical content and materials V. Confirm general timing / schedule for implementing the Strategy. Based on the results of the Stakeholder workshop, Jacobs will develop a draft Stakeholder Engagement and Education Strategy for City staff review. After addressing one round of comments, Jacobs will finalize the Strategy for implementation. Task 1.2 General Meetings, Workshops and Briefings The Jacobs Team will support City staff in engaging internal and external stakeholders via a variety of in person meetings, workshops and briefings. Elected officials will be briefed either through the Special subcommittee established during the Funding Study or full Council presentations. This scope of work would cover 4 meetings over 2 trips by the Project Manager plus 1 additional staff member, as needed. Task 1.3 Stakeholder Materials The Team will work closely with Fayetteville's Communications and Marketing Department and the Media Services Division to support the implementation of a robust and innovative stakeholder engagement and education strategy that reflects the City's long history of reaching out to its citizens. Jacobs will develop the draft technical content of Stakeholder Materials while City staff will finalize the materials for posting and distribution. • Up to 4 PowerPoint presentations in support of Task 1.2 • SpeakUp Fayetteville materials: One Stakeholder Survey and one set of Frequently Asked Questions. 10/17/2019 PAGE 4 OF 10 Task 1 Deliverables — • Stakeholder Engagement Workshop • Draft and Final Stakeholder Engagement and Education Strategy • Meeting materials and 1— 2 team members for up to 4 Meetings, Workshops or Briefings (2 individual trips). • One Stakeholder Survey • One set of Frequently Asked Questions (Fee Basics, Credits and Incentives) Task 1 Assumptions — • The Jacobs Team will facilitate internal stakeholder meetings and workshops. • City staff will administer the SpeakUp Fayetteville website including the compilation and analysis of stakeholder survey data. • Staff with Fayetteville's Communications and Marketing Department and the Media Services Division will facilitate external meetings and support the internal implementation of the technical content provided by the Jacobs Team. • This task will be documented in the Program Summary TM as part of Task 7. Task 2. Final Stormwater Program Definition (EOS/LOS) and Rate Analysis Task 2 would finalize the City of Fayetteville's definition of its future Stormwater Program including Extent of Service (EOS) and Level of Service (LOS) as well as the associated costs based on additional stakeholder feedback. This will include a high-level path forward for capital improvement planning efforts that would serve as the basis for a more detailed master planning and prioritization effort of future drainage studies that would be developed separately. It will support implementation of the Next Steps noted in the Funding Study, including: • Refine future program costs based on selected LOS/EOS option using updated stormwater system condition and needs. • Finalize preferred ECS option and publish it via legislation or other mechanism to ensure Stakeholders understand public versus private drainage responsibilities. In response to Stakeholder suggestions, Task 2 will also develop and analyze an alternative rate structure based on a property's "intensity of development", as represented by percent of a parcel that is impervious instead of on tiers of total impervious area (IA). While not as common, using "intensity of development" as part of their rate calculations is not unprecedented. The cities of Bellevue and Seattle, Washington use IA billing units of 1,000-2,000 feet with a rate structure that is tiered by percent impervious. Starting with the preliminary stormwater customer billing database developed by the City's Geographic Information System (GIS) Department, Jacobs will perform a distribution analysis of the percent imperviousness (buildings, driveways, and similar) to assess its use as an equitable billing unit and what a tiered rate structure would be with its use. After the future Stormwater Program definition, costs and rate structure are agreed to, one additional rate analysis will be performed to confirm the fee schedule needed to support these services. The existing rate model developed as part of the Funding Study will be used to evaluate the rate and financial impacts of funding the final cost of service components. The rate analysis will be summarized as part of the Program Summary Technical Memorandum (TM) which would be developed as part of Task 7. 10/17/2019 PAGE 5 OF 10 Task 2 Deliverables — • Final Stormwater Program definition and cost of service estimate tabulated (over 5 years) for up to 6 program areas. Alternative rate structure analysis that assesses a rate schedule that is tiered based on "intensity of development", i.e. percent of impervious cover/ gross area of property. Stormwater pro forma financial spreadsheet model (financial / rate model) with a detailed 5 -year cash flow analysis and planning level projections over a 20 -year time frame. Task 2 Assumptions — EOS/LOS Option A/B, with minor modifications, will generally serve as the basis for the final Stormwater Program definition and cost of service estimates. The existing preliminary stormwater customer database will be used to generate an alternative rate structure that also integrates intensity of development. The existing financial spreadsheet model, with minor modifications, will serve as the starting point for the alternative rate structure analysis and one additional rate analysis will be performed. This task will be documented in the Program Summary TM as part of Task 7. Task 3. Stormwater Customer Billing Database Task 3 will provide support to the City of Fayetteville as it selects the most cost-effective stormwater billing mechanism and finalizes the corresponding preliminary billing database developed during the Funding Study. Should the City decide to proceed with a Fee Program, the City would self -perform the majority of Task 3, including the extensive QA/QC and database processing efforts needed to ensure the accuracy of the resulting bills and prevent excessive customer appeals. As part of Task 3, Jacobs will support City staff as they implement the Next Steps noted in the Funding Study, including: • Selection of a method of billing property owners (not tenants) either within the existing utility billing system, on the Washington County property tax bill or as a standalone bill. • Refine preliminary customer billing database to confirm impervious area by parcel, property identification number, ownership, mailing address and existing utility account number, if applicable. Task 3 Deliverables — As needed support for the City as it assesses and selects its preference billing method. Up to 3 conference calls with GIS Office staff to strategize and support development of a final stormwater billing database. Task 3 Assumptions The City will be responsible for selecting its preferred billing method with limited support by Jacobs staff. • This task will be documented in the Program Summary TM as part of Task 7. 10/17/2019 PAGE 6 OF 10 Task 4. Sustainable Stormwater Credit Program A stormwater credit is an ongoing, renewable reduction in the fee charged to a property for its contribution (measured via its amount of impervious surface) of runoff to the stormwater system; all properties subject to the stormwater fee are eligible to apply for a fee credit. As part of Task 4, Jacobs will support Fayetteville with determining the applicable range of credits available to customers and how they would be applied. A resulting credit and incentive framework will provide customers with the opportunity to receive reductions on their stormwater bills for specific measures or actions that reduce their stormwater runoff/contribution to Fayetteville's drainage system. A draft and final Sustainable Stormwater Credit and Incentive Framework will be developed for the purposes of interacting with the City's internal and external Stakeholders. Stakeholders will be engaged, as appropriate, to review the draft framework which would provide the "universe" of credit options encompassed by the City's Drainage Manual and Ordinances as well as innovative credits to raise stakeholder awareness and encourage innovative practices. The Jacobs team will also support the City as it decides whether it wants to pursue other incentives such as rebates; stormwater rebates would provide eligible applicants the opportunity to recoup some of the costs of installing approved stormwater Best Management Practices (BMPs) up to the amount of the actual fee for a set period. The Team will identify procedures for implementing the selected credit and rebate programs and application rules and processes for property owners to use in applying for credits and rebates. The framework will also: Assist in determination applicable credits for existing commercial and residential uses and how the credits will be applied, Assist in the determination of applicable credits for new development projects and how the credits will be applied, Identify how the City's credit and rebate programs will generally be administered, including the application documentation needed, enforcement, renewal and a credit appeals process. Task 4 Deliverables — Draft and Final Sustainable Stormwater Credit and Incentive Framework. Task S. Mitigation / Fee -In -lieu -of Program Assessment Task 5 will support the City in assessing the value of a mitigation measure / fee in lieu of program for small infill developments and how such a program would interact with implementation of a Flood Management and Water Quality Fee Program. Fayetteville's 2014 Design Criteria Manual requires mitigations measures such as (1) onsite storage, (2) offsite storage, or (3) offsite drainage system improvements if hydrologic and hydraulic studies reveal that a proposed development would cause increased frequency of flooding, increased depth of inundation of structures, or inundation of unprotected structures not previously subject to inundation. While the DCM does allow for cost sharing of offsite facilities with the City, it's limited budget typically makes it unable to contribute its share of the offsite costs which shifts the burden of these costs back to the developer. Additionally, the City's Unified Development Code (UDC) currently exempts non -SFR (single family residential) additions of 2,000 sf of impervious or less and individual SFR and duplexes (that are not part of a larger subdivision) from these DCM requirements. 10/17/2019 PAGE 7 OF 10 For those infill developments and redevelopments where these DCM requirements are not feasible, the City is interested in providing these with property owners with alternatives, either by selecting a mitigation measure from the Cookbook or paying a FILO. To date, in lieu of fees have mainly been used as part of the development process as an alternative to on-site detention. As such, they are typically a one-time fee used to construct larger, regional stormwater infrastructure versus an ongoing fee used to also fund operation and maintenance costs. For example, Hot Springs offers an in -lieu fee program where the fee is calculated based on $10,000 per acre-foot of stormwater storage. As part of Task 5, the Jacobs team will: A. Benchmark and summarize the use of mitigation measures and FILO incentives in other communities. Facilitate public input meetings. B. Develop a standard "Cookbook" of alternative water quality, flood, and tree mitigation measures for small infill developments to choose from, instead of requiring a site-specific drainage study. The City's Drainage Criteria Manual and Streamside Protection Best Management Practices Manual will serve as the basis for these Cookbook mitigation measures. C. Develop a framework for accepting either mitigation measures or payments in lieu of construction of onsite drainage BMPs. The framework would include policies on when mitigation measures / FILO payments are applicable and a potential fee structure. Task S Deliverables — Draft and Final Mitigation / Fee -In -lieu -of Program Assessment TM, including a Framework, Fee Structure and "Cookbook" of Water Quality, Flood, and Tree mitigation measures Task 6. Ordinances and Intergovernmental Agreements As part of Task 6, the Team will work closely with the City's legal staff to update select Chapters of the City's Unified Development Code, to develop a new ordinance establishing a stormwater enterprise fund and to develop Intergovernmental Agreements with key stakeholders. Task 6.1 Unified Development Code Revisions The City of Fayetteville's Unified Development Code exempts single family homes and duplexes from most stormwater management and tree preservation criteria required for other types of. This exemption has led to a development pattern that is inconsistent with the goals of City Plan 2040, especially Goal 1 (Making appropriate infill and revitalization our highest priority) and Goal 6 (Creating opportunities for attainable housing), by encouraging the development of relatively large (and expensive) single family homes and duplexes on small lots in many redeveloping areas of town, especially in and near downtown. These large structures with no associated storm drainage mitigation or tree preservation create negative impacts to adjacent property owners and to the stormwater system and larger neighborhood as a whole. In comparison, all other types of housing and non-residential development are required to fully meet all water quality, flood mitigation and tree preservation requirements in City code, regardless of the size or relative impact to the storm drainage system or tree canopy. 10/17/2019 PAGE 8 Of 10 The overall purpose of Task 6.1 is to normalize the storm drainage and tree preservation requirements for developments in Fayetteville and to establish consistent requirements based on the impact of each development, rather than land use or development type. The City anticipates that the effects of these changes will likely make requirements for single family homes and duplexes more stringent but may relax requirements for certain other types of development. To do so, the Jacobs team will: A. Review the following relevant UDC chapters: 1. Chapter 151 Definitions 2. Chapter 166 Development 3. Chapter 167 Tree Preservation and Protection 4. Chapter 168 Flood Damage Prevention Code 5. Chapter 169 Physical Alteration of Land 6. Chapter 170 Stormwater Management, Drainage, and Erosion Control 7. Chapter 172, Parking and Loading 8. Chapter 179, Low Impact Development 9. City Drainage Criteria Manual B. Facilitate public input meetings. A minimum of two public input meetings with a focus group and potentially affected stakeholders shall be conducted by the Jacob's team to identify issues and incorporate feedback into the code revisions. C. Redline the existing UDC chapters to refine development thresholds based on land disturbance and impervious surface, instead of building / land use type, based on input from City staff and stakeholder input. D. Attend public hearings. Jacobs team members will attend and present the findings of Tasks 5 and 6.1, including the UDC revisions, "Cookbook" of alterative mitigation measures and framework at one Planning Commission and one City Council meeting. Task 6.2 Enterprise Fund Ordinance and Intergovernmental Agreements Task 6.2 will provide for the development of a new enterprise fund ordinance will provide the basis of fee as well as policies for credits and appeals and establish / adopt a separate Implementation document by reference; the final rate structure and administrative details would be developed later in this Implementation document. Implementation of an enhanced stormwater management program would also require developing and defining specific policies and procedures to convey to key stakeholders exactly what is covered in the program, where Fayetteville provides services and what remains their responsibility. This will be particularly important with key Stakeholders such as the University of Arkansas, Washington County and the Fayetteville School System. Jacobs will develop up to 3 Intergovernmental Agreements, also known as Interlocal Agreementsl, that clearly delineate the extent and level of stormwater services provided by the City, the rights and responsibilities of each party as well as mutual obligations, compensation and miscellaneous terms. 1 Community and Economic Development, University of Arkansas Division of Agriculture. FSP PC 110 on Interlocal Agreements. August 2015. littps://www.uaex.edu/pubIications/PDF/FSPPC110.pdf. 10/17/2019 PAGE 9 OF 10 Task 6 Deliverables: 1. Draft and Final redlined UDC chapters 2. Meeting materials and attendance at 2 public input meetings and 2 public meetings of the Planning Commission and City Council. 3. Draft Enterprise Fund Ordinance, if warranted. 4. Up to 3 Intergovernmental Agreements, if warranted. Task 6 Assumptions: City staff will provide guidance on the development thresholds, based on corresponding land disturbance and impervious surface percentages, it would like to see integrated in the UDC. Jacobs staff will review up to 10 existing chapters / sections of the UDC solely for the purposes of identifying opportunities to improve consistency among storm drainage and tree preservation requirements based on the impact of each development. Revisions for other purposes, such as updating text or consolidating sections will be handled separately by the City. Meeting materials and 1— 2 team members for up to 4 public meetings (requiring 2-3 individual trips). Task 7. Overall Project and Quality Management The objective of this task is to charter the project by defining the design team, management team, individual roles, personnel contact information, and project controls. This includes managing and coordinating project resources and responsiveness consistent with the schedule and budget. Task 7 will also develop a succinct Program Summary Technical Memorandum (TM) summarizing the status / results of: • Stakeholder Engagement and Education activities, • Final Stormwater Program Definition (EOS/LOS) and Rate Analysis, • Development of a Stormwater Customer Billing Database, • Development of a Sustainable Stormwater Credit Program If warranted, the Program Summary TM will also outline next steps towards Program Implementation and final versions of the other deliverables as attachments. Task Deliverables - 1. 12 monthly invoices and progress reports. 2. Monthly status calls, including an agenda, updated schedule, and action items. 3. Draft and Final Program Summary TM. 10/17/2019 PAGE 10 OF 10 Project Deliverables Task q Task Name Deliverables 1. Stakeholder Engagement Workshop 2. Draft and Final Stakeholder Engagement and Education Strategy Stakeholder Engagement and 3. Meeting materials and 1— 2 team members for up to 4 Meetings, 1 Education Workshops or Briefings (2 individual trips). 4. 1 Stakeholder Survey 5. 1 set of Frequently Asked Questions (Fee Basics, Credits and Incentives) 6. Final Stormwater Program definition and cost of service estimate tabulated (over 5 years) for up to 6 program areas. Final Stormwater Program 7. Alternative rate structure analysis that assesses a rate schedule that is 2 Definition (EOS/LOS) and Rate tiered based on "intensity of development", i.e. percent of impervious Analysis cover / gross area of property. 8. Stormwater pro forma financial spreadsheet model (financial / rate model) with a detailed 5 -year cash flow analysis and planning level projections over a 20 -year time frame. 9. As needed support for the City as it assesses and selects its preference Stormwater Customer Billing billing method. 3 Database 10. Up to 3 conference calls with GIS Office staff to strategize and support development of a final stormwater billing database. 4 Sustainable Stormwater Credit 11. Sustainable Stormwater Credit and Incentive Framework. Program Mitigation / Fee -In -lieu -of 12. Mitigation / Fee -In -lieu -of Program Assessment TM (Attachment to 5 Program Assessment Program Summary TM) including a Framework, Fee Structure and "Cookbook" of Water Quality, Flood, and Tree mitigation measures 13. Redlined UDC chapters 14. Meeting materials and attendance at 2 public input meetings and 2 6 Ordinances and public meetings of the Planning Commission and City Council (requiring Intergovernmental Agreements 2-3 individual trips). 15. Enterprise Fund Ordinance and up to 3 Intergovernmental Agreements, if warranted. 16. 12 monthly invoices and progress reports. 7 Overall Project and Quality 17. Monthly status calls, including an agenda, updated schedule, and action Management items. 18. Draft and Final Program Summary TM. Project Assumptions 1. A period of performance not to exceed 12 months. 2. Travel expenses for up to 5 individual trips in support of up to 8 total meetings are included. 3. It is assumed that all deliverables will consist of no more than 2 drafts and 1 final. 4. Unless specified, all deliverables will be provided in electronic format. 5. Key managers and staff from both CITY and FAY shall provide written review comments for deliverables via email within 10 working days. Otherwise, deliverables shall be considered acceptable as submitted. Comments will be addressed, and a final document issued. 10/17/2019 PAGE 11 OF 10 6. EOS/LOS Option A/B, with minor modifications, will generally serve as the basis for the final Stormwater Program definition and cost of service estimates. The existing stormwater customer billing database and financial spreadsheet model, with minor modifications, will serve as the starting points for the alternative rate structure. After the City's preferred rate structure is selected, one additional rate analysis will be performed. Article B. Schedule and Fee JACOBS will commence work within 10 working days of receiving a written notice to proceed with the project. The schedule will be developed in consultation with City staff with activities anticipated to be complete within 12 months. The fee for the Scope of Services is calculated based on the hourly rates, and the estimated Level of Effort (LOE) for this Scope of Services is shown in Table 1. Compensation will be on a not -to -exceed basis, and the project compensation will not exceed a value of $150,200 without written authorization from the client. CITY will be provided with a monthly breakdown of hours spent along with a summary of activities performed. 10/17/2019 PAGE 12 OF 10 Table 1 - Estimated Level of Effort and Expenses to/nnors Role Project Director Senior Consultant Consultant Project M-acer Staff En ineer Project Support Project Assistant Rate $ 225 $ 175 $ 160 $ 140 $ 100 $ 90 $ 85 Hours by Employee 56 16 451 60 396 36 32 Cost by Employee $ 12,600 $ 2,800 $ 72,160 $ 8,400 $ 39,6D0 $ 3,240 $ 2,720 Hours Cost Task l.: Stakeholder En a ement and Education 128 i 23,580 16 0 60 0. 24 0 8 Labor 128 $ 19.480 16 80 24 8 Expenses It 4,100 Task 2: Final Stormwater Program Definition and Rate Analysis 128 $ - 19,660 8 0 96. 0 24 0 0 Labor Program Definition / Costs 40 $ 4,960 16 24 Labor Alternative Rate Structure and 1 Rate Analysis 88 $ 14,600 8 80 Task 3: Sta—ater Custorner Billie Database Support 24 $ 3,840 0 0 24 0 0 0 0 Labor 24 $ 3,840 24 Task 4: Sustainable Stormwater Credit Pr am 1201 $ 14140 4 0 40 0 60 16. 0 Labor 120 5 14.740 4 40 60 16 Task 5: Mit) ation Fee-iMieu-of Program Feasibility Assessment 212 $ - 27 780 20 '.. 16 48 0 128 0 0 Labor - Benchmarking Labor- Cookbook of Mitigation Measures 76 56 $ $ 10,260 7,080 4 8 16 16 8 40 40 Labor- FILO policy framework and fee structure 80 $ 10,440 8 24 48 Task 6: Ordinance and Inter—runental Nreements, 226° $ 32,160 4 0 74 16 120 12 0 Labor IGAs and Enterprise Fund Ordinance 68 s 8,740 4 24 40 Labor- UDC Review and Redhnin 158 $ 19,320 50 16 80 12 Expenses $ 4 100 Task 7: Pro ect Management and Summary Report 209 $ 28,060 4 0 89 dd 40 8 24 Labor - PM (12 months) 92 $ 12,040 24 44 24 Labor Summary Report 120 $ 16,500 4 68 1 40 8 --' Total I 10581 ,,: .r:' .. 6R -. .:.. _ to/nnors City of Fayetteville, Arkansas - Budget Adjustment Form (Legistar) Budget Year Division Adjustment Number /Org2 ENGINEERING (621) 2019 Requestor: Chris Brown BUDGET ADJUSTMENT DESCRIPTION / JUSTIFICATION: Approval of Amendment 2 to the Stormwater Feasibility Study professional services contract with Jacobs, formerly CH2M Hill, in an amount not to exceed $150,200 and to approve a budget adjustment. $100,000 from Other Drainage Improvements (Cedarwood/Glennwood) & $50,200 from the Stormwater Quality Management project. COUNCIL DATE: 11/5/2019 LEGISTAR FILE ID#: 2019-0596 Hally 13 La,( 1012112019 11:31 AM Budget Director Date TYPE: JOURNAL #: GLDATE: RESOLUTION/ORDINANCE CHKD/POSTED: TOTAL - - v.20190816 Increase / (Decrease) Proiect.Sub# Account Number Expense Revenue Project Sub.Detl AT Account Name 4470.621.8810-5314.00 150,200 17008 1 EX Professional Services 4470.621.8810-5817.00 (100,000) 02108 1807.40 EX Improvements - Bridge & Drainage 4470.621.8810-5817.00 (50,200) 02097 1 EX Improvements - Bridge & Drainage H:\Budget Adjustments\2019_Budget\City Counci1\11-05-2019\2019-0596 Jacobs contract amend 1 of 1