Overview
Since 1962 the Village of Arlington Heights has issued numerous General Obligation bonds, spending over $56 million on the Village’s ongoing program to reduce the impact of heavy rainstorms on Village residents. Even with these past expenditures, excessive rain events can still cause flooding in the Village. On July 23, 2011 the Village experienced significant flooding due to a storm that dumped between 5.5 and 7 inches of rain over a four hour period. This storm followed two weeks of substantial rain events which had already saturated the ground. Although there can be no guarantee against future flooding events, as a result of this historic rain event the Village commissioned two separate flood studies. These studies were completed to determine if there were additional affordable infrastructure improvements that could be undertaken that would provide a consistent level of storm water control throughout the community. Over the last few months the Village has completed in-depth planning for the implementation of a long-term storm water control program based on the results of the studies.
In FY2014 the Village’s stormwater efforts were consolidated in one fund called the Storm Water Control Fund. This fund has not had a dedicated source of revenue, but has relied on transfers-in from other funds. Recent infusions of cash have come from a FY2014 transfer-in from the General Fund of $1 million, a transfer-in of $500,000 during the 8-month transition period, and a $2.7 million transfer-in during 2017 due to the closing of the Emerald Ash Borer (EAB) Fund. These transfers-in have covered the ongoing costs of the Backyard Drainage Improvement ($300,000/year) and the Storm Sewer Rehab/Replacement ($500,000/year) programs. As outlined in a status report on the flood studies in March 2017 and again during the CIP review in June 2017, Staff has proposed the imposition of a new storm water utility fee to provide an ongoing source of revenue to cover the annual storm water control program costs as well as the planned five-year storm water control infrastructure improvements. These infrastructure improvements were among the improvements identified by the flood study consultants, and prioritized by an interdepartmental staff committee. The intent of the prioritization was to select those projects that affected the most residents within the available revenue stream.
Proposed Storm Water Utility Fee
Surrounding communities have employed various methods of developing and billing a storm water utility fee. The Village of Palatine charges a flat monthly fee of $5.00 on each bill. The Villages of Buffalo Grove and Wheeling charge a base residential rate of $5.08 and $2.00 respectively. Higher rate tiers are then based on total impervious square footage. Impervious surfaces include buildings, driveways, parking lots, pools, patios, and other similar non-porous areas. Wheeling reported that it took about a year for a GIS consultant to calculate the impervious surfaces for each parcel located within the Village’s boundaries.
Village of Arlington Heights Staff is recommending a variation of the two methods outlined above. The basis of any water and sewer bill is the meter or meters at each location. Single-family homes and numerous small businesses have one water meter per billing address, whereas apartments and multi-tenant commercial properties frequently have a number of meters that are billed to these large properties. As shown in Exhibit 1, a Tier 1 storm water utility fee of $6.25 is proposed for single-family, government and non-profit properties, as well as small businesses with a land area size of 40,000 square feet/billed meter or less. It is proposed that larger properties be charged somewhat higher fees that are increased over Tiers 2 through 5 depending on the size of the land area /meter. The land areas for commercial/industrial properties were determined by accessing data at the Cook County Clerk’s Office, and the number of meters per billing location is kept by the Village’s Water Billing section.
In the proposed fee schedule, the land area square footage increases faster than the proposed tiered increase in the storm water utility fee. This was done to recognize the cost of the storm detention and other storm water control systems that are already required of many of the larger properties.
As shown in Exhibit 2, the annual revenue generated by the proposed storm water utility fee is estimated to be about $1.63 million per year. This would be sufficient to cover the cost of the annual storm water control program and the planned infrastructure projects through about 2022. Storm Water Control infrastructure projects beyond this date would require the sale of additional bonds. The Village’s bond maturity schedule shows that the next available maturities will occur in 2019-2020, at which time the Village’s overall operational and capital needs should also be considered.
Recommendation
It is recommended that the Village Board approve the proposed Storm Water Utility Fee rate structure as outlined in Exhibit 1, and that it be effective starting with the October 2017 billing dates.