Stormwater rate study: consultants recommend 15% fee increase in FY26 and shift nonresidential billing to measured impervious area with a credit program

City consultants and Public Works staff presented an updated stormwater financial plan and rate study to the Environmental Matters Committee on April 10, recommending a 15% increase in the stormwater fee for fiscal year 2026 and a management‑led transition of nonresidential accounts to measured impervious‑area billing paired with a credit program.

Stantec consultant Dave Heider summarized a 10‑year revenue sufficiency analysis that used the FY26 budget baseline and the city’s capital improvement plan. The study showed total watershed restoration fund expenditures of approximately $2.9 million in FY26 (about $2.6 million in operating and maintenance plus capital and debt service). With current fees the fund would run sustained deficits and would deplete policy cash balances over the projection period.

Heider presented a modeled path that would begin with a 15% increase in FY26, followed by a 15% increase in FY27 and annual increases of 6% thereafter, which the consultant said would restore a minimum six‑month operating balance and support planned MS4 permit compliance and CIP spending under the scenario used.

Public Works stormwater program manager Mike Rosberg and stormwater engineer Anne Roederer outlined concurrent policy changes: converting nonresidential billing from tiered categories to a measured impervious‑area methodology and launching a new credit program to reward on‑site stormwater practices, maintenance of existing structural controls, or other qualifying actions (education, green infrastructure, tree planting). Staff said they plan to implement the new structure at the start of the fiscal year but allow an initial waiver period (two quarters) for nonresidential account holders to apply for credits and for staff to process applications.

Committee members pressed staff for additional detail about how much revenue residential and nonresidential accounts generate and how credit participation would affect overall revenues. Staff provided a working split: roughly $1.6 million of the current annual stormwater fee revenue comes from residential customers and roughly $1.0 million from nonresidential (tiered) accounts; staff said moving to a measured system could yield an incremental $100,000–$150,000 in revenue before any credit awards. However, staff emphasized revenue from a structure change depends on measurement methods and credit uptake and that the credit program design remains under active development.

The meeting also covered other program items: city contributions to partner grant or trust programs (an annual contribution to a restoration/trust program was cited at $350,000 in FY26), new staffing reflected in operations (9.5 FTEs budgeted in the stormwater program) and an expanded tree program line (listed at $515,000 in the FY26 operating plan). Committee members discussed whether the tree program funding should be escalated to meet the city’s longer‑term canopy goals and asked staff to show scenarios that include larger tree‑planting budgets.

Staff said they will present the FY26 rate recommendation (15% increase and the proposed structural change) at the April 29 Finance Committee and that a final decision would be folded into the city budget process. No formal committee vote was taken on fee adoption during the April 10 meeting.