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City staff outline stormwater utility shortfall, propose $1/month plus step increases to fund neighborhood drainage
Summary
Public Works warned the stormwater fund will be insolvent by 2033 under current rates and laid out options including a $1/month increase in 2026 plus annual 15¢/month steps to generate about $1.5M/year for neighborhood drainage projects.
Public Works presented a multiyear financial review of the stormwater utility and recommended the council consider incremental rate adjustments to avoid a fund shortfall and begin neighborhood drainage improvements.
Gary Jansen summarized fund history and needs: the stormwater utility was established in 1990 and received one base rate increase in 2017 (a $1.50 monthly base). Since then, expense increases and major capital projects — including the Blackley project now estimated at $36 million — have strained the fund. With current revenue assumptions, staff projected the fund balance could fall below minimum reserves by 2033 if no action is taken.
Jansen presented three options: (1) no base rate change (status quo), which delays a needed rate adjustment until a later, larger increase; (2) an annual 15¢ per month incremental increase each year to extend solvency; or (3) a one‑time $1 per month increase in 2026 followed by 15¢ per month annual increases thereafter. Staff estimated the dollar increase plus steps would yield about $1.5 million a year, extend the fund to 2044 and provide roughly $1.5M in annual neighborhood drainage improvement capacity.
Under the recommended option, the typical residential ERU customer would move from a current $3.50/month base to about $4.50/month after the one‑time $1 increase (plus subsequent 15¢ steps), an increase of about $12 a year. Councilmembers discussed equity across districts, prioritization (worst‑first vs district allocation), and possible grant or state funding opportunities to supplement the program.
Jansen said the city has a decision‑support tool that identifies top projects by district and that neighborhood improvements will take years, even with additional funding; staff recommended returning to council with an ordinance and public notice in January for a formal rate adjustment vote.
Several council members expressed support for the phased approach because it avoids a single large spike; some asked for more data on long‑term cost‑benefit including emergency‑service costs avoided by proactive drainage work. No rate change was adopted at the workshop; staff will return with an ordinance and public outreach plan.
