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Council discusses raising stormwater fees and shifting to utility financing; staff to include bond scenarios in utility study
Summary
City staff previewed an 8% stormwater fee increase and recommended restructuring stormwater financing to rely on utility revenues and revenue bonds instead of tax levies; councilors asked for pro forma scenarios, equity adjustments for nonprofits and phased rate changes to limit sudden impacts.
Calumet City staff told the council they plan to recommend an 8% increase to the stormwater fee as part of an updated utility study intended to move the fund toward expense recovery and to create capacity for capital projects.
Director Hamill briefed the council on the stormwater fund's history and condition, noting the fee began at $20 in February 2004 and has risen over time. “Our recommendation…is an 8% increase,” Hamill said in preview of the utility‑study recommendations. Staff estimated that, under the current CIP and cash projections, revenue sufficiency that would allow the city to draw funds for other projects would not be likely until around 2030.
Council members and advisors pressed staff on financing choices. One advisor recommended treating stormwater as a user‑funded utility with revenue bonds rather than relying on tax levies so that those who contribute to stormwater pay their share; he argued that bonds and a utility fee structure create a fairer linkage between impervious area and cost. The advisor said transitioning to a utility model would require phased rate increases and careful choices about depreciation lives and minimum cash reserves to avoid sudden large hikes.
Councilors also discussed equity issues and existing ordinance language that governs fee reductions for stormwater; staff noted the ordinance language may need revision. Members asked staff to prepare pro forma scenarios that model funding capital with debt versus cash, show anticipated rate impacts, and illustrate options for addressing nonprofit exemptions.
Director Hamill told the council the full utility study would be provided in the council packet and staff could add debt‑funding scenarios to the pro forma. Councilors instructed staff to present these scenarios and return with rate‑structure recommendations next week and more detailed options in subsequent meetings.
