Board votes to create stormwater utility and recommends ERU rate cap

The Village of Cottage Grove board voted Aug. 17 to create a stormwater utility after a presentation showing the village's obligations under its MS4 permit and comparing local buy-in costs for regional compliance programs.

Dan Johnson of Strand Associates presented an impervious-area analysis and proposed funding models. The study used an Equivalent Runoff Unit (ERU) method based on average single-family-residential impervious area (about 4,650 ft2), then calculated that an ERU charge of $8.90 per month in 2027 would generate the operating, maintenance and capital-savings stream the village needs to fund permit compliance, equipment replacement and pond maintenance without shifting the full burden to the general fund.

Trustees debated billing options. Staff offered three common models: (1) standard (same fee for all single-family parcels), (2) tiered (several fixed tiers based on parcel or impervious area) and (3) site-specific (bill by measured impervious area). Trustees and staff favored a tiered hybrid that uses impervious-area data to create simple tiers that balance equity and administrative cost. The board discussed credit rules for on-site best-management practices (rain barrels, rain gardens, infiltration, pond maintenance), noting most communities use a one-time or limited annual credit for verified BMPs.

Trustee Stoa moved a resolution directing staff to implement a stormwater utility with a tiered-hybrid approach, recommending the utility commission set an initial ERU rate not to exceed $8.90 per month and return a communications plan to the board. The motion passed. The board also asked staff to draft an ordinance, define credit policy details (including inspection protocols and whether credits are one-time or annual), and produce outreach materials for residents and businesses.

Cameron (Village staff) said the utility will allow the village to plan and save for periodic large repairs (dredging ponds, culvert repairs, equipment replacement) rather than relying only on the general fund or borrowing short-term. Staff estimated an initial annual utility budget in the mid-six-figure range with approximately $200,000 directed toward long-term asset replacement and a portion shifted from the general fund for operations such as street sweeping.

Staff will present a draft communications plan and ordinance language for board review in the coming weeks and aim for implementation in 2027, after finalizing billing method, credits and administrative procedures. The board specifically asked for a business-facing handout as part of the communications package.