LS presented the history of Rockville’s Stormwater Management (SWM) Program, leading up to how today’s Stormwater Fund balance is decreasing due to decreasing developer contributions while simultaneously new stormwater regulations are putting a greater demand on the City to properly manage modern facilities and retrofit older ones to meet today’s standards. Back in 2004, the EC supported a more sustainable SWM program by recommending a Stormwater Utility Fee. The Mayor & Council then instructed staff to perform an initial study. The City has done this, and has determined that with an increasingly large SWM inspections program (now to cover private as well as municipal facilities) and with a number of stormwater capital improvement projects coming, the current Stormwater Fund balance is insufficient, and will require additional monies from another source. This source could either be the City’s General Fund, or it could be a dedicated Stormwater Utility Fee. Taking money from the General Fund would basically require raising taxes to make up for the shortfall. In Rockville, two-thirds of taxes come from residential, while one-third come from commercial. Thus residences would bear the brunt of funding the stormwater program if it is funded from the General Fund. Alternatively, a stormwater utility fee could be created based on amount of impervious surface on a site. Impervious surfaces are directly correlated to watershed health, as more imperviousness leads to more runoff, more pollutants, etc. Imperviousness in Rockville is only about one-third residential, and two-thirds commercial/industrial/multi-family residential. A fee based on imperviousness is seen thus much more equitable, as those properties with the most damaging runoff would be contributing more to the solution than properties with less impervious area, such as residential plots. The November 27, 2006 M&C packet on Rockville’s website explains this concept. Imperviousness in Rockville was determined using GIS and aerial images. Every commercial, industrial, institutional and multi-family residential property in the City had its imperviousness calculated. Imperviousness amongst the residential sector was found to be fairly homogenous. Sure, there are some McMansions along with some smaller, unmodified homes from the post-WWII boom, but for the most part the residential lots are pretty consistent. Thus a single rate is being proposed for all residential lots. The administrative burden of attempting to calculate residential lots more precisely, and to keep this information up to date, would likely offset any diminished fees that owners of residential lots on the lower end of the spectrum would see, thus the single rate. This single rate, based on ~ 2,100 sq feet of imperviousness, would then become the “Equivalent Residential Unit”, or ERU. The fee for the ERU was determined by first creating the Stormwater Program – adding in all costs for inspections, maintenance and upgrades of the stormwater system, current and new staff, etc. to come up with a total Stormwater Program cost. The ~ $9 million currently in the Stormwater Fund would be spent down to a more reasonable reserve of $1.5 - $2 million, then the Stormwater Fee would be used to support the program at that level. In FY09, the fee would likely be ~$56 dollars, as the Fund is being spent down. This would come to equilibrium over the next 3-5 years, after which time the fee would be raised to approximately $89. After this point, it could either increase gradually each year to keep pace with inflation, or increase in stair-step increments every few years, whatever is more desirable. So, single family homes would all pay a single ERU of $56/$89 dollars. All others would pay in multiples of ERUs. So if a shopping center has 10 times the imperviousness of the typical residential lot, it would pay 10 times the fee. This money would all go into the Stormwater Fund to pay for the stream restorations, NPDES programs, capital improvements, and storm drainage maintenance. This is new – storm drainage used to be in the General Fund. Rockville has historically underfunded storm drain maintenance, and we have several neighborhoods which do flood regularly. Storm drainage maintenance is becoming even more important as ~ 30% of the storm drainage system was built in the 60s using metal pipes which are at the end of their lifespan. The City is currently working with its consultant to establish enabling legislation for the M&C to sign that would allow the Stormwater Fee. This will likely be some modification of Chapter 19 of the City Code, pertaining to Stormwater Management and Flood Control. This fee would be coordinated by the Montgomery County Office of Taxation, and placed on the property tax bill where several other similar fees are often placed. People with a mortgage may not even see this fee – it will just be incorporated into their monthly mortgage payment. The City chose this system as the preferred method for billing as it is a simple system that is already set up. Also, by placing the fee on the tax bill, the default rate is almost nil. If you use other methods, the default rate is much higher. One of the last major aspects of the fee to pin down is credits / exemptions. We don’t think anyone should be completely exempted for the fee, although we will need to determine what qualifies for a credit of some sort (for example, if you own a shopping mall which has up-to-date, onsite SWM treatment).
FK asked what about residential charges? Can there be incentives for implementing good practices such as rain gardens and rain barrels? AL asked about preventing McMansions – perhaps set an upper limit to the ERU, after which you would pay more. KD thought that one way to do that would be to make the 2,100 sq ft ERU not static but dynamic – recalculate over time as properties in the City change so it would continue to be reflective of the average. LS said that while you could use this to try to prevent McMansions, its such a small dollar amount that anyone building such a home could easily pay it. PM said it would be good to have a way of rewarding the smaller houses. LS said that we could re-measure average ERU every couple of years, and if a distinct split developed between McMansions and regular homes we could go to a two-tier residential ERU.
FK said that regardless of how it’s calculated, don’t just stick it on the property tax bill. There should be plenty of outreach preceding this. LS – absolutely. We’ve started a three-part series in Rockville Reports for April, May and June. We’re also planning on setting up meetings with non SFDs as well. FK mentioned that meetings with neighborhood civic associations would be a good way to get the word out. SY wanted to know about any methods the City had in mind to reduce its own imperviousness – With about pervious pavement sidewalks and driveway aprons? LS mentioned that we’d like to do these sorts of projects, but most of the $9 million remaining in the Stormwater Fund has been appropriated to various projects and watershed studies. Thus we’re not going to plan in new projects for money we don’t have. We can look at those kinds of programs once a fee is in place. PM thinks that this Stormwater Fee should be tied in to the Forest & Tree Preservation Ordinance since trees have stormwater value. FK wanted to know about HOAs with common areas, and perhaps giving stormwater credits for reforestation of those areas. LS mentioned that education and outreach would also be a much larger component of the Stormwater Program once fully funded, and this would also go towards those types of HOA improvements. Lastly, with the loss of Jerry Leighton, the Commission no longer has a representative to the Stormwater Fee Advisory Group. The group will likely be reconstituted for this second phase of the Stormwater Fee study, so the Commission will want to think about a replacement for Jerry. | 
