Title
Public Hearing to Consider the Proposed 2019 Water Quality and Flood Protection Initiative;
Adoption of Resolution Finding that a Majority Protest Does [Not] Exist, Directing a Property Owner Ballot Proceeding for the City’s 2019 Water Quality and Flood Protection Fee and Directing the City Manager to Vote “Yes” for City Owned Parcels; and
Introduction of Ordinance Amending the Alameda Municipal Code by Adding Article IV to Chapter 18 to Establish the Water Quality and Flood Protection Fee. (Public Works 351)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City of Alameda’s (City) stormwater fund is failing to keep up with the significant operations, capital, and regulatory requirements of the stormwater system. The City’s risk in maintaining an out-of-date stormwater system is only compounded by rising sea levels and more frequent, intense storms.
The City’s existing stormwater fee has remained flat at approximately $56 annually per single-family home for nearly fifteen years. As a result, the stormwater fund is depleted and has been incurring annual deficit spending since Fiscal Year (FY) 2014-15. Without additional revenue, the City will be forced to eliminate and/or significantly cut its street sweeping and storm drain maintenance programs. Similarly, the adopted FY 2019-21 budget included $0 in stormwater funds for new capital improvements because there is no money available in the fund for this work.
On July 16, 2019, the City Council took the first of two legally required steps to have property owners decide whether to adopt a new stormwater fee. The City Council directed staff to mail a notice to all recorded owners of affected parcels notifying them of an October 1, 2019, public hearing on a proposed 2019 Water Quality and Flood Protection Fee. The proposed additional fee for a residence on a medium sized parcel, which is the most common type of property owned in the City, would be $78 annually.
At the close of the October 1, 2019 public hearing, the City Council will determine whether a majority protest against the proposed fee exists. If no majority protest exists, the City Council can adopt a resolution finding no majority protest, direct a property owner ballot proceeding, direct the City Manager to vote “yes” on the ballot for City-owned parcels, and introduce the Water Quality and Flood Protection Fee ordinance. In this event, ballots will be mailed to all recorded property owners of affected parcels on or about October 10, 2019. Ballots must be returned to the City Clerk on or before November 25, 2019. Tabulation will be performed in the days following, and the results will be brought back to the City Council on December 17, 2019.
BACKGROUND
The City has had a stormwater fee since the early 1990s, prompted by the onset of federal stormwater regulations directed at municipal separate storm/sewer system operations. The City’s most recent assessment shows that the stormwater fund (Fund 351) is running at a $1,000,000 annual deficit. The City’s stormwater fee has remained at a flat rate of approximately $56 annually per single-family home for nearly fifteen years, with no escalator to account for increases in labor, benefits, material costs and vendor services. If this fee had included an escalator, the existing stormwater fee would generate another $1,000,000 annually.
The City’s stormwater system is composed of 11 pump stations, 26 pumps, 126 miles of storm drains, two lagoon systems, 278 outfalls, 2,879 catch basins, and 1,967 manholes. It also includes the 200+ miles of curb and gutter that comprise the most upstream portion of the stormwater conveyance system. Currently, the City’s stormwater system has at least $30,000,000 in high-priority unmet needs including pump stations and pipes from the 1940s and earlier. At the same time, the State Regional Water Quality Control Board continues to mandate more rigorous requirements for trash capture, pollution control, and green infrastructure that, if not met, may lead to fines of as much as $50,000 per incident.
The City’s existing stormwater fee cannot keep up with the significant operating, capital, and regulatory requirements. The current revenue generated from the fee is not sufficient to fund Public Works’ existing operation and maintenance of the stormwater system, the department’s clean water program and municipal stormwater permit responsibilities. Without action to raise more stormwater revenue (or use another funding source), the City may be forced to eliminate and/or significantly reduce its street sweeping and storm drain maintenance programs. These programs protect the Bay and improve water quality annually by preventing 823 dump trucks full of trash and debris from entering our stormwater system and Bay through installation and maintenance of 250+ trash capture devices, 200+ inspections, and sweeping 24,000+ miles of street. The programs protect Alamedans and their property by ensuring 24/7 response before, during, and after storms to keep maintained and operable the City’s 11 pump stations, 26 pumps, and 126 miles of storm drains.
The need for additional revenue for the stormwater system was identified in the last three biennial capital budgets (FY 2015-17, FY 2017-19, and FY 2019-21). In addition, the City Council discussed the stormwater fee and the need for additional revenue in the context of various revenue measure alternatives between February and July 2018.
On July 16, 2019, the City Council considered whether to proceed with a parcel tax (registered-voter election requiring a two-thirds majority for passage) or a property-related fee (property-owner election requiring a simple 50%+ 1 majority of the votes cast for passage). The City Council chose to proceed with the property-related fee and approved a fee report for a proposed Water Quality and Flood Protection Fee. The proposed additional fee for a residence on a medium sized parcel (3,485 to 6,098 square feet), which is the most common type of property owned in Alameda, would be $78 annually. The City Council also scheduled a public hearing as mandated by Proposition 218 (California Constitution Article XIIID) for October 1, 2019 to allow affected property owners to consider the proposed fee and file written protests.
Subsequent to the City Council’s action on July 16, 2019, a notice of public hearing was mailed to all recorded property owners with notification of the October 1, 2019 public hearing and additional information about the proposed fee and the stormwater system. The notice indicated to property owners how to submit a written protest. If the owners of a majority of affected parcels file such a protest, the City may not consider the proposed fee. If there is no majority protest, the City Council may initiate a property owner ballot proceeding by which the fee could be approved if a simple majority of votes cast are in support.
Beyond the notice mailed to 17,961 property owners (associated with 20,578 parcels), staff conducted additional community outreach on the proposed fee. Staff held community meetings at Mastick Senior Center on August 28, 2019 and Leydecker Recreation Center on September 10, 2019. Staff created a new webpage at www.alamedaca.gov/CleanWater <http://www.alamedaca.gov/CleanWater> and uploaded informational materials, including the notice of the public hearing, community meeting presentation materials, frequently asked questions, fact sheet, fee report, July 16 staff report, and this staff report.
On social media, staff made multiple posts to help raise awareness of the elements of the City’s stormwater program, and responded to several dozen questions users raised about the stormwater system and/or the proposed fee. City staff also shared information about the initiative with the Association of Realtors (Alameda), Chamber of Commerce, Community Action for a Sustainable Alameda, Downtown Alameda Business Association, Greater Alameda Business Association, Kiwanis Club, League of Women Voters (Alameda), Mastick Senior Center, Rotary, Sierra Club (local), and West Alameda Business Association.
DISCUSSION
At the conclusion of tonight’s public hearing, the City Clerk will share whether a majority of property owners have submitted a written protest. If not, the City Council can adopt a resolution finding no majority protest, directing a property owner ballot proceeding and directing the City Manager to vote “yes” for City owned parcels, and introduce a Water Quality and Flood Protection Fee Ordinance. The Water Quality and Flood Protection Fee Ordinance is based on the already approved fee report and includes the rates, inflationary provisions, purpose of the fee and limits on its use, and administrative processes for fee collection.
With the City Council’s approval of the resolution and ordinance, staff will then prepare and mail ballots to all recorded property owners of affected parcels on or about October 10, 2019. Ballots will be due back to the City Clerk on or before November 25, 2019. Every parcel owner receives one ballot per parcel and is entitled to one vote per parcel, i.e., an owner of three parcels can submit three votes. Tabulation will be performed in the days following November 25, and the results will be shared with the City Council at the December 17 meeting. The fee is approved if a simple majority of votes cast are in support.
ALTERNATIVES
• Approve this item to let Alamedans decide whether to adopt the proposed Water Quality and Flood Protection Fee increase.
• The City Council could move forward with no stormwater initiative or the City Council could direct staff to return at a later City Council meeting for additional discussion.
FINANCIAL IMPACTS
The costs of the survey, rate study, and ballot proceeding are included in prior City Council authorizations. If the additional fee should be approved by property owners at the $78 annual rate for medium-sized single-family residences, the City’s storm drain maintenance program will realize an approximate $2.9 million increase in revenue annually. It should be noted that the proposed fee is in addition to the existing stormwater utility fee of approximately $56 annually per single-family home charged by the City.
The proposed fee, if approved by voters, will be annually adjusted by the Consumer Price Index for the San Francisco Bay Area using December index of each succeeding year (CPI), with a maximum annual adjustment not to exceed 3%.
Because California Proposition 218 requires that a property-related fee program expenses to be fairly distributed among property owners, exemptions are not permitted. Thus, the Alameda Unified School District (AUSD) and the City both own properties subject to the fee. AUSD’s charges for its 30 parcels are estimated at $78,547 annually. The City’s charges for its 138 parcels are estimated at $55,586 annually. Charges for its 111 parcels at Alameda Point are estimated at $323,130 annually. With respect to the Alameda Point fees, staff estimate 50% of those charges are passed through and paid by lessees, and the remainder would be covered by the City’s Base Reuse Fund (Fund 858). In addition, as parcels are sold, buyers will assume responsibility for the fee.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Alameda Municipal Code Section 18-21, Storm Water Management and Discharge Control.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378 (b)(4) of the CEQA Guidelines, because it involves governmental fiscal activities (approving funding mechanisms), which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
CLIMATE IMPACTS
To meet the challenge of sea level rise and more frequent and intense storms, the City’s funding of its stormwater pumps, pump stations, and pipes must be commensurate with its maintenance, operations, and capital needs. By increasing revenue to get closer to the stormwater system’s current and projected needs, this action is one of the most important, near-term actions recommended in the City’s draft Climate Action and Resiliency Plan.
RECOMMENDATION
Hold a public hearing on the proposed 2019 Water Quality and Flood Protection Fee; adopt a resolution finding [no] majority protest, direct a property owner ballot proceeding, direct the City Manager to vote “Yes” for City-owned parcels; and introduce an ordinance establishing the Water Quality and Flood Protection Fee.
CITY MANAGER RECOMMENDATION
The City Manager concurs with the Public Works Department recommendation to hold a public hearing on the proposed 2019 Water Quality and Flood Protection Fee; adopt a resolution finding [no] majority protest, direct a property owner ballot proceeding, direct the City Manager to vote “Yes” for City-owned parcels; and introduce an ordinance establishing the Water Quality and Flood Protection Fee.
Respectfully submitted,
Liam Garland, Public Works Director
By,
Liam Garland, Public Works Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. Comments for Community Meetings
2. Written Protests
cc: Eric Levitt, City Manager