Title
Adoption of Resolution Certifying the Ballot Tabulation Results for the 2019 Water Quality and Flood Protection Fee Initiative; and
Final Passage of Ordinance Adding Article IV to Chapter 18 of the Municipal Code, and Ordering Levies of the 2019 Water Quality and Flood Protection Fee for Fiscal Year 2020-21, as Approved by a Majority of Votes in Favor of the Fee Submitted by Property Owners. (Public Works 351)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City of Alameda’s (City) Urban Runoff Fund (Fund) has failed 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 The City’s risk in maintaining an out-of-date stormwater system is only compounded by rising sea levels and more frequent, intense storms. Revenues to the Fund come from the City’s existing stormwater fee, which has remained at approximately $56 annually per single-family home for nearly 15 years, while costs have increased significantly. As a result, the 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.
On July 16, 2019 and October 1, 2019, the City Council took action to provide property owners the opportunity to decide whether to adopt a new stormwater 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. Ballots for the Water Quality and Flood Protection Initiative were mailed to all recorded property owners of affected parcels on October 11, 2019, and returned to the City Clerk on or before the deadline of 6:00 p.m. on November 25, 2019. Tabulation was done under the supervision of the City Clerk on November 26, 2019.
The results showed that a majority of the ballots cast, 57%, were in favor of the new fee. This result authorizes the City Council to approve the ordinance and levy the 2019 Water Quality and Flood Protection Fees beginning in FY 2020-21.
As part of the City Council’s consideration in June 2020 of the Mid-Cycle Budget Update, staff will return with a plan for FY 2020-21 expenditures consistent with the Water Quality and Flood Protection Fee Initiative.
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 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 15 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, and the Department’s clean water program and municipal stormwater permit responsibilities. Without action to raise more stormwater revenue (or use of 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 the 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 chose to proceed with a property-related fee and approved a fee report for the 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 lot size owned in the City, 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.
On August 14, 2019, a notice of the October 1, 2019 public hearing was mailed to all 17,961 recorded property owners (associated with 20,578 parcels). Staff conducted additional outreach on the proposed fee at community meetings on August 28, 2019 at Mastick Senior Center and September 10, 2019 at Leydecker Recreation Center. Staff also 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, and July 16 and October 1 staff reports.
On social media, staff made multiple posts to help raise awareness of the elements of the City’s stormwater program, and responded to several dozens of questions community members raised about the stormwater system and/or the proposed fee. City staff also shared information about the initiative with the Association of Realtors (Alameda), Alameda Chamber of Commerce, Community Action for a Sustainable Alameda, Downtown Alameda Business Association, Greater Alameda Business Association, Kiwanis Club, League of Women Voters of Alameda, Mastick Senior Center, Rotary Club of Alameda, Sierra Club (local), and West Alameda Business Association.
On October 1, 2019, the City Council held the noticed public hearing on the proposed fees, determined that a majority protest against the proposed fee did not exist, and adopted Resolution No. 15598. The resolution directed a property owner ballot proceeding, directed the City Manager to vote “yes” on the ballot for City-owned parcels, and introduced the Water Quality and Flood Protection Fee Ordinance.
On October 11, 2019, the ballots were mailed to all recorded property owners of affected parcels with the return deadline to the City Clerk of November 25, 2019 at 6:00 p.m.
DISCUSSION
Tabulation was done under the supervision of the City Clerk on November 26, 2019. The results showed that a majority of the ballots cast, 57%, were in favor of the initiative, and 43% voted no. This result authorizes the City Council to approve the ordinance and levy the 2019 Water Quality and Flood Protection Fees beginning in FY 2020-21.
ALTERNATIVES
• Certify the result of the ballot proceeding and approve the levy of the Water Quality and Flood Protection Fee beginning in FY 2020-21.
• Provide additional direction to staff regarding the initiative.
FINANCIAL IMPACTS
The additional fee approved by voters at the $78 annual rate for medium-sized single-family residences will annually generate approximately $2.9 million more in revenue for the City’s storm drain maintenance program. The newly approved fee is in addition to the existing stormwater utility fee. The new fee will be annually adjusted by the Consumer Price Index (CPI) for the San Francisco Bay Area using the December index of each succeeding year’s CPI, with a maximum annual adjustment not to exceed 3%.
The City will begin collecting the new fee in FY 2020-21. A new fund will be established to account for the collection of the fees. Staff will propose a spending plan for FY 2020-21 consistent with the Water Quality and Flood Protection Fee Initiative, which includes funding of sea level rise and flood protection costs, as part of the Mid-Cycle Budget Update in June 2020.
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
The ability of the City to meet the challenge of sea level rise and more frequent and intense storms will be greatly enhanced by the outcome of this initiative. This includes the City’s funding of its stormwater pumps, pump stations, and pipes which 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
Adopt a resolution certifying the ballot tabulation results for the 2019 Water Quality and Flood Protection Fee Initiative, final passage of the ordinance adding Article IV to Chapter 18 of the Alameda Municipal Code, and order levy of the 2019 Water Quality and Flood Protection Fee for Fiscal Year 2020-21 as approved by a majority of votes in favor of the fee submitted by property owners.
CITY MANAGER RECOMMENDATION
The City Manager recommends adoption of a resolution certifying the ballot tabulation results for the 2019 Water Quality and Flood Protection Fee Initiative and passage of the ordinance.
Respectfully submitted,
Liam Garland, Public Works Director
Financial Impact section reviewed,
Elena Adair, Finance Director
cc: Eric Levitt, City Manager