J U N E 1 4 , 2 0 1 6 KC Water Cost of Service Task Force Meeting #3
Agenda • Welcome and Introductions • Guiding Principles • Overview of Stormwater Utilities across the U.S. • Overview of KC’s Stormwater Utility • KC’s Stormwater Utility Financial Overview • Follow-up Items from May 10 th Meeting • Public Comment • Open Task Force Discussion 6/14/2016 2
Welcome and Introductions
Guiding Principles
Questionnaire Overview • Questionnaire designed to ask questions to help guide decision-making for this process • Purpose was to identify common community values • Results will help to draft guiding principles • Asked to rate level of agreement with value and outcome statements 6/14/2016 5
Questionnaire Responses - Outcomes It is important to … Protect public health and safety Provide a quality product Provide reliable service with few interruptions Perform our work in a safe manner Respond quickly to customer needs Protect the environment Invest in the long-term viability of infrastructure Meet all federal and state regulations Invest in redundant back up systems to avoid interruptions 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Strongly Agree Agree Neutral Disagree Strongly Disagree 6/14/2016 6
Questionnaire Responses - Values Growth and Redevelopment Service to new development and the associated infrastructure extensions should pay for itself and not be funded by existing ratepayers. Rates and charges should recover the full cost to service new growth rather than recover these costs from existing ratepayers. Rates should be competitive with other jurisdictions to help attract and retain businesses, citizens, and customers. Existing ratepayers should fund upgrades to existing infrastructure needed to stimulate redevelopment. Existing ratepayers should fund the extension of service to new developments as a way to encourage new development and growth. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Strongly Agree Agree Neutral Disagree Strongly Disagree 6/14/2016 7
Questionnaire Responses - Values Affordability It is important to reduce the impact of future rate increases on low and/or fixed income households. KC Water should reduce the high burden of increased costs for low and/or fixed income households through a program that helps conserve usage and therefore lowers the bill. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Administrative Cost The cost of administration related to rates should be efficient and should be a simple process used to collect revenue. Rates and charges should be straight-forward, simple to administer and minimize bad debt to not burden customers who pay on time. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Strongly Agree Agree Neutral Disagree Strongly Disagree 6/14/2016 8
Questionnaire Responses - Values Fair and Equitable Fairness is important in structuring utility rates, but as rates rise, KC Water needs to consider the ability to pay by low and/or fixed income households in structuring a funding plan. It is important that utility rates cover the full cost of providing service to the end customers. Customers should see a direct benefit from the infrastructure investments made. 0% 20% 40% 60% 80% 100% Strongly Agree Agree Neutral Disagree Strongly Disagree 6/14/2016 9
Questionnaire Responses - Values Other Ratepayers should understand how services and infrastructure improvements are funded. It is important to plan for the eventual replacement of infrastructure in the rate structure. Infrastructure investment should be paid for over time to distribute costs over multiple generations who will use the system. Rates should be structured to encourage water conservation. KC Water should reduce utility rates with revenue from state and federal taxpayers. 0% 20% 40% 60% 80% 100% Strongly Agree Agree Neutral Disagree Strongly Disagree 6/14/2016 10
Stormwater Utilities in the U.S.
What is Stormwater? The portion of precipitation (rain, snow, etc.) that runs off pavement and rooftops in urban areas 6/14/2016 12
Stormwater Runoff is Natural but………….. What Urbanization Does To Runoff is Not Natural Stormwater Runoff Hydrograph With Urbanization Without Urbanization Rapid conveyance Runoff Volume of more pollutants Greater & earlier peak discharge Stream Flow Rate Greater runoff volume Small & less rapid peak Reduced baseflow Time 6/14/2016 13
Stormwater Can Create Downstream Flooding Problems… 6/14/2016 14
…Accelerates Erosion and Degradation of Streams… 6/14/2016 15
…And Also Carries Pollutants Into Streams, Rivers and Lakes, Which Impacts Water Quality 6/14/2016 16
Stormwater Management Spans Many Issues that Affect Quality of Life: • Flooding • Stream Condition • Public safety • Aesthetic value • Insurance costs • Public safety • Development costs • Habitat • Water Quality • Drinking water • Recreation • Degradation 6/14/2016 17
How do other stormwater utilities work? • Most Stormwater Utilities based on Impervious Area of Customer’s Property (~ 70% of 1,400 = 1,000) • Of those, about 70% define a billing unit based on the average single family home impervious area (~700) • Average impervious area for a single family home is 4,200 square feet (Includes home, driveway, sidewalk, separated garage, etc.) • Billing Unit usually called Equivalent Runoff Unit or ERU Note: Kansas City is based on impervious area on the customer’s property; the billing unit is based on 500 square feet. Source: Western Kentucky University 2014 Stormwater Utility Survey 6/14/2016 18
How do other stormwater utilities work? • Estimated 1,800 Stormwater Utilities in United States • 4 in Missouri (Arnold, Columbia-Boone Co, St. Louis, KCMO) • State with Largest Number = Florida (180) • Average Rate = $4.20 per month per Billing Unit (ERU) • Largest = $35.00/month • Smallest = $0.01/month • Average Billing Unit is 4,200 square feet of Impervious Area (Average for Single Family Home) Note: Kansas City charges $0.50 for each billing unit = 500 sq ft of impervious area Source: Western Kentucky University 2014 Stormwater Utility Survey 6/14/2016 19
How do other stormwater utilities work? • Common Practice (Average Billing Unit): • Residential pays 1 ERU • Non-residential pays 1 ERU for each 4,200 square feet Source: Western Kentucky University 2014 Stormwater Utility Survey 6/14/2016 20
Other Stormwater Utilities in Missouri Revenue Per Monthly Fee Creation Annual 2010 Capita Per Community ERU ($/ERU/Month) Year Revenue Population $1/ERU/Month Arnold 1,750 $3.00 2005 $508,298 21,013 $8.06 Columbia-Boone County $1.75 1993 $1,582,500 115,273 $7.84 Kansas City 500 $0.50 1992 $12,980,000 463,202 $9.34 St. Louis Metropolitan * 318,069 Sewer District (MSD) Source: Western Kentucky Univ. Stormwater Utility Survey 2012 *Note: St. Louis MSD levies a stormwater tax $1.96 per $100 valuation for Administration $6.78 per $100 valuation for Districtwide Stormwater $0.055 to $0.10 per $100 valuation for O&M, CIP Note: For Kansas City, average home assumed to be 2,500 square feet of impervious area. Source: Western Kentucky University 2014 Stormwater Utility Survey 6/14/2016 21
Defining an achievable Level of Service will drive the needed revenues • Flood Management New development vs redevelopment • • Combined vs separate sewer areas • Operation & Maintenance Costs Administration • • Maintenance • Result: Prioritized long-term stormwater CIP • Flood severity • Water quality benefits 6/14/2016 22
Sustainable stormwater funding includes all viable alternatives • Restructure User Charge Stormwater • Evaluate additional funding User Charge sources Special PIAC Assessment Funds • Offer incentives for green Bonds infrastructure • Consider affordability Pay-as-You-Go Developer issues Sinking Fund Incentives • Implement public campaign to build support Development Taxes Fees 6/14/2016 23
KC Stormwater Utility
Stormwater Utility Goals Improve Water Quality Minimize Loss of Life and Property Environmental Enhancements Optimize Infrastructure 6/14/2016 25
KC Stormwater Utility Snapshot • 630 Miles of Storm Sewer • 53,000 Storm Inlets • 15 Stormwater Pump Stations • 13.5 Miles of Levee (3 rd Largest Levee System in U.S.) • Stormwater Fee has remained unchanged since FY2003 • KC Aviation Department is largest customer • FY2016 Unaudited Operating Revenue of $13 Million • FY2016 Unaudited Operating Expense of $17 Million 6/14/2016 26
Services Provided by Stormwater • Street Sweeping • Maintain Levee Systems • Catch Basins Cleaning • Maintain Green Infrastructure • Household Hazardous Waste Dropoff • Leaf and Brush Pickup • Catch Basins Repair • Municipal Separate Storm Sewer System (MS4) Permit • Flo0d Monitoring Compliant • Flood Protection • Neighborhood Flood Improvements Improvements (PIAC Funded) 6/14/2016 27
Stormwater Utility Service Area Blue Kansas City separate storm sewer Green Kansas City combined sewer Yellow Outside city limits 6/14/2016 28
Kansas City Levee Map Kansas City has the 3rd largest Levee system in the U.S. 6/14/2016 29
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