Title
Conduct a Public Hearing and Consider/Discuss/Act on an Ordinance of the City Council of the City of McKinney, Texas, Amending the Code of Ordinances of the City of McKinney, Texas, Through the Amendment of Chapter 110, Entitled "Utilities," Through the Amendment of Article VII, Entitled "Municipal Surface Water Drainage Utility System," by Adding New Division Markers to Aid in the Organization of Article VII, Amending Section 110-394, "Definitions," in Part, by Updating the State Law Reference in the First Line of Said Section and by Amending Certain of the Existing Definitions and Adding a Definition for the Phrase "System-Wide Fee Component," by Amending Sections 110-395 and 110-396 by Replacing Said Sections in Their Entirety With New Section 110-395 and 110-396 Bearing the Same Respective Titles, by Amending Section 110-397, "Exemptions," in Part, by Amending Paragraph (a) to Add "Institutions of Higher Education" to the List of Governmental Entities Exempted From the SDUS Fee and Re-Numbering the List Accordingly, by Amending Section 110-398, "Billing, Deposits and Expenditures," in Part, by Amending Paragraphs (a), (c) and (d), Re-Lettering a Portion of Existing Paragraph (d) as Paragraph (e) and Adding a New Paragraph (f), and by Adding New Sections 110-399 Through 110-404; by Amending Appendix A - "Schedule of Fees" by Deleting Section 110-395, "Schedule of Charges," in its Entirety and Replacing Said Section With a New Section 110-395, "Schedule of Charges," Repealing all Conflicting Ordinances; Providing a Severability Clause; Reserving All Existing Rights and Remedies; Providing For Immunity; Providing For Injunctions; Providing for the Publication of the Caption of This Ordinance; and Providing an Effective Date
Summary
COUNCIL GOAL: Direction for Strategic Growth, Operational Excellence and Financially Sound Government
MEETING DATE: April 7, 2015
DEPARTMENT: Development Services / Engineering
CONTACT: Michael Hebert, PE, Assistant Director of Engineering
RECOMMENDED CITY COUNCIL ACTION:
Approval of the Ordinance and the Storm Water Credit Policy
ITEM SUMMARY:
· The attached ordinance reflects proposed modifications based on multiple discussions and analyses regarding the Surface Drainage Utility System fee.
· The fee is proposed to be set at $4.00 per single family home and per single family land use equivalent (SFLUE) for multi-family properties.
· The fee is proposed to be set at $3.00 per SFLUE for commercial and industrial customers, recognizing the impact of lifting the cap on larger commercial and industrial customers.
· Based on advice from the City Attorney, Staff is recommending removal of the $200 monthly cap on drainage fees to make the system nondiscriminatory, and equitable under State law. Removal of the cap will have a significant impact on commercial and industrial customers with a high amount of impervious surface.
· Staff is also recommending modifying an SFLUE from its current value of 2,343 square feet of impervious surface to 3,000 square feet, recognizing the change in average size of a single-family home in McKinney since the last adjustment.
· Impervious area is a widely accepted method of determining storm water fees.
· Based on the proposed modifications, the net fee for one SFLUE for commercial and industrial customers will actually be slightly lower per square foot of impervious surface.
o The previous fee was approximately $1.17 per 1,000 square feet of impervious area while the proposed fee is $1.00 per 1,000 square feet of impervious area.
· The proposed revisions to the Code of Ordinances includes a Storm Water Credit Program which will allow commercial and industrial customers who are most affected by the removal of the cap, referenced above, to receive credit for existing or proposed best management practices (BMP's) on-site.
o Credits up to 40% can be achieved with the program
o The program is similar to that adopted in Frisco, Addison and Fort Worth
o The proposed policy/program was amended per City Council comments at the February 16, 2015 Work Session. The redline version based on City Council comments is attached herewith. This includes removing the annual maintenance verification submittal requirement for permanent structures, and modifying weekly parking lot sweeping to monthly to receive that credit.
· In an effort to determine whether or not the proposed fee is appropriate, Staff utilized data from previous improvements to Jeans Creek to determine possible future improvement costs for creeks City wide.
· Jeans Creek is a high-end scenario since most of the drainage basin was developed prior to detention and erosion hazard setback requirements.
· Based on the improvements done to Jeans Creek to date, costs are approximately $1.4 million per stream mile.
· Making several assumptions, this translates to an SDUS fee of approximately $9.00 per month per SFLUE without caps in place.
· This scenario is beyond the requirements that will likely be necessary with the current regulations, there a reduction in the fee from $9.00 per month is appropriate.
· After the Council Work Session of February 16, Staff advertised the proposed ordinance in the McKinney Courier Gazette for three consecutive Sundays on:
o March 1, 2015
o March 8, 2015
o March 15, 2015
BACKGROUND INFORMATION:
· In 2013, City Council requested a review of the Storm Water Management Ordinance and issues associated with storm water management in an effort to simplify requirements to make development in McKinney less complicated and more predictable.
· Council formed a focus group and one of the group's recommendations was to increase the surface drainage utility system fee to approximately $5.00 per single-family home.
· City Council created a subcommittee to work with City Staff in order to further review the recommendations of the focus group and provide recommendations on the best method of amending the SDUS fee.
· The subcommittee recommended adjusting the fee to $4.00 per single-family home instead of the focus group's proposed $5.00 per home.
· Upon reaching this preliminary conclusion, Staff began discussions with those customers who would be most affected by the proposed ordinance modifications.
· Based on input received, Council recommended modifying the commercial and industrial fee to $3.00 per SFLUE to address, in part, the significant impact of removing the cap on larger customers.
· Staff sent letters (copies attached) to 100 businesses and 41 multi-family property owners requesting their participation in meetings to discuss the proposed fees. This represented all the customers who may see a significant increase in their fee.
· Staff held 3 meetings which were all open to the public:
o 2 for commercial/industrial customers
o 1 for multi-family customers
· The meetings were advertised on the City's website and through City electronic mailings and were open to all who wished to attend.
· Staff also met with the MEDC Business Retention and Expansion Program (BREP) to discuss the proposed modifications.
· Both the McKinney Courier-Gazette and the Dallas Morning News announced the meetings.
· 27 total attendees participated
· The proposed modifications were also publicly discussed at 2 City Council Work Sessions and 4 City Council meetings/combined meetings.
FINANCIAL SUMMARY:
· Single-family residential properties: $4.00 per month flat rate, generating approximately $2 million per year.
· Multi-family residential properties: $4.00 per SFLUE per month, generating approximately $340,000 per year
· Commercial and industrial properties: $3.00 per SFLUE per month, generating approximately $1.3 million per year.
· No cap is recommended for multi-family, commercial and industrial properties.
· Total estimated revenues per the above recommendations are approximately $3.6 million per year without credits.
· Reductions in revenues will occur due to proposed credits included herewith for the Storm Water Credit Policy (Program Manual). Staff estimates a possible 5-10% reduction in commercial/industrial fees with the policy in place
· If customers do not feel the fees are consistent with their impacts on the surface drainage system, they may request a review of their fee, and City Council can consider a reduction if the reduction is considered nondiscriminatory, reasonable and equitable.
BOARD OR COMMISSION RECOMMENDATION: N/A