HomeMy WebLinkAboutPACKET Joint Town Board Study Session 2023-05-24TOWN OF ESTES PARK BOARD OF TRUSTEES
BOARD OF LARIMER COUNTY COMMISSIONERS
Joint Study Session
No public comment will be heard
Wednesday, May 24, 2023
11:00 a.m.
TO BE HELD VIRTUALLY
This study session will be streamed live and will be available on the Town
YouTube page at www.estes.org/videos.
Agenda
I. Introductions.
II.Estes Valley Stormwater Utility Discussion. (Director Muhonen)
•Optional funding structures – Options 1-5.
III.Adjourn.
NOTE: The Town Board and County Commissioners reserve the right to consider other appropriate items not available at the time the
agenda was prepared.
PUBLIC WORKS Report
To: Honorable Mayor Koenig
Board of Trustees
Board of Larimer County Commissioners
Through: Town Administrator Machalek
From: Greg Muhonen, PE, Public Works Director
Mark Peterson, PE, Larimer County Engineer
Date: May 24, 2023
RE: Estes Valley Stormwater Utility
Purpose of Work Session Item:
Update the Town Board and Board of County Commissioners on optional stormwater
funding structures that do not rely on new user fees as previously discussed jointly with
the Town Board and Larimer County Commissioners in March 2023.
Direction Requested:
Provide direction to Town and County Public Works staff regarding the desire to pursue
a stormwater utility in Estes Park that either includes or omits a user fee assessed on
the owners of improved parcels within both the Town limits and unincorporated Larimer
County within the Estes Valley drainage basins. Such a user fee would require
adoption of a future Intergovernmental Agreement (IGA) that would detail the
responsibilities of both agencies. Conversely, elimination of the previously proposed
user fee also eliminates the need for a stormwater IGA.
Present Situation:
After the 2013 flood, the Town’s Strategic Plan was revised annually in 2016 through
2023 to include various goals and objectives to address flood mitigation. Since 2017,
several Town Board study sessions and joint meetings with the BCC explored this topic
(the history is reflected in 2 attached Town Board reports and the sample user fee
letter). The stormwater utility effort was paused in 2019 when the Town Board selected
Option 4 (take no further action) while waiting to see if grant funding would materialize
to pay for an initial stormwater infrastructure project on the Big Thompson River. These
grant applications were denied in both 2019 and 2020.
At the August 24, 2021, study session, Public Works staff provided updated information
regarding stormwater utility efforts in other Colorado communities and a proposal for the
Town to elevate our stormwater infrastructure maintenance efforts in 2022. At this
meeting, the Town Board affirmed its interest in resuming dialogue regarding rate
structures and a potential partnership with Larimer County regarding the formation of a
stormwater utility in the Estes Valley.
On February 2, 2022, Public Works Engineering staff met with the Larimer Board of
County Commissioners and received confirmation of the Board’s receptivity to resuming
discussions with the Town Board regarding a joint stormwater utility effort.
In January, 2023, the Town Board budget was increased to include $519,000 from the
General Fund to pay for the operation and maintenance of stormwater infrastructure in
Estes Park. This amount includes $405,000 for personnel and $114,000 for materials
and equipment.
On August 19, 2023 a joint work session was held in Estes Park where both the Town
and County Boards affirmed interest in partnering on a future storm water utility. Staff
was asked to research and bring back additional information pertaining to cost models
used in other CO communities to fund stormwater infrastructure, potential grant sources
of stormwater funding, and taxing options to pay for stormwater improvements.
On March 22, 2023, another joint work session was held in Estes Park where staff
reported on the requested research findings. The Board asked staff to research Idaho
Springs’ experience with funding stormwater infrastructure with sales tax revenue and
bring back three variants of user fee funding options for additional discussion. A copy of
the stormwater utility section from the Idaho Springs Municipal Code is attached as
Exhibit A. It is noted that this tool was adopted in 2006 and is funded by 5% of their 1%
sales tax. It generates only $25,000 per year, and capital projects are commonly
funded with added grant and General Fund dollars.
Proposal:
A stormwater utility funding estimating tool was created and is attached in Exhibit B. It
summarizes funding allocations for five options. Note the user fees are broken down
into three cost components (Administration, Operation & Maintenance (O&M), and
Capital (Infrastructure) Expansion). In Options 4 and 5, the user may enter preferred
percentages of program costs to evaluate a variety of funding strategies.
For the sake of evaluation simplicity, the cost estimating tool did not alter three other
highly influential variables that impact total program cost: 1) time duration for
infrastructure buildout, 2) annual inflation of construction costs, and 3) annual change in
sales tax revenue collected. Understanding the limited agency influence over these
variables, it is recommended that a decision be made based on reasonable current
assumptions, and future funding adjustments be made periodically (every 10+/- years)
as updated factual data is obtained.
Option 1. This is the baseline option that has been presented and discussed since
2019. It consists of 20% grants ($28M), 30% user fees ($40M), and 50% sales tax
($70M) for a total program cost of $138M by the year 2047 (3% inflation applied to a
2017 program cost of $79M). User fees would be applied to owners within the Town of
Estes Park (about 5400 parcels) and Larimer County (about 3100 parcels), and would
contribute 30% (rounded) of the stormwater utility program revenue as follows: 4%
Administration, 11% O&M, and 14% Infrastructure Expansion. This option assumes
20% of a new 1% sales tax could be directed toward stormwater infrastructure. If less
than 20% of a new 1% sales tax is available, the timeline for project completion would
need to be extended.
Option 2. This option minimizes the user fee to include only the administrative cost of
billing for the storm water utility. The O&M revenue is relocated to the Estes Park
General Fund (per the 2023 budget) and the Infrastructure Expansion revenue is
reassigned to new sales tax revenue. The modeled funding stream for this option
consists of 20% grants ($28M), 4% user fees ($5M), 65% sales tax ($89M), and 11%
General Fund ($16M) for a total program cost of $138M by the year 2047. This
exposes the absurdity of collecting a user fee to simply pay the cost of fee billing and
collection. If a user fee is instituted, it needs to be large enough to meaningfully
contribute to the operation and/or expansion of the stormwater utility. To this end, the
11% of program costs assigned to the Town’s General Fund could be redirected to a
User Fee if desired. Either way, this option assumes 25% of a new 1% sales tax could
be directed toward stormwater infrastructure. If less than 25% of a new 1% sales tax is
available, the timeline for project completion would need to be extended.
Option 3. This option eliminates all user fees. It reduces the 30-year program costs by
approximately $5M because the administrative overhead of billing users is removed.
This option also eliminates the need for an IGA between the Town and the County since
there are no property owner cost-sharing details to define and assess. The modeled
funding stream for this option consists of 21% grants ($28M), 0% user fees ($0), 67%
sales tax ($89M), and 12% General Fund ($16M) for a total program cost of $133M by
the year 2047. This option assumes 27% of a new 1% sales tax could be directed
toward stormwater infrastructure. If less than 27% of a new 1% sales tax is available,
the timeline for project completion would need to be extended.
Option 4. This is a user-defined option where the user can assign any desired
percentage of program funding to six resource centers to achieve a preferred program
funding strategy.
Option 5. This is also a user-defined option to create a custom funding proposal to pay
for the updated inflated cost of a 30-year program cost of $229M (or $209M without
administrative overhead) the recognizes 2023 personnel costs and more conservative
infrastructure expansion costs. This option allows incorporation of a new stormwater
engineer in the O&M costs paid by future GF revenue. This option can show how 25%
grants ($52M), 0% user fees ($0M), 47% sales tax ($98M), and 28% General Fund
($59M) can pay for a total program cost of $209M by the year 2053. Under this
scenario, 28% of a new 1% sales tax could be directed toward stormwater
infrastructure. If less than 28% of a new 1% sales tax is available, the timeline for
project completion would need to be extended.
Advantages:
• Increased funding for stormwater management would implement the Town Board
strategic plan goals and the Town-adopted Estes Valley Stormwater Management
Program recommendations.
• Elimination of a user fee respects the input from survey respondents who objected to
paying a new fee potentially implemented without a public vote. It also eliminates
the associated cost burden and administrative coordination between the County, the
Town, and the fee payors. Elimination of the user fee eliminates debates regarding
equity and use of the collected fees.
• This program would provide funding to address approximately 350 local residential
drainage improvements adjacent to both residential and commercial sites.
•The new sales tax revenue could be leveraged as local match contributions for
future grant funding applications as soon as 2024.
•Funding the infrastructure expansion with a new sales tax distributes the cost-
sharing burden across millions of visitors and resident shoppers in Estes Park, and
eliminates the need to create a formal stormwater utility enterprise operation.
Disadvantages:
•Modeled sales tax revenue is delayed until an approving public vote occurs.
•Grant revenue forecasts are speculative, and will be greater or lower than modeled.
•Depending upon sales tax ballot language, operations and maintenance activities
may be geographically constrained to the incorporated Town limits.
•Resource investment on improved stormwater management will require investment
of staff time which will divert work effort available for other work demands; however,
Town staff feels strongly that a long-term, multi-faceted funding solution to our
stormwater challenges needs to be developed.
Finance/Resource Impact:
Implementation of a Stormwater Utility proposal will provide the financial resources to
provide sustainable funding for:
•Maintenance of the existing Estes Valley drainage system; and
•Modernization and upgrades for Estes Valley stormwater infrastructure which
sets the stage for lower flood insurance premiums for all who participate in the
National Flood Insurance Program.
Level of Public Interest
Public interest in the problem is low until flooding occurs. Public interest in new
stormwater utility fees is expected to be high.
Attachments:
1 Idaho Springs Municipal Code Stormwater Utility (2006)
2 Stormwater Utility Estimate (PDF)
3 Stormwater Utility Estimate Tool (Excel - Editable) LINK
Attachment 1: Idaho Springs Municipal Code
•ARTICLE IV - Stormwater Utility
•Sec. 12-191. - Establishment.
There is hereby established a stormwater utility within the Public Works Department,
under the day-to-day control of the person designated by the City Council, subject to
overall management and direction by the Mayor and the City Council.
(Ord. 8 §1, 2006)
•Sec. 12-192. - Definitions.
For the purposes of this Article, the following words and terms shall be defined as
follows, unless the context in which they are used clearly indicates otherwise.
Drainage facilities. Any one (1) or more of the facilities and devices used in the
collection, treatment or disposition of storm, flood or surface drainage waters,
including without limitation the following: streets, curbs and gutters; all man-made
structures or natural watercourses designed or used for the conveyance of runoff,
such as conduits and appurtenant features, manholes, canals, storm sewers, drains,
drop structures, flood control basins, sedimentation basins, detention and retention
basins, flood walls, levies, stormwater pumping stations, wetlands, berms, swales,
channels, bridges, gulches, streams, gullies, flumes, culverts, pipes, ditches, siphons,
catch basins, inlets, collection, drainage and disposal pipelines and intercepting
stormwater pipelines; other appurtenant equipment and facilities; improved water
courses and channel bed and embankment improvements and protection devices;
and all extensions, improvements, remodelings, additions and alterations of any of the
foregoing.
Master drainage plan. A plan defining drainage basin boundaries, containing criteria to
be used in preliminary design of drainage facilities, presenting the location and
characteristics of all drainage facilities including those presently existing and those
expected to be needed under ultimate development, providing preliminary design for
required improvements, and including recommended staging of drainage facilities
construction, together with cost estimates.
Stormwater. That part of snowfall, rainfall or other stormwater which is not absorbed,
transpired, evaporated or left in surface depressions, and which flows controlled or
uncontrolled into a watercourse or other body of water.
Stormwater system. The drainage facilities, together with any and all appurtenant
property or other rights or interests owned by the City, designed, installed,
constructed, operated or maintained to perform the functions of the utility.
Utility. The stormwater utility established and governed by this Chapter.
ATTACHMENT 1
Watercourse. A stream, usually flowing in a particular direction, having a body or
banks, including intermittent-flow and seasonal-flow channels, and usually discharging
into another stream or body of water.
(Ord. 8 §1, 2006)
•Sec. 12-193. - Utility jurisdiction.
The utility shall have and exercise jurisdiction over the stormwater system of the City,
as now or hereafter constituted.
(Ord. 8 §1, 2006)
•Sec. 12-194. - Functions.
The utility shall conduct and provide for the investigation, planning, design, financing,
construction, reconstruction, repair, replacement, improvement, extension, operation
and maintenance of the stormwater system by whatever undertakings the City Council
shall determine, including without limitation the following:
(1)Developing, establishing, adopting and continuously reviewing and maintaining the
master drainage plan.
(2)Establishing and, from time to time, amending as necessary rules and regulations
applicable to the stormwater system and to persons and property which use or are
benefited by it.
(3)Establishing and, from time to time, amending as necessary design and
construction standards for drainage facilities, both public and private, within the City.
(4)Surveying and engineering for planning and design of drainage facilities and the
stormwater system.
(5)Constructing, installing, repairing, operating, maintaining, improving, replacing and
reconstructing drainage facilities included within the stormwater system.
(6)Planning and implementing mitigation of wetlands and other environmental
impacts of City capital construction projects.
(7)Acquiring property interests necessary to accommodate drainage facilities
included within the stormwater system.
(8)Complying with agreements of the City pertaining to stormwater, and with the
laws, rules and regulations of all other governmental agencies having jurisdiction over
stormwater within the City.
(9) Obtaining and supporting grant, loan and assistance programs of other public
agencies having a common interest in stormwater projects, studies and management
programs.
(Ord. 8 §1, 2006)
• Sec. 12-195. - Powers.
Acting by and through the utility, the City shall exercise all powers and authority to
perform the functions set forth in Section 12-194 above which are conferred upon the
City by the statutes and Constitution of the State.
(Ord. 8 §1, 2006)
• Sec. 12-196. - Stormwater Utility Fund created.
There is hereby created the Stormwater Utility Fund, which shall be accounted for as a
separate and distinct fund of the City. Any and all funds allocated to or received by the
Stormwater Utility Fund shall be used solely and exclusively to perform the functions
set forth in Section 12-194 above; provided that the Stormwater Utility Fund may
reimburse other City funds for expenses incurred in the performance of the functions
set forth in Section 12-194, and the Stormwater Utility Fund may likewise receive credit
for services rendered by the utility to other funds or departments of the City; and
provided further that nothing herein shall prevent the City from pledging all or any
portion of funds or revenues allocated to the Stormwater Utility Fund to the payment
of principal, interest, premium, if any, and reserves for bonds or any other obligations
lawfully issued or contracted for by the City for the payment or other financing of
utility functions, or for the purpose of refunding any such obligations. The annual
budget of the Public Works Department shall include a proposed budget for the
operations of the utility.
(Ord. 8 §1, 2006)
• Sec. 12-197. - Utility revenues.
(A) Effective as of January 1, 2007, there is dedicated and allocated to the Stormwater
Utility Fund each fiscal year from the Sales Tax Improvement Fund five (5) percent of
the total revenue to the Sales Tax Improvement Fund from sales and use taxes only in
the immediately preceding year, or twenty-five thousand dollars ($25,000.00),
whichever is less. Notwithstanding any other provision of this Article, however, any
restrictions applicable to funds allocated to the Sales Tax Improvement Fund shall
follow and govern the use of funds allocated to the Stormwater Utility Fund from the
Sales Tax Improvement Fund, and the City shall account for the funds in the
Stormwater Utility Fund so as to distinguish Sales Tax Improvement Fund proceeds,
and the income therefrom, from all other funds in the Stormwater Utility Fund.
(B) In addition to the revenues allocated pursuant to Subsection (A) above, the
Stormwater Utility Fund is further authorized to accept and expend as authorized in
Subsection (A) any and all funds and other assets received as gifts, grants,
contributions-in-kind, participation or reimbursement payments, and any other funds
or assets lawfully allocated or dedicated to the Stormwater Utility Fund.
(Ord. 8 §1, 2006)
Attachment 2: Stormwater Utility Funding Calculator
ATTACHMENT 2