City of Bainbridge Island staff are recommending a 28.2% SSWM fee increase in the City’s 2017-2018 proposed biennial budget.
Councilman Roger Townsend, the Council’s ex-officio to the Utility Advisory Committee, supported the increase at Friday’s Council retreat.
Roger Townsend’s recommendation to the Council was not backed up by substantive analysis or discussion. He has shown in City Council and committee meetings he is not a financial detail individual, and his recommendation appears to be based on some City staff questionable and flawed projections and the woefully unengaged Utility Advisory Committee (UAC) discussion on the SSWM budget at their 28 September meeting. UAC Chairman Andy Maron has promoted a SSWM fee increase for more than a year, and he considers financial details and SSWM utility program evaluations as something the UAC should not be doing because the City Council has not asked the committee to do so. He also made it abundantly clear the Utility Advisory Committee does not exist to represent City utility ratepayer’s interests, and that unfortunately is true. Nobody represents utility ratepayer interests in this City government.
SSWM fees could remain where they are or even decreased if this City operated a financially efficient stormwater utility that didn’t add a host of discretionary and science data gathering programs. Higher than required stormwater utility fees have existed for years, and that’s now proposed to get even worse.
The City is also using the SSWM utility to augment the general fund by taking utility ratepayers money and using it other than its Washington State legally intended purpose of flood control and storm drains for the municipally owned and operated stormwater system.
Staffing Levels: The City’s proposed Cost Allocation Plan has 10.42 Full Time Equivalents (FTEs) paid from the SSWM Fund.
Forty-six individual city employees will have all or some of their salary paid by the SSWM Utility.
The field workers (storm drain maintenance, street sweeping, ditching, spoils hauling, culvert maintenance, etc) are budgeted at 3.92 FTE, including field supervision. The City’s pollution discharge permit (NPDES-II) has 1 FTE Engineer and a .7 SSWM technician budgeted, but this is a mature program running on almost automatic, and that adds up to more personnel hours than needed.
A total of 5.62 FTE are doing SSWM utility field type work and managing the stormwater (NPDES-II) permit requirements, including the required part of water quality monitoring.
City now contracts out almost all stormwater utility construction work, and this takes some engineering and contract time … add .5 FTE for engineering and .5 for contract/invoice work.
It should take 6.62 FTE to do the SSWM utility and permit work (and that’s probably liberal on FTE’s labor hours).
The remaining 4.5 FTE are a product of SSWM utility cost overhead allocation. That is about 2.5 FTE higher than a financially efficiently run utility should require, and with the average personnel cost projected at $131,400 per employee, the excessive personnel cost allocation is in the range of $325,000 a year.
Salary and benefits for this supposedly small storm drain utility are $2,462,060 in this biennial budget. That’s $4,944 a city workday in city personnel costs alone, not counting the consultants they hire for field work and data keeping.
Rent: The City proposes charging the SSWM utility $290,008 “rent” for the SSWM utility cost allocated employees using City Hall. This money simply transfers from the SSWM Fund to the City’s General Fund.
Local utility tax: It’s against state law for COBI to directly transfer money from a utility fund (fee collected for a specific purpose) to the General Fund. One way to circumvent that prohibition is to call it a tax and then there is no limit. Cities do not have to charge local utility taxes, but many do just because they can, or they collect their overhead costs if they do not have a cost allocation system. COBI currently charges a 6% local utility tax. That’s $299,400 SSWM utility ratepayers would contribute to the General Fund from stormwater fees in the proposed biennial budget. The utility doesn’t benefit from this tax … it’s simply money transferred so the City Council can spend it on whatever they decide to spend it on.
Repairs and other improvements: For the last five years, the SSWM utility has been averaging $207,000 a year in “repairs and other improvements.” The proposed biennial budget, the City proposes $1.03 million … no explanation for the $616,000 increase. Public Works Director Barry Loveless told the UAC the increase was simply an accounting shift moving the utility annual programs from the capital budget to the operational budget. But there appears to be a shift to contracting out virtually all small jobs that, let’s say, require a backhoe, such as installing a non-complicated drain culvert.
Two significant new programs need mention in an balanced discussion on SSWM rates.
First is an Ecology requirement to have low impact development rules in place by 1 January 2017. Those new rules are a paradigm shift in land development, and after ignoring the deadline for almost three years (probably because the City was up to its ears in the Comprehensive Plan rewrite), the City has hired consultants to draft the Municipal Code changes and write new development regulations. How low impact development is going to be paid for is not on the City Council’s agenda. It’s a stormwater related issue, but it’s a land development and monitoring cost that has little or nothing to do with the City’s stormwater infrastructure. The choices are to increase permit and development fees, pay from the General Fund, pay from Stormwater utility fees, perhaps obtain an Ecology grant at least to get started, or some combination of these revenue sources.
Second is a deep culvert assessment that provides convincing evidence that at least the McDonald Creek culvert under Eagle Harbor Drive needs repair or replacement. That single culvert project is projected to cost more than $1 million.
And finally, it should not be lost on the City Council that a previous Council decided to classify City streets and roads as part of the City’s stormwater sewage system so the City could cease paying stormwater impervious surface charges for City roads. That decision to reclassify streets and roads removed a $900,000+ a year transfer from the General Fund to the SSWM Fund, although the City arbitrarily decided to pay only 30% of that impervious surface fee (about $260,000 a year).
So now, not only does the General Fund not transfer funds to the SSWM Fund, the SSWM Fund moves money to the General Fund through cost allocations, employee space rental charges, and utility taxes. The SSWM Fund annually pays a significant portion of their non-capital expenditures to the City’s General Fund.
There is no more regressive collection of citizen money than this City’s SSWM fee. The utility also pays for a number of discretionary programs that do nothing meaningful for the utility, but this City has no program review for program effectiveness, and the City Council is not about to upset the status quo because program evaluations might lead to personnel changes and reduce revenues to the General Fund.
The SSWM utility remains a relatively muddled mess of various costs and charges and programs, and it’s about to get a large revenue boost from a City Council that simply doesn’t comprehend the issues because they hear only from a City staff that wants to protect their General Fund revenue more than they want to put utility customers first and run a cost effective stormwater utility.