Consultants recommend stormwater utility - and fees

All property owners would pay to fund sewer upgrades

Jan. 25, 2012

Shorewood - Village officials continue to explore the prospect of forming a stormwater utility as a revenue source for the major sewer improvements slated for the next decade.

At a comprehensive sewer planning meeting Monday, the Village Board met with experts from Short Elliott Hendrickson, a Minnesota-based firm comprised of engineers, architects, planners and scientists. SEH staff provided an overview of stormwater utilities, which are growing in popularity as cash-strapped municipalities seek out additional sources of revenue beyond taxes.

Village Manager Chris Swartz provided updated cost estimates for the storm and sanitary work that is being planned to alleviate the flooding caused by the heavy downpours in July 2010. Swartz said the entire project hovers around $30.54 million, based on existing estimates.

As proposed, the work is to be funded through a variety of methods, including the general tax levy and a grant from the Milwaukee Metropolitan Sewerage District.

Experts tout utilities for funding

The proposed stormwater utility would fund about $13.7 million, or slightly less than half, of the improvements.

Consulting firms like SEH have touted the benefits of forming a stormwater utility because it can serve as a dedicated, predictable financial tool. Revenue from the utility would be kept in a fund separate from the operating budget. But a utility would mark a change in the community for tax-exempt entities - including government buildings, schools and churches - as they would pay fees for the runoff they generate.

Trustee Thad Nation expressed reservations about assessing a fee to the local school system, which has lost revenue in recent years based on the state's existing funding formula.

"They have no recourse to cover this," Nation said. "The money to fund (stormwater usage) would have to be funneled out of the schools."

In the case of the schools, Swartz said it is possible the fee could be covered by the village. He pointed to the past funding of refuse collection as an example of the municipality covering the tab for the schools.

Tiered rates likely

If the village does move forward with a utility, it is likely different rates will be assessed on residential, commercial and institutional propertys. Each category would have its own tiers, based on the amount of usage. A specific tier would determine how much a property owner would be charged. The amount of paved surface on a property likely would impact fees because pavement increasesrunoff. Conversely, a property rich in green space would likely be charged a lower rate.

Swartz said further discussion on the feasibility of a utility will take place in March.

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