While they took no formal vote on the creation of a storm water utility, Cloquet City Councilors directed city staff to continue with the process of making the utility a reality during Tuesday's meeting.
Audience member and Cloquet businessman Dan Lundquist did wonder why the city had to create a new utility when costs had previously come from the city's general fund. In answer to his questions, City Administrator Brian Fritsinger explained that increasing state regulations mean increased costs for compliance. Plus, with decreasing state aid to cities, general fund dollars are being stretched more every year.
In a nutshell, an estimated $350,000 per year would be raised by the new utility, money the city could only spend on storm water-related expenses, from street and sewer construction and maintenance projects to public education measures and/or a new street sweeping machine.
The money would be raised by billing homeowners an average of $4 per month - which would either come as part of the water bill or, in the case of those who aren't on city water, in a quarterly or semi-annual billing - and commercial/industrial properties according to the amount of impervious surface (hard surfaces that don't absorb rainwater) the property contains. Duplexes would be charged about $6 per month.
As an example, the bill for City Hall - which has an estimated 15,681 square feet of impervious surface - would amount to $14.55 per month. In general, according to a flyer available at the meeting, most small businesses can anticipate a monthly bill of approximately $20, while the bill for a big box retailer will come in closer to $400 a month.
Although the city wasn't commanded by the state to set up a storm water utility, it is a way the state allows cities to raise funds to pay for what basically are unfunded mandates from both the state and federal government regulating how cities must manage surface water in order to preserve natural resources.
"Not only do we have these requirements now, they're never going to decrease," said Caleb Peterson, assistant city engineer. "Our current five-year [storm water discharge] permit expires in 2011 and the requirements will ramp up when we apply for a new one."
Commercial and industrial property owners would be able to apply for credits if they are already implementing measures to control storm water runoff, for example by building retention ponds, rooftop gardens, etc. As well, Peterson said businesses whose discharge bypasses the city's storm sewer system could apply for credits. The maximum credit would likely be 75 percent, he said.
A storm water utility is also fairer than coming up with the money from property tax revenues, Peterson noted, because it is based on use. Properties with more impervious surface pay more. Plus, tax-exempt organizations like churches and schools also pay their share of costs.
Peterson said city staff have been discussing proposed fees with a number of the commercial and industrial land owners already, in an attempt to settle issues before the bills go out.
"A lot of other cities started sending out bills and then decided to develop a credit policy, so they had to issue big refund checks," he said.
At Tuesday's meeting, Mayor Bruce Ahlgren directed Peterson to set up a public information meeting on the proposed utility, and new First Ward Councilor Dave Manderfeld requested the council also hold a work session meeting on the subject.
While city officials are aiming for a smooth roll-out of the utility with everyone fully informed, Fritsinger is hoping it happens sooner rather than later.
"We assumed [the utility] would be in place by April 2010, so we're already behind," he said in answer to a council question. "It is integral to our 2011 budget."
Commercial and industrial property owners can call the city's Public Works Department at 218-879-6758 to find out what the estimated fee would be for their properties. General information on the storm water utility is also posted on the city's website at www.ci.cloquet.mn.us.