Murray stormwater rates set to increase
Oct 21, 2019 03:34PM
● By Shaun Delliskave
Murray City Public Works Director Danny Astill presents a new stormwater rate plan to the city council.
By Shaun Delliskave | [email protected]
While Murray residents have one of the lowest stormwater utility rates along the Wasatch Front, at $4.65, the city council approved a five-year incremental increase at the Oct. 1 city council meeting. Residents can expect to pay $8.25 per month by the year 2025.
“Since completing our Storm Water Master Plan, we have been working with Zion’s Public Finance, Inc. to review and develop a financial model that includes our capital improvements plan, equipment, and personal needs,” Murray City Public Works Director Danny Astill said. “Based on the financial model, we developed several scenarios, which were evaluated based on the city’s ability to pay for improvements as we go or the ability to take on more debt to pay for those improvements along with the staffing and equipment needed to maintain compliance with our permit.”
Murray City’s last rate study was completed in 2011; therefore, the city felt a need to review its stormwater rates to ensure that it is planning wisely. To serve the many demands placed on its stormwater system, the city is anticipating significant capital improvements to maintain current levels of service, meet stormwater regulations, and protect its citizens from stormwater runoff. Further, inflationary costs are resulting in increased operating expenses. Rates must be designed to keep up with these changes and must be structured to fairly and equitably serve customer needs.
State and federal stormwater regulations to improve water quality are increasing operational costs significantly. The city anticipates the need to add one full-time position by 2021 to meet the associated permitting and inspection requirements.
A review of projected revenues under the existing rate structure relative to proposed expenses indicated that the city would not have sufficient revenues to fund the needed capital improvements without a rate increase.
According to Murray City’s Public Works report to the city council, “This rate structuring was chosen, after extensive discussions with city staff and its consultants, because it has minimal impact on existing stormwater ratepayers. A residential unit would initially see an increase of $1.00 per month, or $12.00 per year. The city then increases the rate, each year after that, by $0.65 per month, for a total increase of $7.80 each year.”
Zion’s Public Finance, Inc. worked closely with Murray City and Hansen, Allen & Luce, Inc., the city’s stormwater engineering consultants, to provide a recommended rate schedule that would account for growing operating expenses, capital improvement needs, and increasing stormwater regulations. The primary objectives of the rate analysis were to ensure sufficient revenues to cover all costs, maintain existing bond covenants and debt coverage ratios, and to keep at least 180 days’ worth of cash on hand in the stormwater utility fund. The city also desired to minimize impact on existing ratepayers while providing desired service levels and funding necessary capital improvements.
Even tax-exempt organizations, such as churches and Intermountain Medical Center, will be impacted by the rate change based on the Equivalent Residential Unit (ERU). “What we have determined is that every property is going to give us so much runoff. We base all the ERU on that same square footage that is developed, and then we apply it to every single home and business related to that as well. IMC, the mall, and churches—with big parking lots—will all [see rates go] up based on the amount of ERUs," Astill said.
Growth in stormwater equivalent residential units (ERUs) is based on historical growth in the city and has been projected at a rate of 0.2 percent per year, which equates to approximately 69 ERUs per year. Murray City currently has 34,469 ERUs.