Incentive program sweetens deal for Cedar Rapids stormwater fee revamp

CEDAR RAPIDS — Cedar Rapids is looking to sweeten the deal to ease in a sweeping change of how customers, including the region's largest employers and retailers, pay for stormwater utilities.

A policy change under consideration calls for $250,000 per year to entice or share costs with stormwater utility customers to install infiltration practices that could curb storm runoff.

'We all have to change our habits from time to time,' Mayor Ron Corbett said. 'The key is whether a fee will change our habits or not and we will see between the fee and the incentive hopefully our habits will change.'

The City Council unanimously approved Tuesday a first vote on a restructured stormwater fee that charges more to customers that send the most water into the gutter system. Officials say this will help control flash flooding and generate revenue to update the aging storm sewer network, which as an estimated $75-$100 million backlog of work to be done.

The fee restructuring would be phased in over several years to minimize the year-to-year increase. When fully implemented, the new structure could generate an extra $1 million per year, upping stormwater fee revenue to $5 million annually.

The policy change could be finalized with another vote on May 24 or June 14.

The incentive program called the 'Stormwater Best Management Practices Cost-Share Program' would up the amount available annually from $25,000 to $250,000, extend it from residential to all customers, remove the $2,000 per project cap and set priorities based on a master plan for the storm system. Applicants would have to provide a 50 percent match for a project.

Council member Scott Olson has been working on the changes for more than a year and said he is pleased with the final proposal.

It was revised in the past two weeks to include the incentive program. Corbett criticized an earlier version as unfair to the customers who'd be most impacted.

Public Works Director Jen Winter said the cost-sharing program would be paid for with proceeds from the stormwater fee. She said implementation of best practices could have an added benefit of reducing the backlog of maintenance needs.

The stormwater fee plan pits improved environmental practices against the area's biggest employers and retailers, prompting city officials to tread carefully and weave in several changes to make it more tolerable to those that would be most impacted, including adding incentives and phasing in the plan.

'I think with the incentives many large customers will mitigate large fees, and the community will win as they do that,' City Council member Scott Overland said.

The current fee structure doesn't distinguish customers who infiltrate stormwater on-site versus those that send large volumes of stormwater into the city's gutters, typically due to large swaths of pavement or structures with insufficient green space to absorb water. The 15 payment tiers currently cap out at $3,133 annually for non-residential properties with 40 or more acres.

The new plan is based on 'equivalent residential units' as a measure of imperviousness, rather than overall property size. Seventy four of the area's largest employers and retailers — Rockwell Collins, Walmart, Lindale Mall, schools and mobile home parks — would bear the brunt of the policy change.

The proposed policy calls for $. 17 per ERU per day with no cap. Some customers could see their bills grow 1,400 percent to about $46,500 annually. But most would still see a similar bill of about $62 per year.

Large customers initially scoffed, prompting Cedar Rapids to revise its plans. But several customers including Rockwell Collins and UnityPoint Health-St. Luke's came around to say while the added costs aren't ideal, they support the change.

Officials with Kirkwood Estate Mobile Homes Park had continued to oppose the plan. A petition with 123 signatures, signed mostly by residents, called for the city to scrap the plan. According to information from the city, a typical resident there could pay $1.15 per month in fiscal 2017, increasing to $4.02 per month by fiscal 2020.

The plan proposed Tuesday calls for the restructured fee phased in over six years from fiscal 2017 with a cap of 100 ERUs to fiscal 2021 with a cap of 500 ERUs and then no cap in fiscal 2022. Property owners also can earn credits for education, pervious gravel and non-discharge.

The credits can be added together and could reduce the ERUs factored into the bill by up to 75 percent.