Cedar Rapids’ proposed stormwater fee hits biggest employers and retail destinations

CEDAR RAPIDS — The area's biggest employers, largest manufacturers and most heavily used retailers could see stormwater utility fees soar 14 times above their current bills as Cedar Rapids tries to manage the effects of high-intensity storms and flash floods with a dated stormwater system needing some $100 million in improvements.

The proposed fee calculation is based on how much impervious surface covers a property. Big organizations with sprawling parking lots and massive structures find themselves bearing the brunt of the plan, if adopted.

A who's who of local establishments — Lindale Mall, Transamerica, Menard's, Mercy Medical Center, Walmart, Target, General Mills, Cedar Rapids schools and Hy-Vee — populate a list of 74 customers with 100 total properties that would be most impacted, according to a city analysis.

Residential customers would be largely unscathed. According to city documents, 90 percent of customers will see a reduction or no change in their bill, aside from typical annual rate increases.

One impacted customer, Unity Point-St. Luke's, is taking a larger view of the plan.

'Obviously, it is not something that thrills me,' said Lannie Checketts, UnityPoint Health-Cedar Rapids senior vice president and chief financial officer. 'We look at it like a fee, like water or sewer, something you pay for utilization. There is an element of fairness and we want to be good corporate citizens.'

St. Luke's would see its bill go from $3,000 to $14,000 or $15,000 under the plan, Checketts said. The hospital would cut within its budget to absorb the cost, he said.

St. Luke's already has installed some stormwater mitigation, such as permeable pavers in a parking lot, and will be looking to incorporate more 'green' infrastructure as part of renovations and construction, Checketts said.

Rockwell Collins, which has three locations on the list, would see a fee increase at the higher end of the scale, said Tom Gentner, director of environment, safety, and health, but he did not provide specific financials because the plan is fluid.

He said the company thinks the restructured fee concept is fair — that properties with more runoff pay more — but wants more discussions about the pace of implementation and rates.

Rockwell looked at constructing a parking lot bioswale — a drainage ditch designed to absorb runoff — but passed after a $40,000 estimate, Gentner said. Another recommended mitigation tool, porous pavement, has engineering challenges with Iowa's repeated frost-thaw cycles, he said. Still, Rockwell will be exploring options, he said.

Under the current system, property owners regardless of the land use pay 17 cents per day per quarter acre of property, or about $60 per year. Bills top out at $3,133.

Under the new plan, a property owner with 10 acres, 5 of which are impervious, would see the annual bill increase 19 percent from about $2,600 to $3,100.

Those with 100 acres, 75 of which are impervious, would pay nearly 14 times more than the current $3,133, up to $46,592 a year.

The 74 most-impacted customers would see their bills at least double, the city analysis showed. The Gazette Company's commercial printing facility on Bowling Street is among those listed.

A city spokeswoman said state law prohibits releasing fee information for individual customers, so it was unclear how much each customer would be impacted.

In aggregate, the top 74 customers pay $259,109 in fees, which would climb to between $813,818 and $1.07 million under the plan, according to the city.

The proposed changes have spurred scrutiny from those most affected.

The perspective from St. Luke's and Rockwell appears to be in line with other feedback received by the city. Most understand changes are needed and fair, but want to see the fee phased in, more credits given for installing green infrastructure and to exempt or reduce the impact on tax-dependent entities like schools, according to Sara R. Baughman, city utilities spokeswoman.

Based on the feedback, the city is looking at revisions. While an initial analysis figured the increase occurring in 2017, a revised version calls for a five-year phase-in. And, instead of credits maxing out at a 30 percent bill reduction, the revision calls for a 75 percent reduction cap.

The restructured fees would have increased revenue from $4 million to $5.5 million a year under the original plan, but that would decrease to $5 million a year if the revisions are adopted.

The city initially estimated it needed $50 million in upgrades after a flash flooding episode. But it now says the needs are twice that, about $100 million.

'The additional revenue provided by the proposed change will go directly to storm sewer improvements, which will benefit the entire community by helping reduce flash flooding risks,' Baughman said.

The city hopes the fee restructuring encourages more environmentally friendly infrastructure on properties.

'Ideally one day we'd like to see our whole community practicing infiltration on their individual lots,' said Sandy Pumphrey, a project engineer in the Public Works Department.

The plan is expected to go the infrastructure committee in March and, if approved, to the full City Council for consideration.

Many cities around the country have been restructuring stormwater fees to battle flooding and pay for updates to old stormwater systems, said Cooper Martin, sustainability program director for the National League of Cities Sustainable Cities Institute in Washington, D.C.

Martin identified rain gardens, bioswales, green roofs, porous pavements and gutter systems feeding to rain barrels as popular choices for holding rainwater on the property. Martin said ideal stormwater management systems can have no added costs for new construction, but can be pricey to remodel into existing property.

'For existing buildings, obviously there's a trade off what the fee is versus the cost of making changes,' he said.