Rhea Rivera, CGFM

Director, Financial Services

Issue Statement: A preliminary FY 27 stormwater assessment rate must be adopted by the Commission to be provided to the County Property Appraiser by August 4, 2026.  The City's proposed stormwater assessment rate is $145 per equivalent residential unit (ERU), with an ERU being defined as one residential unit or 1,507 square feet of impermeable surface.  

This agenda item is for the preliminary assessment resolution for FY 2027, as required by the Ordinance.

Recommended Action: The City Commission adopt a resolution approving the preliminary rate resolution adopting a stormwater assessment rate of $145.00 per year per ERU and establish Monday, 6:00 p.m., September 14, 2026, as the time and date of a public hearing to be held in Commission Chambers as regards to the adoption of the FY 2027 final annual stormwater assessment rate. 

In 2011, staff proposed to the City Commission that the fee for stormwater services be moved from the monthly utility bill to an assessment on the annual property tax bill to facilitate both the billing and collection of these fees. The City Commission directed staff to proceed with the implementation of this proposal which culminated in the adoption of Ordinance O-2011-015 which was adopted on second reading on July 20, 2011. The Ordinance establishing this program requires a preliminary resolution and an annual resolution be adopted during the budget process each fiscal year. These were done for FY 2012 with the preliminary resolution, R-2011-090, adopted on July 20, 2011, and the annual resolution, R-2011-115, adopted on September 12, 2011.

This method of billing is expressly permitted for stormwater charges in Florida Statutes Section 403.0893. The tax bill collection method provides essentially a 100% reliable collection rate to ensure a consistent funding source to support ongoing operations, maintenance, funding of debt service and the direct funding of some capital projects.

This rate is applied to all properties within the City, but certain governmental properties are exempt from assessments and are charged in an alternate manner for the benefits they receive from the City’s drainage system. A few other properties within the City are also exempt due to having sufficient retainage or retention capacity when measured against the rainfall in a 25-year storm. All properties and the associated fees are indicated in the stormwater management assessment role on file in the City Clerk’s office.

In the FY 2022 budget, the City Commission approved a business plan initiative, funding a stormwater rate study conducted in conjunction with the City's Stormwater Master Plan.  The Stormwater Master Plan is part of the City's long-term efforts to address drainage and stormwater issues.  The Stormwater Master Plan was prepared by Hazen Sawyer while the separate rate study was prepared by Raftelis Consulting.

On the June 1, 2022 City Commission meeting, a joint presentation on the Master Plan and the rate study were provided.  The master plan identified over a dozen major projects to be completed over a 15-year period.  The estimated cost of the projects at that time was approximately $50 million.  As shown in the attached master plan and rate study presentation, the prior rate was not sufficient to maintain existing stormwater operations and activities, and the Fund was experiencing an annual shortfall in excess of $0.5 million a year.

The study recommended a series of gradual increases after FY 2023 to provide sufficient resources to fund stormwater operations, capital equipment, and the design and construction of planned improvements identified in the Stormwater Master Plan. The recommended FY 2024 increase was deferred to FY 2025 as the City adjusted the timing of certain projects to pursue grant funding opportunities. The City was successful in obtaining grant funding for two major projects, and staff is currently pursuing low-interest funding through the State Revolving Fund to provide the required local match.

The current rate (FY 26) is $138 per ERU. For FY 27, staff recommends that the current annual rate be increased by $7 to $145 per ERU consistent with the recommendations of the rate study completed in FY 22. This will be the fifth increase since 2003, following prior increases in FY 2016 from $72 to $84 per ERU, FY 2023 to $114 per ERU, FY 2025 to $125 per ERU, and FY 2026 to the current rate of $138 per ERU. These adjustments support the fiscal stability of the Stormwater Fund and provide the resources necessary to meet current operating needs and advance future capital projects.

The proposed rate will appear on the TRIM notice to be mailed to all property owners by August 24, 2026. There will be a hearing in regards to the final adoption of this rate on September 14, 2026, to establish the rate to appear on the property tax bill to be mailed to all property owners at the beginning of November. At the time of the final hearing, a lower rate may be adopted by the Commission if it so chooses, but a higher rate can be adopted at that time only with a significant amount of effort and expense. 

The recommended FY 2027 stormwater assessment rate is $145 per year per ERU, an increase of $7 over FY 2026, translating to an additional cost of $0.58 cents per month.  This rate will generate about $6.0 million in revenues, net of the estimated 4% prompt payment discount, reflecting an incremental revenue increase of about $289 thousand.  This will help support ongoing operations and infrastructure maintenance, funding of debt service and the direct funding of some capital projects.

It should be noted that this proposed rate adjustment for FY 2027 is recommended as part of a series of rate adjustments over time to ensure sufficient fiscal resources are available to directly fund the capital infrastructure called for as part of the stormwater master plan.