TCI initiated the Storm Water Utility Fee Comprehensive Study in response to rate equity concerns raised by the City Council. During the summer of 2012, as part of the FY 2013 budget process, TCI proposed an 11.8% increase to the Storm Water Utility Fee. The rate increase was intended to fund:
When the matter was considered for approval, the City Council raised concerns regarding the equity of the existing fee structure as well as the need for increasing service levels. The proposed rate increase was not approved and TCI was directed by City Council to evaluate the rate structure of the Storm Water Utility Fee and to make recommendations to address the equity concerns. As a result, Storm Water Utility rates have not been increased since 2008. Currently, the utility is operating at a deficit relying on reserves to meet expenses. Over the last two years, TCI studied best practices in setting storm water utility rates, and having completed the Storm Water Utility Fee Comprehensive Study, TCI proposed a revised rate methodology to the City Council as part of the FY 2016 budget with the recommendation to revise the rate design to address equity concerns and adjust rates based on the cost of service.
Under the rate structure originally established in 1993, the Storm Water Utility Fee is assessed based upon the lot size and land use type of benefited properties and included a "rate cap" for non-residential properties. The rate structure included four user classes as shown below.
In FY 2013, TCI conducted a pilot study to include completing a comparative analysis of best practices on what was the most equitable and defendable method for billing storm water fees as well as recommendations on how to implement such a method. It is well accepted that a rate structure based on impervious area is most equitable and considered a best practice. The pilot study determined that this methodology is utilized by 55 of 91 Texas municipalities surveyed and recommended that San Antonio adopt the impervious surface based rate methodology.
Based upon the findings of the pilot study, FY 2014 Budget included funding to complete a Storm Water Utility Fee Comprehensive Study to restructure the Storm Water Utility Fee from based upon lot size and land use to one based upon impervious cover. The scope of the study included an external component to be completed by a consultant and internal component to be completed by TCI staff as the table below demonstrates.