ORD 2012-16 ADOPTING STORM & SURFACE WATER FEESORDINANCE NO. 2012 -16
AN ORDINANCE of the City of Bainbridge Island, Washington, relating to
storm and surface water management; amending Sections 13.24.089 and
13.24.090; and adding two new sections to Chapter 13.24 of the Bainbridge Island
Municipal Code (BIMC), adopting storm and surface water management fees for
city streets and roads, state highway right -of -way, and private roads, and
providing for an effective date in conformance with the Kitsap County Superior
Court Order of February 29, 2012 in Bainbridge Ratepayers Alliance v. City of
Bainbridge Island, Kitsap County Superior Court Cause No. 10 -2- 00638 -1.
WHEREAS, Chapter 35.67 RCW provides that cities are authorized to establish storm
water ( "storm sewer ") utilities; and
WHEREAS, the
City of Bainbridge Island
( "City
") has had a Storm and Surface Water
Management (formerly "Storm
Drain ") utility since
1987;
and
WHEREAS, in 2007, the City Council adopted Ordinance No. 2007 -39 which amended
BIMC 13.24.089 to change the fee charged to City -owned right -of -way from 30% to 100% of
the fee provided in BIMC 13.24.080, effective January 1, 2008; and
WHEREAS, in 2010, the City Council determined that the fee structure amendment to
BIMC 13.24.089 adopted in Ordinance No. 2007 -39 was based on erroneous financial
information; and
WHEREAS, in response to that determination, the City Council adopted Ordinance No.
2010 -34 which changed back the fee charged to City -owned right -of -way in BIMC 13.24.089
from 100% to 30% both prospectively and retroactively; and
WHEREAS, Ordinance No. 2010 -34 referenced RCW 90.03.525 as providing that the
storm and surface water utility fee charged by the City to state highway right -of -way shall be
30% of the general City rate, and
WHEREAS, Ordinance No. 2010 -34 further found that the City, prior to the effective
date of Ordinance No. 2007 -39, charged the same 30% storm and surface water utility rate to the
City roads as to the state highway right -of -way; and
WHEREAS, Ordinance No. 2010 -34 also found that both the City roads and the state
highways provide infrastructure to convey storm water such that reduced rates are warranted;
and
WHEREAS, on March 9, 2011, the Bainbridge Ratepayers Alliance ( "Ratepayers
Alliance ") filed its first amended complaint in Kitsap County Superior Court, alleging in its
twelfth cause of action that in adopting Ordinance No. 2010 -34, the City had retroactively
enacted storm and surface water management rates for city roads without any supporting
documentation thereby unfairly burdening other rate payers. Bainbridge RateBayers Alliance v.
City of Bainbridge Island, Kitsap County Superior Court No. 10 -2- 00683 -1; and
WHEREAS, both the Ratepayers Alliance and the City moved for summary judgment on
the issue of the validity of the storm and surface water management rates established by
Ordinance No. 2010 -34; and
WHEREAS, Presiding Judge Russell Hartmann of Kitsap County Superior Court heard
oral argument on cross motions for summary judgment on the issue of storm and surface water
management rates on May 27, 2011; and
WHEREAS, the Court issued its oral ruling on July 22, 2011, granting the Ratepayers
Alliance motion for summary judgment on the twelfth cause of action, ruling that the retroactive
adoption of storm and surface water management rates of 30% in Ordinance No. 2010 -34 was
arbitrary and capricious because it was based on a statute (RCW 90.03.525) related only to state
roads; there was no equivalent evidence reflecting the City's investment in its roads; and
WHEREAS, the Court entered an order formally granting summary judgment to the
Ratepayers Alliance on the issue of storm and surface water management fees on September 1,
2011, following which the Ratepayers Alliance filed an additional_ motion asking the Court to
establish a remedy and to order payment of attorney fees to the Ratepayers Alliance; and
WHEREAS, the Court first heard argument on the issue of a remedy and attorney fees
on December 9, 2011, after which the Court directed further briefing, and then heard additional
argument on February 24, 2012; and
WHEREAS, immediately following oral argument on February 24, 2012, the Court
issued its oral ruling that the City has the authority to enact a ordinance setting storm and surface
water management fees to City roads retroactive to the effective date of the storm and surface
water rates established by Ordinance No. 2007 -39, and that the Ratepayers Alliance is not
entitled to attorney fees; and
WHEREAS, the Court entered its formal order establishing a remedy, denying attorney
fees and entering a partial final judgment on February 29, 2012, in which the City was granted a
period of nine months from that date for the City's legislative authority to enact new storm and
surface water fees applicable to City right-of-way, retroactive to the January 1, 2008 effective
date of the storm and surface water rates established by Ordinance No. 2007 -39; and
WHEREAS, the Court on its own initiative reversed its earlier determination and
ordered that its February 29, 2012 order on the storm and surface water issue was a final
determination, subject to immediate appeal pursuant to Civil Rule 54(b); and
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within the 30 -day appeal period, so that the Court's February 29, 2012 order became a final
determination no longer subject to appeal; and
2
WHEREAS, following expiration of the 30 -day appeal period of the Court's February 29
order, the City on April 3, 2012 issued a request for proposals to provide the City with a study by
experts in the field of surface water utilities, utility rates and road design of the relationship
between the City street system and its storm and surface water management (SSWM) utility with
the objective of developing alternative rate approaches that equitably account for any offsetting
contributions of the street system to the SSWM utility; and
WHEREAS, on May 9, 2012, the City Council authorized a contract with FCS Group, in
association with Parametrix, to provide the City with consulting services on the issue of
appropriate stormwater fees to be charged to City streets and roads; and
WHEREAS, FCS Group had just provided consulting services to the Washington State
Legislature's Joint Transportation Commission on the issue of stormwater cost recovery, and
was experienced in providing consulting services to a numerous communities in Washington for
stormwater utility formation and rate studies, and the associated engineering consulting firm,
Parametrix, has had long experience in road design and stormwater engineering; and
WHEREAS, in preparing its storm and surface water management street rate analysis for
the City, FCS Group structured its study to encompass three -fold objectives as follows:
1. Assess the relationship between the City's street system and Storm and Surface
Water Utility. Analyze value to the SSWM Program of the City's street system
and other in -kind services that may reduce the cost of managing stormwater from
private and public property.
2. Develop equitable rate alternatives for City streets that reflect the value of the
street system's contributions to the SSWM Program. Each alternative is
evaluated against the requirements that it be accurate, fair, clear, and supported by
a legitimate rationale. The depths of each analysis depended on the availability,
accuracy and level of detail of information available from the City.
3. Survey the approaches of other jurisdictions in Western Washington to the same
issue. The survey contains results for approximately seventy -five Phase I and
Phase 11 NPDES permit holders. The survey documents the approach each city
takes in administering a stormwater charge on their streets.
and;
WHEREAS, FCS Group presented a summary of its conclusions to a joint workshop of
the City Council and the City's Utility Advisory Committee in the Special /Regular Meeting of
the City Council on Wednesday, August 8, 2012, during which both Council members and
Committee members were provided the opportunity to discuss those conclusions and ask
questions of the FCS Group and Parametrix study team; and
WHEREAS, FCS Group submitted its written report entitled "City of Bainbridge Island
Storm and Surface Water Management Street Rate Policy Analysis Report of Findings" to the
City on August 24, 2012; and
3
WHEREAS, the FCS Group study looked at six alternatives for adopting SSWM rates
for the City's roads and the rationale for each, summarized as follows:
1. Alternative: Charge City streets full rate for all impervious surfaces. Rationale: Streets
are an impervious surface and should be charged as such.
2. Alternative: Exempt City streets from the stormwater rate because they are a part of the
stormwater system. Rationale: Streets are an integral part of the stormwater conveyance
system and should be exempt.
3. Alternative: Reduce or exempt City streets from stormwater rate because of past capital
investment. Rationale: Street fund capital investment in stormwater infrastructure and
facilities may offset some or all SSWM charges to the Street Fund.
4. Alternative: Charge City streets a rate based on proportion of runoff managed from other
property. Rationale: Streets provide stormwater conveyance for both streets and other
developed properties.
5. Alternative: Charge City streets a rate based on the unallocated value of stormwater
maintenance provided by the Street Fund. Rationale: Stormwater system maintenance
provided by Street Fund may offset some or all SSWM charges to the Street Fund.
6. Alternative: Consider redefining the chargeable area of City Streets. Rationale: The
equivalent residential unit (ERU) value could theoretically be defined to include a portion
of the fronting residential street.
and;
WHEREAS, the FCS Group study did not recommend Alternative 5 as a valid rate
method because the City already appropriately allocates the cost of stormwater system
maintenance provided through the Street Fund to the SSWM utility and follows the state budget
and reporting system (BARS) in which all labor, equipment, and materials charges are recorded
against their respective fund and activity account; nor did it recommend Alternative 6 as a valid
rate method because the City's ERU definition does not include a portion of the fronting street
and the City's data does not allow a ready analysis of this alternative; and
WHEREAS, the FCS Group study concluded that Alternative 1 (charging the streets
100% of the impervious surface rate) was a valid rate method because streets, like rooftops or
parking lots, affect the runoff pattern that existed prior to development, charging the streets
would be consistent with charges to other developed property; yet the FCS Group study
identifies this alternative as the least applicable for the City, because City streets clearly provide
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investment in the system; and the study also concluded that Alternative 4 (charging streets based
on the proportion of the associated drainage infrastructure serving the road itself (31 %) versus
the proportion serving developed property (69 %)) would be a valid rate method because it would
II
credit streets for the conveyance capacity over and above that which they need for the streets, yet
the FCS Group did not recommend this alternative; and
WHEREAS, the FCS Group study, while concluding that Alternatives I and 4 were both
valid, instead recommended that the City exempt the City streets from the stormwater fee for
either of two reasons set forth in Alternative 2 (streets owned or operated by the City are defined
by the federal National Pollution Discharge Elimination System (NPDES) permit enforced by the
Washington State Department of Ecology to be part of the City's Municipal Separate Storm
Sewer System (MS4)), or in Alternative 3 (the City is responsible for at least $27 million in
associated stormwater infrastructure in the streets serving developed property over and above
what would be needed for just street run off — valued at the City's undepreciated stormwater
assets); and
WHEREAS, the FCS Group study concluded with the recommendation: "... Based on
the finding that City streets could be exempted from the stormwater rate for either of two reasons
in the City of Bainbridge Island — the fact that they are part of the conveyance system and the
initial analysis showing that their investment in stormwater facilities in the right -of -way could
outweigh their SSWM charges for a significant period of time — we are most comfortable
advising the City to exempt its City streets from stormwater rates. This recommendation is
further supported by the finding that eighty -five percent of our survey respondents exempt city
streets ...:" and
WHEREAS, FCS Group answered additional written questions dated August 28, 2012
from the Utility Advisory Committee in a follow -up memorandum from FCS Group dated
August 31, 2012; and
WHEREAS, at the request of the Utility Advisory Committee, FCS Group and
Parametrix representatives made themselves available for a conference call with the Committee
in the afternoon of Tuesday, September 4, 2012, and responded to questions and comments from
Committee members; and
WHEREAS, the Utility Advisory Committee following that conference call compiled a
report of comments on both the FCS Group study and the City process that was submitted to the
City Council on September 4, 2012; and
WHEREAS, the chair of the Utility Advisory Committee presented that report and
provided additional comments regarding the FCS Group study and the issue of SSWM fees
charged to City roads to the City Council at its Regular City Council Study Session meeting of
Wednesday, September 5, 2012; and
WHEREAS, other members of the Utility Advisory Committee and members of the
public also provided comments to the City Council regarding the FCS Group study and the issue
of SSWM fees charged to City roads at the September 5, 2012 Study Session; and
WHEREAS, in response to the
FCS Group
study
report that 85% of
the cities surveyed
exempted their streets from stormwater
charges, the
City
Council asked that
FCS Group
be
5
requested to provide a follow -up survey those jurisdictions to determine, if possible, the rationale
employed by each of them to reach that result; and
WHEREAS, counsel for the Ratepayers Alliance wrote to the City Council on
September 10, 2012, stating that the Ratepayers Alliance favors Alternative 1 (charging 100% of
the impervious rate) of the alternatives identified by FCS Group; and
WHEREAS, on September 12, 2012, FCS Group submitted a follow -up survey of the
rationale relied on by those 85% of jurisdictions that exempt city streets from stormwater
charges, to the extent that that could be determined by FCS Group; and
WHEREAS, FCS Group reported that some ofthe jurisdictions, including Arlington,
Burlington, Kirkland, and Mill Creek, reported informally that they exempted their streets from
stormwater charges because those streets are a part of their respective stormwater systems; and
WHEREAS, FCS Group also determined that a number of jurisdictions had set forth the
rationale for exempting city streets in their municipal codes, including, for example, the City of
Battle Ground Municipal Code, Section 13.125.050, which provides in part: "The following
special categories of property are exempt from service charges and system development charges:
City street rights -of -way, all of which are a part of the system pursuant to the plan ;" and
WHEREAS, the City of Burien Municipal Code, Section 13.10.340(9), provides: "The
city roads and state highway programs provide substantial annual programs for the construction
and maintenance of drainage facilities, and the road systems and their associated drainage
facilities serve as an integral part of the surface and storm water management system. City and
state road drainage systems, unlike the drainage systems on other properties, are continually
being upgraded to increase both conveyance capacity and control. City roads and state highways
shall not be charged a rate in recognition of the benefit to the surface and storm water
management services provided by the drainage facilities associated with the city roads and state
highway programs; provided, that those drainage facilities are constructed, operated, and
maintained in accordance with this chapter."; and
WHEREAS, the City of Covington Municipal Code, Section 13.30.050(9), which
exempts city streets, provides in part: "The City roads and State highway programs provided
substantial annual programs for the construction and maintenance of drainage facilities, and the
roads systems and their associated drainage facilities serve as an integral part of the surface and
stormwater management system. "; and
WHEREAS, the City of Federal Way Municipal Code, Section 11.40.100, which
exempts city streets, provides in part: "... the city and county roads and state highway programs
provide substantial annual programs for the construction and maintenance of storm drainage
control facilities, and the roads systems and their associated storm drainage facilities serve as an
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WHEREAS, the City of Kenmore Municipal Code, Section 13.40.050(J), provides in
part: "... both the city streets and state highway programs provide substantial annual programs
I
for the construction and maintenance of drainage facilities, and the streets systems and their
associated drainage facilities serve as an integral part of the surface and stormwater management
system... "; and
WHEREAS, the City of Lake Forest Park Municipal Code Section 13.16.050(J) states in
part: "... the city and county roads and state highway programs provide substantial annual
programs for the construction and maintenance of storm drainage control facilities, and the roads
systems and their associated storm drainage facilities serve as an integral part of the surface and
stormwater management system...."; and
WHEREAS, the follow -up survey from FCS Group was transmitted to the City Council
and to the Utility Advisory Committee that day in advance of the discussion of SSWM fees to
City roads scheduled for the Regular City Council Business Meeting of September 12, 2012; and
WHEREAS, during the Regular City Council Business Meeting of September 12, 2012,
at which FCS Group and Parametrix representatives were present to answer any additional
questions, the City Council discussed and debated the issue of the appropriate SSWM charges to
be charged to City roads in accord with the Kitsap County Superior Court order of February 29,
2012; and
WHEREAS, the Council considered that FCS Group in its Report of Findings concluded
that any one of four of the six rate alternatives identified (Alternatives 1 -4) could be adopted as
accurate, fair, clear, and supported by a legitimate rationale; and
WHEREAS, the Council also considered that FCS Group in its Report of Findings
concluded with a recommendation that the City exempt City roads from stormwater charges
based on either the rationale of Alternative 2 (streets are defined to be part of the stormwater
system) or Alternative 3 (the City has made a substantial capital investment in the stormwater
system serving property development over and above the runoff from the City streets
themselves); and
WHEREAS, the Council considered that, in the one other case apart from Bainbridge
Ratepayers Alliance v. City of Bainbridge Island, where plaintiffs had challenged a city's
stormwater rates to city roads, the Superior Court and the Court of Appeals had upheld the
validity of the City of Tacoma Municipal Code Section (TMC 12.08.530) that exempts city
streets from stormwater charges based on a combination of the rationale that city streets are part
of Tacoma's stormwater system and that Tacoma had made substantial capital investments in the
stormwater infrastructure serving developed property. Post v. City of Tacoma, (unpublished
opinion) 139 Wn. App. 1074 (2007); and
WHEREAS, the Council considered that where plaintiffs in a parallel challenge to a
city's inclusion of capital investment in its water system for purposes of calculating a water
user's equitable share of system costs — where the city had obtained at least part of that
infrastructure through federal or state grants or from infrastructure investment of developers —
the Washington Supreme Court held that the inclusion of outside funding in its asset base was
VA
valid, as the Legislature had not explicitly prohibited such inclusion for cities. Landmcrr °k
Development, Inc. v. City of Roy, 138 Wn.2d 561 (1999); and
WHEREAS, the Council further considered that the emphasis by the Kitsap County
Superior Court's oral ruling of July 22, 2011 and by the letter sent on behalf of the Ratepayers
Alliance of September 10, 2012, on the equal treatment of stormwater charges for the equivalent
category of private and public property required by RCW 35.67.025 and RCW 35.92.021
compels a renewed review of the City's Municipal Code to determine if private roads are being
charged the same stormwater rates as City and state roads; and
WHEREAS, it appears that at least from the January 1, 2008 effective date of storm and
surface water rates established by Ordinance No. 2007 -39, the numerous private roads serving
various groups of properties on Bainbridge Island have been exempt from any stormwater
charges, as there is no subsection in the code establishing any SSWM fees for private roads,
much less fees equivalent to BIMC 13.24.089 setting stormwater fees for city -owned right -of-
way or BIMC 13.24.090 setting stormwater fees for state highway right -of -way; and
WHEREAS, on the other hand, either a publicly or privately owned road that is an
adjunct to a commercial development is charged an equal commercial stormwater fee under
BIMC 13.24.080, as such a road is considered to be the equivalent of a driveway into the
commercial development; and
WHEREAS, an example of such a publicly owned road that is an adjunct to a public
commercial development and charged a commercial stormwater fee under BIMC 13.24.080 is
NE Henshaw Place adjacent to the Bainbridge Island City Hall development, and an example of
such a privately owned road that is an adjunct to a private commercial development and charged
a commercial stormwater fee under BIMC 13.24.080 is Madrone Lane associated with the
Roberts LLC development on Winslow Way; and
WHEREAS, while BIMC 13.24.090 purports to require charges to state highway right -
of -way at a rate of 30% of the fee provided in BIMC 13.24.080, the City has never collected any
such stormwater charges from the state due to the statutory barriers to collection embedded in
RCW 90.03.525(2); and
WHEREAS, the Council also considered that private roads, since at least 1997, have
been required to conform to the same design requirements as public streets (Section 7.01 of the
City of Bainbridge Island Design and Construction Standards and Specifications, adopted by
Ordinance No. 1997 -23), and therefore in effect, private roads now provide the same
complement of stormwater benefits as City roads; and
WHEREAS, at the end of the City Council discussion and debate regarding the
appropriate SSWM rates to charge City roads the Council voted 4 -1 (2 members having excused
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2 and Alternative 3 in that study and exempt City roads from stormwater charges retroactive to
the January 1, 2008 effective date of Ordinance No. 2007 -39, in conformance with the Kitsap
I
County Superior Court Order of February 29, 2012 in Bainbridge Ratepayers Alliance v. City of
Bainbridge Island; and
WHEREAS, being cognizant of the requirement in RCW 35.67.025 and RCW
35.92.021 for the same stormwater charges to be charged to the same category of both private
and public property, the City Council also voted to apply the same exemption to private roads;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BAINBRIDGE
ISLAND, WASHINGTON, DOES ORDAIN AS FOLLOWS:
Section 1. The above recitals shall be considered to be adopted by and included as part of this
Ordinance.
Section 2. A new section is added to the Bainbridge Island Municipal Code to read as follows:
13.24.088 Methodology for street and road charges
A. City roads and municipal streets are defined by the city's NPDES Phase II
permit to be a part of the city's Municipal Separate Storm Sewer System and,
in addition, the city is responsible for at least $27 million in undepreciated
stormwater infrastructure in the city streets serving developed property over
and above what would be needed for just street runoff. City streets and roads
therefore should be exempt from stormwater fees.
B. RCW 90.03.525 prohibits a city from charging a state highway right -of -way
more than 30 percent of the comparable property rate, but also prohibits a city
from charging more than the fees the city charges to its own city streets.
Accordingly, since city streets are exempt from stormwater fees, RCW
90.03.525 requires that the same exemption apply to state highway right -of-
way.
C. RCW 35.67.025 and RCW 35.92.021 both require that a city charge the same
stormwater fee to public property as the rates charged to private property of
the same category. Accordingly, since city streets are exempt from
stormwater fees, RCW 35.67.025 and RCW 35.92.021 both require that the
same exemption apply to private roads.
Section 3. Section 13.24.089 of the Bainbridge Island Municipal Code is hereby amended to
read as follows:
13.24.089 City Srstreets and roads charge.
The monthly fee for eity owned Fight of way shall be- 30 pefeent of the fee
provided in BIN4G 13z4.0 -90.. City -owned right -of -way shall be exempt from
stormwater fees.
9
This exemption, however. does not apply to a city -owned road that is an adjunct
to a city commercial/multi development such as NE Renshaw Place adjacent to
City Hall, and which is therefore charged a stormwater fee pursuant to BIMC
13.24.080 as part of a commercial /multi development.
Section 4. Section 13.24.090 of the Bainbridge Island Municipal Code is hereby amended to
read as follows:
13.24.090 State highway charge.
Pursuant to RUW 90.03.525 the monthly 1�e for state highway right 4 way shall
be 30 per-cent of the fee pTovided-in Bran C 0
n
13.24.8�, unless the eity and- state
otherwise. State highway right -of -way shall be exempt from stormwater fees.
Section 5. A new section is added to the Bainbridge Island Municipal Code to read as follows:
13.24.091 Private roads charge,
Private roads (a private "Way -of- travel," as defined in BIMC 12.16.020(P), that is
owned by either private persons or public entities) shall be exempt from
stormwater fees.
This exemption, however, does not apply to a private road that is an adjunct to a
commercial /multi development, such as Madrone Lane adjacent to the Roberts
LLC property on Winslow Way, and which is therefore charged a stormwater fee
pursuant to BIMC 13.24.080 as part of a commercial/multi development.
Section 6. In conformance with the Kitsap County Superior Court Order of February 29, 2012 in
Bainbridge Ratepayers Alliance v. City of Bainbridge Island, Kitsap County Superior Court
Cause No. 10 -2- 00638 -1, the charges established by this ordinance, amending BIMC 13.24.089
and BIMC 13.24.090 and adding a new section BIMC 13.24.091 related to private roads, shall be
retroactive to January 1, 2008 - the effective date of storm and surface water charges established
by Ordinance No. 2007 -39.
Section 7. This ordinance shall take effect and be in force five (5) days from its passage,
approval, and publication as required by law.
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PASSED BY THE CITY COUNCIL this 10th day of October, 2012.
APPROVED BY THE MAYOR this 10`x' day of OctobeL,2Q12.
ATTEST /AUTHENTICATE:
Rosalind D. Lassoff, City Jerk
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL
PUBLISHED:
EFFECTIVE DATE:
ORDINANCE NUMBER:
Debbi ster, Mayor
September 21, 2012
October 10, 2012
October 12, 2012
October 17, 2012
2012 -16