Recommendation
Staff recommends that the Mayor and Council adopt the attached resolution. If the Mayor and Council find the changes to the resolution acceptable a motion to amend the resolution as modified should be made, seconded and passed and then the resolution as so amended may proceed to adoption.

Discussion
In FY 2008, Public Works staff indicated that a stormwater utility fee will be needed to fund Rockville's existing and expanded stormwater, storm drainage and water quality programs. Historically, rapid development has funded much of Rockville's stormwater management with fees imposed on developers. With few opportunities for new development, staff identified the need to seek other funding sources to cover new programs and the maintenance of the public stormwater infrastructure.

In FY 2008 the Mayor and Council approved an ordinance to amend the City Code to include a new Stormwater Management Utility Fee. This ordinance enables the City to charge an annual fee per Equivalent Residential Unit ("ERU"). Although the Mayor and Council adopted the ordinance that enabled the fee, no fee was adopted in FY 2009. The expenses for the new program in FY 2009 were funded from the Stormwater Management's reserves.

The FY 2010 Stormwater Management Budget was proposed with a fixed fee per ERU equal to $61.85. During the FY 2010 budget process, staff was directed to analyze the Stormwater Management cash flow using a lower fee of $40.00 instead of the $61.85 as originally proposed. At the second Mayor and Council worksession on April 27, 2009, the Mayor and Council unanimously agreed to implement the $40.00 fee for FY 2010. Residential properties, irrespective of impervious surface, will pay one ERU or an annual fee of $40.00. Commercial properties will pay the ERU rate of $40.00 multiplied by the measured ERU's per property. As approved by the Mayor and Council, the fixed fee per ERU will increase by approximately 22.9 percent each year from FY 2010 through FY 2014, and 0.5 percent each year from FY 2015 through FY 2019, though Mayor and Council can set the rates annually. The estimated ERU rates for FY 2010 through FY 2019 are listed below:

FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019
$40.00	$49.20	$60.45	$74.30	$91.20	$91.65	$92.10	$92.60	$93.05	$93.50

In addition to the fixed fee per ERU, the attached Resolution also establishes a fee of $150.00 for credit applications to reduce the annual Stormwater Management Utility Fee for private stormwater management facility owners. The credit is available to owners who structurally maintain and operate an approved stormwater management facility, such as a pond, sand filter, bioretention or other designated facility. The application fee is based on the estimated amount of staff time necessary to review the credit application and verify all supporting documentation.

Mayor and Council History
October 27, 2008: FY 2010 Budget Preview / Worksession - Part I
November 3, 2008: FY 2010 Budget Preview / Worksession - Part II
February 23, 2009: Final FY 2010 Budget Preview
March 23, 2009: Fiscal Year 2010 Proposed Operating Budget and Capital Improvements Program
Introduction of Ordinance to Appropriate Funds and Levy Taxes for Fiscal Year 2010
Introduction of Resolution to establish the Equivalent Residential Unit Rate for the Stormwater Utility Fee
March 30, 2009: Public Hearing on the Fiscal Year 2010 Constant Yield Tax Rate
First General Budget Public Hearing on the Fiscal Year 2010 Proposed Operating Budget and Capital Improvements Program
April 13, 2009: Second General Public Hearing on the Fiscal Year 2010 Proposed Operating Budget and Capital Improvements Program
April 20, 2009: First Mayor and Council Budget Worksession - Operating Budget
April 27, 2009: Second Mayor and Council Budget Worksession - CIP Budget, Other
May 4, 2009: Final FY 2010 General Budget Public Hearing on the Fiscal Year 2010 Proposed Operating Budget and Capital Improvements Program

Public Notification and Engagement
The FY 2010 Proposed Operating and Capital Improvements Program budgets are available on the City's Web site, and hard copies are available at City Hall and the Twinbrook and Rockville libraries. Public hearings were held on March 30, April 13, and May 4, 2009. FY 2010 Adopted Operating and Capital Improvements budgets will be available to the public in July 2009.

Fiscal Impact
The adopted FY 2010 Operating budget for the Stormwater Management Fund equals $2,569,680 and the adopted FY 2010 CIP budget equals $1,975,314. The adopted budgets are based on the stormwater utility fee of $40.00 per ERU which will generate approximately $1.62 million in fee revenue for FY 2010.

Next Steps
The FY 2010 adopted budget will begin July 1, 2009 and continue through June 30, 2010. The FY 2010 budget books will be distributed in July 2009.

Attachments
Attachment A - Resolution

Department Head:



Gavin Cohen, Director of Finance
Approved on: 05/05/2009

City Manager:

Scott Ullery, City Manager
Approved on: 05/06/2009