According to a recent study, Coppell is not charging enough for stormwater fees, but officials are planning to change that.
During Tuesday night’s City Council meeting, the council was briefed on the findings of the stormwater fee study and what actions it could take to ensure it is collecting the right amount in fees.
Dan Jackson, vice president of Wildan Financial Services, which conducted the study, said homeowners in Coppell pay a monthly stormwater fee of $1 per unit. Multi-family units pay $7 per acre with a maximum of $75, and commercial properties pay a similar rate with its fees capped at $75 as well.
“That was one of the key findings of the story because it resulted in a lot of your commercial customers paying a fee for stormwater service that is far below the cost of providing that service,” Jackson said. “…Under the current fee structure, commercial customers, particularly those capped at $75 per month, are paying far below what it is costing the city to provide their service.”
Jackson said Coppell stormwater fees are one the lowest if not the lowest in the Dallas-Fort Worth area. Cities such as Frisco, Richardson, Grand Prairie, Lancaster and North Richland Hills all have fees much higher than Coppell. He said the sweet spot for residential stormwater fees is somewhere between $4 and $6 per month.
To get Coppell on a competitive level, Wildan recommends the city implement a new stormwater fee structure that is based on impervious surface area instead of acreage, which Jackson said is the industry standards.
“That will align much more closely the commercial customers' monthly fee with what the cost is to provide that service,” Jackson said.
The city can implement this fee change over a seven- or five-year period.
Under the seven-year implantation schedule, the residential fee of $1 per month would rise to $5 a month by October 2023. After October 2023, the rate would remain fixed for the next four years. The cost would vary with commercial customers, Jackson said. For example, commercial customers using between 0 to 10,000 square feet of impervious area are currently paying about $5 a month. Under the new fee schedule, these customers would pay about $7 a month, and this fee would gradually increase to about $10 a month.
Larger commercial properties would see a bigger impact, Jackson said. For instance, a business using between 100,000 and 250,000 square feet is currently paying $24-$48 per month. Wildan recommends setting the fee at $49 per month, which would go up to $112 in 2021 and eventually to $350 per month by October of 2026.
Under the five-year implantation, the fees would not be different, but they would be implemented more quickly for those using more surface area.
“The only difference between the five-year and the seven-year is your top-tiered commercial customers,” Jackson said. “If you did a seven-year implementation plan you would have to contribute a little bit more from the general fund to support your stormwater fund over the next couple of years. You’d have to subsidize it by $1.5 million with the seven-year plan, but with the five-year plan it would be $1.2 million.”
On the residential side, if the city implemented the fee change, $5 a month would be in the sweet spot of where everyone is right now, Jackson said.
The council agreed the five-year plan would be the better option.
“I think doing the five-year (plan) makes sense,” said Councilman Gary Roden. “There’s no sense in us continuing this cost from the general fund no longer than we have to.”
The council plans to hold a public hearing on the proposed increase as well as adopt the changes to the city’s drainage utility district rates on March 24.