HomeMy WebLinkAbout2025-06-19; Stormwater Management Funding (Districts - All); Gomez, PazTo the members of the:
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Council Memorandum
June 19, 2025
To:
From:
Via:
Honorable Mayor Blackburn and Members of the City Council
Paz Gomez, Deputy City Manager, Public '-{:!_ff/ks/
Sheila Cobian, Assistant City Manager ))~
Re: Stormwater Management Funding (Districts -All)
{city of
Carlsbad
Memo ID# 2025038
This memorandum provides information related to stormwater management funding in the City
of Carlsbad.
Background
The city owns and operates a complex stormwater drainage system consisting of 828 miles of
curbs and gutters, 4,495 storm drain inlets, 202 miles of pipelines, 3,911 cleanouts, 3.3 miles of
open channels and 712 storm drain outfalls. The effective operation and maintenance of the
system is critical for flood control, erosion control and safety, and to comply with the Municipal
Stormwater Permit1 to protect water quality at our local creeks, lagoons and ocean.
The safe and effective operation of the storm drainage system and implementing the Municipal
Stormwater Permit are key to the city's values including open space and the natural
environment, access to recreation and active, healthy lifestyles and sustainability.
Stormwater Funding History
• From 2003 to 2022, the Stormwater Fund received revenues from a stormwater fee paid
by residents as part of their trash bill to fully fund the Watershed Protection Division,
known at that time as Storm Water Programs, and approximately 85% of storm drain
maintenance programs described below.
• On April 6, 2021, the City Council adopted Resolution No. 2021-075 (Attachment A),
approving an agreement to transition to a new waste hauler, Republic Services, Inc.
Beginning on July 1, 2022, the Franchise Agreement required the waste hauler to charge
customers the fee, instead of the city charging residents. The city receives quarterly
1 California Regional Water Quality Control Board San Diego Region Order No. R9-2013-0001, as amended by
NPDES Order Nos. R9-2015-0001, and R9-2015-0100, NPDES No. CAS0109266 National Pollutant Discharge Elimination
System (NPDES) Permit and Waste Discharge Requirements for Discharges from the Municipal Separate Storm Sewer
Systems (MS4's) Draining the Watersheds Within the San Diego Region
Public Works Branch
Environmental Sustainability Department
1635 Faraday Avenue I Carlsbad, CA 92008 I 442-339-2799 t
Council Memo -Stormwater Management Funding (Districts -All)
June 19, 2025
Page 2
reimbursement payments directly from Republic Services, Inc. to compensate for trash
reduction-related stormwater program expenses.
• In preparation for the updated fee structure, HF&H Consultants completed a Trash-
Reduction Stormwater Cost Allocation Study (Attachment B), which determined the
maximum allowable funding that can be collected based on the average annual projected
trash reduction related costs.
o The study determined that a total of $1,347,056 in annual trash reduction
stormwater costs may be collected as a reimbursement from the city's waste
hauler.
o The city began receiving annual payments of $1.3 million from Republic Services,
Inc., as of July 1, 2022, a decrease of $1.8 million from the previous fiscal year (FY).
o That amount increased to $1,400,198 in FY 2023-24 and $1,435,803 is the
estimate for FY 2024-25 due to a built-in escalator based on the Consumer Price
Index, All Urban Consumers (CPI-U). The latest increase was 5.1%.
• For FY 2022-23 and FY 2023-24, the average annual deficit of $1,521,666 was offset by
using existing reserves in the Stormwater Enterprise Fund.
• Drainage Capital Improvement Program, or CIP, projects are primarily funded by the
General Fund, which vary year to year. In the FY 2024-25 budget, drainage CIP projects
funded by the Infrastructure Replacement Fund had total requested appropriations of
$8.2 million.
Discussion
There are three primary functional areas in the Public Works Branch that are key to stormwater
management: the Watershed Protection Division in the Environmental Sustainability
Department, and the Storm Drain Maintenance and Storm Drain Engineering divisions in the
Transportation Department. The Watershed Protection Division implements compliance
programs for the Municipal Stormwater Permit. The Storm Drain Maintenance Division inspects
and cleans the storm drain system and manages the street sweeping contract. The Storm Drain
Engineering Division plans and designs storm drain CIP projects.
Storm Drain Maintenance
Once the trash revenue decreased in 2022, the program's overall revenues were insufficient to
support its expenditures. The program has since been using some of its fund balance to support
its operations that are not otherwise covered by ongoing revenue sources. Unlike the General
Fund, because this program is run through an enterprise fund, the fund balance can be used for
operational costs. Based on preliminary budget estimates, the program will no longer be able to
rely on its fund balance moving forward to help support operations. Because of this, the General
Fund is transferring $2 million to the Storm Drain Enterprise Fund in the FY 2025-26 budget to
Council Memo -Stormwater Management Funding (Districts -All)
June 19, 2025
Page 3
help support the program and ensure it does not fully deplete its fund balance below acceptable
levels.
In addition to the decrease in revenue, program costs have risen and are expected to further
increase in the FY 2025-26 budget. Most notably, the city's street sweeping contract funded out
of this program is nearly doubling in cost from approximately $650,000 per year to $1,250,000
per year, primarily due to prevailing wage rates. This increase is expected to continue for the
foreseeable future. Assuming that costs in the program continue to steadily increase in step with
inflation in future years, and no other revenue source is identified, the program will need to rely
on General Fund transfers to a greater extent. This will impact the General Fund forecast and its
future surplus levels.
Storm Drain Engineering
In addition to operating costs, the city must consider the funding sources for storm drain
management-related CIP projects. Priority projects include Buena Vista Creek Channel
Maintenance at El Camino Real, Citywide Drainage Improvement Program and Headwall
Replacement Program, among several others. These projects are primarily programmed within
the city's Infrastructure Replacement Fund (IRF), which is funded by annual transfers from the
General Fund. Allocations in the IRF for storm drain-related CIP projects vary annually but are
projected to range between $6.7 million and $21.1 million on an annual basis over the next five
years. Thus, the storm drain CIP projects are ultimately using General Fund dollars that could be
otherwise allocated to support other city infrastructure.
Aging stormwater infrastructure, along with impacts from climate change and sea level rise, will
likely increase the need for additional storm drain CIP projects to safely manage stormwater and
prevent flooding in the near and long term.
Watershed Protection
Lastly, while the exact costs are unknown, the city's costs to implement the Municipal
Stormwater Permit are expected to increase with a new permit anticipated to be issued in
FY 2026-27. In addition to the potential for new permit requirements, the city could face
additional regulatory actions from the San Diego Regional Water Quality Control Board such as a
Total Maximum Daily Load (TMDL), a pollution reduction plan that sets a limit on the amount of a
pollutant like bacteria, sediment or nutrients, that can enter a water body from stormwater
runoff. Implementation of TMDL could cost in the tens of millions of dollars.
Funding sources
Most municipalities in California fund their stormwater programs through non-balloted funding
options. These may include options such as the General Fund, regulatory fees or solid waste fees,
Council Memo -Stormwater Management Funding (Districts -All)
June 19, 2025
Page 4
where appropriate. Additionally, there is an allowable balloted means for funding stormwater
programs that includes a property-related fee, governed by the Proposition 218 process. In
San Diego County, the Cities of Solana Beach and Del Mar both passed Proposition 218
stormwater fees in 2007 and 2008, respectively. The City of Encinitas attempted to pass a
Proposition 218 stormwater fee in 2006, but the ballot measure did not pass.
Next Steps
Staff are evaluating potential funding sources that could provide long-term dedicated funding for
some or all stormwater management programs moving forward. If the city chooses not to pursue
a dedicated funding source, continued General Fund transfers will be needed to fund day-to-day
maintenance and operations, stormwater permit compliance programs and storm drain CIP
projects for the foreseeable future.
Attachments: A. City Council Resolution No. 2021-075
B. March 12, 2021, Trash-Reduction Stormwater Cost Allocation Study
cc: Geoff Patnoe, City Manager
Cindie McMahon, City Attorney
Laura Rocha, Deputy City Manager, Administrative Services
Tim Lyons, Assistant City Attorney
Tom Frank, Transportation Director/City Engineer
Zach Korach, Finance Director
James Wood, Environmental Sustainability Director
ATTACHMENT B
Managing Tomorrow's Resources Today
201 N. Civic Drive, Suite 230
Walnut Creek, California 94596
Telephone: 925/977-6950
www.hfh-consultants.com
Robert D. Hilton, Emeritus
John W. Farnkopf, PE
Laith B. Ezzet, CMC
Richard J. Simonson, CMC
Marva M. Sheehan, CPA
Robert C. Hilton, CMC
To:
TECHNICAL MEMORANDUM
Robby Contreras, Assistant City Attorney, City of Carlsbad
James Wood, Environmental Manager, City of Carlsbad
From: Rick Simonson, Senior Vice President, HF&H
Geoff Michalczyk, Senior Associate, HF&H
Date: March 12, 2021
Subject: Trash-Reduction Stormwater Cost Allocation Study
The purpose of this technical memorandum is to summarize the findings of our stormwater cost
allocation study for the City of Carlsbad (City). The information is organized in the following
sections:
1. Background and Study Objectives-describes the City's stormwater management system,
regulatory requirements, and study objectives.
2. Stormwater Program Costs and Cost Allocations -summarizes the average annual
budgeted costs, over the next ten years (FY 2021-22 through FY 2029-30) to maintain the
City's stormwater facilities and maintain regulatory compliance and identifies trash
reduction related costs to be funded through the City's solid waste enterprise.
3. Findings and Recommendations -summarizes the maximum stormwater funding from
the solid waste enterprise based on the average annual projected trash-reduction-related
costs. All other stormwater-related costs will remain funded through other City
departments (e.g., Public Works).
1. BACKGROUND
Stormwater, runoff from rain events that flow over land or impervious surfaces without
percolating into the ground, is considered a nuisance. Firstly, insufficient drainage infrastructure
may lead to flooding during significant storm activity. Secondly, stormwater mobilizes pollutants
(e.g., motor oil, trash) from impervious surfaces which drain into local creeks, lagoons, water
storage reservoirs and, ultimately, the Pacific Ocean. To mitigate flooding concerns, the City
Stormwater TM 12Mar2021_FINAL.docx
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Mr. Robby Contreras
March 12, 2021
Page 2 of 7
Managing Tomorrow's Resources Today
operates and maintains a storm drainage system which is comprised of curbs and gutters, catch
basins (inlets), pipes, outfalls, culverts, and ditches which divert stormwater to local creeks to
prevent flooding. To mitigate pollution concerns, the City has dedicated staff and programs in
place to manage the environmental compliance requirements as regulated through a National
Pollutant Discharge Elimination System 1 (NPDES) permit.
The City's stormwater program performs services that are needed to comply with the NPDES
permit requirements in its San Diego Region Municipal Regional Stormwater Permit (Order No.
R9-2013-0001, as amended by Order Nos. R9-2015-0001 and R9-2015-0100) (MRP). The regional
permit covers 39 municipal, county government, and special district entities located in San Diego
County, southern Orange County, and southwestern Riverside County. These requirements focus
on controlling stormwater pollution. In addition, the City's stormwater program constructs and
operates storm drainage facilities to convey runoff to receiving waters.
Funding for the City's stormwater program is currently provided by a combination of the
following: 1) revenues from a one-time storm drainage development impact fees (e.g., Storm
Water Pollution Prevention Plan Fees and Storm Water Quality Management Plan Fees), which
are collected at the time a parcel is developed or amended; 2) the general fund; and, 3) the solid
waste fund.
Recently, costs incurred to comply with the trash reduction elements of the MRP have increased
significantly. Particularly, the purchase and installation of trash capture devices on inlets to
reduce the amount of trash that enters the stormwater system. In addition, street sweeping
costs have increased. As such, the stormwater program costs funded through the solid waste
enterprise may have not kept pace with the increasing costs.
The objective of this study was to:
1) Identify all costs incurred by the City to maintain the stormwater system and to
comply with the MRP requirements.
2) Identify the direct and indirect costs incurred by, or benefits accruing to, the City's
solid waste enterprise. This will provide a cost-based approach by which the solid
waste enterprise will reimburse the General Fund for the trash reduction related costs
necessary to comply with the MRP.
1 Created in 1972 by the Clean Water Act, the NPDES permit program is authorized by the EPA to allow state
governments to perform many permitting, administrative, and enforcement aspects of the program.
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March 12, 2021
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2. STORMWATER PROGRAM COSTS AND COST ALLOCATIONS
Operations and Maintenance Costs
Managing Tomorrow's Resources Today
We met with City staff to identify all activities associated with stormwater drainage and
compliance with the NPDES pollution control requirements. We found most of the NPDES
regulatory compliance/reporting costs and the costs to clean, maintain, and repair the City's
drainage facilities (e.g., inlets, pipes, outfalls}, are captured in the City's budget for the,
Watershed Protection Division, within the City's Environmental Management Department,
within Public Works. Street sweeping costs are captured in the City's budget for the
Transportation Department, within Public Works.
Figure 1 summarizes the budgeted FY 2021-22 stormwater-related expenses. The FY 2021-22
budgeted expenses are the basis for the average annual stormwater-related costs, assuming 3%
annual inflationary increases in costs.
Figure 1. City Budget Programs with Stormwater-related Activities/Expenses
City Budget Programs with Stormwater-related FY 2021-22 Average Annual Costs
Activities Budget over the next 10 yrs1
NPDES Permit-Related Expenses
Trash Program Assessment $20,000 $22,928
Trash Expenses $215,344 $246,867
Street Sweeping $706,188 $809,565
Watershed Protection Staff Time $841,859 $965,097
Annual Reporting Expenses $16,837 $19,302
Participation in Regional Efforts $4,209 $4,825
Total NPDES Permit-Related Expenses $1,804,437 $2,068,585
Membership Dues/Costs
APWA Membership $360 $413
CASQA Membership $815 $934
Total Membership Dues/Costs $1,175 $1,347
Public Works & General Fund Related Costs
Storm Drain Maintenance Group $944,214 $1,082,436
Watershed Protection Program $1,180,268 $1,353,045
OH -Storm Drain Engineering $69,763 $79,975
OH -CM&I Stormwater lnsp $109,836 $125,915
Total Public Works & General Fund Related Costs $2,304,081 $2,641,371
Total $4,109,693 $4,711,302
1 Average annual cost assumes 3% annual inflation beginning FY 2022-23.
To determine the trash-reduction-related expenses to be borne by the solid waste enterprise, we
worked with City staff to: first, identify which expense line items within the Environmental
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March 12, 2021
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Managing Tomorrow's Resources Today
Management, Transportation, and other Public Works Departments, included stormwater-
related expenses; and second, identify which stormwater-related costs are incurred to prevent
trash from entering the stormwater drainage system (e.g., education and outreach, street
sweeping, trash capture device cleaning) or remove trash that has entered the system.
Figure 2 summarizes the average annual trash-related stormwater O&M costs {$1,347,056), over
the next ten-year period (FY 2021-22 through FY 2029-30), including the cost allocation method
and rationale if a budget expense line item is not exclusively a trash-related expense.
Environmental Department staff activities vary day-to-day and not all staff time within the
department is tracked in sufficient detail to carve out "trash-related" activities; however, City
staff did identify that 12.8% of Watershed Protection staff time was spent on trash-related
activities during the previous fiscal year. Therefore, where we know budgeted costs are not
exclusively related to trash-reduction activities (e.g., NPDES reporting, regional meetings), we
allocated 12.8% of such costs to be borne by solid waste rate payer. This is an approximation
based on our understanding that trash-reduction activities will continue at approximately the
same level, on average, through this ten-year planning period. The actual time and expenses
spent on trash-reduction reduction activities may be higher or lower than what was experienced
during the previous fiscal year.
Figure 2. FY 2020-21 Trash-Related Stormwater O&M Expenses
City Budget Programs with Stormwater-related Average Annual % Allocated to Solid Waste-
Costs over the Related Cost Allocation Method/Rationale Activities
next 10yrs1 Solid Waste Stormwater O&M
NPDES Permit-Related Expenses (from Figure 1)
Trash Program Assessment $22,928 100% $20,000 Directly identified Trash reduction costs
Trash Expenses $246,867 100% $215,344 Directly identified Trash reduction costs
Street Sweeping $809,565 100% $706,188 Directly identified Trash reduction costs
Watershed Protection Staff Time $965,097 12.8% $107,758 Actual proportionate share of staff time tending to Trash-Annual Report $19,302 12.8% $2,155 reduction related NP DES activities in FY 2019-20. Participation in Regional Agency meetings $4,825 12.8% $539
Total NPDES Permit-Related Expenses $2,068,585 $1,051,983
Membership Dues/Costs
APWA Membership $413 12.8% $46 Actual proportionate share of staff time tending to Trash-
CASQA Membership $934 12.8% $104 reduction related NPDES activities in FY 201S-20.
Total Membership Dues/Costs $1,347 $150
Other Environmental Department Costs
Storm Drain Maintenance Group $1,082,436 12.8% $120,859
Watershed Protection Program $1,353,045 12.8% $151,074 Actual proportionate share of staff ti me te ndi ng to Trash-
OH -Storm Drain Engineering $79,975 12.8% $8,930 reduction related NPDES activities in FY 2019-20.
OH -CM&I Stormwater lnsp $125,915 12.8% $14,059
Total Other Environmental Departement Costs $2,641,371 $294,922
Total $4,711,302 I $1,347,056 Ito Figure 4
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Mr. Robby Contreras
March 12, 2021
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Capital Costs
Managing Tomorrow's Resources Today
In addition to the annual O&M costs, the City has incurred, and will incur additional, capital costs
to maintain the stormwater system and comply with the MRP. Figure 3 summarizes the actual
capital costs to purchase and install trash capture devices prior to FY 2020-21 and all storm-water
related projected capital expenses over the next ten years (FY 2021-22 through FY 2030-31). Not
all of the projected capital costs are related to trash-reduction-related projects; therefore, Figure
3 includes a subtotal of only the trash-related projects.
Figure 3. Stormwater Capital Projects (FY 2018-19 through FY 2024-25)
FY2026-27
through
Stormwater-Related Capital Projects FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY2030-31
Agua Hedionda Creek Maintenance $58,000 $80,000 $80,000 $80,000 $0
Buena Vista Creek Concrete Channel Maintenance $3,550,000 $0 $0 $0 $0
Citywide Drainage Improvement Program $2,297,500 $595,000 $265,000 $265,000 $265,000 $1,325,000
Laguna Drive Storm Drain $1,000,000 $1,494,000 $0 $0 $0
Lake Calavera Outlet Improvements $40,000 $0 $0 $0 $0
Park Drive Street and Drainage Improvement $2,100,000 $0 $0 $0 $0
DMP Facility BL-L (College Blvd. Bridge Reimb. Plda "B") $0 $0 $0 $0 $0 $1,816,101
Storm Drain Condition Assessment $0 $200,000 $200,000 $200,000 $200,000 $200,000
Storm Drain System Rehab and Repair Program $200,000 $200,000 $200,000 $0 $0
Total
$298,000
$3,550,000
$5,012,500
$2,494,000
$40,000
$2,100,000
$1,816,101
$1,000,000
$600,000
Total Stormwater Projects $9,245,500 $2,569,000 $745,000 $545,000 $465,000 $3,341,101 $16,910,601
Subtotal: Trash-related Stormwater Capital Projects ONLY FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27
None identified at this time; The City is currently studying and identifying "hotspot" areas that may require trash capture devices
in the near future
Subtotal: Trash-reduction related Stormwater Projects ONLY $0 $0 $0 $0 $0 $0
Annual Amortization of Trash-reduction-related Stormwater Capital Projects
Of the $16,910,601 in stormwater-related capital projects currently included in the City's
approved 10-year capital improvement plan, none has been spent, or projected to be spent, on
trash-related projects which should be borne by solid waste rate payers.
However, City staff is currently studying "hotspots" around the City which may require trash
capture devices to eliminate, or significantly reduce, trash loads in the City's receiving waters.
These trash capture devices, will aid with satisfying the requirement of Provision C.10 of the MRP,
as they will be an integral component in meeting the MRP's trash generation area management
requirement of 100% trash load reduction, or no adverse impact to receiving waters from trash,
by July 1, 2022. The trash control devices and trash reduction program capital costs have been
identified as allowable costs to be borne by the City's solid waste enterprise, as these costs are a
direct result of trash generated within the City, by its businesses and residents, and the cost of
StormwaterTM 12Mar2021_FINAL.docx
Total
$0
$0
$0
$0
+ l0years
$0
Managing Tomorrow's Resources Today
Mr. Robby Contreras
March 12, 2021
Page 6 of 7
collecting and disposing of trash is the responsibility of those who generate the trash. Once City
staff identifies the "hotspots" a comprehensive trash reduction program will be developed, which
will include the number, type, and costs for procuring, installing, and maintaining the trash control
devices. Since the plan, and subsequent costs have not yet been determined, no stormwater-
related capital costs should be borne by the solid waste rate payers at this time.
3. FINDINGS AND RECOMMENDATIONS
Figure 4 summarizes the projected average annual trash reduction-related stormwater O&M costs
(from Figure 2) and capital costs (from Figure 3) the General Fund/Other Enterprise Funds are
projected to incur to reduce trash loads in the City's receive waters, over the next ten fiscal years.
To reduce the impact of the significant capital expenditures on the solid waste enterprise, we
recommend amortizing the cost of the capital costs over the typical useful life of the trash control
devices (10 years) and the current term of the City's franchise agreement with its refuse hauler.
Amortizing the reimbursement of the capital costs over ten years will help minimize the initial
impact to the solid waste enterprise budget, and ultimately, the City's solid waste rates.
Figure 4. Average Annual Trash-Related Stormwater Costs (FY 2021-22 -FY 2029-30)
Average Annual
Expenses
O~erating & Maintenance (O&M} Costs (from Figure 2)
NPDES Permit-Related Expenses $1,051,983
Membership Dues/Costs $150
Other Environmental Department Costs $294,922
Total O&M $1,347,056
Capital Costs -FY 2021-22 through FY 2030-31 (from Figure 3) $0
+ 10years
Amortization of Capital Costs paid by (or to be paid by) General Fund $0
Average Annual Total Trash-Reduction Stormwater Costs $1,347,056
Figure 4 summarizes the recommended O&M and capital reimbursement of $1,347,056, which
the solid waste hauler should make to the City to cover the costs of trash reduction .
It should be noted, as discussed above, the City is in the processing of developing its plan to
procure, install, and maintain trash capture devices to satisfy the requirements of Provision C.10
or the MRP. Once the plan is developed with sound cost projections, the amortized capital costs
may be added to the O&M costs shown in Figure 4, which will increase the reimbursement due
the City from its solid waste hauler.
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Mr. Robby Contreras
March 12, 2021
Page 7 of 7
Managing Tomorrow's Resources Today
In addition, the revenue received from the franchised hauler should be directly booked, or
transferred, to the Solid Waste Enterprise Fund, the General Fund, and/or other City
funds/department, proportional to where the stormwater-related expenses have been booked
(e.g., funds to cover the cost of street sweeping would be transferred to the Transportation
Division, funds to cover the cost of NP DES reporting requirements would be transferred out to the
Watershed Protection Division).
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