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City of San Leandro City Council Meeting Date: April 2, 2024 Agenda Number: 13.a. Agenda Section: ACTION ITEMS File Number: 24-107 File Type: Staff Report Adopt Two Resolutions: 1. Intent to Initiate Proposition 218 Process for Stormwater Fee Amendment and Approve the Stormwater Fee Report; and 2. Adopt Balloting Procedures for the Proposed Stormwater Fee Amendment RECOMMENDATION: Adopt a Resolution to initiate a proceeding for the approval of a Stormwater Fee Amendment and approve the Stormwater Fee Report, and adopt a Resolution approving ballot procedures. BACKGROUND AND ANALYSIS The City of San Leandro operates and maintains a stormwater system, which provides vital services to safeguard neighborhoods from flooding and to protect local waterways from pollution. The system consists of complex infrastructure including surface drains, underground pipes and conduits, pump stations, creeks and channels, which captures the City’s drainage before it enters San Francisco Bay. The City’s stormwater system requires long-overdue improvements to address flood control limitations and aging infrastructure. A Stormwater Fee was adopted by the City Council in 1993. The fee generates approximately $1.1 million annually; it has not been increased in 30 years. The revenue is far short of the estimated $4.8 million annual cost to manage the stormwater system. The Storm Water Enterprise Fund has been operating at an annual deficit and has a projected negative $2.5 million fund balance. The Public Works Department began working with Schaaf & Wheeler and HF&H Consultants LLC (HF&H) on an analysis of the City’s stormwater system and to understand the funding needs and options for revenue generation. Staff presented an overview of the Storm Drain Master Plan to the City Council Facilities and Transportation Committee on February 7, 2024. The draft Stormwater Fee Report was presented to the City Council on March 4, 2024. At the March 4 Council meeting, Council directed staff to proceed with the next steps towards implementing a potential stormwater fee amendment to partially fund the City’s stormwater system needs. Stormwater Fee Report A fee report is necessary to meet Proposition 218 requirements and must be based on the final stormwater fee rate proposed in the mailed ballot proceeding. The Stormwater Fee Report (Attachment C) completed by HF&H serves as the basis for the Proposition 218 Property Related Fee Balloting. The revenues required to fund the proposed stormwater utility, including baseline Operations and Maintenance, additional operating needs, and annual capital projects are approximately $4.8 million. Page 1 City of San Leandro Printed on 3/28/2024