The City's utility rates are structured to collect the necessary revenues to meet operating and maintenance costs of the infrastructure, to cover debt service for bonds, and to maintain adequate operating fund reserves. At its September 10, 2014 meeting, the City Commission adopt an ordinance, on first reading, to amend Chapter 110, of the Miami Beach City Code adjusting the stormwater utility rates.

Following the first reading of the aforesaid ordinance, the City Commission discussed having received e-mails from several residents questioning the veracity of the City’s stormwater rate methodology, while others wondered whether the rates proposed were fairly apportioned (Some thought that single family homeowners should pay more, while others thought condominiums should pay less or that those living in mostly flooded areas should pay more). The City Attorney stated that the City’s current rate calculation was calculated in 1996 and, at that time, based upon an analysis and report prepared by the City’s Consultant (at that time CH2M Hill).

At its September 30, 2014 meeting, the City Commission approved on second reading and public hearing, Ordinance No. 2014-3898, amending stormwater utility rates for Fiscal Year 2014/15. As a result of these discussions, the City has enlisted the assistance of AECOM, the City’s flooding and sea level rise consultant, to review the current stormwater rate methodology.

The current stormwater methodology utilizes an allocation of the Equivalent Residential Unit (ERU). One ERU presently equates to 791 square feet of impervious area and is the base unit of all residential units throughout the City. This measurement serves as the common index to compare runoff generated by each property. The ERU is developed using a statistical sampling of residential parcels which totals the impervious area including the building footprint and any additional impervious areas such as driveways, walkways, porches, decks, etc. For billing purposes, residential units are considered the same regardless of whether it is a condominium or a single family dwelling. Each residential property is assessed equally. Non-residential customers are charged a stormwater fee by taking the actual impervious area and dividing it by the 791 square feet. The total number of current ERU’s is 110,265. The annual revenue requirement is then divided by the total number of ERU’s to determine the required rate.

At the Mayor’s Blue Ribbon Panel on Sea Level Rise meeting on May 31, 2016, a presentation was provided by AECOM reviewing the present methodology and providing alternatives to modify the current method. The Panel voiced concerns with the proposed method and offered suggestions to be incorporated prior to the method moving forward.

At the Finance and Citywide Projects Committee (FCWPC) meeting on June 17, 2016, a presentation was made by AECOM on the current and proposed methodologies. The basis for the change was the revised value of the ERU from 791 square feet to 849 square feet, which was derived by an analysis of residential properties including condominiums. Therefore, due to the increase in the square footage, the stormwater fees would result in some shift of revenue requirements from non-residential properties to residential properties. Several tiers of residential properties were presented from small to very large properties and their subsequent calculated annual fee based on current rates. There was concern expressed by the Committee that there appeared to be too large an increase on the medium single family residence. The recommendation of the FCWPC was to review the methodology that was presented taking into account the concerns discussed, for staff to meet individually with each Commissioner prior to the next Commission meeting; and put an item on the agenda for the City Commission’s consideration.

AECOM has modified their recommendations to address the concerns raised at the FCWPC. The proposed ERU remains the same at 849 square feet of impervious area. However, the single family home class has been reduced from four tiers to only two tiers. This means that the majority of the single family homes will remain as a single ERU while those with the largest impervious footprint will be measured and calculated.