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L RFP NO. 14 -069 Proposal Provided to ='ry; City of Santa Ana, Public Works Agency y • Shared Cost Budget for Orange County Stormwater Program 2014 -2015 — "'$5.4 Million • Individual Cost Budget for Orange County Stormwater Program Copermittees 2014 -2015 - -104.8 Million The costs for the program have almost tripled since the inception of the stormwater program and are anticipated to continue to increase with the renewal of the MS4 Permit. The key areas that are anticipated to have significant financial impacts to the City in the near -term include the following: The Santa Ana Region MS4 Permit is in the process of being renewed and is expected to be adopted by late 2015. While much of the MS4 Permit is expected to remain the same or fairly similar', it is highly likely that the revised MS4 Permit will require a much more robust reasonable assurance analysis /study in order to provide a mechanism for the City to be in compliance with the MS4 Permit Receiving Water Limitations provisions (a compliance pathway) while the program is being implemented, but the receiving waters are not yet meeting water quality standards. The level of effort for the reasonable assurance analysis is functionally a "TMDL - lite." The Newport Bay Watershed stakeholders are working with the Regional Board to develop a TMDL to address selenium. Although it is structured as a Phased TMDL that will be implemented over 20- 30 years, the BMP Strategic Plan for the Santa Ana -Delhi and San Diego Creek Subwatershed (December 2013) and the resulting TMDL implementation plan will require the City to continue to participate in and evaluate /implement /monitor various BMPs, including the Santa Ana -Delhi Diversion Project. • The adoption of the Trash Amendments by the State Water Resources Control Board in April 2015 will require the City to select one of two compliance approaches (Track 1 or Track 2) in order to comply with these new requirements. While it is recognized that this program may be implemented jointly with the County of Orange and /or other MS4s, the fiscal impact to the City is expected to be substantial. The fiscal impact of the City's stormwater program is anticipated to increase because of additional, costly permit requirements. This fiscal challenge is exacerbated by the fact the California's Proposition 21810 regulations requires ballot measure approval for a new or increased fee dedicated to support storm drainage services — unlike services for water, sewer and /or solid waste collection, which are exempt from this balloting requirement. Most communities in California that have considered a dedicated funding source for stormwater services have determined that the base support level amongst local voters is below the threshold to generate the optimal funding level — and a more complex approach is needed. The City is seeking assistance in conducting a Fee Study, which would determine the cost impacts and revenue requirements of current and proposed stormwater permit programs, and identify and recommend various funding options. The general approach for the development of the Fee Study includes the following: 7 Shared costs include those activities performed by the County of Orange as Principal Permittee under the Program's Implementation Agreement and the separate cost share agreements for the TMDLs. E Individual costs include those incurred by each Permittee from the implementation of the jurisdictional LIP. 9The key areas that may be modified within the renewed MS4 Permit include Receiving Water Limitations, TMDLs, Municipal Inspection Programs, and New Development /Significant Redevelopment. 10 In November 1996, California voters approved Proposition 218, which requires that any new or increased property- related fee for storm drainage be subject to ballot measure approval NPDES & Environmental Programs Fee Study t RFP No. 14 -069 ��C June 23, 2015 at 2:00 p.m.