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Memo June 19,2007 Page 2 of 4 11. For the above service, a fee needs to be charged. Many other Cities in Minnesota have set up storm drainage utilities. They all basically use a similar approach for determining the utility fee. 12. The approach is to take a certain size rainfall event and determine the resulting average runoff generated from different types, groups, or categories of properties. The categories are based on the amount of impervious area on an average parcel in that category. Impervious areas, such as roofs and driving areas, cause more runoff than the pervious areas of a parcel, such as grassed areas. Trying to calculate the runoff from every individual parcel would be too expensive a process. Thus, properties are grouped into similar categories. The number of categories used depends on how complex one wants to get. Some Cities use 4 categories while some use over 10 categories. 13. The following 4 categories were set up for Pequot Lakes: Vacant-fields, empty lots, parks - Basically 0% impervious Residential - "average" 1/3 acre lot -About 25% - 30% impervious Medium Density Non-residential* - About 55% - 60% impervious Heavy Density Non-residential * - About 70% and higher impervious * I believe it is referred to as Commercial, Industrial & Institutional in the Ordinance. Non-residential is a better descriptor as Commercial, Industrial, & Institutional does not necessarily cover the range that could fall into this category. 14. After the categories were determined, a factor was assigned to each category based on the amount of runoff it generates as compared to a typical residential parcel. The reason the comparison is made to a typical, or average, residential parcel is that in most cities, as in Pequot Lakes, the residential category makes up the majority of the parcels. This factor is called a Residential Equivalency Factor, or REF. 15. Following are the REF's calculated for each category: Vacant = 0.2 -there is still a little runoff, even from a grassed vacant parcel Residential = 1.0 Medium Density Non-residential = 2.3 Heavy Density Non-residential = 4.0 16. Remember, these categories are from a use or storm drainage perspective and not necessarily from a pure zoning perspective. 17. A monthly fee is then charged based on the size and REF for each parcel based on the following formula: Area of parcel in acres x REF x monthly rate established and periodically updated by the City Council.