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$108,100 should be funded from the Storm Water Management Fund. The Storm Water Management Fund was created for the purpose of funding projects that would encourage new development and decrease the amount needed for ponding. Although there was a significant drainage problem prior to the Zitzloff development, the problem was exacerbated by development and does provide benefit in the form of an overflow for Business Park 95. Staff recommended that 50 percent of the $108,100, or $54,050, be funded from the Storm Water Management Fund and 50 percent from the Storm Water Utility Fund for the Mississippi River Storm Water Subdrainage District No. 1 project. Councilmember Zimmerman inquired as to how much money the City expected to collect from the district in the Storm Water Management Fund. City Engineer Olson replied that the charge is $3,741 per acre and there is approximately 14 acres within the district. Councilmember Zimmerman inquired as to how much the City collects from the Storm Water Utility fund. City Engineer Olson replied approximately $330,000 annually. He explained that staff is recommending the 50/50 split because the project would be correcting an existing drainage problem. Councilmember Kurak inquired if it was tree that the City had not utilized the Storm Water Management fund to date. City Engineer Olson replied that to the best of his ability the fund has not been used. Councilmember Kurak stated that the Storm Water Utility fund is a fund that has caused a lot of concern in the community so the City should treat it very carefully. She stated that when she was made aware of the fact that the project was to be funded from the Storm Water Utility fund she made the request that funds be taken from the Storm Water Management Fund and does not agree with the 50/50 split. The Storm Water Utility fund was established to be used for maintenance items not new construction. Councilmember Zimmerman stated that he agreed that the Storm Water Utility fund was established to handle maintenance items. Councilmember Hendriksen requested that the City Engineer review the conditions that existed on the Parabody site and other neighboring properties that would justify using the Storm Water Utility fund. City Engineer Olson stated that the Storm Water Utility fund was established to maintain the storm sewer system, but it has been used to correct drainage problems because the lack of maintenance causes drainage problems. He explained that there were numerous instances in the Finance Committee/September 11, 2001 Page 2 of 7