"Rain Town" by Hiroyasu Inshida
(if you click through to the YouTube page I suggest switching it to 720p HD mode for better image quality)
The opening titles say:
"In this town, since who knows when, rain has never stopped.
Residents moved out to suburbs and high ground around
"rain town."People's memories are now deeply submerged.But into this forgotten rainy town
sometimes, someone wanders."
Graduation film by Hiroyasu Inshida made at Kyoto Seika University.
Animated and colored using TVP Animation: