Multiple pressures have been building in recent decades for Municipalities managing stormwater infrastructure
The first challenge is polluted streams
Second is tightening DEP and EPA regulation. Municipalities now need to do more to meet regulatory requirements, associated with their NPDES permits
Third sw infrastructure in the mid Atlantic region is aging. Its reaching the end of its useful life faster than its being replaced.
The forth challenge is increased development. There’s more impervious area now creating more sw runoff for existing downstream sw pipelines to manage which can lead to capacity issues, causing flooding and public safety concerns.
And the fifth challenge is level funding. How do you come up with the revenue necessary to address the first 3 challenges when general tax revenue in many Municipalities remains stable from year to year.
Another benefit is that Stormwater utilities provide a dedicated revenue stream for stormwater improvements.
Relying on general tax revenue for stormwater improvements isn’t practical for most communities. There simply isn’t enough money to cover all of the needs a municipality must address, and stormwater often falls to the bottom of the list because money is allocated to more high profile projects such as a bridge replacement or pavement rehabilitation.
SWUs overcome this challenge by providing a dedicated revenue source that are not robbed for other municipal funding needs
As previously mentioned, as infrastructure continues to age, the need for capital improvements and revenue requirements increase. Municipalities ability to invest in improvements may decrease over time as revenue remains static and cost of improvements/regulatory requirements increase So SW fees provide a more predicable and steady stream of revenue which is not based upon upswings and downturns of economy.
It Allows for general funds that were going towards SW to be redirected to other municipal needs such as police, fire, roads, and other infrastructure.
While There are many reasons for which municipalities may consider forming a regional Utility, Financial reasons seem to be the leading driver for most municipalities. A leading financial reason is that Stormwater fees are more equitable than a property tax.
That’s because SW fees Fairly apportions cost to the burden each property contributes to the system That’s because rates are based upon a property’s impervious area which correlates to the “contribution to the problem” (quantity/quality of runoff ) as opposed to the assessed value of property.
For this reason fees are much more flexible and responsive to the true nature of stormwater than a straight property tax would be. The value of your land is not necessary a direct correlation with how much stormwater you create, so a property tax is inherently unfair for this purpose.
Another way in which SWU fees are more equitable than a property tax is that it enables you to collect fees from tax-exempt users who often make major contributions to runoff with their large impervious surface areas. Churches and non-profit organizations like hospitals and universities contribute a lot of stormwater runoff to the local watershed, but currently don’t pay towards SW costs since they’re tax-exempt. With a SW fee, for-profit business owners and residents don’t have to shoulder the cost burden alone.
These two reasons result in a significant cost savings to residential users. As stated on the slide our survey of municipalities shows that the average residential property owner will save 50-70% by paying a fee instead of paying for SW through taxes.
Another important aspect of a fee based structure, is that the fees are tailored based upon the actual level of service a property receives from the system. Credits are given to property owners who make improvements to property to reduce quantity or improve quality of stormwater leaving property. This has the added bonus of encouraging good behavior: inspiring people to install stormwater control measures like rain gardens, buffers, etc. on their property. And provides an incentive for businesses to reduce impervious surface (leads to overall reduction in stormwater managed by Utility.) This saves the municipality money.
Some rate structures employ a flat rate or tiered fee for some or all customers rather than a calculate charge based on the condition of each property. Sometimes flat rates are employed for residential and discrete rates are applied for non residential.
Rate structures that classify and group properties by development intensity, or runoff coefficient is a form of tiering. Commonly, properties are grouped into five to 10 descriptive classes ranging from undeveloped or very lightly developed to very heavily developed. Many times this method also groups customers based on gross area of property, so dual tiers of area and development intensity are used in the fee calculation formula.
Fees per geographic area – Does runoff go to a stream with a maximum pollutant load threshold? Is a different level of service provided to different sections of a municipality.
Empirical studies demonstrated that imp surface area on a property is the single most significant factor influencing stormwater volume , peak runoff rate, and pollutants
Similar to an “EDU” used in sewer billing Communities with larger ERUs generally imply more affluent areas or residential parcels with larger homes.
Its important to correctly calculate the EUR, because if an ERU is larger than the actual average single family impervious area means that non-residential properties will pay less than their fair share of the cost for stormwater management and residential properties will pay more.
What should be classified as residential? Hampden classifies Single Family res as homes, attached homes, townhouses, condos, duplexes and row homes. Does not include mobile homes in mobile home parks, apartments or agricultural properties.
A stormwater utility brings numerous benefits. Managing stormwater through a regional or County wide authority derives even more
One benefit is that a regional solution Supports watershed planning and management. - Political boundaries and watershed boundaries seldom coincide. When you can move outside of political boundaries and can solve stormwater problems on a watershed basis, you can start to address the problem and the source together. So for instance you can address the downstream flooding problem along with the upstream cause of the flooding. This allows for more effective stormwater solutions to be implemented…you are no longer dealing with a fragmented approach
Economies of scale is another benefit. There’s a lot of fixed costs of SW management. When you can divide those fixed costs out over more users, economies of scale are realized as costs per municipality come down.
For instance, with capital improvement projects, generally higher unit quantities result in lower unit price bids, so pipelines can be replaced or slip lined for a reduced cost if larger projects are implemented.
Along those same lines is increased purchasing power for equipment and supplies and enhanced opportunities for government grants and loans.
As I’m sure you’ve realized, Subsidized funding is getting harder and harder to come by and we’re seeing that funding agencies are giving higher consideration to entities that have sustainable stormwater programs, those that are implementing regional approaches to do what they can to streamline costs and that have developed a long term funding mechanism which ensures the infrastructure installed through the grant or loan will be adequately maintained. Also, a lot of the funding programs, such as those awarded through the Commonwealth Financing Authority are political in nature and legislators are more likely to get behind projects benefiting a larger constituent base. So regional entities can generally get more favorable consideration for grant dollars.
Historically the role of WVSA was as a wastewater authority serving 36 municipalities in Luzerne County. All the colored municipalities are in WVSA’s ww service area. Of those municipalities, 14 are member municipalities who have board representation and 22 are nonmembers, so they receive service, but not direct representation. And of those 22, 6 are served by a smaller regional authority that’s a bulk customer of WVSA.
Of those 36 municipalities 31 have entered into inter-gov agreements with WVSA for SW services. Each of those are shown in green.
The remaining municipalities that chose not to opt in received MS4/NPDES waivers or to date have decided to explore a smaller regional solution through the smaller regional authority.
Why is WVSA doing all of this? One benefit is that a regional solution Supports watershed planning and management. - Political boundaries and watershed boundaries seldom coincide. When you can move outside of political boundaries and can solve stormwater problems on a watershed basis, you can start to address the problem and the source together. So for instance you can address the downstream flooding problem along with the upstream cause of the flooding. This allows for more effective stormwater solutions to be implemented…you are no longer dealing with a fragmented approach
Economies of scale is another benefit. There’s a lot of fixed costs of SW management. When you can divide those fixed costs out over more users, economies of scale are realized as costs per municipality come down. For instance, with capital improvement projects, generally higher unit quantities result in lower unit price bids, so pipelines can be replaced or slip lined for a reduced cost if larger projects are implemented.
Most municipalities have been differing almost all maintenance of their storm sewer systems bc they don’t have labor or equipment to manage it. Studies show that for every $1 of differed maintenance it equals $4-$5 of future capital improvement cost. So there is a surmounting financial need to replace stormwater systems… WVSA will help the municipaltiies better maintain their systems through things such as flishing or rebuilding inlets. However bc the SW systems are so diapitated, WVSA is also providing labor and equipment to deal with emercency situations, such as pipe collapse.
Municipal Savings Plans – In order to minimize the issue of differed maintenance WVSA is setting up savings plans for each municipality. Whereby a portion of WVSA’s fee revenue goes into separate accounts for each municipality. WVSA will then reimburse the municipalities for costs related to improving their Sw system.
Community Stormwater Parks – Desire to improve the community by developing recreational destinations. These are places were WVSA will implement BMPs required by the permit, but also educated the property owners on the importance of water quality, while at the same time provide recreations opportunities and green space.
Fee charged to property owner Frees up municipal tax revenue
What’s really the key to making this work? What’s the key to reducing costs and administrative obligations? It really boils down to Strategic partnerships.
And regional entities have been shown to develop more effective partnerships than single municipalities.
In the case of WVSA, partnerships started when they joined together with the municipalities to tackling growing stormwater concerns.
We also hope to partner with Luzerne County Flood Protection Authority on Green Infrastructure Projects. This is allowing WVSA to implement large scale regional BMPs – in flood control devices owned by the Flood Protection Authority. This is Reducing cost of regulatory compliance by at least $9M.
Through a partnership with USGS, the federal government bought from WVSA the imagery and LIDAR WVSA developed to derive IA data. They have also formed a Strategic Partnership with the Army Corps of Engineers who will help complete GIS mapping of all sw infrastructure in the 33 municipalities. From there condition assessment, and asset management planning will likely be completed. The Corp is also assisting in completing requirements of Appendix A and C of new permits which includes mapping of Abandoned mine drainage sources and sources of priority organic compounds. This needs to be completed by 2019 and 2020. The partnership with the Corp is a 50/50 cost share, so WVSA is cutting those costs in half through this partnership. In addition, WVSA will look to form partnerships with local universities, schools and organizations who will come alongside them to assist with MCMs #1 and #2 which is public education and public involvement. All the new stormwater requirements cost money and there is not a lot of grant dollars available for stormwater, so the more partnerships WVSA forms the lower they can keep user fees. Partnerships which can be used to meet new regulatory requirements is key.
WVSA’s regional approach enables municipalities to meet MS4 requirements over the next 5 years at a savings of 50% - 70% then if each municipality were to do it alone.
50-70 percent…that’s a really big savings!
Nj future redevelopment forum 2019 vicari
Stormwater Utility Overview
Adrienne M. Vicari, P.E.
Financial Services Practice Area Leader
Herbert, Rowland & Grubic, Inc.
Municipal Stormwater Challenges
• Challenge #1: Polluted streams
• Challenge #2: Aging infrastructure
• Challenge #3: Increased development = more stormwater, flooding
• Challenge #4: Tightening regulations
• Challenge #5: Level funding
• Historically, municipalities have funded stormwater costs through tax revenues which have
remained stable despite growing costs
A Growing Trend
• Over 1,800 stormwater utilities in the U.S.
• First utility formed in 1974
• Continued growth over past 5 decades due to:
– Increased regulation
– Significant precipitation events
• Enabling legislation in PA passed in 2013
- Municipal and County Authorities can
charge a fee
- Second Class Townships can charge a fee
- Home Rule Municipalities can generally
charge a fee
• Enabling legislation in DE enacted in 2006
- Authorizes local agencies to establish and manage stormwater programs & User fee
- No waivers or exemptions to any groups
2018 STORMWATER UTILITY LOCATIONS
Ref: WKU Stormwater Utility Survey 2018
More than 1800 Stormwater Utilities estimated in 40 states
Financial Benefits of a Stormwater Utility
Benefit #1: Provides a steady dedicated revenue stream
• Dedicated source of funds
• Funds directed solely to stormwater management
• Need for capital improvements and revenue requirements
increase as infrastructure ages
• More predictable and steady stream
Financial Benefits of a Stormwater Utility
Benefit #2: Funding via Stormwater fees is more equitable than a tax
• Fairly apportions costs to the burden each property contributes to the
In roughly 40 municipalities surveyed, an avg residential property owner saves between 50% -
70% by paying a fee vs. through taxes.
• Fees can be collected from tax exempt users
• Credits provided based on level of service received
• Provides an incentive for businesses to reduce impervious surface
How Are Stormwater Fees Assessed?
92% of Stormwater Fees
based on Impervious Area
18% are based upon
Source: Black & Veatch 2018
Stormwater Utility Survey
Often incorporates Gross Area or other characteristics.
Common Stormwater Rate Structures
• Impervious Area (IA) estimates developed for
• Does not differentiate between residential and
non residential properties
• Typically more equitable
• ERU = Equivalent Residential Unit
• IA estimates developed for a sampling of
residential properties and all nonresidential
• Residential properties pay either a flat ERU or
Tiered ERU fee.
• Nonresidential properties pay multiples of an
1 ERU =
3,500 sq ft
13 ERUs *
Tier IA Range
0 0-499 No Fee
1 500-1499 $2.00
2 1500-3999 $4.50
3 4000-6499 $8.30
4 6500- $1.70 per 1000 sq ft IA
– O&M Agreement
• Account for varying levels of on-site stormwater management
• Account for properties that:
– Reduce rate or volume of stormwater leaving property
– Improve quality of stormwater leaving property
– Are separate MS4 Permit holders
• Typically capped [25%-50%] of fee
Benefits of a Regional Approach
1. Supports watershed planning and management
2. Streamlines regulatory requirements (in many states)
3. Eliminates duplication of services
4. Gains economies of scale
5. Increases purchasing and borrowing power
6. Enhanced opportunities for government grants and loans
7. Expanded cost share options
8. More cost effective and equitable approach to rate payers
The MOST cost- efficient
and equitable approach!
Serves 32 municipalities
in Luzerne County,
Partnering to Meet Stormwater Needs
• Property Owners partner with WVSA and their municipality to:
• Implement BMPS for control of stormwater runoff
• Engage in public events promoting water quality.
Credits to reduce fees are available for both activities.
• Municipalities maintain ownership of MS4 permits and maintain local control of existing
stormwater infrastructure. They adopt ordinances, assist with MCMs and submit annual reports.
• Administers the MS4 Permits.
• Completes MS4 Minimum Control Measure (MCMs) requirements.
• Installs BMPs, performs street sweeping, etc., to meet pollution reduction requirements.
• Assists municipalities with infrastructure maintenance and improvements.
• Maps municipal infrastructure.
• Reimburses each municipality for a portion of SW infrastructure improvement costs.
1. Partnering with 32+ municipalities to save money w/
economies of scale and streamlined permitting
2. Strategic Partnerships for MS4 BMPs
Ex. Luzerne County Flood Protection Authority and developers
3. Strategic Partnerships for Mapping & Data Development
Ex. USACE and USGS
4. Strategic Partnerships for MCM’s
Ex. Large Property Owners, Schools, Universities, Watershed
Stewards Girl Scouts, Boy Scouts
WVSA is Reducing Costs through:
Why WVSA Got Involved
• WVSA’s Partnerships reduces overall cost by:
Results in fee to average residential property owner of $4.80 per month =
60% Savings over paying through taxes!
50% - 70%
Adrienne Vicari, P.E.
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