MSA Stormwater Practice Leader Eric Thompson, PE, guides viewers through the stormwater utility development process. He covers the three critical elements to a utility’s success, based on his team’s past experience. Eric also shares some simple "rules-of-thumb" to give you a better idea of what communities like yours are doing when it comes to stormwater management and utility creation.

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IS A STORMWATER UTILITY THE
RIGHT FIT FOR YOUR COMMUNITY?
PRESENTED BY ERIC THOMPSON, PE, CFM
Webinar hosted March 26, 2015

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WHATISASTORMWATER UTILITY?
HOWISASTORMWATER UTILITY DEVELOPED?
WHATAREALTERNATIVES TOANERUSYSTEM?
WHATARECRITICALELEMENTS FORSUCCESS?
STORMWATER UTILITY CREDITS
WHATAREOTHERCOMMUNITIES DOING?

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WHAT IS A STORMWATER UTILITY?
OVERVIEW
A Stormwater Utility, like other utilities, provides a service to the public
supported by charging fees to its customers.
Service – Stormwater Management
• Drainage
• Flood Damage Prevention
• Water Quality Management
• Erosion and Sediment Control
Fee – Runoff Volume

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WHAT IS A STORMWATER UTILITY?
A STEP IN THE EVOLUTION OF PUBLIC SERVICES
» Water Utility – 1950s
» Waste Water Utility – 1970s
» Solid Waste Utility – 1980s
» Stormwater Utility – Now
Need for expanded services with improved
quality, provided by an aging system = increased
cost.

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WHAT IS A STORMWATER UTILITY?
UTILITIES FUNDED THROUGH USER FEES
User fees are directly related to contribution to problem and/or benefit received from program.
Water Utility – Volume of Water Used
Waste Water Utility – Volume of Water Used
Solid Waste Utility – Weight of Refuse
Stormwater Utility - Stormwater Runoff

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WHAT IS A STORMWATER UTILITY?
BASIS OF STORMWATER UTILITY USER FEES
Roofs
Driveways
Streets
Landscaped
Areas
100
50
0
0 0.01 0.1 1.0 4.0
PercentageofContribution
Inches of Rain
Source: Pitt
90% of events

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WHAT IS A STORMWATER UTILITY?
ERU SYSTEM
* Sometimes a reduced value is applied
• Flat Fee =
1 ERU per Living Unit
- Single Family
• Flat Fee =
1 ERU per Living Unit*
- Duplex
- Multi-Family
• Parcel Impervious Area
ERU Size (square feet)
- Commercial
- Industrial
- Tax Exempt
X Charge Rate

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WHATISASTORMWATER UTILITY?
HOWISASTORMWATER UTILITY DEVELOPED?
WHATAREALTERNATIVES TOANERUSYSTEM?
WHATARECRITICALELEMENTS FORSUCCESS?
STORMWATER UTILITY CREDITS
WHATAREOTHERCOMMUNITIES DOING?

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HOW IS A STORMWATER UTILITY DEVELOPED?
DEVELOPMENT STEPS
7. Implementation Assistance
6. Public Education
5. Master Account Database
4. Stormwater Utility Ordinance and Policies
3. Credit Handbook
2. Land Use Analysis
1. Feasibility Study

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HOW IS A STORMWATER UTILITY DEVELOPED?
FEASIBILITY STUDY
A Stormwater Utility Feasibility Study will answer
the following questions……….
1. What is the ERU size in your City?
2. Approximately how many ERUs are there Citywide?
3. How will the stormwater program cost distribution
among users differ between a stormwater utility and
property-tax system?
4. What ERU charge would be needed to support the
proposed stormwater program utility budget?

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HOW IS A STORMWATER UTILITY DEVELOPED?
FEASIBILITY STUDY – ERU SIZE
Statistically Significant Random Sample
Multi-Family
All parcels >1 living unit
Single Family

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HOW IS A STORMWATER UTILITY DEVELOPED?
FEASIBILITY STUDY – ERU SIZE
Impervious Area Associated with Single Family Residential Parcels
1.3% 2.0%
7.9%
13.2%
27.2%
23.8%
9.9%
6.0%
4.0%
2.0% 1.3% 1.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%

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HOW IS A STORMWATER UTILITY DEVELOPED?
FEASIBILITY STUDY – IMPERVIOUS AREA ESTIMATION
Non-Residential
impervious areas
are estimated
using aerial
photos and
zoning/land-use
maps
~64.7 impervious acres ÷ 3605 ft2 = 782 Non-Residential ERUs

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HOW IS A STORMWATER UTILITY DEVELOPED?
FEASIBILITY STUDY – CHARGE DISTRIBUTION
17%
83%
PROPERTY TAX SYSTEM
Non-Residential Residential
39%
51%
10%
REVISED STORMWATER UTILITY RATE
STRUCTURE
Non-Residential Residential Tax-Exempt

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HOW IS A STORMWATER UTILITY DEVELOPED?
FEASIBILITY STUDY – CHARGE DISTRIBUTION
Residential Stormwater Charges
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250
Charge per year
StormwaterProgramRevenue
Per Residential Unit, User
Fee System
Per $85,000 Assessed
Valuation Property Tax

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HOW IS A STORMWATER UTILITY DEVELOPED?
FEASIBILITY STUDY – CHARGE DISTRIBUTION
Non-Residential Stormwater Charges
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000
Charge per year
StormwaterProgramRevenue
Per acre non-res parcel, User Fee
System
Per $200K of Assessed Valuation
Property Tax

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WHATISASTORMWATER UTILITY?
HOWISASTORMWATER UTILITY DEVELOPED?
WHATAREALTERNATIVES TOANERUSYSTEM?
WHATARECRITICALELEMENTS FORSUCCESS?
STORMWATER UTILITY CREDITS
WHATAREOTHERCOMMUNITIES DOING?

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WHAT ARE ALTERNATIVES TO AN ERU SYSTEM?
STORMWATER RATE STRUCTURES
Non-Area Based
Flat Fee
Tiered Fee by
Land Use
Area Based
Impervious Area
Only
ERU- Based
Flat SFR
Parcel Fee
Tiered SFR
Parcel Fee
Non-ERU BasedPervious and
Impervious Area

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WHATISASTORMWATER UTILITY?
HOWISASTORMWATER UTILITY DEVELOPED?
WHATAREALTERNATIVES TOANERUSYSTEM?
WHATARECRITICALELEMENTS FORSUCCESS?
STORMWATER UTILITY CREDITS
WHATAREOTHERCOMMUNITIES DOING?

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CRITICAL ELEMENTS OF SUCCESS
1. PREPARATION OF A CLEAR STATEMENT OF NEED
The Community must document that the implementation of the utility will result In
an increased level of service proportional to the stormwater utility fee.
Without an easily definable problem
statement such as a need to provide
flooding or drainage relief to a large
portion of the City or a need to
satisfy new unfunded water quality
standards (such as the new Phase II
storm water rules) a storm water
utility can appear to be a shell game
where money is switched from one
pot to another to simply free up
funds from the general tax levy for
other non-storm water programs.

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CRITICAL ELEMENTS OF SUCCESS
2. COMPLETE AND TRANSPARENT ACCOUNTING
The argument for implementing a utility is often based only on the fact
that costs will be shifted away from residential properties towards non-
residential properties (including tax-exempt properties) and will be
fairer since this fee structure is proportional to the stormwater
generated by each parcel. This is a valid argument; however, if
insufficient detail is provided to support this general statement strong
resistance from community businesses may develop.
In practice, comparatively few businesses will be severely impacted
annually by a utility. Usually less than 5% of the customers can be
expected to have storm water utility bills over $100 per month.

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CRITICAL ELEMENTS OF SUCCESS
3. SENSE OF CONTROL FOR CUSTOMERS
• Stormwater Utility Credits provide a sense of control for
customers; since they can reduce their storm water
charges through a reduction in their ‘usage’ of the storm
water management service provided by the municipality.
• In common practice the implementation of credits affect
the overall utility revenue generation potential by less
than 5%; a small concession for greater public acceptance
of a utility.

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WHATISASTORMWATER UTILITY?
HOWISASTORMWATER UTILITY DEVELOPED?
WHATAREALTERNATIVES TOANERUSYSTEM?
WHATARECRITICALELEMENTS FORSUCCESS?
STORMWATER UTILITY CREDITS
WHATAREOTHERCOMMUNITIES DOING?

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STORMWATER UTILITY CREDITS
Possible Credit-Eligible Customers
Non-Residential Residential

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STORMWATER UTILITY CREDITS
0%
25%
50%
75%
100%
Single-Family
Residential
Rate and Volume Water Quality Direct Discharge Industrial NPDES Other
%COMMUNITIESSURVEYED*
Credit Types

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WHATISASTORMWATER UTILITY?
HOWISASTORMWATER UTILITY DEVELOPED?
WHATAREALTERNATIVES TOANERUSYSTEM?
WHATARECRITICALELEMENTS FORSUCCESS?
STORMWATER UTILITY CREDITS
WHATAREOTHERCOMMUNITIES DOING?

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WHAT ARE OTHER COMMUNITIES DOING?
IOWA
75 Utilities, Ave = $45/ yr
ILLINOIS
# Unknown, Ave ~ $50/yr
MINNESOTA
71 Utilities, Ave = $32/yr
WISCONSIN
120 Utilities, Ave = $62/yr

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STORMWATER UTILITY REVENUE POTENTIAL
Population – 5,000
Residential ERUs =1 ERU per 2.7 people
=1,851
Non-Res. ERUs =65% of Total ERUs
=3,438
Total ERUs =5,289
State Average ERU Rate = $50/yr
City Revenue Potential = $264,450

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QUESTIONS?

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IS A STORMWATER UTILITY THE
RIGHT FIT FOR YOUR COMMUNITY?
PRESENTED BY ERIC THOMPSON, PE, CFM
Webinar hosted March 26, 2016