Stormwater Utility Fees: Implementation Considerations

Transcription

1 Stormwater Utility Fees: Implementation Considerations Glenn Barnes Environmental Finance Center

2 By the end of this session, participants should be able to: List major stormwater management revenue options available Explain the basic rules and limitations for using different options to pay for stormwater services

3 General Methods of Raising Local Government Revenue Taxes Public Enterprise Fees Stormwater Management/Utility fees Drinking water/wastewater fees Impact fees Regulatory fees Fines and Penalties Contractual agreements Assessments

4 Methodology of Charge Source: SESWA 2009 Survey

5 Factors that (Can, Should and Do) Influence Revenue Choices Legal Considerations Community perspectives, goals and objectives Customer Fairness and equity Revenue stability and reliability Political acceptance Administrative complexity Peer pressure

6 How To Charge for Stormwater Flat rate Charge based on impact of property on stormwater runoff Charged based on range of impact calculated as Equivalent Residential Unit, or ERU Commercial and Residential different?

7 Rate Structure & Rate Study Analysis Potential Rate Methodologies Impervious Area* Impervious Area + Gross Area Gross Area/Intensity of Development/Land Use Others Common Rate Modifiers Uniform/Flat Rate (with or w/o Tiers) Water Quality Charge/Factor Typical User Fee Credits Detention Ponds & Structural Controls Onsite Greenspace Green Growth Guidelines/LID * Most Common Rate Methodology Slide Source: Ron Feldner, Stormwater Consultant

8 Basis of Stormwater Charge Source: SESWA 2009 Survey

9 How the User Fee is Calculated: Equivalent Residential Unit (ERU) = Billing Unit ERU = median singlefamily residential impervious area Example ERU: Rooftop = 1,400 sq ft Driveway = 1,200 sq ft Sidewalk = 400 sq ft Total ERU = 3,000 sq ft Slide Source: Ron Feldner, Stormwater Consultant

10 How the User Fee is Calculated: Non Single Family Residential ERU Calculation = Building Footprint = 10,000 sq ft Parking Lot = 14,000 sq ft Total Impervious Area = 24,000 sq ft ERU = 3,000 sq ft Total = 24,000/3,000 = 8 ERUs Slide Source: Ron Feldner, Stormwater Consultant

11 How the User Fee is Calculated: Credits Building Footprint = 10,000 sq ft Parking Lot = 14,000 sq ft Total Impervious Area = 24,000 sq ft ERU = 3,000 sq ft Total = 24,000/3,000 = 8 ERUs 1 ERU = $4.00/month 8 ERUs = 8 x $4.00 = $32.00/month Credit for Detention = 30% New Bill Amount $22.40/month Slide Source: Ron Feldner, Stormwater Consultant

12 How the User Fee is Calculated: Residential Tiering 0.66 ERU < 2,000 sq ft 1.33 ERU > 4,000 sq ft 1.0 ERU = 3,000 sq ft 3 Residential Tiers Slide Source: Ron Feldner, Stormwater Consultant

13 Average Monthly Utility Rates 2007 SESWA $3.18/month (46 respondents) GA $3.18 SC $3.91 NC $2.62 TN $3.08 KY $ Florida Stormwater Association 91 Utilities Surveyed (primarily in Florida) $4.32/month 2006 NC Triangle COG (37 respondents) $4.00 per month 2007 AMEC Earth & Environment 628 SW Utilities Nationwide 3.74/month Slide Source: Ron Feldner, Stormwater Consultant

14 The (perhaps literally) Million Dollar Question: Tax or Fee?

15 Tax vs. Fee Whether the charge is a tax or a fee is the most frequently litigated issue in stormwater court cases nationwide Why is this so important?

16 Tax vs. Fee Most properties with large amounts of impervious surface are also large taxpayers in the community...

17 ...but not all Tax vs. Fee

18 Durham, North Carolina budget = $8,068,718 $2.17/mo < 2,000 sq ft of impervious surface $4.50/mo. 2,000 sq ft Other/com.: $4.50 per month for each ERU (2,400 sf.)

19 Durham Property Taxes Property tax rate = 60.3 cents per $100 property valuation Assessed Value - Real Property $13,740,351,450 Tax Levy on Real Property $82,854,319 It would take 5.8 cents/$100 to generate $8,068,718

20 $300,000 House Current Fees $54/year ($4.50/mo. on water bill) If budget funded by property tax $174/year

21 $15,000 House Current fees $26/year ($2.17/mo.) If budget funded by property tax $8.70/year

22 Church (24,000 Sq. Ft Impervious Area) Current fees $540/yr ($45/mo.) If budget funded by property tax $0

23 Mega Mall (3,815,240,000 SF) Current fees 1590 ERU's $7,155/mo. ($85,860/yr) If Budget funded by property taxes ($113,675,753) $65,931/yr

24 Durham Bulls Ballpark (163,200 sf) Current fees Fee = $306/mo. ($3,672/yr) If funded by property tax $0

25 Other Key Legal Issues Is the charge voluntary? Is the charge actually a special assessment? Is the fee reasonable and directly related to cost of service? Are properties charged receiving a benefit proportional to what they pay? Must fees be confined to stormwater program only? Source: NAFSMA, Guidance for Municipal Stormwater Funding

26 General Legal Findings In order for a charge to be a fee, overall cost of program must be reasonably related to service provided Fee should be proportional to property s contribution to stormwater runoff Source: NAFSMA, Guidance for Municipal Stormwater Funding

27 General Legal Findings Participation in the program should b e characterized as voluntary If state has constitutional provisions governing imposition of a new tax, it may be necessary to seek voter approval for the fee Source: NAFSMA, Guidance for Municipal Stormwater Funding

28 Implementation Issues & Funding Resources

29 How are your user fees billed? 77% With water or other utility bills 16% With tax bills 7% Other Graphic and Data Source: Black and Veatch 2007 Stormwater Utility Survey

30 Who is responsible for the payment of user fees? 67% Property owner 20% Resident 13% Other (e.g., water or other utility bill recipient) Graphic and Data Source: Black and Veatch 2007 Stormwater Utility Survey

31 What types of properties are exempt from user fees? 61% Streets/highways % Undeveloped land % Rail rights-of-way % Public parks % Government % School districts % Colleges/universities % Water front % Airports % Churches % Other % None Graphic and Data Source: Black and Veatch 2007 Stormwater Utility Survey

32 What types of properties are exempt from user fees? Source: SESWA 2009 Survey

33 What is the basis for your user fees? 65% Impervious area 6% Gross area with intensity of development factor 9% Both impervious and gross areas 14% Other (e.g., number of rooms, water use, flat fee) 6% Gross area with runoff factor Graphic and Data Source: Black and Veatch 2007 Stormwater Utility Survey

34 How frequently do you bill? 62% Monthly % Annually % Bimonthly % Quarterly % Other Graphic and Data Source: Black and Veatch 2007 Stormwater Utility Survey

35 Are credits provided for private detention/retention facilities? 46% Yes 2005 = 46% 2002 = 53% 1999 = 50% 54% No Graphic and Data Source: Black and Veatch 2007 Stormwater Utility Survey

36 Are user-fee credits provided to encourage customers to control or reduce stormwater pollution? 68% No 32% Yes 1% Quality only 11% Quantity only 20% Both quality and quantity Graphic and Data Source: Black and Veatch 2007 Stormwater Utility Survey

37 Resources Free guide that discusses sources of funding, legal implications, and implementation of funding. Also has five case studies

38 Resources Five page summary guide on funding alternatives, stormwater utilities, barriers and case studies from EPA Region 3

39 Resources

40 Questions?