In the face of more extreme weather, how do we equitably fund stormwater utilities?

March 10, 2020

Stormwater utilities are becoming increasingly vital for communities. With planning, the financial responsibility can be distributed fairly.

 

By Andrew Burnham, David Hyder, and Kelly Westover

Extreme weather events continue to increase. That means properly working stormwater systems are essential. These systems—which typically include roadside swales, inlets, catch basins, channels, green infrastructure, and buried pipes—are designed to manage rainfall runoff. Working properly, they protect properties and keep roadways open.

At the same time, these systems serve as one of the key lines of defense against degradation of waterways and the environment by properly managing the runoff before it hits streams, rivers, and lakes.

As increasing demands are placed on stormwater systems around the US, coupled with the rising need to better manage stormwater, many communities are looking for ways to fund new systems and improvements. Historically, funding for stormwater systems has come from property taxes. That strategy usually falls short. Often, stormwater systems take a back seat to a current crisis or the needs of a community that are more publicly visible.

 

Aerial image of impervious area in a St. Petersburg, Florida, neighborhood.

 

Without a specific funding source, it is difficult to manage a stormwater system—and to do so proactively.

Some cities are creating a separate utility to manage their stormwater challenges. That utility has its own stormwater fee for residents. These communities recognize that an organized approach to stormwater, much like water and sewer utilities, allows for proactive management, provides increased levels of service, and addresses aging infrastructure.

_q_tweetable:Without a specific funding source, it is difficult to manage a stormwater system—and to do so proactively._q_A dedicated funding source makes future planning possible. Doing so equitably from a fee perspective, however, can be challenging.

Flip a light switch on, and the electric meter detects the power use. Turn on a faucet, and the water meter measures the flow. Utilities charge consumers based on their use of these services.

However, there’s no meter to detect the amount of stormwater a utility receives per property. As a result, a property’s impervious area has often served as a proxy for the potential use of the stormwater system. Given the difficulty in gathering and managing this data, many communities make some rather broad assumptions when setting stormwater fees. That often leads to challenges within the community.

This is a situation the City of St. Petersburg, Florida, faced. That changed recently when our team worked with local officials to create an equitable solution to fit the city’s needs and property characteristics.

 

Tiered stormwater fees

For years, St. Petersburg charged single-family property owners a flat fee to manage their stormwater system, regardless of the impervious area on their property. The owner of a small single-family home paid the same rate as the owner of a home 10 times as large. Based on our team’s guidance, the city moved to a four-tiered fee system based on a property’s impervious footprint.

It makes the system more equitable from a fee perspective. The four tiers were created based on an analysis of all homes in the service area. The tier break points recognize significant changes in the amount of impervious area on a parcel while maintaining administrative simplicity.

Using the tiered method, properties are placed into categories based on their impervious square footage. Under this system, property owners pay an amount proportional to the potential amount of stormwater runoff. The largest impervious footprints are in the highest fee tier. Effectively you pay for what you use, which is a strong tenet of utility rate setting.

 

The four tiers for St. Petersburg’s stormwater fees.

 

Mapping properties

The impervious area is typically the portion of a property that does not absorb rainwater. It creates runoff that may be discharged to the stormwater system. These areas include paved surfaces, rooftops, and accessory buildings, such as sheds or barns.

Impervious areas also include pools and driveways that use non-paved methods, such as gravel or crushed shells. Some cities may exclude these additional impervious areas. The decision for what impervious features to include depends on the needs of the community and local practices.

Measuring the impervious footprint of properties requires a combination of high- and low-tech methods of aerial imaging.

On the high-tech side, infrared technology is available that shows clear differences between plants and pavement or rooftops. Pairing enhanced imagery with advances in machine learning allows engineering teams to quickly determine a property’s impervious square footage. But there are limitations. Areas with excessive tree cover can often give false readings and skew results.

Each property evaluation still requires an engineer to review images to ensure accuracy. In St. Petersburg, our team used existing high-resolution aerial imagery and GIS image-classification techniques to create a database for each parcel. The information formed the basis for a modernized, equitable fee structure for the city with the most up-to-date data available.

 

Under this new program, each resident can review their specific account details. This includes property ID, impervious surface measurements, and billing tier and rates.  

Innovation in public engagement

Measuring impervious area and setting fees that enhance the level of equity within a city are the bedrock efforts in advancing the funding of stormwater service. It’s also important to convince the public of the value. Stormwater is a quality-of-life service. When it’s working correctly, it is almost invisible to members of the community.

When setting up its stormwater fee changes, the City of St. Petersburg, chose a robust public-engagement effort and an innovative customer portal. The portal allowed for transparency, customer communication, and appeals to be handled rapidly and with accountability. This resulted in a high level of understanding.

No customer likes to see their fee increased. Being able to show parcel owners their impervious-area footprint, correct any errors, and allow a channel for meaningful conversation can make the process move in a productive direction.

 

 

Example of internal dashboards to track engagement with the customer portal.

 

Prepare for the future, reduce recovery time

The aftermath of a flood or extreme weather event leaves a lasting impact. Recovery can take months or years. The cost, both financial and emotional, is often high. It’s in the wake of these events that we usually have our most serious discussions about preparing for the worst. Instead, we should begin planning before the worst happens.

Communities continue to face increasing stormwater costs. They come from extreme weather events that push the limits of the utility or from the steady deterioration of underfunded maintenance. Setting up a stormwater utility and an equitable fee structure allows cities to operate effective stormwater systems that are funded by those contributing to and benefiting from the system. 

Want to learn more? Hear the Stantec team discuss this case study at 8:30 a.m. Tuesday, March 17, in Cincinnati at the WEF National Stormwater Symposium 2020.

 

About the authors

Andy Burnham helps lead operations and business development activities for our Financial Services practice from Tampa, Florida. He has assisted with utility rate-related regulatory proceedings in multiple states and territories.

David Hyder is principal based in Washington, D.C., and helps communities plan for the future of their utility programs. His goal is to pinpoint potential road blocks—and provide creative solutions.

Kelly Westover is a financial management consultant based in Sarasota, Florida. Kelly’s work focuses primarily on the wet weather practice.

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