NC STATE UNIVERSITY

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Some Ideas about Funding
NC STATE UNIVERSITY
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Three Big Questions

1. How much will it cost?
2. How will we pay for it?
3. Will the public be willing to pay?

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Estimating Program Costs

• What will it cover? Possibilities include
• Operations and management,
• Planning,
• Capital improvements,
• Public education,
• Mapping,
• Street sweeping,
• Household toxin collection,
• Illegal discharge detection,
• Storm drain marking,
• Commercial/industrial regulation.

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What is the state of your system?

• Montgomery County, MD
• Many of the countys facilities have not been
  adequately maintained.
• The average age of the stormwater management
  facilities is 15-20 years old and the average age
  of the enclosed system is 40 years old.
• The system has deteriorated and will require
  significant and costly reconstruction.

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How Will You Pay for It?

1. The general fund
2. Ad-valorum tax
3. Stormwater utility

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The General Fund
Problem There will be wide swings in available
revenue. After a major flood, public interest is
high and public officials are responsive. But
that drops off considerably when the flood goes
away.
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Ad Valorum Tax
Problem A propertys contribution to the
stormwater problem does not necessarily
correspond to its value. vs.
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Pros and Cons of a Stormwater Utility

• Pros
• Its a steady funding mechanism
• Equitable because based on contribution to the
  problem
• Provides an incentive for businesses to reduce
  impervious surface
• Cons
• Can be hard to get community acceptance
• Have to develop a rate structure and a database
  of customers and impervious area.

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Another Benefit of Stormwater Utilities
Most state and federal agencies require local
governments to provide some percentage of
matching funds they will make an investment.
The utility fee provides a stable funding
source that can make your municipality a
contender for various outside financial
opportunities.
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Stormwater Utilities Catching on in NC
Asheville Charlotte Durham Gastonia Greensboro Low
ell Raleigh Wilmington Winston-Salem
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Stormwater Utility An Interesting Beast

• Stormwater utilities are different from other
  utilities
• Customers want services such as power and
  water and are willing to pay to receive them on
  demand.
• On the other hand, stormwater ratepayers are
  being asked to pay to prevent
  things they dont want, such as
  water
  pollution and flooding.

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There is likely to be opposition to establishing
a stormwater utility. Principal objectors are
tax-exempt organizations, which would not be
exempt from paying a utility fee.
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Stormwater Awareness Low
Few residents are aware that storm drains empty
directly into creeks or that stormwater
management facilities require maintenance. Withou
t a common understanding of stormwater
management, cooperation is unlikely. Spend time
gaining an understanding of what the programs
need to be in your community and then communicate
them to the public.
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Marketing is Crucial!
If meaningful public involvement is provided,
there is much less chance that the community will
feel that a rain tax has been imposed on them
(and less chance of a lawsuit). In general,
legal challenges are rare (16 have faced legal
challenges and most challenges were not
sustained).
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Marketing Tips from Griffin, GA

• Town of Griffin Top 50 utility customers
  received one-on-one visits.
• Sales pitch
• Hospital director A speeding ambulance could
  skid out of control during frequent street
  flooding.
• Business owner It is inconvenient for
  employees when 6 inches of stormwater runoff
  surrounds the firm.

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More Marketing Advice

• Insert a citizens group between yourself and
  every hard decision you must make.
• Show photos of flood-prone spots they speak
  volumes about the need for a stormwater utility.
• Create a logo for the utility and put it on
  everything vehicles, stationery, offices,
  watershed signs.
• If you are not marketing the program every day
  and showing people where the money is going,
  youre setting yourself up for failure.

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Setting the Rates

• Rates depend on revenue requirements and the
  number of customers.
• The average monthly residential charge in 1999
  was 2.50.
• A majority of the rates fall between 1.00 and
  5.00 per month, with 50 of respondents setting
  their monthly fees between 2.00 and 4.00.

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Rates Exemptions

• You cannot exempt anyone. But you can allow
  partial credits against the fees for items such
  as
• Residents of neighborhoods that maintain
  drainage ponds
• A commercial property with storm-runoff
  mitigation features.
• Schools that teach water conservation.

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Stormwater Utility Ordinances

• Enact two ordinances to create a stormwater
  utility
• The first one establishes the components of
  the utility.
• The second one sets the rate structure.
• Forming the utility through two ordinances allows
  the flexibility to alter the rate structure at a
  later date without having to revise the first
  ordinance.

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More Advice from Scott Bryant
Certainly weve got to explain regulations.
However, the real strength of the story is that
the program and projects are needed to protect
our drinking water, take care of public drainage
problems, mitigate flood hazards and generally
make our community a better place to live and
work.
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Greensboro Fee Structure

• Greensboros three-tier fee structure
• 2.70 / month for the average homeowner
• 1.50 / month for lower levels of impervious
  surface
• 3.90 / month for large footprints
• The Big Mac analogy

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What has Greensboro done with its utility money?

• Citywide inventory of stormwater system.
• More than 50 capital improvement projects since
  1996.
• Local erosion and sediment-control program.
• Local watershed program.
• Extensive stream-corridor
  reforestation program.