13. STORMWATER FEE / UTILITY
Overview
Stormwater utilities provide a mechanism to generate the revenue needed to effectively manage stormwater. Left unaddressed, stormwater can lead to pollution, flooding, and streambank erosion. Essentially, a stormwater utility is a fee-for-service arrangement in which residents are charged for the service of managing stormwater, and fees are deposited into a dedicated enterprise account. The revenue provides a stable funding source for activities such as: maintenance and upgrades of storm drains, detention basins, and stormwater control structures; development of drainage plans; mapping of stormwater outfalls; and administrative costs. Development of a stormwater utility may be linked to the development of a stormwater management program and passage of a stormwater and erosion control bylaw. Massachusetts recently passed enabling legislation to explicitly allow municipal stormwater utilities.
Stormwater utilities can be structured in a variety of different ways. Larger stormwater utilities may form their own department, while small communities may prefer to expand the staff of the existing stormwater authority, usually the Department of Public Works. Fees should be charged based on contribution to stormwater runoff, usually calculated based on factors such as percent impervious area and lot size. Communities may charge a set fee for residences based on estimates of typical impervious area, while commercial properties may be charged based on their actual impervious area. Credits can be offered to account for steps taken to reduce stormwater impacts, for example through the use of “low-impact development” techniques such as rain gardens, vegetated swales, and stormwater retention ponds.
Local Examples
Over 400 communities in the U.S. have created stormwater utilities, and the number is rapidly growing. In Massachusetts, only a few communities have moved forward to develop stormwater utilities or fee structures. Chicopee, a small city in western Massachusetts, is the best-known example, but Newton and Reading have also recently adopted stormwater fees.
Chicopee hired the Pioneer Valley Planning Commission (PVPC) to help develop the program, which served as a pilot for the state. PVPC’s responsibilities included organizing an advisory committee, completing legal research, researching stormwater utilities structures, and conducting public outreach. After significant background research and due diligence, Chicopee passed an ordinance to collect fees from residents specifically for the purpose of managing stormwater, and created a Stormwater Utility Bureau in the Department of Public Works. Fees are charged monthly per Equivalent Residential Unit (ERU) based on impervious area, and were expected to generate $500,000 annually for stormwater management programs.
Chicopee’s experience highlights key determinants of success. Community involvement is crucial, and the Department of Public Works attributes the lack of customer complaints to a strong foundation of public education. A comprehensive stormwater management ordinance helps to organize the program and build community support. The fee structure should be rational, fair, and transparent. An advisory committee with members representing relevant municipal departments, the business community, advocacy/environmental groups, state agencies, elected officials, and ratepayers can build a broad base of support for the stormwater utility. Chicopee’s experience also identifies potential pitfalls. In particular, it is important to develop a well-organized billing and organizational process, since billing and rate assessment can be surprisingly complicated. Ongoing community outreach and involvement is also essential.
Resources
AMEC and Vanasse Hangen Brustlin, Inc., Stormwater Management and Financing Seminar, December 8, 2005 (On file at IRWA)
Charles River Watershed Association, Stormwater Financing Information and Report (html)
Assessment of Stormwater Financing Mechanisms in New England: Final Case Study Report, 2007 (pdf)
Pioneer Valley Planning Commission, How to Create a Stormwater Utility (pdf)
Water Wise Communities: Index
- Introduction & Using the Handbook
- How Development Affects Water (link to IRWA site)
- Checklist: Is Your Community Water Wise?
- Water Wise Tools:
