Isolated, Now Integrated

As part of the total water resource system, stormwater management increases funding needs

• By Katie McCarthy
• Jan 01, 2007

Municipalities are entering a new era of greater public expectation and heightened regulation for stormwater management. Early stormwater systems were built solely for conveyance. Contemporary stormwater management and its systems have become part of a complete water resource system along with water development, treatment and distribution, as well as sewage collection. With local governments taking on the challenge of an integrated system for water management, most of the issues that need to be addressed will need a new source of funding.

Stormwater managers face a difficult task in having to find the resources to meet expectations from the public and the government. Unless local governments have saved money for a rainy day, new ways to pay for stormwater management projects need to be found.

Stormwater management may be a bit difficult for smaller cities that will soon be affected by stricter U.S. Environmental Protection Agency regulations. At first, stormwater and stormwater discharges were only the responsibility of local governments. The Clean Water Act extended that responsibility to state and federal agencies as well as landowners who are required to detain and treat stormwater on their properties.

Defined by EPA, stormwater discharges are flows "generated by runoff from land and impervious areas such as paved streets, parking lots, and building rooftops during rainfall and snow events that often contain pollutants that could adversely affect water quality."

From Nonpoint to Point
Stormwater discharges initially were considered a nonpoint source of pollution. Today, that is not the case. Most stormwater discharges are now considered point sources and require coverage by a National Pollutant Discharge Elimination System (NPDES) permit. The permits are state-authorized for the most part. EPA remains the permitting authority for only a few states, territories, and most of the land governed by Native American tribal law.

The NPDES rules were published in two phases. Released in 1990, Phase I of the NPDES stormwater regulations applies to operators of large- and medium-size municipal storm sewer systems (MS4s). Under these regulations, large MS4s (serving a community of 250,000 or more) and medium MS4s (serving a community between 100,000 and 250,000) must obtain NPDES permits and manage their stormwater discharges. In 1999, Phase II regulations went into effect and require small MS4s (serving a community of less than 100,000 as well as construction that disturbs 1 to 5 acres) to obtain NPDES permits.

Due to their obligations to comply with NPDES permits, cities of all sizes are rethinking their current stormwater management systems. The NPDES is changing the enforcement of stormwater management from a traditionally industrial focus to a commercial and even residential focus. With NPDES, public and private sector environmental personnel handling stormwater management need to be on top of their game to ensure compliance and ensuring compliance requires financial resources.

Finding Funding
In 2006, the National Association of Flood and Stormwater Management Agencies (NAFSMA) published "Guidance For Municipal Stormwater Funding." It provides a resource for local governments to help address their stormwater program financing challenges.

The guidance, which was funded through an EPA grant, is available on NAFSMA's Web site at http://www.nafsma.org. Last summer, EPA hosted a "Stormwater Webcast" discussing the guidance and funding strategies.

One of the greatest funding challenges is the fact that stormwater management competes with other basic services that a local government provides, including police and fire protection, transportation systems, sewage treatment, water, public libraries, social services, and recreation centers.

Local governments also need to develop stormwater systems that meet regulatory requirements. Some of these requirements will need to work with other local governments including cities, counties, and other special districts. Both of these issues must be taken into account when considering funding and function of a stormwater system.

Successfully funded programs not only manage money through a variety of these methods but also rely on a business plan model that helps guide program and funding decisions. Local governments need to

• define their programs before they consider funding,
• then have a clear vision of how much the program will cost,
• know what resource requirements are needed, and
• determine what timing issues will come into play.

NAFSMA recommends that local governments think of sources of funding in terms of money, revenue, and resources.

"Money is a range of sources and types of funds that can be tapped to support stormwater such as appropriations of general revenues, proceeds of bond sales, and special purpose sales taxes?.

"Revenue is a term usually used in specific reference to the cash flow generated by user fees of various sorts and other relatively consistent income streams such as charges, assessments, rentals, and fines. Other stormwater utilities have a periodic charge applied to all customers?.

"Resources take many forms -- ranging from developer-contributed capital facilities to federal and state grants and loans to maintenance of the public drainage systems performed by homeowners' associations and other private property managers," according to the guidance.

The guidance focuses on local governments developing service/user/utility fees to support stormwater management programs. It also includes procedural, legal, and financial considerations for developing these programs.

Across the country, utility fees have begun popping up as stormwater managers prepare for NPDES permits and citizens learn more about what stormwater management can accomplish. Some municipalities have generated a fair amount of revenue for their programs.

Lenexa Puts Stormwater to Use
A suburban community of almost 50,000 residents, Lenexa, Kan. has developed an innovative stormwater management program. Vision 2020 started in 1996 when city leaders decided to balance Lenexa's natural resources with newly constructed projects that would allow the community to continue its growth and development.

Vision 2020 redefines stormwater as an asset to the city with an innovative regional, watershed approach to address stormwater quantity and quality.

One of the core projects, Rain to Recreation, reduces flooding, protects water and environmental quality, and creates recreational opportunities for Lenexa.

"We moved from a traditional stormwater management program into a more innovative approach that included building stormwater wetlands and small lakes," said Michael T. Beezhold, Lenexa's watershed manager.

The multifaceted management program has provided citizens with new recreational facilities along Coon Creek, as well as new wetlands, and Lake Lexena, which encompasses 35 acres in a 240-acre parkland.

The program's funding came from three primary sources. In 2000, citizens approved by a 78 percent majority a capital improvement sales tax for five years. In 2005, city leaders presented their progress and the tax was approved for another five years by the same 78 percent majority. The tax has been generating $2 million to $2.5 million a year, and Beezhold predicts the city will not seek an extension in 2010.

The city adopted a stormwater utility fee in 2000. The utility primarily funds the operations and maintenance aspect of the stormwater management program. Residents pay $2.15 per an equivalent dwelling unit of 2,750 square feet. Non-residential rates are based on the area of the property divided into equivalent dwelling units. The utility has been well received by the public, and it also generates about $2 million to $2.5 million a year.

Lastly, a capital charge was adopted in 2004. For new construction the cost to the builder is $850 per single family unit, and this charge generates about $500,000 a year.

Fort Worth Taps Utility Fee
Another example of a successful stormwater management utility program is the city of Fort Worth. With more than 600,000 residents, Fort Worth recently adopted its own stormwater management utility fee. Appearing on water bills for the first time in July 2006, residents are charged by a tier system from $1.45 to $5.80 according to garage capacity and living area. Nonresidential rates are based on the amount of hard surface area on the property divided into a standard equivalent residential unit of 2,600 square feet.

The new utility revenue will help fund a five-year improvement plan that will help strengthen the infrastructure of the city's management program as well as provide major and minor improvements to maintenance, said Don McChesney, city project manager for the department of transportation and public works.

Fort Worth also has an environmental fee attached to its water bill that funds environmental programs in the city. Since 1999, the fees have helped pay for education, management, and improvements.

Utility fees have been a viable funding option in a number of cities across the United States. A study from the Center for Urban Policy and the Environment at Indiana University-Purdue University Indianapolis reports on seven different cities and their annual income from user charges. The cities range in size from Union, Ohio with a population of 6,400 to Louisville-Jefferson County, Ky., with a population of 600,000. The most established program, Fort Collins, Colo., has been generating revenue since 1980. Its utility fee generates $5.6 million each year, charging a single family residence $7.44 per month. Other successes include Sarasota County, Fla., which generates $13.9 million with a population of 300,000 by charging residents $6.70; and Olympia, Wash., which generates $2.5 million with a population of 45,000 by charging residents $6.

Cities aren't alone in their stormwater management funding goals; councils of governments also are working toward similar goals.

North Central Texas, Toledo Councils at Work
Since the early 1990s, the North Central Texas Council of Governments (NCTCOG) has been working to save cities money by planning for common needs, cooperating for mutual benefit, and coordinating for sound regional development. As the NPDES Phase 1 permits became required, the council worked with seven large cities, including Fort Worth and Dallas, to help develop stormwater management systems.

With the Texas Commission on Environmental Quality recently issuing Phase II permits, the council is gearing up to present stormwater management plans for more than 60 cities. As a council, NCTCOG can ensure that the permitting will be successful and still save cities a few dollars.

"We are trying to develop a program that is going to be effective and that the state is going to look at as responsive to the permit. And we're going beyond what the state expects a small city to do," said Keith Kennedy, manager of environmental programs for NCTCOG.

Cities not aligned with a council initially may get a permit from the state, but in this heightened time of enforcement, they'll need a pretty strong program, said Kennedy.

In funding these new stormwater management programs, NCTCOG is mindful of cost considerations: only one consultant is needed, best management practices are updated, and a common education program can be developed.

Negotiation also can lead to savings. NCTCOG successful negotiated with EPA to lower the number of required wet-weather monitoring sites saving North Texans tens of thousands of dollars, according to Kennedy.

In northwest Ohio, the Toledo Metropolitan Area Council of Governments (TMACOG) has found it easier to attract grants as a large community.

"When everyone partners up, it strengthens your proposal," said Elaine Moebius, environmental planner for TMACOG.

TMACOG received funding through the Clean Water Act Section 319 nonpoint source grants program to replace of failed septic systems. The grant was administered by TMACOG but managed by health departments in four counties. TMACOG also received Great Lakes Commission funding that helped the council revise its regional stormwater standards manual and host two workshops for engineers, landscape architects, and builders. EPA helped fund a two-year public awareness campaign about stormwater (Give Water A Hand) that satisfies part of the NPDES requirement.

Funding a stormwater management program may take a little creativity. Using a combination of fees, cost sharing, and grants will make a strong program. Whatever the solution, sources are becoming more plentiful as more and more professionals are discussing the topic.

This article originally appeared in the January/February 2007 issue of Water & Wastewater Products.

This article originally appeared in the 01/01/2007 issue of Environmental Protection.