NC STATE UNIVERSITY

1. Some Ideas about Funding NC STATE UNIVERSITY

2. Three Big Questions • How much will it cost? • How will we pay for it? • Will the public be willing to pay?

3. 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.

4. What is the state of your system? • Montgomery County, MD • Many of the county’s 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.

5. How Will You Pay for It? • The general fund • Ad-valorum tax • Stormwater utility

6. 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.

7. Ad Valorum Tax Problem: A property’s contribution to the stormwater problem does not necessarily correspond to its value. vs.

8. Pros and Cons of a Stormwater Utility • Pros: • It’s 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.

9. 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.

10. Stormwater Utilities: Catching on in NC Asheville Charlotte Durham Gastonia Greensboro Lowell Raleigh Wilmington Winston-Salem

11. 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 don’t want, such as water pollution and flooding.

12. 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.

13. Stormwater Awareness: Low Few residents are aware that storm drains empty directly into creeks or that stormwater management facilities require maintenance. Without 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.

14. 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).

15. 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.

16. More Marketing Advice • Insert a citizen’s 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, you’re setting yourself up for failure.

17. 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.

18. 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.

19. Check the website for example ordinances. 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.

20. More Advice from Scott Bryant “Certainly we’ve 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.”

21. Greensboro Fee Structure • Greensboro’s 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

22. 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.