Beyond ERUs: Sustainable Stormwater Finance SC Stormwater Forum

1. Beyond ERUs: Sustainable Stormwater FinanceSC Stormwater Forum Jeff Hughes, Environmental Finance Center www.efc.unc.edu (919) 489-1342 jhughes@sog.unc.edu

2. Strategic Revenue Planning • Stormwater services and revenue Requirements • Revenue options • Designing strategic cost recovery systems (matching 2. with 1.)

3. First Rule of Strategic Planning: Know Your Service • Beneficiaries • Cost drivers • Legal framework • Provision options (who, how, where)

4. Service Drivers • Quantity control • Quality control

5. Stormwater Services

6. Phase II Services/Minimum Measures • Public Education and Outreach Program • Public Involvement and Participation Program • Detect and Eliminate Illicit Discharges • Runoff from Construction Activities • Post-construction Stormwater Runoff Program from New Development and Redevelopment • Pollution Prevention/Good Housekeeping Program

7. Taxes Property Sales Gas Plan review fees Permit fees Operation fees Household fees Performance guarantees Penalties Special assessments Impact fees Nutrient charges ? ? Revenue Options

8. Other Charges • Stormwater management permits (N = 18) • Stormwater management site plan • review (N = 36) • Stormwater inspection during • construction (N = 27) • Stormwater inspection after • construction (O&M) (N = 10) Does your stormwater utility receive some or all of these revenues? Slide Source: FSA 2005 Stormwater Survey, www.florida-stormwater.org

9. What Can Your Revenue Choices Do for You?

10. Factors that (Can, Should and Do) Influence Revenue Choices • Legal • Community perspectives, goals and objectives • Fairness • Revenue stability and reliability • Political • Administrative • Inertia • Peer pressure

11. Community Perspectives • Stormwater management is a public good • Stormwater services are primarily private services • Stormwater management is primarily about environmental stewardship • Stormwater management is about meeting regulations • Stormwater management is about giving the people what the they want.

12. Community Objectives • Growth Pays for Itself • Polluter Pays • Protect the Disadvantaged • Keep it Simple

13. Revenue Choices and Incentives for Encouraging “Good” Behaviors • Fee vs. Taxes • Regulatory fees vs. service fees • To tier or not to tier • To waive or not to waive

14. The Great Fairness Debate: Tax vs. Fees

15. Durham, North Carolina • 2006-07 budget = $8,068,718 • $2.17/mo < 2,000 sq ft of impervious surface • $4.50/mo. ≥ 2,000 sq ft • Other/com.: $4.50 per month for each ERU (2,400 sf.)

16. Durham Property Taxes • Property tax rate = 60.3 cents per $100 property valuation • Assessed Value - Real Property $13,740,351,450 • Tax Levy on Real Property $82,854,319 It would take 5.8 cents/$100 to generate $8,068,718

17. $300,000 House • Current Fees • $54/year ($4.50/mo. on water bill) • If budget funded by property tax • $174/year

18. $15,000 “House” • Current fees • $26/year ($2.17/mo.) • If budget funded by property tax • $8.70/year

19. Church (24,000 Sq. Ft Impervious Area) • Current fees • $540/yr ($45/mo.) • If budget funded by property tax • $0

20. Mega Mall (3,815,240,000 SF) • Current fees • 1590 ERU's • $7,155/mo. ($85,860/yr) • If Budget funded by property taxes ($113,675,753) • $65,931/yr

21. Durham Bulls Ballpark (163,200 sf) • Current fees • Fee = $306/mo. ($3,672/yr) • If funded by property tax • $0

22. Not all Taxes are Created Equal • Special tax districts • Clear tax designation

23. Impact on Budgets: Village of Clemmons • Population: 16,900; • Budget $4.5 million • Stormwater budget FY 2005-2006: $475,000 • Tax Rate 9.85 cents per $100 valuation • ERUs Billed: 10,900 • Stormwater Fee: $44.40/yr per ERU ($3.70 mo.) • Town Employees: 14 total (Pub. Works - 8 employees with 1 stormwater administrator)

24. Impact on Budgets: Town of Carrboro • Tax base = $1,373,733,504 • Population 18,000 • Budget (05-06) $16,000,000 • Tax rate = 62.44 cents per $100 of property valuation • Stormwater budget??? (114,000??) • Employees??