stormwater funding and utility development community session amec earth & environmental, inc

Reese Utilities - 1

Stormwater Funding and Stormwater Funding and Utility DevelopmentUtility DevelopmentCommunity SessionCommunity Session

AMEC Earth & Environmental, Inc.AMEC Earth & Environmental, Inc.

Andy ReeseAndy Reese

Charlene JohnstonCharlene Johnston

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AgendaAgenda 1:00 Introductions1:00 Introductions

Overview of municipal stormwater programs in RI – Overview of municipal stormwater programs in RI – progress to dateprogress to date

1:15 Stormwater Utility Overview – Andrew Reese1:15 Stormwater Utility Overview – Andrew Reese Keys to success at the local levelKeys to success at the local level Regional approachesRegional approaches

2:15 Break2:15 Break 2:30 Discussion: Municipal concerns, state role, 2:30 Discussion: Municipal concerns, state role,

next stepsnext steps 4:00 Adjourn 4:00 Adjourn

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Introductions Introductions RI Stormwater OverviewRI Stormwater Overview

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Stormwater Utility OverviewStormwater Utility Overview1:15-2:151:15-2:15

What is a stormwater utility?What is a stormwater utility? What makes it “better” than other methods?What makes it “better” than other methods? How do we go about setting one up?How do we go about setting one up?

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Urban Stormwater Paradigm ShiftsUrban Stormwater Paradigm Shifts

1. “Run it in ditches”1. “Run it in ditches”

2. “Run it pipes”2. “Run it pipes”

3. “Run it in 3. “Run it in stormwaterstormwater pipes”pipes”

4. “Keep it from 4. “Keep it from stormwater pipes”stormwater pipes”

5. “Just don’t cause a 5. “Just don’t cause a flood”flood”

6. “Oh… and don’t pollute 6. “Oh… and don’t pollute either”either”

7. “It’s the ecology 7. “It’s the ecology stupid!”stupid!”

8. “Water is water is 8. “Water is water is water...shed”water...shed”

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Flooding problemsFlooding problems Aging infrastructureAging infrastructure Development pressuresDevelopment pressures Erosion of channels & creeksErosion of channels & creeks Water quality & ecologyWater quality & ecology Regulatory mandatesRegulatory mandates LawsuitsLawsuits Quality of life & aestheticsQuality of life & aesthetics Preservation of property valuePreservation of property value Drinking water protection and Drinking water protection and

replenishmentreplenishment

All these paradigms lead to specific All these paradigms lead to specific drivers for stormwater programs:drivers for stormwater programs:

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1. Administration1. Administration General Administration General Administration Gen Prog Planning & Gen Prog Planning & DevDev Interlocal Coordination Interlocal Coordination Grants Program Grants Program

2. Billing And Finance2. Billing And Finance Billing Operations Billing Operations Customer Service Customer Service Financial Management Financial Management Indirect Cost Allocation Indirect Cost Allocation General Government General Government Support Support

3. Public Ed & 3. Public Ed & InvolvementInvolvement Public Awareness Public Awareness SW Qual Ed & SW Qual Ed & ReportingReporting Public Involvement Public Involvement Citizen’s Advisory Citizen’s Advisory GroupGroup Non-profit Integration Non-profit Integration Media Relations Media Relations Risk Communications Risk Communications

7. Capital Improvements7. Capital Improvements Major Capital Improvements Major Capital Improvements Minor Capital Improvements Minor Capital Improvements Land, Easement, And ROW Land, Easement, And ROW

8. Regulation And 8. Regulation And EnforcementEnforcement Code Dev & Enforcement Code Dev & Enforcement General Permit General Permit AdministrationAdministration Drainage Sys Insp & Reg Drainage Sys Insp & Reg Zoning & Land Use Reg Zoning & Land Use Reg Special Inspection Programs Special Inspection Programs Flood Insurance Program Flood Insurance Program Multi-Obj Floodplain Mgmt Multi-Obj Floodplain Mgmt Erosion Control Program Erosion Control Program Pest, Herb & Fertilizer Pest, Herb & Fertilizer Used Oil & Toxic Materials Used Oil & Toxic Materials Spill Response & Clean Up Spill Response & Clean Up Illicit Con & Illegal Dumping Illicit Con & Illegal Dumping Groundwater & Drinking Water Groundwater & Drinking Water Watershed Assessment & TMDL Watershed Assessment & TMDL Septic & I&I Program Septic & I&I Program Industrial Program Industrial Program Monitoring Monitoring

4. Technical Support4. Technical Support GIS Applications GIS Applications Database Management Database Management Mapping & Imagery Mapping & Imagery General Data Collection General Data Collection Web & Customer Support Web & Customer Support

5. Engineering & Planning5. Engineering & Planning Des Criteria, Stds And Des Criteria, Stds And GuidanceGuidance Field Data Collection Field Data Collection Quantity Master Planning Quantity Master Planning Quality Master Planning Quality Master Planning Design, Field & Ops Engr Design, Field & Ops Engr Retrofitting For Water Retrofitting For Water QualityQuality Hazard Mitigation Hazard Mitigation Zoning Support Zoning Support Multi-objective Planning Multi-objective Planning SupportSupport

6. Operations & Maintenance6. Operations & Maintenance

General Maintenance Mgmt General Maintenance Mgmt General Routine Maintenance General Routine Maintenance General Remedial Maintenance General Remedial Maintenance Emergency Response Maint Emergency Response Maint Infrastructure Management Infrastructure Management Public Assistance Public Assistance

Elements of a comprehensive Elements of a comprehensive stormwater programstormwater program

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Stormwater Program CostsStormwater Program Costs

$0$0

$100$100

$200$200

$250$250

$50$50

$/Dev. Acre/Year$/Dev. Acre/Year

$150$150

IncidentalIncidental

MinimalMinimal

ModerateModerate

AdvancedAdvanced

ExceptionalExceptional

Regulatory mandates or Regulatory mandates or program anomalies can program anomalies can skew these numbersskew these numbers

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MineMine

Public SystemPublic System

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What is a Stormwater Utility?What is a Stormwater Utility?

• A funding methodA funding method

• A program conceptA program concept

• An organizational entityAn organizational entity

Mix of methodsMix of methods


1. There are about 125 1. There are about 125 “funding” methods and “funding” methods and variations for local variations for local governments… some governments… some better than others…better than others…

2. There is a 2. There is a big differencebig differencebetween “resources”, between “resources”, “money” and “revenue”“money” and “revenue”


Resources, Money & RevenueResources, Money & Revenue Resources – free, non-monetary, donated, Resources – free, non-monetary, donated,

volunteer, goods and servicesvolunteer, goods and servicesYour neighbor’s lawnmowerYour neighbor’s lawnmower

Money – one-time, unpredictable, Money – one-time, unpredictable, undependable, episodic, limitedundependable, episodic, limitedYou buy your own lawn mowerYou buy your own lawn mower

Revenue – regular, predictable, money, Revenue – regular, predictable, money, budgeted, cash flowbudgeted, cash flowYou hire a landscape firmYou hire a landscape firm


Shared Costs

InspectionFees

Grants

Building Blocks for FundingBuilding Blocks for Funding

Impact Fee

BondingGeneral

Fund

Resource User Fee Volunteers

Special Sales Tax

TaxAssessment

Fines


What is a What is a stormwater utility?stormwater utility?

What makes it What makes it “better” than other “better” than other methodsmethods

How do we go How do we go about setting one about setting one up?up?

Where are we?Where are we?


MineMine

Public SystemPublic System


What is a Stormwater Utility?What is a Stormwater Utility?

• A use-based funding methodA use-based funding method

• A program conceptA program concept

• An organizational entityAn organizational entity

Mix of MethodsMix of Methods


Advantages of a Stormwater Advantages of a Stormwater Utility to Support ProgramsUtility to Support Programs

SStable table

AAdequate dequate

FFlexiblelexible

EEquitablequitable

Read my lips:Read my lips:““no new taxes”no new taxes”


StableStableUtility vs. Tax or “Money” FundingUtility vs. Tax or “Money” Funding

““Money” or Money” or Tax-basedTax-based

User fee basedUser fee based

Maximum possible program

Time

$$$$


$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

1 26 51 76 101 126 151 176 201 226 251 276 301 326 351 376 401 426 451 476 501 526 551 576 601 626

628 Utilities 628 Utilities Some “apples and oranges”Some “apples and oranges”Some “lemons”Some “lemons”Median = $3.23Median = $3.23±±Mean = $3.74Mean = $3.74±±


AdequateAdequate

Okay - tell me when Okay - tell me when you start to feel this you start to feel this would be too much would be too much to charge to solve to charge to solve flooding and flooding and pollution problems pollution problems where you live?where you live?

$ 1$ 1

$ 2$ 2

$ 3$ 3

$ 4$ 4

$ 5$ 5

$ 6$ 6

$ 8$ 8

$ 10$ 10


AdequateAdequateFor every $1 dollar per For every $1 dollar per month per house month per house (and appropriate fees (and appropriate fees to non-residences)to non-residences)

A utility can typically A utility can typically generate about $25 to generate about $25 to $35 per developed acre $35 per developed acre per year.per year.


$0$0

$100$100

$150$150

$200$200

$50$50IncidentalIncidental

ExceptionalExceptional

$$/Developed Acre/Yr$$/Developed Acre/Yr

AdvancedAdvanced

$250$250

MinimalMinimal

ModerateModerate

$1 fee$1 fee

$4 fee$4 fee


FlexibleFlexible Primary source for the Primary source for the

wholewhole program program Other fees to enhance Other fees to enhance

equityequity Credits to encourage good Credits to encourage good

performanceperformance Can be geographically Can be geographically

basedbased Can take into account Can take into account

environmental costsenvironmental costs Can encourage LID designsCan encourage LID designs


EquitableEquitable Costs are driven by:Costs are driven by:

runoff peakrunoff peak runoff volumerunoff volume runoff pollutionrunoff pollution

Each of these Each of these variables is variables is directlydirectly related to related to imperviousimpervious area in an urban area in an urban setting.setting.

““The more you pave the more you pay.”The more you pave the more you pay.”


How a Fee is Calculated:How a Fee is Calculated:some estimate of developmentsome estimate of development

Equals 1.0Equals 1.0ERUERU

Say it isSay it is25002500 sqsq ftft


How a Fee is CalculatedHow a Fee is Calculated

= 1 ERU= 1 ERU

= 40 ERUs less credit= 40 ERUs less credit

Rate structures can reflect a number of different things…not just impervious area


Typical PropertiesTypical Properties$4.00/month charge$4.00/month charge

Fast FoodFast Food$62.72/mo$62.72/moless creditless credit

Large Res.Large Res.$5.50/mo$5.50/mo

Small Res.Small Res.$2.50/mo$2.50/mo

200,000 sq ft shopping200,000 sq ft shopping700,000 sq ft impervious700,000 sq ft impervious

$1121.20/mo$1121.20/moless creditless credit

2 tiers residential2 tiers residential


Typical Commercial BuildingTypical Commercial Building

Say rental is $18/sq ft/yr or $180,000/yrSay rental is $18/sq ft/yr or $180,000/yrUser fee is $40/mo or $480/yrUser fee is $40/mo or $480/yr

this is less than this is less than 5 cents5 cents per sq ft per year per sq ft per year not counting credit (0.26%)not counting credit (0.26%)

60% parking60% parking40% office40% office10 ERUs10 ERUs$4/mo/ERU$4/mo/ERU

10,000 sq ft 10,000 sq ft commercial bldgcommercial bldg




How do we go How do we go about setting one about setting one up?up?



We first need We first need to be clear to be clear

about potential about potential pitfalls…pitfalls…


Who will not like the concept?Who will not like the concept?

• tax exempt propertiestax exempt properties

• people with large paved people with large paved areas with cheap areas with cheap buildingsbuildings

• fixed incomefixed income

• sometimes developers sometimes developers don’t like itdon’t like it

• MAYBE EVERYONEMAYBE EVERYONE


Really, it would have Really, it would have worked but… worked but…

-or--or-

How To Fail FlawlesslyHow To Fail Flawlessly


Defining “Failure”Defining “Failure” What failure is What failure is notnot::

Not going forward with Not going forward with the utilitythe utility

Not achieving a mature Not achieving a mature program in the first few program in the first few years – but knowing the years – but knowing the program pathprogram path

Not having 100% Not having 100% approval or a approval or a unanimous voteunanimous vote

What failure What failure isis::Having an uncontrolled Having an uncontrolled

and unplanned crashand unplanned crashNot being able to meet Not being able to meet

the expectations you the expectations you created (not a program created (not a program driven rate)driven rate)

Having a generally Having a generally ignorant or unsupportive ignorant or unsupportive public and stakeholderspublic and stakeholders

"Retreat Hell! We're just attacking in another direction.” "Retreat Hell! We're just attacking in another direction.” H.P. CroweH.P. Crowe


Andy’s Top Ten ListAndy’s Top Ten List

1.1. We did it the convenient and inexpensive way, not We did it the convenient and inexpensive way, not the right way.the right way.

2.2. We didn’t make a true compelling case.We didn’t make a true compelling case.

3.3. We didn’t understand the process.We didn’t understand the process.

4.4. It was not legal.It was not legal.

5.5. We didn’t involve the community early enough or in We didn’t involve the community early enough or in the right ways.the right ways.

6.6. We couldn’t explain our program and funding We couldn’t explain our program and funding strategy or rates.strategy or rates.

7.7. We didn’t prepare our elected officials for vocal We didn’t prepare our elected officials for vocal complaints.complaints.

8.8. Our revenue and rate structure limited our ability to Our revenue and rate structure limited our ability to do our program.do our program.

9.9. Our database was messed up without ability to Our database was messed up without ability to easily fix. easily fix.

10.10. Our program or performance did not meet Our program or performance did not meet community expectations.community expectations.


It It cancan work: work: There are probably 800 stormwater There are probably 800 stormwater

utilities that fund utilities that fund comprehensivecomprehensive stormwater management programs in stormwater management programs in the United States todaythe United States today

Probably 500 more that fund only part of Probably 500 more that fund only part of a stormwater programa stormwater program


Really, it Really, it cancan work and… work and…

-or--or-

How To Succeed How To Succeed Flawlessly (almost)Flawlessly (almost)


A question of “due diligence”A question of “due diligence”

Establishing a Establishing a successful successful stormwater stormwater utility requires utility requires that you pay that you pay attention to five attention to five key areas of key areas of due diligence:due diligence:

1.1. Governance and inter-Governance and inter-municipal consensusmunicipal consensus

2.2. Program concept and Program concept and the compelling casethe compelling case

3.3. Public and political Public and political education and supporteducation and support

4.4. Financial policies and Financial policies and documentsdocuments

5.5. Database development Database development & accuracy and & accuracy and customer servicecustomer service


Example Logic Justifying a UtilityExample Logic Justifying a Utility

Stormwater Problems are Real and UnresolvedStormwater Problems are Real and Unresolved The Problems Can be SolvedThe Problems Can be Solved Government Must LeadGovernment Must Lead Benefits will Result Benefits will Result Adequate, Stable, Equitable Funding is NeededAdequate, Stable, Equitable Funding is Needed A Utility is the most Practical Vehicle for SolutionsA Utility is the most Practical Vehicle for Solutions


Can you make a Can you make a compellingcompelling case… case…

……with a straight face ?with a straight face ?


A strong compelling case A strong compelling case unites diverse people:unites diverse people:

Right BrainRight Brain Flooding picturesFlooding pictures Horror storiesHorror stories MoviesMovies TestimonialsTestimonials Environmental Environmental

appealsappeals Threats of Threats of

impending doomimpending doom

Left BrainLeft Brain StatisticsStatistics Cost informationCost information Infrastructure Infrastructure

informationinformation Lost revenue or Lost revenue or

tourist dollarstourist dollars Regulatory FactsRegulatory Facts


Ok, lets talk Ok, lets talk mechanics of setting mechanics of setting

one upone up


2 or 3 Step Process2 or 3 Step Process

DIMS StudyDIMS Study

Feasibility StudyFeasibility Study

Utility Utility ImplementationImplementation

With or withoutWith or withoutSWACSWAC


Heeeeers Charlene !Heeeeers Charlene !


Advisability StudyAdvisability StudyDIMS (does it make sense…at all)DIMS (does it make sense…at all)

A DIMS study takes quick and dirty look at A DIMS study takes quick and dirty look at whether it is advisable to begin the process of whether it is advisable to begin the process of stormwater utility development and outlines a stormwater utility development and outlines a general roadmap, costs, and approach.general roadmap, costs, and approach.

It answers the question, “does this make sense at It answers the question, “does this make sense at all?”all?”


Why is a DIMS study a good thing?Why is a DIMS study a good thing?

Tests the water with very little political, Tests the water with very little political, financial, or emotional investmentfinancial, or emotional investment

Can normally be authorized without RFPCan normally be authorized without RFP Operates “under the radar” as an internal Operates “under the radar” as an internal

quick studyquick study Builds internal vision for going forwardBuilds internal vision for going forward Can happen very quickly – takes a couple Can happen very quickly – takes a couple

days to completedays to complete


Cost vs. Revenue

Background Information

Compelling Case

Show Stoppers

Program Priorities

Next Steps If “GO”

Our ProcessOur Process