November 15, 2016

Innovative Funding Strategies

Stormwater Finance Forum

Primary Stormwater Funding Sources

2

General Fund:

Property and Sales Tax,

Special Assessments

Fees:

Stormwater Fees,

Development Fees

FeesStormwater

fees, Development

fees

Grants / Loans

General FundProperty,

Sales, Taxes

FeesStormwater

fees, Development

fees

Grants / Loans

General FundProperty,

Sales, Taxes

By the Numbers

3

2,000Estimated Number of Stormwater Utilities in the US

Estimated Stormwater Utilities in New England

Estimated Stormwater Utilities in New Hampshire

15

0

National Perspective

4Source: University of Western Kentucky 2016 Stormwater Utility Survey

Los Angeles CA - Largest Pop. Served 3 million

Indian Creek, FL - Smallest Pop. Served 88

Average Population Served 70,000

Median Population Served 18,000

Stormwater Utilities By State

National Perspective

5

Source: BV Stormwater Utility Survey

Basis Used for Stormwater Fee

Source: University of Western Kentucky 2016 Stormwater Utility Survey

2016 Stormwater Fees

National Average Monthly Stormwater Fee $5.14

National Median Monthly Stormwater Fee $4.00

6

Stormwater Utility Concept

A tax is means of generating revenues

A stormwater fee is intended to reflect the cost of providing a service, similar to other utilities (i.e. water, sewer etc.)

A stormwater utility: management of a public system, organized to deliver a specific service

Taxes User Fees

Benefits of Stormwater Utility Approach

7

Case Study Examples

8

Ft. Lauderdale, FL

Ann Arbor, MIDowners Grove, IL

Maryland

Ann Arbor, MI - Stormwater Utility

9

City established stormwater utility in 1984, first in Michigan

Fees flat for residential (same fee for all) and measured impervious for non-residential

Minimal credits offered to non-residential parcels

2006 City revamps stormwater fee structure

Stormwater fee tiers implement

Expansion of credit program to all parcel owners

Hawksley is currently engaged to examine

Performance of fee structure and cost of service

Level of service analysis

Expansion of credit program

Single-Family and Two-Family Residential

Measured Impervious Quarterly Charge

Up to 2,187 sq. ft. $17.00

> 2,187 to 4,175 sq. ft. $29.75

>4,175 to 7,110 sq. ft. $51.00

Over 7,110 sq. ft. $89.75

Non-Residential

Measured Impervious per Acre $425.00

Ann Arbor, MI – Impacts of Fee Structure

10

0

20

40

60

80

100

120

- 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 9,000 9,500 10,000

Nu

mb

er

of

Acco

un

ts

Impervious Area

Single & Two Family Impervious Area Distribution

Fee structure has encouraged reductions in impervious area

Ann Arbor, MI - Cost Allocation Process

11

FY 2017 Enterprise Fund

Budget

Administrative Services

Public Engagement

Customer Related Costs

Runoff Area CostsSpecific Customer

Costs

Allocate Budget to Expenditure Category

Regulation and Enforcement

Operations and Maintenance

Organization and Finance (Billing)

Capital Fund(System Renewal)

Capital Fund(New Service)

Public Engagement

Organization and Finance (Billing)

Administrative Services

Operations and Maintenance

Capital Fund(System Renewal)

Capital Fund(New Service)

Regulation and Enforcement

Customer Specific Charges

Impervious Area Charge

Customer Charge

Stormwater utility allows for cost of service based

fee development = equitable cost recovery

Downers Grove, IL – Stormwater Fee with Tax Reduction

12

Stormwater utility established in 2012

In response to multiple Village-wide flooding events

Extensive public engagement

Key selling point for utility and the fee was concept of equity

Established fee to fund all stormwater expenses

Offsetting property tax reduction of $2.5 million

Provided direct feedback to parcel owners based on

impacts

Downers Grove

Population served 48,000

Annual SW Fee

Revenues

$4

million

Ft. Lauderdale, FL – Location Based SW Fees

13

Fort Lauderdale, FL: Tidal Flood Maps from GIS data sets.

City’s stormwater system handles two types of stormwater events:

Precipitation driven

Tidal driven

Hawksley team members engaged to examine financial plan and

fee structure to address capital needs

Stormwater Enterprise Fund

BudgetTidal Based

CostsRunoff Based

Costs

Allocated based on Impervious

Area

Allocated based on Trip Generation

Rates

Tidal Charge Base SW Charge

Maryland - Rain Tax

14

Background

In 2012 then-governor signs into law House Bill 987 requiring

stormwater fee for largest urban jurisdictions in Maryland

Deadline for establishment of stormwater remediation fee July 1, 2013

Concept of the fees are met with significant amount of opposition and

national press (CNN, Forbes, Wall Street Journal, etc.)

$- $20 $40 $60 $80 $100 $120 $140

Prince George's County

Montgomery County

Anne Arundel County

Baltimore City

Baltimore County

Howard County

Charles County

Harford County

Carroll County

Frederick County

(Millions)

FY 2017 Stormwater Funding Sources

Stormwater Fees General Fund Grants

Maryland - Rain Tax

15

In 2015, Governor “repeals” the rain tax - Counties are no longer required to maintain a stormwater

fee but must still fund watershed programs that meet long-term TMDL requirements

Take Aways

16

Over the long-haul stormwater funding will need to come from within the community

Specific funding approach should match characteristics of community

To be successful there has to be a compelling reason for change…….…..you want more money, why?

Stormwater utilities have tremendous upside

QUESTIONS

David.hyder@hawksley.com

443-538-1175