Be Prepared With Your Funding of Expanded Stormwater Services: Part One of An Ongoing Series

In late December of 2019 , the U.S. Environmental Protection agency released proposed settlement agreements for Small Municipal Separate Storm Sewer System (MS4) permits to public comment. The Settlement Agreements are the outcome of numerous petitions for review of EPA's final National Pollutant Discharge Elimination System (NPDES) general permits for discharges of stormwater from MS4s in Massachusetts and New Hampshire under the Clean Water Act (CWA). Though the process of approval is months away, it should become a reality at the end of the year 2020  or after municipal budgets are set for next year. 

The NPDES MS4 permit will require municipalities to add programs, procedures and implement projects to comply with six minimum control measures (MCMs).  Experience of municipalities already dealing with their own MS4 permits suggests that meeting the six MCMs will cost in the tens of thousands to over $100,000.  The six MCMs are:

1. Construction Erosion Control on both public and private construction projects
2. Post Construction Stormwater Management that reduces pollutants from stormwater that is discharged from a site.  This also requires communities to retrofit the MS4 with facilities that will reduce pollutants discharged to the Waters of the United States.
3. Good Housekeeping Practices, which are standard operating procedures that a municipality may adopt to reduce pollutants that come into contact with stormwater (street sweeping, use of deicing materials, minimize use of pesticides, etc.) 
4. Public Education campaigns to make the public aware of stormwater related issues.
5. Public Participation programs that will engage the public in the planning and execution of proper stormwater practices.
6. Illicit Discharge Identification and Elimination programs that will inspect the MS4 at a minimum annually to identify and eliminate all non-stormwater discharges into the MS4. 

Communities already struggle with insufficient funding to maintain public infrastructure. As a result, flooding due to under sized and improperly maintained drainage systems continues to worsen.  These new responsibilities will increase competition for the limited general revenue funds and make it more difficult to provide the matching funds necessary to secure the help from grant programs that might fund projects that will reduce the risk of street flooding and environmental degradation.  

There is time now to consider your financial options.  For many communities across the United States, including 21 communities in Massachusetts, a stormwater utility was determined to be a more fair and equitable method for funding stormwater activities than the property tax system. Fees collected by a stormwater utility are placed in an Enterprise Fund that is solely dedicated to stormwater related activities and cannot be redirected to any other use.  Under a stormwater utility funds are collected based on how much of a financial burden a property puts on the MS4.  Properties generating larger volumes at greater runoff rates require larger infrastructure to prevent flooding and reduce the environmental harm caused by pollutants discharge into groundwater and area waterways.

An optional first step that allows communities to “test the waters” is a “Does It Make Sense” (DIMS) workshop. The cost for conducting a DIMS workshop is a few thousand dollars and is typically a one-day workshop with the leadership of the community. It begins with a discussion of existing conditions, existing practices, and existing problems.  It then develops the best justification for changing the way stormwater is funded.  This is the first test to see if there is a “Compelling Case” that will convince elected officials and the general public that this is a logical and proper course of action.  The third topic of the workshop is to identify program priorities.  These priorities should support the Compelling Case by explaining the benefits that will result to the rate payers.  Fourth is an approximation of the rates that would be charged to support all of the services, identified in the third step, that the program will now provide. This step is an opportunity to increase or decrease the services to be offered.  The fifth step is a discussion of “Show Stoppers,”  political or other pressing issues within the community that might halt or result in rejection of the concept.  After completing all five steps, you’ll have the answer to the question “Does It Make Sense?”  

If it does make sense, the next step would be to conduct a Feasibility Study. The Feasibility Study involves a greater level of effort than the DIMS study, which varies with the size of the community. A Feasibility Study examines in detail the condition and the level of service that the existing infrastructure is providing and evaluates what improvements would be needed to eventually provide a level of service that is acceptable. A similar analysis is performed on the existing stormwater related programs and activities to identify staffing and equipment needs and changes to programs that would allow the community to provide the services now demanded of the stormwater program. The Feasibility Study also includes a detailed analysis of the impervious area of the customer base.  This analysis produces a good estimate of the revenue that can be expected and develops a rate structure that fairly and equitably allocates the cost of stormwater services.  Modifications to the rate structure are recommended in the form of credits for on-site stormwater management measures, or special service districts that might not receive all of the service offerings, as in the case of riparian properties. The program analysis and the rate analysis come together in a rate study that considers all sources of revenue (other fees, grants, general fund contribution and loans) to determine the rates that need to be charged in order to fund all of the services now being provided.  The last component of the Feasibility Study describes how the stormwater utility will be organized, who will have oversight responsibilities, who will be responsible for managing its operation and how will the fees be collected.  These details are codified in one or more legislative documents that will go before the elected officials and the public.

In Massachusetts, both the DIMS Workshop and the Feasibility Study may be funded by the State’s Municipal Vulnerability Preparedness (MVP) Planning Grants and MVP Action Grants.  GZA is also assisting other communities with their Municipal Vulnerability Preparedness Plans and MVP Action Grant applications. In addition, John Ferris, PE of GZA has assisted 60 Counties, Cities, Villages and Towns  from across the United States with developing stormwater utility programs.  Our knowledgeable team is available to advise and guide you through the planning and implementation of your stormwater utility program that is tailored to meet the specific needs and requirements of your community.

Read Part Two: What Is A Stormwater Utility Enterprise Fund?

Read Part Three: Fair, Equitable, and Legally Defensible Stormwater Enterprise Funds