Consensus-Building and Its Consensus-Building and Its Role in Successful Stormwater Role in Successful Stormwater Utility ImplementationUtility Implementation

Danny Bowden, City of RaleighDanny Bowden, City of RaleighScott McClelland, CDMScott McClelland, CDM

Presented at:Presented at:NC APWA Innovations in Water NC APWA Innovations in Water Resources & Stormwater ManagementResources & Stormwater Management

September 27, 2004September 27, 2004

Presentation AgendaPresentation Agenda

Drivers for the stormwater funding study Role of the stakeholder group Establishment of a utility for the City of

Raleigh Lessons learned and ongoing efforts

What Drove the Need to Perform a Stormwater

Management Funding Study?

Consequences of Increased Consequences of Increased Uncontrolled UrbanizationUncontrolled Urbanization

TimeTime

Str

eam

Flo

w R

ate

Str

eam

Flo

w R

ate

With UrbanizationWith UrbanizationWithout UrbanizationWithout Urbanization

Greater & earlierGreater & earlierpeak dischargepeak discharge

Greater runoff volumeGreater runoff volume

Smaller & less rapid peakSmaller & less rapid peak

Reduced baseflow Reduced baseflow

Rapid conveyanceRapid conveyanceof more pollutantsof more pollutants

Impacts of Increased RunoffImpacts of Increased Runoff

Creates downstream flooding problems

Accelerates erosion and degradation of our streams

Carries pollutants into streams and rivers, impacting water quality

Did the City’s Stormwater Program Have Adequate Resources?

Previous Stormwater Management Previous Stormwater Management Program Budget and Staffing LevelsProgram Budget and Staffing Levels

The City’s Existing Level of ServiceThe City’s Existing Level of Service

Operation & Maintenance – 5 staff members provided all maintenance for City’s stormwater program (making maintenance solely reactive)

Operation & Maintenance – 5 staff members provided all maintenance for City’s stormwater program (making maintenance solely reactive)

Capital Improvements – CIP was funded by a mix of City funds and grants. Program needs were prioritized to try and address the most critical needs

Capital Improvements – CIP was funded by a mix of City funds and grants. Program needs were prioritized to try and address the most critical needs

Program Administration – City did a good job of planning, but lacked resources to update models for new conditions and to manage new CIP projects

Program Administration – City did a good job of planning, but lacked resources to update models for new conditions and to manage new CIP projects

Over 3,000 Stormwater Complaints Were Made By City Residents Since 1986Over 3,000 Stormwater Complaints Were Made By City Residents Since 1986

Less than 15% of those complaints had

been addressed

Less than 15% of those complaints had

been addressed

City Drainage Basin Studies Had Identified Nearly $100 Million of CIP Needs

Federal and State Water Quality Federal and State Water Quality RegulationsRegulations

NPDES Phase I & II Regulations EPA/State 303(d) List Nutrient sensitive waters (i.e. Neuse Rules) Wetlands/401 Regulations Federal Clean Water Act - TMDLs

What Questions Does This Raise???What Questions Does This Raise???

Are the City’s programs effective in achieving its goals?

Does the City have adequate staff to support its programs?

What role does the current funding play in making these goals more difficult to achieve?

Are the citizens satisfied with the City’s current level of service?

What Role Does a Stakeholders Group Play in the Process?

Financial, Technical, and Stakeholder Financial, Technical, and Stakeholder Input Is Used to Develop Input Is Used to Develop RecommendationsRecommendations

RECOMMENDATIONS

Collect and Evaluate Data

Define BillingMethodology

DetermineBilling Units

EstablishAdministrative

Procedures

F I N A N C I A L

IdentifyStormwater

Needs

SelectFundingMethods

Develop 5-yrFinancial Plan

Set User Fee

T E C H N I C A L

AppointCitizen

Committee

CommitteeReviews Needs

CommitteeReviews FundingMethods

CommitteeReviewsUser Fee

STAKEHOLDER INPUT

Project Approach Gave Every Member Project Approach Gave Every Member of the Process An Equal Voteof the Process An Equal Vote

Stakeholders

Consensus-Based

Results

Old ApproachOld Approach Our ApproachOur Approach

StakeholdersProject Sponsor

Stakeholder Group Workshop ProcessStakeholder Group Workshop Process

Invite representatives with diverse opinions Facilitate meetings to emphasize “fairness

and equity” Discuss program levels of service Group/consultant

presents results to Council

Invite a Diverse Group to Represent Invite a Diverse Group to Represent the Customers At-Largethe Customers At-Large

StakeholdersGroup

StakeholdersGroup

State and Local Government

State and Local Government

Citizen Action Groups

Citizen Action Groups

HomeownersAssociationsHomeownersAssociations Environmental

InterestsEnvironmental

Interests

Commercial Business Interests

Commercial Business Interests

Homebuilders Association

Homebuilders Association

Non-Profit Groups

Non-Profit Groups

Schools and UniversitiesSchools and Universities

Case Study: City of RaleighCase Study: City of Raleigh

Stakeholders Group Consisted of 25 MembersStakeholders Group Consisted of 25 Members

Office of State Construction

Wake Co. Environmental Services

North Carolina State University

Meredith College

Wake County School System

Local High Schools (2)

Crabtree Valley Mall

Practicing Engineer

Chamber of Commerce

Office of State Construction

Wake Co. Environmental Services

North Carolina State University

Meredith College

Wake County School System

Local High Schools (2)

Crabtree Valley Mall

Practicing Engineer

Chamber of Commerce

Homebuilders Associations

Association of Realtors

Environmental Group (3)

Homeowners Association (2)

Citizen Action Groups (2)

Church Representative

Apartment Management (2)

Local Non-Profit Groups (2)

Progress Energy

Homebuilders Associations

Association of Realtors

Environmental Group (3)

Homeowners Association (2)

Citizen Action Groups (2)

Church Representative

Apartment Management (2)

Local Non-Profit Groups (2)

Progress Energy

Stakeholder Meeting TopicsStakeholder Meeting Topics

Meeting #1 – Introduction, Expectations, & Schedule

Meeting #2 – Stormwater 101 & Program Level of Service

Meeting #3 – Existing Program Level of Service & Cost

Meeting #4 – Stakeholder Field Trip Meeting #5 – Level of Service Improvements

and Cost

Stakeholder Meeting Topics (con’t)Stakeholder Meeting Topics (con’t)

Meeting #6 – Future Level of Service Selection Meeting #7 – Existing Funding Sources &

Options Meeting #8 – Program Rate Structures Meeting #9 – Fee Adjustments & Credits Meeting #10 – Stakeholder Recommendations

Stormwater Management Functional Stormwater Management Functional AreasAreas

Stormwater Program Management The planning and management of assets

associated with stormwater Operations and Maintenance

The management of stormwater assets to assure that the assets continue to operate at peak efficiency

Capital Improvements Project (CIP) The construction of new assets that upgrade

older portions of the stormwater system and that handle growth within the system

Stormwater Management GoalsStormwater Management Goals

Flood control

Water quality protection

Operation and maintenance

Regulatory compliance

Environmental protection

Long-term financing

Community acceptance

Levelsof

Service

Developing a Level of ServiceDeveloping a Level of Service

Level of Service Maintenance

Management, Compliance and Implementation

Capital Improvement

Projects

AFully Preventative/ 100%

Routine

Comprehensive Planning + Regulatory Compliance + Full

Implementation5- to 7-year plan

BMixture of Routine and

Inspection Based

Pro-Active Planning + Regulatory Compliance + Systematic

Implementation10- to 15-year plan

C Inspection Based OnlyPriority Planning + Regulatory

Compliance + Partial Implementation

20- to 25-year plan

DResponsive Only

(Complaint-based)

Reactionary Planning + Partial Compliance + Minimal

Implementation40- to 50-year plan

FLess than full response

to all complaintsNo Planning +

Non-Compliance75- to 100-year plan

Stakeholder Group Field TripStakeholder Group Field Trip

15 stakeholders and 2 city council members visited 9 stormwater project sites

Sites were chosen to show examples of “the good, the bad, and the ugly” of stormwater management

City of Raleigh Stormwater Program City of Raleigh Stormwater Program Level of Service Matrix Level of Service Matrix

Level of Service

Program Management and Compliance

Capital Improvement

Projects

Annual Program

Cost

Level of Service, Existing Stormwater Program, 2002.

C

$17 million

Responsive Only

Comprehensive Planning, NPDES Compliance, Full Implementation

Pro-Active Planning, NPDES Compliance,

Systematic Implementation

Priority Planning, NPDES Compliance,

Partial Implementation

Fully Preventative/ 100% Routine

Mixture of Routine and Inspection Based

Inspection Based Only

$11.8 million

$6 million/year (16- year program)

$4 million/year (25- year program)

$3 million/year (33- year program)

Operation and Maintenance

B

A

D $6.5 millionn/a$2 million/year

(50- year program)

$8.5 million

Stormwater Utility Stakeholder Level of Stormwater Utility Stakeholder Level of Service Voting Results Service Voting Results

Stakeholder Voting Tally

Program Components

Stakeholder Voting Tally

Program Components

Stakeholder Voting Tally

Level of Current Stormwater Program, 2002.

00

7

9

6

7

9

6

9

7

6

0

$6 million/year (16-year program)

$4 million/year (25-year program)

$3 million/year (33-year program)

C

Program Components

B

A

D n/a$2 million/year

(50-year program)

Fully Preventative/ 100% Routine

Operation and MaintenanceProgram Management and

ComplianceLevel of Service

Mixture of Routine and Inspection Based

Inspection Based Only

Responsive Only

Comprehensive Planning, NPDES Compliance, Full Implementation

Pro-Active Planning, NPDES Compliance,

Systematic Implementation

Priority Planning, NPDES Compliance,

Partial Implementation

Capital Improvement Projects

How Should We Pay For Our Stormwater Management Program?

Residential Property Tax29%

Commercial Property Tax15%

Sales Tax17%

Fund Balance7%

Transfers7%

Intergovernmental9%

Fees & Misc.5%

Inspection Fees3%

Convention Center3% Interest

1%Licenses4%

Components of General Fund:Components of General Fund:

Traditional Funding Has No Traditional Funding Has No Relationship to Stormwater ServiceRelationship to Stormwater Service

Funding Options for Stormwater Funding Options for Stormwater ManagementManagement

Taxes Ad Valorem Municipal Service Districts Special Assessments Sales Taxes (Local Government Sales & Use Taxes)

Utility or Public Service Enterprise Fees (User Fees)

Other Funding Impact Fees Grants Loans/Bonds

Funding Capability of Each Funding Funding Capability of Each Funding OptionOption

Funding OptionProgram

ManagementOperation & Maintenance

Capital Improvements Growth

Ad Valorem Municipal Service Districts Special Assessments Local Government Sales Tax Enterprise (User) Fees Licenses/Permits Penalties/Fines Grants Bonds

How Do They Compare in Some Key How Do They Compare in Some Key Areas?Areas?

Funding Option Authority EquityRevenue Capacity

Ease of Implementation Initial Costs System Costs

Ad Valorem Tax Yes Low Sufficient? Easy Low LowMuncipal Service Districts Tax Vote Low Sufficient Difficult Moderate ModerateSpecial Assessments Ordinance High Sufficient Difficult High ModerateLocal Government Sales Tax Vote Low Insufficient Difficult Low LowEnterprise Fees Ordinance High Sufficient Moderate Moderate ModerateLicenses/Permits Yes High Insufficient Moderate Low ModeratePenalties/Fines Yes Moderate Insufficient Moderate Low ModerateGrants Yes Low Insufficient Moderate Low LowBonds Yes n/a Insufficient Moderate Low Moderate

A Stormwater Utility Charges a User Fee A Stormwater Utility Charges a User Fee Based on Impacts to the Stormwater Based on Impacts to the Stormwater SystemSystem

Pollutants Pollutants Pollutants Pollutants

Water RunoffWater Runoff Water RunoffWater Runoff

Stormwater Utilities: New Concept?Stormwater Utilities: New Concept?

First utility established in 1976 (Bellevue, WA) Trend continued in the late 80’s/early 90’s in

response to NPDES Phase I Approximately 400 utilities exist today Most larger communities in North Carolina are

now funded by a stormwater utility

RaleighCharlotte

GreensboroWinston-Salem

DurhamFayettevilleWilmingtonGreenvilleChapel Hill

WashingtonWilson

High PointRocky Mount

Benefits = ChargeBenefits = Charge

Management of runoff benefits owners and tenants

Benefit relates to property’s contribution to the problem (runoff burden)

Fee relates to runoff Common proxy for runoff is impervious area

Customer receives services from the utility in direct

measure to the runoff burden

Customer receives services from the utility in direct

measure to the runoff burden

Utility Fees Should Be Fair and Utility Fees Should Be Fair and Equitable Based on Service NeededEquitable Based on Service Needed

Water utility – volume used Wastewater utility – volume generated Solid waste program – volume/weight Stormwater utility– runoff contribution

A Stormwater User Charge Is Typically A Stormwater User Charge Is Typically Based on Impervious SurfaceBased on Impervious Surface

2400 sq ft

1600 sq ft

1030 sq ft

880 sq ft

65 sq ft

87 sq ft

Comparison Between Ad Valorem and Comparison Between Ad Valorem and a Stormwater User Feea Stormwater User Fee

Advantages In place already Easy to collect and

administer (tax collector)

Can be sufficient for all services

Disadvantages Not dedicated Competition Not equitable

Advantages

Equitable (i.e., fee related to service provided)

Stable & dedicated funding

Encourages good behavior

Sufficient for all services

Disadvantages

Startup costs

Administrative costs

Ad ValoremAd Valorem Stormwater User FeeStormwater User Fee

City of Raleigh Stormwater Program City of Raleigh Stormwater Program Levels of Service & Annual CostsLevels of Service & Annual Costs

Level of Service

Program Management

and Compliance

Capital Improvement

Projects

Annual Program

Cost

Estimated User Fee

($/SFU/month)

Equivalent Tax Rate ($/$100)

NOTES:1) = CDM estimate of Current City of Raleigh Program

$2.88 $0.033C

$17 million $5.76 $0.067

$11.8 million $4.00 $0.046B

$2.20 $0.026

Operation and Maintenance

A

D $6.5 millionn/a$2 million/year

(50-year program)

$8.5 million

$6 million$6 million/year

(16-year program)

$4 million/year (25-year program)

$3 million/year (33-year program)

$2 million

$5 million

$3 million

$2.5 million

$4.8 million

$3 million

Cost Comparison for the Typical Cost Comparison for the Typical Residential Home OwnerResidential Home Owner

Tax rate needed for LOS B = $0.046 per $100 assessed value

For median home:

User rate needed for LOS B = $4.00 per month per SFU

For median home:

$156,000/$100 x 0.046 = $71.76/yr

$4.00 x 12 = $48.00/yr

Ad ValoremAd Valorem Stormwater User FeeStormwater User Fee

Outcome of City of Raleigh Stormwater Outcome of City of Raleigh Stormwater Funding StudyFunding Study

Stakeholders broadly supported an increase in the City’s level of service

The group voted almost unanimously to fund the program with a utility

Stakeholders participated in the presentation to Council

Council approved the implementation of the utility in May 2003

Continuing Efforts and Lessons Learned

Keys To Establishing A Successful Keys To Establishing A Successful Stormwater Utility ProgramStormwater Utility Program

Review and establish the current level of service of the program

Involve a stakeholders group to determine the desired level of service of the public at-large

Allow the stakeholders to choose the desired funding option

Utilize the stakeholder process to gain the support of the citizens and local government officials

Ongoing Efforts….Ongoing Efforts….

Per the stakeholders’ recommendations, the City Council has also approved the following: Stormwater Utility Fee Credit Manual Approval of 10 additional stormwater staff Establishment of a permanent, 10-member

Stormwater Management Advisory Commission

Role of the Stormwater Management Role of the Stormwater Management Advisory CommissionAdvisory Commission

Recommends policy changes to council Reviews and comments to council on the

annual capital improvement program Responds to council and staff for advice on

stormwater utility matters Presents council with an annual report of key

actions and issues

Lessons LearnedLessons Learned

Program and utility recommendations came from the stakeholder group and not city staff or council led to community support

Facilitation by consultant kept the stakeholders on task

Public education is a continual process and you can never do too much public education when implementing a stormwater utility

Coordination between key city departments is crucial to implementation – stormwater services/ billing/ GIS/ budget office

Lessons LearnedLessons Learned

Look for the unknowns in billing systems and with the impervious data Address Conflicts in Databases Homeowners Associations/ Common Open

Space Areas Billing of HOA’s versus Individual Unit Owners Billing of Tenants versus Owners Semi-Impervious Surfaces

Lessons LearnedLessons Learned

Customer Service Provide it Efficiently and Promptly Clearly Define Roles of Different Departments Count on a Ten Fold Increase in Calls During

the First Six Months of the Utility and Staff Accordingly

Err on the Side of the Customer - Quote from Scott McClelland, CDMScott McClelland, CDM

Thank You For Your Time!

Any Questions??