Chapel Hill – June 23, 2005 Scott Bryant, PE – JEWELL Engineering Consultants Chapel Hill – June 23, 2005 Scott Bryant, PE – JEWELL Engineering Consultants Managing Stormwater Utilities for Results

Stormwater Issues NPDES stormwater rules TMDLs Flooding hazards Drainage infrastructure Public awareness & involvement Nonpoint source pollution Water supply protection Watershed restoration & management Quality of life Water resource & ecological protection BMPs Basinwide Rules

Framework for a Stormwater Solution

* Utility 101 * NC Utilities * Management Lessons Learned Overview

Basic Options for Funding the Stormwater Program 2 key primary funding methods2 key primary funding methods –General funding (tax based) –Utility funding (user fee based) Supplemental funding can come from…Supplemental funding can come from… –Plan review fees –Site inspection fees –Interest earned on idle funds –A few others

A Fee for Stormwater? A fee for stormwater is a new concept for many! A fee for stormwater is a new concept for many!

Stormwater Utility must be… > Allowed by state law, > Desired by local decision makers, & > Accepted by community ratepayers.

The Stormwater Reality “It’s nothing but a tax increase, and I can’t go along with that. We have to live within our means.” “We’re going to pay for it one way or the other. It’s either establish the fees or take money out of the (city’s) general fund.” “If I vote against this resolution will the EPA come down and arrest me?” “ “It’s going to move (our city) into the next level of stormwater management.” Recently in the news regarding proposed utilities:

Willingness to Pay? Citizen perception of free services in pastCitizen perception of free services in past How much would the typical citizen in your community be willing to pay for the “new” stormwater services?How much would the typical citizen in your community be willing to pay for the “new” stormwater services? Utility fee raises level of service expectationsUtility fee raises level of service expectations

More Impervious Area Greater Stormwater Runoff & Pollution Greater Impact to Receiving Waters Basis for Stormwater Fee Basis for Stormwater Fee

Two customer billing classifications typical –Single-family residential (SFR) –Non-single-family residential Fairness and equity in fee structure to cover public program cost of serviceFairness and equity in fee structure to cover public program cost of service Majority of revenue often from Non-SFR classMajority of revenue often from Non-SFR class –Commercial/industrial –Public streets and roads (to bill or not to bill?)

“Show Me the Money”* I = 20% I = 50% *From the movie, “Jerry Maguire”

SFR Levels of Imperviousness What is the “typical” SFR parcel?What is the “typical” SFR parcel? ERU, ESU, otherERU, ESU, other Nationwide average ~ 2,500 sq ftNationwide average ~ 2,500 sq ft Based on over 53,000 SFR parcels

Tiered Rate Structures Example: Single-Family Residential Tiers Impervious Range (square feet) Number of Parcels Percent Distribution Tier I 600 – , % Tier II 2000 – , % Tier III , %

Tier I SFR Example Parcel ID xxxx Parcel Area = 7,567 sq ft Impervious Area House = 1088 sq ft Paved Drive = 515 sq ft Total Impervious = 1603 sq ft (21.2%)

Tier II SFR Example Parcel ID xxxx Parcel Area = 12,234 sq ft Impervious Area House = 1147 sq ft Shed = 302 sq ft Paved Drive = 1096 sq ft Total Impervious = 2545 sq ft (20.8%)

Tier III SFR Example Parcel ID xxxx Parcel Area = 13,618 sq ft Impervious Area House = 2,284 sq ft Shed = 119 sq ft Paved Area = 715 sq ft Total Impervious = 3,118 sq ft (22.9%)

Commercial Property (or any Non-SFR Property) Parcel ID xxxx Parcel Area = 453,461 sq ft Impervious Area Building = 98,652 sq ft Paved Lot = 269,558 sq ft Total Impervious = 368,210 sq ft (81.2% imperviousness) (81.2% imperviousness) Stormwater Utility Fee = 368,210 sq ft/2,543 sq ft per ERU or 145 ERUs (for example)

Stormwater Program Cost Centers Stormwater Program Cost Centers AdministrationAdministration –Program mgt, utility (if applicable) customer service, billing, indirect costs, etc Water QualityWater Quality –Monitoring programs, BMP inspections, illicit discharge program, NPDES MS4 permit compliance, TMDL programs, etc. Planning & EngineeringPlanning & Engineering –Plan review, master planning, floodplain mgt, GIS, system inventory, technical guidance, capital project design, consultant management, etc. Public Education –Education, outreach, and involvement programs System Operation & Maintenance –Sweeping, infrastructure maintenance, open channel maintenance, litter collection, drainage complaint response Capital Improvement Program (CIP) Debt Service, if applicable Fund Balance/Retained Earnings –Use should mesh with program strategy

Utility 101 NC Utilities Management Lessons Learned

Greensboro’s Projected Program Expenditures (10 years into Utility - Fiscal Year 04-05) Capital Improvement Program Contributions 31% Administration 4% Water Quality 5% Public Education 1%Planning & Engineering 10% System Maintenance & Ops Mgt 26% Street Cleaning & Litter/ Floatables Control 19% Indirect 4%

Summary Stats for Local Stormwater Utilities In North Carolina - April 2004 Survey - Charlotte, Durham, Fayetteville/Cumberland, Greensboro, Raleigh, Wilmington, Wilson, Winston-Salem

Annual Revenue - NC Utilities

Expenditures – NC Utilities

Full Time Staff – NC Utilities Total FTEs per Square Mile of Service Area

Staff by Function – NC Utilities

Utility 101 NC Utilities Management Lessons Learned

Education, Education, Education FutureLeaders/StewardsFutureLeaders/Stewards Define the “public”

A little “humor” may be helpful… Ad sponsored by the Texas Natural Resource Conservation Commission & U.S. EPA

Program Leadership + Vision + Strategy + Action Vision without action is a daydream; Action without vision is a nightmare. - Japanese proverb

Understand the “MEP Mandate” MEP Organizational Resources ($, People, Other Assets) Legal / Regulatory MandatesPolitical Will

Get a Good Lawyer Place utility on a solid legal foundation from day one.Place utility on a solid legal foundation from day one. –Hard lessons will be learned through a lawsuit –Greensboro & Durham Cases liability could have exceeded $28 MM in Greensboroliability could have exceeded $28 MM in Greensboro –Legal action is distraction for program, staff, and community

Understand System Anatomy Open stream channel Manmade pipe system Stormwater pond Culvert system Inlets

Focus on the Customer Think like a business in providing excellent customer serviceThink like a business in providing excellent customer service –Public staff should understand their jobs exist to serve the rate-paying customers. –Value creation. –Recognize only time will help some accept the utility.

Pay-as-You-Go v. Debt Financing Pay-as-you-go Pay-as-you-go –Provides time to evaluate real needs and find optimal solutions –Interest cost savings –Allows for future borrowing –Allows more flexibility in funding operating costs –More limited # and scope of capital projects Debt financing –G.O. or Revenue Bonds –G.O often cheaper, but require vote –If have a number of problem areas with good capital solutions identified –Can often show more improvements in lesser time –Ability to fund larger projects –If revenue stream stable and will support –Pay debt service from annual revenue; reduces pay-as-go funding Key = Financing should mesh with stormwater program strategy

Develop & Implement a CIP Rating System -Maximize objectivity in use of limited public funds -Develop rating criteria that is important to the community -public safety -regulatory requirements -ability to fund -ability to permit/mitigate -Keep database of projects -Make public

Balanced Program Measurement 4 broad areas (or perspectives) – Kaplan & Norton4 broad areas (or perspectives) – Kaplan & Norton –Customers (how do we appear to customers?) –Financial performance (budget v. actual, etc) –Learning & growth (how do we change & improve?) –Internal processes (what do we need to perform & excel at?) Very appropriate forVery appropriate for public/nonprofits public/nonprofits Recall strategicRecall strategic context context Measures should flow from strategy

Tracking Progress in Receiving Waters

Ambient water quality monitoring results - WQI

Sound Utility Fee Crediting Policy *Understand major revenue and cost (expenditure) centers for the public stormwater program *Structure policy ensuring financial solvency to satisfy ongoing public operational and capital needs *Provide fair and reasonable incentives for ratepayers that adopt proper controls *Provide awareness of the fee-crediting program

Seek to Leverage Local Resources Availability of state and federal grant programsAvailability of state and federal grant programs External funding support can help keep rates lower and/or defer the need for a rate increaseExternal funding support can help keep rates lower and/or defer the need for a rate increase Demonstrates good financial stewardshipDemonstrates good financial stewardship Partner with nearby municipalities/towns/counties to extent possiblePartner with nearby municipalities/towns/counties to extent possible Learn from the experiencesLearn from the experiences of others of others

“Stormwater Virtuous Cycle” People & Program Stakeholders Thoughtful Vision & Focused Plans Visible Results Value Recognized Program Implementation Community motivated Quality of life

Scott Bryant, PE – JEWELL Engineering Consultants Office Tel Scott Bryant, PE – JEWELL Engineering Consultants Office Tel Q & A The ultimate test of management is performance. -Peter F. Drucker