Stormwater Financing/Utility Starter Kit

Stormwater Utility Funding

MAPC and project partners developed a Stormwater Utility/Funding Starter Kit to help municipalities take control of local water quality issues via a long-term funding source for stormwater management, which is encouraged by the U.S. Environmental Protection Agency and The Massachusetts Department of Environmental Protection.

Massachusetts municipalities are authorized under Massachusetts General Laws to establish a stormwater management authority, empowering them to charge fees to property owners, just as traditional utilities are allowed to charge fees for electricity, drinking water, and sewering services (MGL Chapter 40 Section 1A, Chapter 40A Section 5, Chapter 44 Section 53F‐1/2, and Chapter 83 Section 16).

Why Now?

Stormwater runoff is the Commonwealth’s leading cause of water quality and quantity problems. Increasingly common problems like beach and shellfish bed closures, fish kills, water contamination, habitat loss, and depleted groundwater are the result of non-treated and poorly controlled stormwater runoff.

The recent rapid growth and development of many communities has resulted in an increase in impervious surfaces, which significantly and adversely impacts surface and ground water, coastal waterbodies, and the safety of transportation infrastructure. As additional land is developed, the volume and rate of pollutants in stormwater entering storm sewers, rivers, streams, and reservoirs will continue to increase. Sustainable and preemptive efforts must be made now to prevent future flooding, bank erosion, and scouring.

All residents, property owners and businesses have some impervious surfaces on their properties (rooftops, walkways, driveways, roadways) that contribute to the production of stormwater.

Additionally, ninety-nine of the 101 MAPC communities will be required to meet the conditions of the new National Pollutant Discharge Elimination System (NPDES) and the Small Municipal Separate Storm Sewer (MS4) permits for Massachusetts Watersheds. The concept of establishing a drainage service fee, whether administered under a new stormwater utility entity or existing department, has proven to provide a stable and equitable source of financing for stormwater programs.

For additional information about stormwater and nonpoint source pollution, please see MAPC’s Stormwater Management page.

Stormwater Fee Strategies

There are a number of strategies commonly used to formulate equitable drainage fees. Typically, the fee is based on the amount of runoff produced by a property’s impervious surfaces. Under this model, impervious surface area is calculated using statistically based data for median footprints of different building types. This data is subsequently used to set a billing metric known as an “Equivalent Residential Unit,” or ERU.

Each residential property within the municipality is charged for one ERU per month at a pre-defined rate, while a large commercial properties are generally charged additional ERU’s (e.g. five ERUs per month). Fees are collected and funneled into a special revenue, typically an Enterprise Fund, which is kept separate from all other funded activities and accounts for charged fees in exchange for goods and services.

Massachusetts municipalities are authorized to establish an Enterprise Fund under MGL Chapter 44, Section 53F½. Credits can be earned through reducing impervious cover, conserving natural land, water harvesting and reuse, groundwater recharge, and/or environmentally sound development using alternative stormwater or Low Impact Development techniques.

Stormwater Financing/Utility Starter Kit Sections

The full Stormwater Financing/Utility Starter Kit can be downloaded here.
(Please note that the file is large [25 MB], which can take some time to download.)

Individual Kit Modules can be downloaded as listed:

1. Introduction/Overview
2. Module 1: Needs Assessment
3. Module 2: Financing Structure and Rate Development
4. Module 3: Outreach and Education (Internal and External)
5. Module 4: Administration and Management Options

Stormwater Utility Analysis Workbook

Included below is a parametric workbook designed to help municipalities analyze existing and anticipated budgets and design appropriate billing and revenue structures for stormwater utility programs.

Stormwater Fee Calculation Tool (Excel File)

Stormwater Tool Test (PDF File. Example numerics inserted to illustrate the use of the tool.)

This workbook is not intended  to be, nor does it claim to be, a comprehensive budgetary or accounting tool. MAPC does  not guarentee the acuracy of its output. The user has the right to employ the  tool as needed and is encouraged to change or add parameters as they see fit. The user assumes responsibility for the accuracy of calculations. Use of this tool includes an acceptance of thesre teerms and conditions.

Starter Kit Templates

The following templates can be used by municipalities to begin to plan and develop their long-term stormwater management funding scheme. The templates are designed as companion pieces to the Starter Kit. Municipalites should tailor the templates to suit their planning needs.

Revenue and Expenditures:

• Existing Stormwater Activities and Expenditures
  The Expenditure Chart outlines how towns can show their existing costs related to capital improvements, debts and current operations and maintenance.
• Revenue Plan
  The Revenue Plan template illustrates how towns can model and/or present their fee structure and billing units.
• Expenditure Plan 
  The Expenditure Plan template demonstrates how a municipality can clearly represent how and where the revenue from the utility fee is going to be spent.

Developing Fees:

• Graduated Fee
  The Graduated Fee graphic illustrates the critical elements of establishing graduated fees using based on the intensity of development (i.e. proportion of the impervious surface of the entire parcel).
• Credit and Incentive Plan 
  The Credit and Incentive Plan template provides single family properties and new developments with clear incentives for incorporating sustainable site control and water management strategies into their homes and properties.
• Billing Plan
  The Billing Plan template includes an explanation or sample bill that would explain how and when the fees will be distributed, i.e. new line items on existing utility bills, town distributed invoices etc.
  Public Outreach and Education

Public Outreach and Education:

• Public Outreach Plan
  The Public Outreach Plan template outlines the critical steps towns ought to take to design and successfully implement the new drainage fee and/or utility. The plan is broken into two main sections; Part I: Literature Publication and Web-Presence, and Part II: Outreach and Collaboration.

Questions?

For more information about the Stormwater Financing/Utility Starter Kit contact Darci Schofield.

Project Partners

Thank you to all our working and focus group members who provided extremely valuable expertise and guidance. We hope to continue to work with them on the implementation of drainage fees/utilities in the near future.