Chapel Hill – June 23, 2005Chapel Hill – June 23, 2005

Scott Bryant, PE – JEWELL Engineering ConsultantsScott Bryant, PE – JEWELL Engineering Consultants

Managing Stormwater Managing Stormwater Utilities for ResultsUtilities for Results

Stormwater IssuesStormwater 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 Framework for a Stormwater Stormwater

SolutionSolution

* Utility 101

* NC Utilities

* Management Lessons Learned

OverviewOverview

Basic Options for Funding Basic Options for Funding the Stormwater Programthe Stormwater Program

• 2 key primary funding methods2 key primary funding methods– General funding (tax based)General funding (tax based)– Utility funding (user fee based)Utility funding (user fee based)

• Supplemental funding can come from…Supplemental funding can come from…– Plan review feesPlan review fees– Site inspection feesSite inspection fees– Interest earned on idle fundsInterest earned on idle funds– A few othersA few others

A Fee for Stormwater?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 Stormwater Utility must be… must be…

>> Allowed Allowed by state law, by state law,

>> Desired Desired by local decision makers, & by local decision makers, &

>> Accepted Accepted by community ratepayers. by community ratepayers.

The Stormwater RealityThe Stormwater Reality

““It’s nothing but a tax increase, and I can’t go along It’s nothing but a tax increase, and I can’t go along with that. We have to live within our means.”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:Recently in the news regarding proposed utilities:

Willingness to Pay?Willingness to Pay?

• Citizen perception of Citizen perception of free free servicesservices in past in past

• How much would the How much would the typical typical citizencitizen in your community be in your community be willing to pay for the “new” willing to pay for the “new” stormwater services?stormwater services?

• Utility fee raises level of Utility fee raises level of service expectations service expectations

More Impervious

Area

Greater Stormwater

Runoff & Pollution

Greater Impact to Receiving

Waters

Basis for Stormwater Fee Basis for Stormwater Fee

Basis for Stormwater FeeBasis for Stormwater Fee

Two customer billing classifications typicalTwo customer billing classifications typical– Single-family residential (SFR)Single-family residential (SFR)

– Non-single-family residentialNon-single-family residential

• Fairness and equity in fee structure to cover public Fairness and equity in fee structure to cover public program cost of serviceprogram cost of service

• Majority of revenue often from Non-SFR classMajority of revenue often from Non-SFR class– Commercial/industrialCommercial/industrial

– Public streets and roads (to bill or not to bill?)Public streets and roads (to bill or not to bill?)

““Show Me the Money”*Show Me the Money”*

Potential Stormwater Utility Revenue Based on Impervious Principle

(Total Impervious % = 20, 30, 40, and 50; Assumes Typical SFR property = 2,500 square feet)

$0$100$200$300$400$500$600

$1 $2 $3 $4 $5 $6 $7 $8$ / Single Family Residential per Month

An

nu

al R

even

ue

per

Sq

uar

e M

ile

(in

Th

ou

san

ds

of

$)

I = 20%

I = 50%

*From the movie, “Jerry Maguire”

SFR Levels of ImperviousnessSFR Levels of Imperviousness

• What is the “typical” SFR parcel?What is the “typical” SFR parcel?• ERU, ESU, other ERU, ESU, other • Nationwide average ~ 2,500 sq ftNationwide average ~ 2,500 sq ft

Distribution of Single Family Residential Properties in Greensboro

0

100

200

300

400

500

600

700

800

900

602

969

1,335

1,702

2,069

2,435

2,802

3,169

3,535

3,902

4,269

4,636

5,002

5,369

5,736

6,102

6,469

6,836

7,202

More

Impervious Square Footage

Nu

mb

er

of

Pro

pe

rtie

s Based on over 53,000 SFR parcels

Tiered Rate StructuresTiered Rate StructuresExample: Single-Family Residential TiersExample: Single-Family Residential Tiers

Impervious Impervious Range Range (square feet)(square feet)

Number of Number of Parcels Parcels

Percent Percent DistributionDistribution

Tier ITier I 600 – 1999600 – 1999 18,05218,052 32.6%32.6%

Tier IITier II 2000 – 28992000 – 2899 18,66118,661 33.7%33.7%

Tier IIITier III 2900 +2900 + 18,66118,661 33.7%33.7%

Tier I SFR ExampleTier I SFR Example

Parcel ID xxxx-0002-052Parcel ID xxxx-0002-052Parcel Area = 7,567 sq ftParcel Area = 7,567 sq ft

Impervious AreaImpervious AreaHouse = 1088 sq ftHouse = 1088 sq ft

Paved Drive = 515 sq ftPaved Drive = 515 sq ft

Total Impervious =Total Impervious =1603 sq ft 1603 sq ft

(21.2%)(21.2%)

                                             

Tier II SFR ExampleTier II SFR ExampleParcel ID xxxx-0003-024Parcel ID xxxx-0003-024

Parcel Area = 12,234 sq Parcel Area = 12,234 sq ftft

Impervious AreaImpervious Area

House = 1147 sq ftHouse = 1147 sq ft

Shed = 302 sq ftShed = 302 sq ft

Paved Drive = 1096 sq ftPaved Drive = 1096 sq ft

Total Impervious = Total Impervious =

2545 sq ft2545 sq ft

(20.8%)(20.8%)

                                              

Tier III SFR ExampleTier III SFR Example

Parcel ID xxxx-0702-069Parcel ID xxxx-0702-069Parcel Area = 13,618 sq Parcel Area = 13,618 sq

ftft

Impervious AreaImpervious AreaHouse = 2,284 sq ftHouse = 2,284 sq ft

Shed = 119 sq ftShed = 119 sq ftPaved Area = 715 sq ftPaved Area = 715 sq ft

Total Impervious = Total Impervious = 3,118 sq ft3,118 sq ft

(22.9%)(22.9%)

                                               

Commercial Property (or any Non-SFR Commercial Property (or any Non-SFR Property)Property)

Parcel ID xxxx-0001-009Parcel ID xxxx-0001-009Parcel Area = 453,461 sq ftParcel Area = 453,461 sq ft

Impervious AreaImpervious AreaBuilding = 98,652 sq ftBuilding = 98,652 sq ft

Paved Lot = 269,558 sq ftPaved Lot = 269,558 sq ft

Total Impervious = 368,210 sq ftTotal Impervious = 368,210 sq ft (81.2% imperviousness)(81.2% imperviousness)

Stormwater Utility Fee =Stormwater Utility Fee =368,210 sq ft/2,543 sq ft per ERU 368,210 sq ft/2,543 sq ft per ERU

oror145 ERUs (for example)145 ERUs (for example)

Stormwater Program Cost CentersStormwater Program Cost Centers

• AdministrationAdministration– Program mgt, utility (if Program mgt, utility (if

applicable) customer service, applicable) customer service, billing, indirect costs, etcbilling, indirect costs, etc

• Water QualityWater Quality– Monitoring programs, BMP Monitoring programs, BMP

inspections, illicit discharge inspections, illicit discharge program, NPDES MS4 permit program, NPDES MS4 permit compliance, TMDL programs, compliance, TMDL programs, etc.etc.

• Planning & EngineeringPlanning & Engineering– Plan review, master planning, Plan review, master planning,

floodplain mgt, GIS, system floodplain mgt, GIS, system inventory, technical guidance, inventory, technical guidance, capital project design, capital project design, consultant management, etc.consultant management, etc.

• Public EducationPublic Education– Education, outreach, and Education, outreach, and

involvement programsinvolvement programs

• System Operation & System Operation & MaintenanceMaintenance– Sweeping, infrastructure Sweeping, infrastructure

maintenance, open channel maintenance, open channel maintenance, litter collection, maintenance, litter collection, drainage complaint responsedrainage complaint response

• Capital Improvement Capital Improvement Program (CIP)Program (CIP)

• Debt Service, if applicableDebt Service, if applicable• Fund Balance/Retained Fund Balance/Retained

EarningsEarnings– Use should mesh with Use should mesh with

program strategyprogram strategy

Utility 101

NC Utilities

Management Lessons Learned

Greensboro’s Projected Program Expenditures Greensboro’s Projected Program Expenditures (10 years into Utility - Fiscal Year 04-05)(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 Summary Stats for Local Stormwater Utilities In North CarolinaUtilities In North Carolina

- April 2004 Survey -- April 2004 Survey -Charlotte, Durham, Fayetteville/Cumberland, Greensboro, Charlotte, Durham, Fayetteville/Cumberland, Greensboro,

Raleigh, Wilmington, Wilson, Winston-SalemRaleigh, Wilmington, Wilson, Winston-Salem

Annual Revenue - NC UtilitiesAnnual Revenue - NC Utilities

$112

$36

$118

$38 $26

$11

$177

$63

$49

$15

MEAN MEDIAN LOW HIGH STD DEV

NC Stormwater Utilities 2004 Annual Revenue

$/acre $/person

Expenditures – NC UtilitiesExpenditures – NC Utilities

Full Time Staff – NC UtilitiesFull Time Staff – NC Utilities

-

0.200

0.400

0.600

0.800

1.000

1.200

MEAN MEDIAN LOW HIGH STD DEV

It Takes the Right PeopleNC Local Stormwater Utilities

Total FTEs per Square Mile of Service Area

Staff by Function – NC UtilitiesStaff by Function – NC Utilities

Utility 101

NC Utilities

Management Lessons Learned

Education, Education, EducationEducation, Education, Education

FutureFutureLeaders/Leaders/StewardsStewards

FutureFutureLeaders/Leaders/StewardsStewards

Define the “public”

A little “humor” may be helpful…A little “humor” may be helpful…

Ad sponsored by the Texas Natural Resource Conservation Commission & U.S. EPA

Program Leadership + Vision + Strategy + ActionProgram Leadership + Vision + Strategy + Action

Vision without action is a daydream;Vision without action is a daydream;Action without vision is a nightmare.Action without vision is a nightmare.

- Japanese proverb- Japanese proverb

Understand the “MEP Mandate”Understand the “MEP Mandate”

MEMEPP

Organizational Resources

($, People, Other Assets)

Legal / Regulatory Mandates

Political Will

Get a Good LawyerGet a Good Lawyer

• Place utility on a solid legal Place utility on a solid legal foundation from day onefoundation from day one..

– Hard lessons Hard lessons willwill be learned be learned through a lawsuitthrough a lawsuit

– Greensboro & Durham CasesGreensboro & Durham Cases• liability could have exceeded liability could have exceeded

$28 MM in Greensboro$28 MM in Greensboro

– Legal action is distraction for Legal action is distraction for program, staff, and communityprogram, staff, and community

Understand System AnatomyUnderstand System Anatomy

Open stream channel

Manmade pipe system

Stormwater pond

Culvert systemInlets

Focus on the CustomerFocus on the Customer

• Think like a businessThink like a business in in providing excellent customer providing excellent customer serviceservice

– Public staff should understand their Public staff should understand their jobs exist to serve the rate-paying jobs exist to serve the rate-paying customers.customers.

– Value creation.Value creation.

– Recognize only time will help Recognize only time will help some accept the utility.some accept the utility.

Pay-as-You-Go v. Debt FinancingPay-as-You-Go v. Debt Financing

Pay-as-you-goPay-as-you-go– Provides time to evaluate Provides time to evaluate

real needs and find optimal real needs and find optimal solutions solutions

– Interest cost savingsInterest cost savings– Allows for future borrowingAllows for future borrowing– Allows more flexibility in Allows more flexibility in

funding operating costsfunding operating costs– More limited # and scope More limited # and scope

of capital projects of capital projects

Debt financingDebt financing– G.O. or Revenue BondsG.O. or Revenue Bonds– G.O often cheaper, but require G.O often cheaper, but require

votevote– If have a number of problem If have a number of problem

areas with good capital solutions areas with good capital solutions identifiedidentified

– Can often show more Can often show more improvements in lesser timeimprovements in lesser time

– Ability to fund larger projects Ability to fund larger projects – If revenue stream stable and will If revenue stream stable and will

supportsupport– Pay debt service from annual Pay debt service from annual

revenue; reduces pay-as-go revenue; reduces pay-as-go fundingfunding

Key = Financing should mesh with stormwater program strategy

Develop & Implement a CIP Rating SystemDevelop & Implement a CIP Rating System

-Maximize objectivity in useof 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 MeasurementBalanced Program Measurement• 4 broad areas (or perspectives) – Kaplan & Norton4 broad areas (or perspectives) – Kaplan & Norton

– CustomersCustomers (how do we appear to customers?) (how do we appear to customers?)

– Financial performanceFinancial performance (budget v. actual, etc) (budget v. actual, etc)

– Learning & growthLearning & growth (how do we change & improve?) (how do we change & improve?)

– Internal processesInternal processes (what do we need to perform & excel at?) (what do we need to perform & excel at?)

• Very appropriate for Very appropriate for

public/nonprofitspublic/nonprofits

• Recall strategic Recall strategic

contextcontext

Measures should flow Measures should flow

from strategyfrom strategy

Tracking Progress in Receiving WatersTracking Progress in Receiving Waters

Tracking Progress in Receiving WatersTracking Progress in Receiving Waters

0

20

40

60

80

100

J S N J M M J S N J M M J S N J M M J S N J M M J S N J

Month

WQ

I Sc

ore

N. Buffalo S. Buffalo Water-Supply

Program Goal = 70

1999 2000 2001 2002 2003

2004

Ambient water quality monitoring results - WQI

Sound Utility Fee Crediting PolicySound Utility Fee Crediting Policy

*Understand major *Understand major revenuerevenue and and cost (expenditure) cost (expenditure) centerscenters for the public stormwater program for the public stormwater program

*Structure policy *Structure policy ensuring financial solvencyensuring financial solvency to satisfy to satisfy ongoing public operational and capital needsongoing public operational and capital needs

*Provide *Provide fair and reasonable incentivesfair and reasonable incentives for ratepayers for ratepayers that adopt proper controlsthat adopt proper controls

*Provide *Provide awarenessawareness of the fee-crediting program of the fee-crediting program

Seek to Leverage Local ResourcesSeek to Leverage Local Resources• Availability of state and federal grant Availability of state and federal grant

programsprograms

• External funding support can help keep External funding support can help keep rates lower and/or defer the need for a rates lower and/or defer the need for a rate increaserate increase

• Demonstrates good financial Demonstrates good financial stewardshipstewardship

• Partner with nearby Partner with nearby municipalities/towns/counties to extent municipalities/towns/counties to extent possiblepossible

• Learn from the experiences Learn from the experiences

of othersof others

““Stormwater Virtuous Cycle”Stormwater Virtuous Cycle”

People & Program

Stakeholders

Thoughtful Vision & Focused

Plans

Visible Results

Value Recognize

d

Program Implementatio

n

Community motivated

Quality of life

Scott Bryant, PE – JEWELL Engineering ConsultantsScott Bryant, PE – JEWELL Engineering ConsultantsOffice Tel 336.996.9974Office Tel 336.996.9974

Email sbryant@jewellengr.comEmail sbryant@jewellengr.com

Q & AQ & A

The ultimate test of management is performance.

-Peter F. Drucker