1. Beyond ERUs: Sustainable Stormwater Finance SC Stormwater Forum Jeff Hughes, Environmental Finance Center www.efc.unc.edu (919) 489-1342 jhughes@sog.unc.edu

2. Strategic Revenue Planning 1.Stormwater services and revenue Requirements 2.Revenue options 3.Designing strategic cost recovery systems (matching 2. with 1.)

3. First Rule of Strategic Planning: Know Your Service Beneficiaries Cost drivers Legal framework Provision options (who, how, where)

4. Service Drivers Quantity control Quality control

5. Stormwater Services

6. Phase II Services/Minimum Measures 1.Public Education and Outreach Program 2.Public Involvement and Participation Program 3.Detect and Eliminate Illicit Discharges 4.Runoff from Construction Activities 5.Post-construction Stormwater Runoff Program from New Development and Redevelopment 6.Pollution Prevention/Good Housekeeping Program

7. Revenue Options Taxes  Property  Sales  Gas Plan review fees Permit fees Operation fees Household fees Performance guarantees Penalties Special assessments Impact fees Nutrient charges ?

8. A.Stormwater management permits (N = 18) B.Stormwater management site plan review (N = 36) A.Stormwater inspection during construction (N = 27) A.Stormwater inspection after construction (O&M) (N = 10) Slide Source: FSA 2005 Stormwater Survey, www.florida-stormwater.org Other Charges Does your stormwater utility receive some or all of these revenues?

9. What Can Your Revenue Choices Do for You?

10. Factors that (Can, Should and Do) Influence Revenue Choices Legal Community perspectives, goals and objectives Fairness Revenue stability and reliability Political Administrative Inertia Peer pressure

11. Community Perspectives Stormwater management is a public good Stormwater services are primarily private services Stormwater management is primarily about environmental stewardship Stormwater management is about meeting regulations Stormwater management is about giving the people what the they want.

12. Community Objectives Growth Pays for Itself Polluter Pays Protect the Disadvantaged Keep it Simple

13. Revenue Choices and Incentives for Encouraging “Good” Behaviors Fee vs. Taxes Regulatory fees vs. service fees To tier or not to tier To waive or not to waive

14. The Great Fairness Debate: Tax vs. Fees

15. Durham, North Carolina 2006-07 budget = $8,068,718 $2.17/mo < 2,000 sq ft of impervious surface $4.50/mo. ≥ 2,000 sq ft Other/com.: $4.50 per month for each ERU (2,400 sf.)

16. Durham Property Taxes Property tax rate = 60.3 cents per $100 property valuation Assessed Value - Real Property $13,740,351,450 Tax Levy on Real Property$82,854,319 It would take 5.8 cents/$100 to generate $8,068,718

17. $300,000 House Current Fees  $54/year ($4.50/mo. on water bill) If budget funded by property tax  $174/year

18. $15,000 “House” Current fees  $26/year ($2.17/mo.) If budget funded by property tax  $8.70/year

19. Church (24,000 Sq. Ft Impervious Area) Current fees  $540/yr ($45/mo.) If budget funded by property tax  $0

20. Mega Mall (3,815,240,000 SF) Current fees  1590 ERU's  $7,155/mo. ($85,860/yr) If Budget funded by property taxes ($113,675,753)  $65,931/yr

21. Durham Bulls Ballpark (163,200 sf) Current fees  Fee = $306/mo. ($3,672/yr) If funded by property tax  $0

22. Not all Taxes are Created Equal Special tax districts Clear tax designation

23. Impact on Budgets: Village of Clemmons Population: 16,900; Budget $4.5 million Stormwater budget FY 2005-2006: $475,000 Tax Rate 9.85 cents per $100 valuation ERUs Billed: 10,900 Stormwater Fee: $44.40/yr per ERU ($3.70 mo.) Town Employees: 14 total (Pub. Works - 8 employees with 1 stormwater administrator)

24. Impact on Budgets: Town of Carrboro Tax base = $1,373,733,504 Population 18,000 Budget (05-06) $16,000,000 Tax rate = 62.44 cents per $100 of property valuation Stormwater budget??? (114,000??) Employees??