Stormwater Finance Update Webinar March 11, 2019 Jeff Hughes Evan Kirk Erin Riggs Liz Roknich Environmental Finance Center School of Government University of North Carolina (919) 843-4956 jhughes@sog.unc.edu www.efc.unc.edu www.efc.sog.unc.edu
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How you pay for it matters Supporting fair, effective, and financially sustainable delivery of environmental programs through: Applied Research Program Design and Evaluation Teaching and Outreach Advising Policy Analysis 3
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Acknowledgements/partners Division of Water Infrastructure, North Carolina Department of Environmental Quality State Water Infrastructure Authority State and Local Government Finance Division, North Carolina Department of State Treasurer North Carolina League of Municipalities NC Stormwater Utilities and Local Governments United States Environmental Protection Agency 5
Agenda Introduction and Financial Needs Stormwater Utility Finances Stormwater Utility Fees and Dashboard General Stormwater Finance Trends and Emerging Practices Open Discussion/Questions 6
Map of participants locations 7
Stormwater capital needs Unreliable National Needs Assessments (2012 EPA study $19.2 billion estimate likely low) Unknown Statewide Needs ($17 to $26 billion in water and wastewater capital needs over the next 20 years do not include stormwater) Perspective local stormwater costs over $500 Million to implement part of Jordan Lake Rules 8
NC stormwater utility financials (FY 2017) $208,202,981 in revenues reported by municipal stormwater utilities 9 out of 10 largest cities have utilities 36 of 50 largest cities 66 out of 97 MS4 Permit holders have stormwater fees Phase I 6 Phase II 60 No Permit 22 Source: Analysis prepared by the EFC using self reported information submitted to the Local Government Commission
Stormwater revenues vs. other local government revenues (64 municipalities reporting utility fees in 2017) Source: Analysis prepared by the EFC using self reported information submitted to the Local Government Commission
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2019 North Carolina Stormwater Fees Survey www.efc.sog.unc.edu
Map of NC stormwater utilities 16
By the numbers 88 80 3 41.2% $6.68 ($80.16) Fee Structures Municipalities Counties Of NC population served Weighted average monthly (yearly) residential bill for property with 3,000 sq. ft. of impervious surface 17
Number of Fee Structures 20 18 16 Monthly Residential Fee at 3,000 Square Feet of Impervious Surface Area 14 12 10 8 6 4 2 0 Data Source: 2018-19 NC Stormwater Fees Survey: Environmental Finance Center at the University of North Carolina (n = 88) 18
To tier or not to tier 19
A few interesting trends Slow growth of new utilities -- two new utilities added last year. Annual adjustments -- 13 utilities raised fees since last year (1 lowered residential fees but raised fees on non-residential customers) Variation in monthly charges across the state is increasing with time (standard deviation has increased since 2010 from $1.4 to $2.6) 20
Number of Fee Structures Fee adjustments over last decade (2010 to 2019) 10 9 Inflation Since 2010 of 15.2% 8 7 6 5 4 3 2 1 0 No Change 1-15.2% 15.3-25% 26-50% 51-75% 75-100% 101%+ Percent Change in Rates Data Source: 2018-19 NC Stormwater Fees Survey: Environmental Finance Center at the University of North Carolina (n = 44) 21
Factors that influence fees: regulatory framework? 22
Do it yourself analysis 23
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How is stormwater revenue spent? 18-19 19-20 20-21 21-22 22-23 Administrative Costs 36% 24% 18% 15% 15% Infrastructure Costs 35% 42% 51% 60% 57% Planning Services 14% 12% 10% 8% 9% Community Services 8% 11% 13% 11% 12% Field Services 7% 10% 8% 6% 7% *The infrastructure cost estimates cover routine stormwater system maintenance, repairs, retrofits, street sweeping, green infrastructure, capital stormwater and stream restoration projects, and Public Works facility expenses. If capital costs are 10 to 35 percent of expenses statewide (likely over-estimate), $20.8 to $72.8 million in fee revenue can be used for debt servicing.. 25
Emerging practices and trends Waivers and exclusions (e.g. airports..) Fee credits offered for fee payer stormwater installations Cost share programs (grants/loans) to incentive investments on private property (e.g. Raleigh Rainwater Rewards) Larger projects (e.g. Durham new wetland installation) Increased use of debt financing? Pay for performance procurement (e.g. environmental impact bonds)? 27
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Questions? Type your questions in the questions box within the control panel 33