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1.2 WHAT IS A STORMWATER UTILITY? Stormwater utilities are a relatively recent development in municipal stormwater management. The first were developed in Colorado and Washington in the early 1970's. More than 20 cities and counties established utilities in Washington, Oregon, Colorado, and Utah by 1980. Because stormwater management has traditionally been among the most difficult programs for local governments to fund, the concept of a stormwater utility -- an enterprise fund that could provide stable funding for stormwater operations and capital projects quickly spread to other regions. During the 1980s stormwater utilities were established in cities and/or counties in Ohio, Oklahoma, Utah, Michigan, Minnesota, Kentucky, Montana, and other states. In 1981, the City of Tampa was the first Florida community to conduct a detailed assessment of the feasibility of using a stormwater utility for improving service, maintaining their existing system, and funding future capital investments. However, Tampa decided not to adopt a stormwater utility to fund its stormwater management program. In 1986 the City of Tallahassee was the first Florida community to actually develop and implement a stormwater utility. Stormwater utilities have flourished since 1986. The most accurate information on the number of stormwater utilities in Florida is available from the biennial stormwater utilities survey conducted by the Florida Stormwater Association (FSA), originally chartered as the Florida Association of Stormwater Utilities (FASU). The 2001 Stormwater Utility Survey is included as Appendix A of this manual. At the end of 2002, 100 Florida cities had advised FSA that they had established stormwater utilities to serve municipal residents, and 7 of Florida's urban counties had developed stormwater utilities to serve residents of unincorporated areas.
1.2.1 The Stormwater Utility Concept
The nature of stormwater management has changed dramatically since
the first stormwater utilities were formed. Historically, stormwater
management (drainage) programs were narrowly defined and focused generally
on water quantity control (flooding) issues. Local environmental quality
concerns played a role in the development of some stormwater utilities
(perhaps most notably in Bellevue, Washington), but the predominant
issues in most communities were flooding and erosion problems. Similar
situations and concerns exist in Florida.
Chronically limited funding for capital investments, operation and
maintenance of Florida stormwater management systems, combined with
recent emphasis placed on stormwater quality management by the emerging
Federal extension of NPDES permitting to stormwater discharges, dictates
that Florida communities secure stable funding and develop new and innovative
financing strategies for their stormwater management programs. The essence
of a stormwater utility is summarized in the following concepts:
Focused-Mission Oriented
Stormwater utilities are frequently founded for a particular purpose
such as improving drainage within the community. However, other issues
such as water quality improvement and environmental management may be
included in the initial charter of many utilities, or included in an
expanded charter after the utility has operated for a few years.
Enterprise Orientation
Most stormwater utilities are designed to provide the majority of a
community's stormwater funding thereby offsetting other funding sources
such as the General Fund. FSA's 1997 Stormwater Utility Survey
indicated that utility revenues provided 80% of the operating budget
and 75% of the capital construction program funding within the surveyed
communities.
Sustainable Revenues
Revenues generated by stormwater utilities gradually increase as communities
grow with periodic revenue jumps related to rate increases. The average
monthly stormwater utility rate reported in the 2001 Stormwater Utility
Survey for the 66 respondents varied from $0.50 to $8.33 per billing
unit, and averaged $3.36 per unit, which equated to an average revenue
of about $2,170,000 per year. Comparison of utility rates between 1999
and 2001 indicates that seven utilities had increased their rates with
increases ranging from 6% to 40%, with the average increase being 15%.
The majority of the responding stormwater utilities (89%) remained unchanged
during the two-year period.
Rate Methodologies
There is a general continuity in stormwater
utility service rate methodologies -- no single method is used in all
applications -- nor does one appear to be suitable or appropriate. The
most commonly used stormwater rate methodology, used in over 90% of
Florida communities, is based on the amount of impervious area.
Exemptions
Not all properties within Florida communities are charged for stormwater
utility services. Only 10% of the participants in the 2001 Stormwater
Utility Survey did not allow any exemptions. Most utilities grant exemptions
to certain types of properties based upon their ownership, level of
development, quality of runoff, extent of community use and other considerations.
The most common exemptions are for streets/highways (76%), undeveloped
property (76%), railroad properties (56%), agricultural areas (52%),
and parks (36%). Many utilities also exempt government properties (26%),
and those properties related to school districts, special districts,
and similar public functions.
Credits
Many Florida utilities, 48% of the utilities participating in the 2001
Stormwater Utility Survey, recognize runoff attenuation and water quantity
treatment benefits from certain development practices on private properties
and give the property owners credits against their utility service charges.
The 2001 Stormwater Utility Survey found that possible credits ranged
from 5% to 100% of the bill with an average reduction for properties
receiving credits of about 48%.
Billing & Collection of Utility Fees
Adding the stormwater utility bill to existing monthly bills for other
utility services provided is the most common billing process, used by
over 70% of Florida stormwater utilities, because it reduces billing
and collection costs. About 21% of the utilities add the stormwater
utility charges to the annual property tax bill, with the remaining
8% of the utilities opting for other methods.
Revenue capacity depends primarily on whether undeveloped as well as
developed properties are charged, and whether the community charges
itself for streets and other public properties. Cities with more mature
stormwater programs have higher service charges than those just beginning
to develop their programs.
Chapter 6 provides an in-depth
discussion of billing, collection and enforcement methods that have
been used in Florida for establishing a stormwater utility.
1.2.2 Focus of A Stormwater Utility
Stormwater utilities are commonly based on improving a community's
ability to meet a variety of objectives, such as funding improved maintenance
and capital investments, to improve flood management abilities while
also re-establishing/re-hydrating wetlands to take advantage of their
natural treatment abilities to improve water quality prior to discharge
to delicate estuarine waters. Florida stormwater utilities commonly
focus on several of the following services:
However, some utilities focus on addressing a single objective, such as water quality improvement.
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