|
|||||
|
Chapter 4 Rate Structure Fundamentals Executive Summary As developed in Chapter 1, a stormwater utility is to stormwater what an electric utility is to electricity and a water utility is to drinking water. It is a specifically defined service unit within a government that generates revenues through charges for service to those to whom it provides service. As also discussed in Chapter 1, it is typically responsible for provision of some or all of the following services:
As a defined service unit, the stormwater utility typically has a staff assigned to resolving stormwater management problems. A key aspect of a stormwater utility, like any utility, is that it generates its revenues through user charges. The charge is based on the amount of stormwater a particular parcel passes to the stormwater system. The more the runoff, or in some cases the dirtier the runoff, the more the charge. The monies generated can be used only for stormwater management purposes. Key to an effective stormwater utility is the rate structure itself. This structure determines whom pays and how the charges are determined. A good rate structure provides a solid legal foundation for the charge and assures that the charges are both fairly determined and properly assigned. It must be founded on solid stormwater engineering concepts and provide open access and review by ratepayers. This chapter discusses the fundamental concepts behind the development of a sound utility rate structure. It is important to note that the range of possible rate structures is virtually unlimited. Probably no two-rate structures in the country are exactly identical. This chapter is intended to explore the basics common to most systems, especially those found in Florida counties, municipalities and special districts, and to briefly comment on more advanced options utilized in more complex situations and as the utility evolves. The chapter is divided into three sections: Section 1 reviews certain basic concepts, such as the concept of "utility", the "theory of burden", the concept of "user charge" and basic legal tenants, each of which is basic to the design of a stormwater utility rate structure. Section 2 moves into the mechanics of rate structure design. Finally, Section 3 briefly sketches the relationship between financial strategy and rate structure design..
|
|
