Paying for Watershed and Stormwater Management Programs

Transcription

1 Paying for Watershed and Stormwater Management Programs Center for Watershed Protection: 2018 National Watershed and Stormwater Conference April, 10 th, 2018 Stacey Isaac Berahzer Environmental Finance Center at The University of North Carolina

2 Dedicated to enhancing the ability of governments and other organizations to provide environmental programs and services in fair, effective, and financially sustainable ways through: Applied Research Teaching and Outreach Program Design and Evaluation How you pay for it matters

3 Objectives Look at evolution of water quality management in the US Consider how Green Infrastructure (GI) has influenced water quality financing Consider more local financing options: Stormwater Utilities P3s Integrating into traditional budget/accounting process Watershed Green Infrastructure

4 Evolution of Water Quality Management in the US Point source pollution management Examples: Wastewater treatments plants Factory outfalls 4

5 Evolution of Water Quality Management in the US Point source pollution management Examples: Wastewater treatments plants Factory outfalls Non-point source pollution (of larger, single-site projects) Examples: Detention ponds Constructed wetlands Examples: Rain gardens Permeable pavement 5

6 Evolution of Water Quality Management in the US Point source pollution management Examples: Wastewater treatments plants Factory outfalls Non-point source pollution (of larger, single-site projects) Examples: Detention ponds Constructed wetlands Non-point source pollution (of smaller, distributed sites) Examples: Rain gardens Permeable pavement Cisterns Photo by Stacey Isaac Berahzer: Cistern from 1980s, Grand Riviere, Trinidad 6

7 Green Infrastructure (GI) An array of products, technologies and practices that use natural systems or engineered systems that mimic natural processes to enhance overall environmental quality and provide utility services. - EPA Photo by Erin Weeks: Two cisterns located at the NC Botanical Gardens in Chapel Hill, NC

8 Challenges of GI GI BMPs are by nature scattered across a jurisdiction Local governments have the main regulatory burden of addressing stormwater issues like CSOs, but Many of the most ideal sites for GI will be on PRIVATE property

9 Evolving Stormwater Finance 1. General government uses tax revenue to pay what it can to manage stormwater on public land 2. Regulations drive private property projects 3. Off-set fee programs/impact fees 4. Governments establish enterprises and stormwater fees to generate revenue 5. Rebates/cost share programs 6. Fees increase to level where crediting fees for on-site improvements becomes viable incentive 7. Loans 8. Tax incentives 9. Trading 10. Property Assessment Backed (e.g. PACE like)

10 Money is Not Likely Coming from the Federal Government

11 Caveat 1: Increased State Revolving Fund Levels for Clean Water SRF $1.4 billion $1.7 billion Drinking Water SRF $0.9 billion $1.2 billion Whether it is by law, policy, rating criteria, or simply lack of demand, no state has taken full advantage of the eligibilities available to it under Title VI of the Clean Water Act. Source:

12 Caveat 2: New WIFIA Program BORROWER: Baltimore City Department of Public Works, MD TOTAL PROJECT COSTS: $573 million REQUESTED WIFIA LOAN AMOUNT: $200 million POPULATION SERVED BY SYSTEM: 1.8 million people PROJECT TYPE: Wastewater treatment plant, public water system, and stormwater management Source:

13 Caveat 2 Cont d: WIFIA Consolidated Appropriations Act signed by the President on 03/23/2018 Authorized $55 million for WIFIA EPA estimates that this will mean: ~ $5.5 billion in credit assistance, and Finance ~ $11 billion in water infrastructure investment This is an increase over 2017 funding levels

14 Stormwater Utilities P3s Integrating into traditional budget/accounting process Watershed Green Infrastructure WATER QUALITY FINANCING AT THE LOCAL LEVEL

15 STORMWATER UTILITIES

16 U.S. Total Number of Stormwater Utilities 1,639 Source: Western Kentucky University Stormwater Utility Survey 2017

17 Credit/Discount on Stormwater Utility Fees A reduction in (monthly) fee due to installation of BMPs BENEFITS: Allow rate payers to control and reduce their service fee Improve legality of a stormwater utility fee Encourage private property owner participation in both water quality and flood relief improvements Reduce public expenditures on the stormwater management program

18 Some Southeast Stormwater Utilities: How well subscribed to is your credit 1. Very popular more than 50% of eligible customers get credits 2. Somewhat popular More than 25% of eligible customers get credits 3. Not very popular a very small % of customers get credits 4. Almost no customers get credits program? (2014) Very popular... 0% Somewhat popul... 7% Not very popul... 79% 14% Almost no cust...

19 Some Southeast Stormwater Utilities: What would happen if a lot of customers began to seek credits suddenly? (2014) 1. My utility would go bankrupt 2. My CIP program would have to go on hold 3. My staff would get overwhelmed 4. Stormwater quality in my jurisdiction would improve dramatically 5. All of the above My utility wou... 0% My CIP program... 16% 16% My staff would... 36% 32% Stormwater qua... All of the abo...

20 $10.00 Georgia: Monthly Residential Stormwater Fees $8.00 at 3,000 sq ft of impervious surface $6.00 $4.00 $2.00 $- 20

21 Georgia: How are stormwater fees collected? Stormwater Fee Collection Methods n = 62 Utility Bill 44% Property Tax Bill 40% Stand Alone Bill Unknown

22 Georgia: How does collection rate vary by collection method? Average collection rate by method: 96% 94% Property Tax Bill Utility Bill 89% Stand Alone Bill

23 Georgia: How many stormwater utilities have credit programs? 12.5% No 87.5% Yes Source: EFC at UNC, Georgia Stormwater Survey; Source: (National) 2012 Stormwater Utility Survey, Black and Veatch

24 PUBLIC PRIVATE PARTNERSHIPS

25 P3s - Private Investment Necessary U.S. communities are facing a total of $106 billion in needed stormwater management and combined sewer correction upgrades or improvements Source: American Rivers et al Banking on Green: A Look at How Green Infrastructure Can Save Municipalities Money and Provide Economic Benefits Community-Wide.

26 Public Private Financing (P3) Source:

27 INTEGRATING INTO TRADITIONAL BUDGET/ACCOUNTING PROCESS

28 Getting on the Bill in Raleigh Sample bill Courtesy City of Raleigh, NC

29 Incorporating Green Infrastructure into Traditional Budget Process Capital vs O&M Budget GI and the Uniform Chart of Accounts du/reslib/item/crosswalki ng-between-gray-andgreen-infrastructurebudget-officers Estimating Costs for GI Example: Cost of a tree?

30 Considerations: Cost of a Tree Benefits: Energy savings Air Pollution Reduction Runoff Reduction Property Values Costs: Purchasing Planting Pruning Irrigation Pests Disease Control Removal Disposal Sidewalk Repair Leaf Litter Clean Up Liability Other factors: species, age, placement

31 To Watch: WOTUS Happenings Waters of the United States definition could have impact on financing of water quality The 2015 Clean Water Rule redefined the scope of where the Clean Water Act applies New applicability date for the 2015 Clean Water Rule is deferred till 2020

32 Review of Objectives Look at evolution of water quality management in the US Consider how Green Infrastructure (GI) has influenced water quality financing Consider more local financing options: Stormwater Utilities P3s Integrating into traditional budget/accounting process Watershed Green Infrastructure

33 Stacey Isaac Berahzer twitter.com/staceyib_enviro