The last blog post discussed stormwater as a growing community challenge, and how this is reflected in the level of loan applications received by the Georgia State Revolving Fund (SRF) program.

Maximizing Stormwater Funding: Innovative Strategies for Communities - Part 2
Local and Regional Stormwater Funding and Financing Strategies

Owing to both the diversity and magnitude of stormwater infrastructure investments, communities may need to seek funding through sources beyond federal or state programs. Also, since many federal and state programs are in the form of low-interest loans, there is a need to generate funds to repay these loans. Local and regional funding and financing options could come from public agencies and philanthropic groups, as well as local and regional taxes and fees.

Taxes, such as property tax, can be paid into a community’s general funds, where communities can allocate funding for various municipal priorities, including stormwater. However, using non-enterprise funds, such as taxes via the general funds, to pay for stormwater services can be challenging for two primary reasons. First, non-enterprise funds are not obligated to any specific infrastructure improvement, which can make it difficult to ensure that funds collected via taxes are actually spent where initially intended. Second, paying for stormwater services via taxes can have equity implications, as there is not typically a direct connection between the runoff burden a customer is placing on the stormwater system and the taxed amount.

Innovating at the Local and Regional Level

In many communities, ratepayers contribute to stormwater management costs through drinking water and wastewater rates (e.g., a customer might be charged one rate based on drinking water usage to cover water supply infrastructure investment and another rate, also based on water usage to cover stormwater infrastructure needs), one-time fees, and special assessment district benefit fees. Developer fees can be applied to land developers for site plan reviews and inspections. However, stormwater utility fees provide a more innovative and effective approach to stormwater financing. Structured properly, stormwater fees can offer a predictable, dedicated and equitably distributed source of revenue for stormwater infrastructure improvements. “Equitable” because the customer pays for their fair share of burden on the community’s stormwater system. The term “equivalent residential unit” (ERU) is used in the stormwater world to represent the impervious area, and therefore burden, that a typical residential customer places on the overall system. In many cases, the fee for commercial, non-profit and industrial customers is then calculated based on how many ERUs make up the non-residential customer’s property.

Stormwater Utility Case Study: Unified Government of Athens-Clarke County

In 2018, the Athens-Clarke Public Utilities Department (ACC-PUD) confronted significant financial demands to enhance its operations. Alongside essential upgrades to three wastewater treatment plants, the stormwater collection system alone required nearly $92 million in capital improvements, primarily addressing large, corrugated metal pipes carrying streams under ACC-maintained roads that were rusting and failing. This level of investment underscored the pressing need for sustainable financing to both maintain service and address aging infrastructure (Shearer, 2018).

To understand how ACC-PUD navigated these challenges, it’s essential to revisit the origins of the Unified Government of Athens-Clarke County’s (ACCGOV) Stormwater Management Program (SMP). Following the creation of a citizen/staff Stormwater Advisory Committee, the Stormwater Utility was established in 2004, along with a proposed rate structure, fees, service areas, and credit policy. For over a decade the Stormwater Utility was funded through three sources: Special Purpose Local Option Sales Tax (SPLOST), developer fees, and a dedicated Stormwater Enterprise Fund (stormwater utility) (Williams, 2020). However, competition for SPLOST and TSPLOST dollars made it apparent that those funding sources would not be sufficient for stormwater capital funding (T. Stevenson, personal communication, January 6, 2025).

By 2017, the ACCGOV faced mounting challenges as stormwater infrastructure demands grew. Conducting a Stormwater Utility Fee Review Study between 2018 and 2019, it became apparent that the revenue generated from the stormwater utility fee, previously used for emergency stormwater pipe repairs, was insufficient to address the failing pipes. This shortfall prompted considerations about raising the fee to meet long-term infrastructure needs (Athens-Clarke County Unified Government, n.d.).

Key Developments in Addressing Stormwater Funding

2018-2019: Building a Sustainable Funding Strategy
In late 2018, the M&C approved a technical memorandum outlining a roadmap to modernize stormwater management.
This included:

• Maintaining high standards of service for infrastructure maintenance and regulatory compliance.

• Expanding maintenance responsibilities to stabilize public discharge points beyond standard rights-of-way.

• Adding personnel and equipment to enhance pipe inspections and operations.

• Funding critical infrastructure replacements and watershed improvements through a mix of stormwater utility revenues and future SPLOST funding.

By mid-2019, Phase II of the Fee Review Study was completed. This portion focused on evaluating the rate structure and credit system. It introduced measures to incentivize stormwater mitigation efforts by customers, enhancing equity and fairness in fee distribution.

2019-2020: Leveraging SPLOST and Strategic Budgeting
In November 2019, Athens-Clarke County voters approved the SPLOST 2020 referendum, which included $500,000 for stormwater infrastructure repairs and replacements. This support reflected a community-wide recognition of the importance of stormwater system improvements.

Building on this momentum, the M&C reallocated $6.3 million from excess SPLOST 2011 proceeds in 2020, dedicating $2 million to the Live Stream Pipe Replacement Program. This program prioritized 55 critical pipe replacement projects, signaling a comprehensive approach to infrastructure renewal.

2023 – 2024:  Stormwater Rate Increases

Inundated by severe flooding, several culverts failed in January of 2023, adding “impetus to the need to find stormwater capital funding.” In the fall of that year, the topic of stormwater rate increases was again broached in M&C meetings. Members of a Stormwater Advisory Committee appointed by the Mayor shared their perspectives at one of those meetings.

Only a week after a stormwater rate increase was approved in January of 2024, another flood struck Athens-Clarke County. Though less damaging that the previous year’s flood- in due to stormwater investments made in 2023 – this even further underscored the need for capital funding for stormwater management (T. Stevenson, personal communication, January 6, 2025).

Resources for Stormwater Management

The Georgia Stormwater Fees Dashboard is a tool developed by GEFA and the Environmental Finance Center “to assist stormwater utility managers and local officials in analyzing residential, nonresidential, and multi-family stormwater fees against multiple characteristics, including utility finances, system characteristics, customer base socioeconomic conditions, and geography (UNC, 2017).” Last updated in 2017,  the dashboard references state collected and analyzed stormwater fee structures from 48 GA utilities (UNC, 2017).

Presently, GEFA is preparing to launch the Georgia Municipal Water Rates reporting site.  In addition to displaying water and wastewater rates as of January 2024, the new portal will allow water rates to be verified and updated as needed and feature dashboards to help utility managers and local officials benchmark residential water and wastewater rates.

Regional and national stormwater surveys also add to the body of knowledge on stormwater utilities. In their 2021 Stormwater Utility Report, the Southeast Stormwater Association (SESWA) surveyed 105 utilities, 33 of which were located in Georgia (SESWA, 2021). Of Georgia respondents, SESWA reported Monthly Stormwater Utility Rates as ranging from $0.40 to $9.50, with rates generally increasing from 2007 to 2021 (Table 1).

Concluding this 2-Part Blog Series on Stormwater Financing

While there are several funding and financing options available to utilities, growing stormwater infrastructure needs and aging systems necessitate communities to push for financing models that create dedicated streams of revenue for stormwater management, specifically structured to avoid disproportionate impacts on low-income and marginalized communities. Well-designed stormwater utilities provide a promising avenue for meeting these objectives.

This is part of a blog post series funded by the Georgia Environmental Finance Authority (GEFA). Disclaimer: The opinions of the writers should not be considered legal advice or endorsement by GEFA.

References

Athens-Clarke County Unified Government. (n.d.). 2018-2020 Stormwater Utility Fee Review. https://www.accgov.com/8490/2018-2020-Stormwater-Utility-Fee-Review

Athens-Clarke County Public Works. (2019a, October). Technical Memorandum: ACC Stormwater Fee Review Phase I Memo to ACC Updates. https://www.accgov.com/8490/2018-2020-Stormwater-Utility-Fee-Review

Athens-Clarke County Public Works. (2019b, May). Technical Memorandum: ACC Stormwater Fee Review Phase II Memo to ACC Updates.

Environmental Protection Agency. (2024, January 2). EPA facility stormwater management. Water Management. https://www.epa.gov/greeningepa/epa-facility-stormwater-management

Environmental Protection Agency. (2022). CWSRF 2022 annual report. Clean Water State Revolving Fund. https://www.epa.gov/cwsrf

Environmental Protection Agency. (2022, April). Stormwater infrastructure funding and financing: EPA report to Congress.

Williams, B. (2020, November 18). Memo from Manager to Government Operations Committee. https://www.accgov.com/DocumentCenter/View/78934/Memo-from-Manager-to-Government-Operations-Committee-November-18-2020

Shearer, L. (2018, September 19). Athens-Clarke to spend millions on sewer, wastewater systems. Athens-Banner-Herald | Online Athens. https://www.onlineathens.com/story/news/politics/county/2018/09/19/athens-clarke-to-spend-millions-on-sewer-wastewater-systems/10257021007/

Southeast Stormwater Association. Southeast Stormwater Utility Report. https://www.seswa.org/assets/Services/Utility-Surveys/2021Survey/Report%203.26.2021.pdf