Rates at for some stormwater utilities are the same today as they were 10 years ago. And a new report from Council Associate Partner Black & Veatch finds utilities may be paying an increasing cost for those steady rates.
The 2014 Stormwater Utility Survey finds that nearly two-thirds of utilities responding say they’re short of funding. Nearly a third say they haven’t raised rates since at least 2004.
That gap is causing issues at many utilities. Some report they don’t even have enough funding to take care of urgent projects. Many more say that they haven’t been able to develop plans for dealing with especially wet weather.
The report is based on responses from 78 stormwater utilities in 25 states.
Just 6% of the stormwater agencies responding said they had adequate funding to meet all their needs. The full report shows about half have enough money to take care of their most urgent needs; 17% say they can’t even take care of all their urgent issues.
Nearly all of the utilities get the vast majority of their funding from user fees. Taxes and grants typically cover just a tiny fraction of the budget. Despite the need for more funding, nearly a third said they hadn’t raised rates in the past 10 years; another 27% said they hadn’t raised rates in at least 5 years.
The Black & Veatch report finds that with such a dependency on cash revenues, utilities could run into trouble paying for capital projects if the user fees don’t keep up.
With limited funding, some critical planning work also isn’t getting done. For instance, only 12% of the utilities responding say they’ve developed integrated wet weather management plans to support wastewater and stormwater requirements. Only 9% have developed integrated water resource plans.
Incentives may help
One key opportunity for utilities may be to make better use of credits and incentives to encourage property owners to help. Less than half of the utilities offer credits now and just 4% of property owners take advantage of them.
The low usage may be the result of how the credit programs are structured. Often, it may cost property owners more to make the capital improvements to reduce flow and improve water quality than they would pay in fees without doing the work.
Restructuring those programs could prompt more property owners to take action themselves, reducing the burden on utilities. The report also suggests that credits and incentives have some public education value, helping the public to see the impact they have and giving them some control to take action.
Regional solutions needed
Finally, the report finds most stormwater utilities are responsible only for one city and they work independently. The number of agencies identified as standalone utilities increased by nearly 10 percentage points since the survey was last conducted two years ago.
Working with other agencies to create regional solutions to a regional issue may help all the participating utilities save money through economies of scale, by adopting consistent standards and approaches, and through eliminating operational inefficiencies.