What is a Stormwater Utility? (Part 1 of 2)

A stormwater utility may help address some of the challenges faced by New Hampshire’s municipalities in addressing stormwater pollution. Many New Hampshire communities are implementing new plans to reduce, manage, and control stormwater pollution to comply with the MS4 General Permit. If you are unfamiliar with the MS4 General Permit or why it’s relevant now, here is a link to a previous blog post on that topic. Most New Hampshire communities already have a long list of necessary repairs, without sufficient funding. Paying for additional stormwater management required under the MS4 permit out of the general fund could further stress these communities’ budgets. To prevent this stress, the New Hampshire legislature created an opportunity to create a dedicated funding source specifically for stormwater management. In 2008, New Hampshire passed legislation authorizing municipalities to create stormwater utilities. See RSA 149-I:6-a through RSA 149-I:6-d.

What is a Stormwater Utility?

A stormwater utility is a dedicated revenue source for stormwater management projects. Towns collect revenue and assess costs based on different metrics. The most common are based on property values. Costs for education, police and fire departments, parks, or street paving are all assessed based on property values. But property values are not necessarily correlated to usage of these services. A more expensive house doesn’t necessarily send more children to local schools, or have more calls to emergency dispatch.

Other town services are based on usage. A city pays for drinking water or sewage treatment by charging users based on the amount of water flowing through a meter. Some towns charge for waste removal through a pay-by-bag program, where a user must purchase town-supplied trash bags. Not only are such usage charges arguably “fairer,” but they also create a financial incentive to reduce impacts. Using less water lowers one’s water bill; increased recycling limits costs for trash removal. Additionally, where the cost is directly related to usage, the fees collected for those services typically are dedicated to the costs of the service, not to the general fund. Revenue from the water bill, for example, is used exclusively for the water and sewage treatment services.

In a stormwater utility, a municipality assesses fees based on the factors that directly influence stormwater pollution—impervious surface, lot runoff, lot size, or a similar factor. Impervious cover is the most common factor used for assessing stormwater utility fees. The municipality can then use that money to directly address stormwater pollution. Forming a stormwater utility reduces pressure on a town’s general fund, creates predictability for stormwater management, and incentivizes strategies to reduce stormwater pollution.

In part 2 on this topic, I will explain the process for forming a stormwater utility in New Hampshire and some information about stormwater utilities throughout New England.

About the Author: Nathaniel B. Morse

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