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Five resource/ cost-recovery trends

Five resource/ cost-recovery trends

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    Keeping it clean

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    Keeping it running

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    National Pollutant Discharge Elimination System (NPDES) permit and status

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Trend No. 3: Resources, or the lack thereof, impact program administration. For the most part, once customer class, gross and impervious area, stormwater exempt status, and the like are established for a parcel, many utilities don't make a concerted effort to keep the information up to date. More than 40% of respondents don't have a defined process for regularly maintaining and updating parcel information.

Parcels are dynamic; they can be consolidated or subdivided and land use can change. Despite this reality, only 15% of the utilities update parcel information monthly. One-quarter update annually.

“While utilities are keen on establishing user fees to establish a dedicated revenue stream, they seem to lack the resources needed to support the level of effort required for program administration, managing parcel data, and billing operations,” says Kumar. “Investing in adequate resources ultimately pays dividends in the form of accurate billing, revenue maximization, efficient credit and appeals administration, and in establishing a sustainable stormwater program.”

Trend No. 4: Credits and incentives aren't very prevalent. Despite the emphasis on “green” solutions, more than 75% of responding utilities don't offer customers quantity-reduction credits or incentives.

In 2002, almost 60% of the survey's respondents gave credit for best management practices like private detention and retention facilities. In 2005 and 2007 the percentage fell below 50%; now it's up to 53%. Two-thirds say their ordinance for new or redevelopment doesn't give credit for best management practices.

Credits enhance the equity of cost-recovery efforts by rewarding customers for managing stormwater on their property. But they also lower a utility's revenues, and offsetting the gap requires raising rates for all other customers. With budgets already tight, encouraging conservation while also keeping rates down becomes a tough balancing act.

Kumar believes that “with innovative approaches that effectively address program priorities and costs and optimally balance diverse rate-relief factors including credits, incentives, phasing in increases, and capping charges, managers can establish a user fee program that garners the support of diverse stakeholder groups.”

Trend No. 5: Best management practices are on the rise. Managers are responding to increasing National Pollutant Discharge Elimination System (NPDES) requirements and wet-weather management by educating the public, detecting illicit discharges, monitoring quality, and street sweeping. In 2005, 64% reported monitoring stormwater quality and 71% had illicit discharge detection programs. Five years later, the percentages have risen to 81% and 94%, respectively.

In general, operations financed primarily by user fees are in better shape to deal with an increasingly difficult regulatory environment because they don't have to compete with other public services for a share of dwindling general revenues. But even so, financial adequacy and rate setting continue to challenge stormwater managers.

Editor's note: Reach Black & Veatch's Prabha Kumar at kumarpn@bv.com.

WEB EXTRA

Visit www.bv.com/stormwatersurvey for a list of stormwater user fees charged by 70 cities and counties.