Stormwater Utilities

A stormwater utility is an mechanism designed to manage and finance the control, collection, and treatment of stormwater runoff. Much like utilities for water, electricity, or sewage, a stormwater utility provides an essential service that helps maintain the infrastructure needed to handle the excess water that flows over land during and after rainstorms or snowmelt events. This utility can be part of a county, municipality, or other regional authority, and its primary function is to address issues related to stormwater runoff that can impact public health, property, and the environment.  Forty-two states plus the District of Columbia have stormwater utilities in operation.  The first stormwater utility started in 1974 and now there are more than 2,000 utilities throughout the country.  In 2019 the Clean Stormwater and Flood Reduction Act was signed into law authorizing the creation of stormwater utilities in NJ.

Why Is Stormwater Management Important?

Stormwater management has become increasingly critical. When rain falls on natural landscapes, the water either gets absorbed by the ground or flows into natural water bodies. However, due to impervious surfaces like roads, parking lots, and buildings, rainwater cannot penetrate the ground. Instead, it flows over these surfaces, picking up pollutants such as oil, chemicals, and debris, and often enters storm drains that empty into nearby rivers, lakes, or coastal areas.  Municipalities have significant obligations through state law and permits to ensure its stormwater system is maintained.  These obligations take resources:  time, equipment and personnel.  Municipalities rarely have enough resources to do all that they are required to do and want to do.

Unmanaged stormwater can lead to several problems:

• Flooding: When heavy rainfall occurs, the excess water can overwhelm local drainage systems, leading to localized flooding that can damage property and infrastructure.
• Water Pollution: Stormwater often carries pollutants from roads, parking lots, and lawns into natural water bodies, harming aquatic ecosystems.
• Erosion: Rapid stormwater runoff can erode riverbanks and landscapes, leading to sedimentation and habitat destruction.
• Strain on Infrastructure: Aging or poorly designed stormwater systems can struggle to manage increased runoff, especially in growing urban areas, which increases maintenance costs.

To address these concerns, local governments can create stormwater utilities that help manage and mitigate these impacts by funding stormwater infrastructure projects and promoting best management practices.

How Does a Stormwater Utility Work?

A stormwater utility functions similarly to other utilities, such as water or electricity services. It is typically funded through fees collected from property owners based on how much impervious surface (like roofs, driveways, and parking lots) they have on their land. These surfaces contribute to runoff, so properties with larger areas of impervious surfaces tend to pay more, as they generate more stormwater.  Unlike property taxes, where tax exempt and governmental properties do not pay property taxes, all property owners will pay a stormwater utility fee.  This makes it more equitable then funding stormwater management through property taxes.  All properties that contribute to stormwater runoff, pay to manage and reduce that runoff.

The revenue generated by these fees is used to:

• Maintain and Upgrade Infrastructure: This includes storm drains, retention ponds, pipes, and other facilities designed to collect and manage stormwater.
• Reduce Flooding: Stormwater utilities help mitigate flood risks by improving drainage systems and implementing green infrastructure solutions, like rain gardens or permeable pavements.
• Protect Water Quality: Utilities invest in measures that reduce pollutants in stormwater before it reaches natural water bodies. This might involve installing stormwater management features or establishing buffer zones around water bodies.
• Public Education and Outreach: Many utilities also engage in educating the public about the importance of stormwater management, encouraging practices like using rain barrels, reducing chemical lawn treatments, or properly disposing of waste.

How are Stormwater Fees Calculated?

Stormwater fees are usually based on the amount of impervious surface on a property, as this correlates with the volume of runoff the property generates. Some common methods for calculating stormwater fees include:

• Flat Rates: Some municipalities charge a flat fee to all property owners, regardless of size, though this is less common.
• Tiered Rates: In this system, properties are categorized into different tiers based on the amount of impervious surface, with higher tiers paying more.
• Impervious Area Calculation: Many stormwater utilities use precise measurements of the impervious area on each property to determine fees. This method ensures that property owners pay proportionally to the runoff they contribute.

In some cases, property owners can reduce their stormwater fees by implementing strategies to reduce runoff, such as installing rain gardens, permeable pavers, or retention basins on their property.