US EPA Stormwater Finance Forum

The US EPA Water Infrastructure and Resiliency Finance Center held Stormwater Finance Forums in Alhambra and Oakland, California in April 2017. Attendees were surveyed for finance strategies and challenges, and the general tone of responses was consistent with common struggles we hear from clients: funding for municipal stormwater is difficult to identify, acquire, and keep. The Stormwater Finance Forum aimed to address this struggle to identify stormwater funding sources by hearing concerns, providing resources, answering questions, and providing case studies and possible solutions. An assortment of topics was covered over the course of the day in Oakland, and the Forum facilitated extensive discussion between the regulators and the regulated community of municipalities. The following summarizes messages shared during the Oakland Stormwater Finance Forum.

Stormwater is not a service like drinking water, electricity, and sewer:

Management of the stormwater utility is not traditionally considered on the same level as drinking water, wastewater, and power. These utilities typically have their own department and dedicated funding, whereas responsibility for stormwater conveyance and water quality is found in a variety of departments, depending on the organization – sometimes Public Works for collection/conveyance to address drainage and flooding, for planning and building, and for permit compliance; sometimes an environmental department for water quality; and sometimes in its own division – and, therefore, funding is often shared. However, stormwater management is a critical service. Stormwater management is related to public safety in terms of flood management, environmental health, public health issues (with surfers getting sick after a storm being a classic example). Stormwater is increasingly considered a possible water source in California as infiltration and reuse projects are encouraged by the California State Water Resources Control Board (State Water Board). In fact, the topic of the most recent seminar in the STORMS seminar series hosted by the State Water Board was enhancing groundwater recharge with stormwater (a recording of the seminar can be found HERE:

Changes to Proposition 218 restrictions for collecting fees are proposed:

Another hurdle cited as an impediment to obtaining stormwater funding is Proposition 218 and its impact on stormwater fee programs. Proposition 218 was intended to ensure that “all taxes and most charges on property owners are subject to voter approval.[1]” Exceptions are given to imposing a new or increasing an existing property-related fee for water, sewer, and refuse collection – however, stormwater was excluded from the definition of “water, sewer, or refuse collection” in court case Howard Jarvis Taxpayers Ass’n v. City of Salinas (2002)[2]. There are current legislative efforts, such as California Senate Bill 231, that may reduce some of these hurdles, but opinions vary as to how or if legislation should be changed. Representatives from municipalities without an existing stormwater fee program expressed hesitation to consider a stormwater fee a viable funding option, due in part to the costs associated with developing the program and getting a program on a ballot and the high likelihood of failure. Forum speakers advised that successful stormwater fee programs are those where the community feels an ownership of the program and buys into the benefit – and programs that incorporate an expiration date and cap of fee increases. Branding, messaging, and framing are also important. To paraphrase an example given at the forum, the phrase “The project’s goal is to reduce pollutants in stormwater” is not nearly as effective as “Everyone deserves access to clean water to surf, swim, and play in.” Why is more important than what.

Grant funding, is available, for those who are prepared:

The importance of stormwater and associated struggles with funding are validated by the many grants available. However, municipalities in attendance voiced struggles with qualifying for, acquiring, and maintaining grant funding. Those in attendance pointed to long lists of grant requirements, short timelines and permit cycles, and match fund requirements as significant hurdles to taking advantage of a grant program. Additionally, attendees noted they often don’t have shovel-ready projects ready to include in a grant application when an application period opens, and therefore miss the opportunity to apply. A new grant database was announced by the EPA Water Finance Clearing House (coming this summer) and creative approaches to funding were shared.

Kennedy/Jenks is prepared to assist with strategic approaches to compliance and has a highly successful grant funding team. Only time will tell what changes to permitting and grant programs will be proposed in the future. That said, Kennedy/Jenks Consultants has successfully helped numerous municipal programs acquire and maintain grant funding, comply with applicable stormwater permits, and navigate other obstacles programs face. Kennedy/Jenks Consultants will continue to stay on top of the latest updates and help municipalities with their stormwater issues.

Links to the presentations, as well as other resources, can be found HERE:

[1] http://www.lao.ca.gov/1996/120196_prop_218/understanding_prop218_1296.html

[2] http://www.cacities.org/getattachment/a4ca5fb1-a3e1-4512-bfd6-1cc390229089/9-2009-Annual-DANIEL-HENTSCHKE_Proposition-218-Upd.aspx