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Submerged houses are seen by flood waters from Tropical Storm Harvey in Rose City
The Avenue

As flood risks intensify, stormwater utilities offer a more resilient solution

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The 2017 hurricane season is not yet complete, but Houston’s damage from Hurricane Harvey and Florida’s fallout from Hurricane Irma have already left a severe economic and environmental toll. Yet as disaster turns to recovery in each state, the storms serve as national reminders of resilience challenges facing the country’s most flood-prone areas and the need to help them. Federal recovery efforts are not only receiving more scrutiny, but state and local strategies are also gaining more attention, including adaptive measures and investments in resilient infrastructure.

Flood risks are not just limited to severe storms, though. The ways in which planners, engineers, and other leaders manage and design cities every day plays a huge part too. Houston’s urban sprawl over the past few decades, for instance, exposed its most vulnerable households to greater dangers. Meanwhile, aging infrastructure systems designed to handle excess flows of water–and even daily rainfall–failed to protect the environment or mitigate flood risks.

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Fortunately, many places across the U.S. are addressing these challenges head-on. One strategy growing in popularity is the development of stormwater utilities, which represent an increasingly flexible way for municipalities to plan and pay for more resilient water management practices. As America’s physical growth continues, stormwater utilities offer a powerful toolset to both capture negative externalities that intensify stormwater risks and recycle revenues into more resilient patterns of growth.

Roofs, streets, parking lots, and other impervious surfaces often limit the amount of stormwater that can naturally soak into the ground, causing pollutants to flow rapidly into nearby streams and overwhelm sewers instead–a huge and costly challenge. And with impervious surface cover on the rise in many places–now accounting for more than 25 percent of all the land area in some markets–the environmental and economic implications are huge. That also says nothing of the mounting costs to manage agricultural runoff in more rural regions.

In response, stormwater utilities help municipalities develop more strategic plans and durable revenue sources to manage stormwater runoff, typically by introducing new programs and financial tools, such as user fees, taxes, and grants to support green infrastructure projects. Often nested within existing local government bodies–such as public works departments–these utilities equip municipalities with greater technical and financial capacity to improve drainage, comply with environmental regulations, and embrace other forms of low impact development.

In this way, stormwater utilities are crucial in managing local water resources more reliably and predictably, at a time when many of the country’s drinking water and wastewater utilities face pressing financial and economic concerns amidst climate extremes. They are also adjusting the mindset around long-term costs related to physical development. However, since stormwater utilities can vary widely in size and scope from place to place, it can be difficult to consistently gauge their reach in different markets or measure their impact on infrastructure performance.

To address this gap, researchers at Western Kentucky University (WKU) conduct an annual survey that examines stormwater utilities nationally. Based on the 2016 survey’s findings, WKU estimated 1,583 stormwater utilities exist across the country–a large total to be sure, but still small considering the gravity of the health and environmental challenge at hand.

As the map below illustrates, stormwater utilities tend to concentrate in only a few regions nationally. Almost half of the 1,583 utilities are concentrated in five states–Minnesota (197), Florida (180), Wisconsin (126), Washington (117), and Ohio (105)–and many tend to further cluster in specific counties, including more than 33 in Hennepin County, MN, alone. Several of these states allow or encourage the development of stormwater utilities, which has resulted in their proliferation in particular areas in recent years. Not surprisingly, the majority of these utilities appear in more developed, urbanized areas that tend to experience frequent runoff concerns, including 922 utilities (or 58 percent of the national total) in the 100 largest metro areas like Minneapolis, Seattle, and Miami.

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Despite concentrating in many urbanized areas, stormwater utilities are still incredibly fragmented and remain relatively new for the most part, which can make it challenging to support integrated, regionwide efforts. For example, 1,165 utilities (or about 75 percent of the estimated national total) have service populations under 50,000 residents each. Although there are some sizable stormwater utility efforts underway in large markets like Los Angeles and Baltimore–which together have a service population exceeding 4.5 million residents–many municipalities do not house any stormwater utilities, including parts of Louisiana and Mississippi. And those areas that do contain stormwater utilities have only established them in the last 15 years or so on average; from Tampa to Toledo, many utilities only took shape in the last 5 years.

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Finally, regardless of their size and location, one of the major aims of stormwater utilities is to direct additional financial resources toward stormwater management and infrastructure improvements; and here, too, regions vary widely in their capacity. Nationally, stormwater utilities generate more than $2.1 billion in annual revenue, but $1.7 billion (76 percent) of that is concentrated in only 303 utilities across 50 counties, led by places like Prince Georges County, Md., and Tarrant County, Texas, as highlighted in the table below. To generate revenue, municipalities use a variety of approaches–from service fees to property taxes–but they most commonly depend on fees linked to the amount of impervious surface cover on individual residential parcels (or an Equivalent Residential Unit (ERU) system). Collectively, 739 of the 1,583 stormwater utilities use ERU fees, although the specific calculation and coverage of these fees can also vary markedly and lead to fluctuations in revenue.

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As Houston and other regions embark on a path toward recovery, the key moving forward is to rebuild neighborhoods and adapt systems in a more timely, efficient, and inclusive way. The success of these efforts depends on some level of federal and state action, of course, but local strategies are critical to driving lasting solutions, particularly when it comes to actually planning and paying for a more resilient built environment. While experimenting with new financial tools, such as resilience bonds, can help, establishing stronger institutional frameworks and management plans are just as (if not more) important. Yet far too many communities simply do not have stormwater utilities to accelerate these efforts, and many of the utilities that do exist remain fragmented and limited in their regional scope.

Urban and rural communities alike should look toward stormwater utilities as a key institutional lever to coordinate regional action and drive more resilient infrastructure investments. The natural environment can handle storms and floods, but ongoing urban development and other human activities often end up inflicting widespread damage and leading to contamination. Stormwater utilities should be able to appropriately capture these negative externalities, using a fee structure that ideally curbs non-resilient behavior or at least collects fees when it does not. Critically, those revenues should recycle back to incentivize more responsible behavior and invest in systems that will perform well over the long term.

Simply creating more stormwater utilities is not a solution in itself; regions must carefully weigh the feasibility and benefits of a regional utility approach and ultimately aim to generate a stable and equitable source of revenue to get projects done. However, as extreme climate events grow in number and intensity, planners, policymakers, and other local leaders should consider the role of stormwater utilities more seriously—not just before the next major storm hits, but every day.

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