Sustainable Financing for Municipal Stormwater Management Programs

Abstract

Municipal stormwater management (SWM) programs represent significant public investments that are largely funded through property taxes in Canada. Stormwater revenue drawn from taxes must compete with many other municipal services, and is often inadequate to provide an acceptable level of service demanded by the community. In addition to meeting current needs, municipalities must also finance future program revenue requirements (e.g. to renew or replace aging infrastructure, to comply with new stormwater regulations, or to operate and maintain additional facilities due to new development). Competing demands for limited tax funds will force municipalities to pursue alternative financing mechanisms in order to provide a financially sustainable SWM program. In this chapter, a stormwater rate is investigated as an alternative sustainable financing mechanism. A stormwater rate that is based on each property's contribution to runoff quantity and quality offers a logical and legally defensible method for allocating municipal SWM program costs. Revenue is thus generated as a user fee, and in a more fair and equitable manner than the assessed property value. Stormwater rates are a relatively new concept in Canada, but have been successfully implemented in hundreds of municipalities throughout the United States. Recent case studies in Ontario are used to highlight the issues and approaches for developing a stormwater rate as a sustainable financing option. All monetary amounts in this chapter are given in Canadian dollars. Sustainable Financing for Municipal Stormwater Management Programs 380 23.1 Background Stormwater management systems represent valuable public assets that provide a number of benefits for many users. Municipalities are generally responsible for managing all aspects of stormwater within their jurisdiction, including operations and maintenance (O&M) of SWM facilities located within the public right-of-way limits or easements. The municipal SWM system may include watercourses, culverts, bridges, storm sewers, swales, catchbasins, inlets, outfalls, ponds and other water quality treatment devices. By controlling floodwaters and preventing pollutants from reaching streams, rivers and lakes, SWM systems can protect the health and safety of the public and the environment as well as minimize flooding and erosion threats to public and private property. In so doing, clean and healthy water resources support public drinking water supplies, and can attract local investment through increased land values. Furthermore, clean water resources can support recreational activities, tourism, business and manufacturing, as well as healthy aquatic and terrestrial habitats. Despite substantial investments in municipal SWM systems and facilities, there will always be a need to invest in new capital improvement projects and to reinvest in the operation, maintenance, planning, and management of the SWM program. Like other public works, SWM facilities and related infrastructure must be inventoried, assessed, valued, and managed accor...