It’s important to understand and evaluate your existing stormwater management program, including the current level of service you provide to your citizens and how much it costs. You can then estimate the required costs for your desired future program based on the necessary level of service to achieve your goals. A detailed financial analysis of your current costs and necessary future costs will help you evaluate potential financial strategies and persuade funders that you have a well-thought-out plan.
Determining the scope of your stormwater finance strategy
To assemble your stormwater-related program costs, you should first determine the scope of community programs and activities to include in the finance strategy. Communities may differ in what aspects they want to include. Once you define the scope, you can identify your existing assets, annual program costs, and future buildout of new assets and activities and develop a financial strategy. You should consider including programs that address both water quality (regulatory programs) and water quantity (flooding or drought programs).
Bring together various sectors and government departments that implement in-scope activities. Work with them to develop a complete list of stormwater-related activities and assets you will use to assemble your current and future costs. These departments and entities may include:
- Public works, engineering and utilities, parks and recreation, streets, transportation, finance, planning, housing, sustainability officers, and public information officers.
- A dedicated stormwater management department/utility.
- Flooding/FEMA coordinators or flood control districts.
- Economic development, as stormwater programs could support infrastructure improvements that promote economic growth.
- Other applicable departments within the community’s government structure.
Examples of Stormwater Program Scopes
- Care for stormwater infrastructure/drainage and collection system.
- Compliance with regulations and permits (e.g., MS4 permit requirements, including minimum control measures and requirements for water quality and/or combined sewer overflow permit/consent decree/long-term control plan).
- Management for flood protection and drought resilience (may include stormwater capture for groundwater recharge and water supply augmentation).
- Improvement or protection of water bodies or the watershed, such as aquatic and riparian habitat enhancement, as well as bank stabilization (could include activities encompassed under the MS4 permit).
- Implementation of green streets, complete streets, and urban greening.
- Stormwater capture for potable and non-potable uses.
- Oversight of private assets (not encompassed under the MS4 permit).
Estimating stormwater-related costs
Estimating expenditures for stormwater activities and assets can be difficult because they are spread across multiple city departments. You must estimate some allocations using the larger department budgets, such as public works, engineering, planning, wastewater, and streets/transportation. For this reason, it’s important for senior officials and staff in each department to help develop the stormwater finance strategy.
Consider the following strategies and principles to determine current stormwater-related costs:
- Create a tailored expense tracking sheet. Coordinate with multiple departments to determine their specific stormwater-related activities. Each community’s expense tracking sheet will likely be unique based on how it conducts stormwater activities.
- Determine cost categories for your specific community. Decide the best way to categorize your total program costs. Choose cost categories that can combine stormwater-related activities, such as:
- Capital costs (pre-construction and construction, cost of capital).
- Operation and maintenance (O&M) costs.
- Land costs (easement costs, opportunity costs, land acquisition and transaction costs).
- General administration costs.
- Regulatory program costs (MS4 permit program actions like street sweeping, public outreach, inspections, and customer service).
- Develop consistent, transparent accounting. Multiple departments in the community should have a common understanding of how to describe the stormwater-related activities or personnel that will be combined into these cost categories (see Figure 1). When assigning costs for each activity in each category, clearly state which costs are included. For example, determine if the project cost will include land costs. Ensure that the various departments consistently share, use, and understand these norms.
- Create detailed estimates for the following cost categories:
- Current capital costs: Capital costs, or the cost of constructing stormwater management controls, can be a significant portion of the stormwater budget. They can also vary year to year based on needed infrastructure. Capital projects can be stand-alone stormwater projects, but they are most often a component of other infrastructure projects—such as street reconstruction capital projects that upgrade the storm sewer or build green infrastructure within the public right-of-way.
- Current O&M and lifecycle costs: O&M costs of stormwater best management practices and system assets reoccur annually. To estimate O&M costs for existing stormwater or drainage infrastructure, create an asset inventory and then identify your community’s existing (or baseline) level of service (or maintenance routine) for each asset (see link to Asset Management). Combine the present worth of the project’s total construction cost and the annual O&M costs to determine the total present cost or lifecycle cost. See the additional resources below for best practices you can use to calculate lifecycle costs.
- Land costs: Land costs can significantly impact the cost of stormwater controls. The key components of land costs are easement and right-of-way costs, opportunity costs, and land acquisition and transaction costs.
- Administration and other annual program costs: When determining these costs, ensure you do not duplicate costs accounted for under different cost categories, such as O&M.
Case Study: Successful Expense Tracking Tools
The University of Maryland Environmental Finance Center’s Municipal Online Stormwater Training Center (MOST) provides technical and financial stormwater management resources for the Chesapeake Bay watershed. These resources apply elsewhere, too. MOST provides a sample stormwater budget worksheet and other helpful cost resources and case studies—specifically, see the Stormwater 101 Module.
The Environmental Finance Center at Sacramento State University developed a Toolkit to Support Financial Planning for Municipal Stormwater Programs. It includes an expense spreadsheet for tracking stormwater costs.
Figure 1. Develop a common understanding of cost category composition.
Common Stormwater Program Costs
Current capital costs should include multi-benefit projects that are within the scope of your stormwater finance strategy, such as:
- Costs to manage flood protection and drought resilience.
- Costs to improve water bodies or the watershed.
- Costs for green streets, complete streets, and urban greening.
- Current O&M and lifecycle costs.
- Land costs.
- Administration and other annual program costs.
O&M costs include site inspection during and after construction, labor, materials, energy, landscape equipment, structural maintenance, dredging, disposal of sediments, and litter removal (EFC UMD, 2014). O&M costs for existing stormwater or drainage infrastructure include both the hard infrastructure (pipes, outfalls, catch basins, etc.) and best management practices (ponds, swales, raingardens, infiltration basins, green roofs, etc.).
Program administration costs include personnel (salary and benefits), equipment and equipment maintenance, utilities, supplies, and contract services, as well as:
- Ordinance development, legal support, and plaintiff attorney fees.
- Administrative service, office supplies, printing, mailing, NPDES permit, and other fees.
- Monitoring and program assessment.
- Any reporting (MS4 annual report, stormwater management plan).
- Manual and handbook production.
- Website development and updates.
- Grant writing.
- Customer service and complaint hotline.
- Informational systems (GIS, customer service ticketing system).
- Planning.
Case Study: San Mateo County, California, Cost Estimation Approach
To determine funding needs and options for its community stormwater programs, San Mateo County convened a consultant team that worked with its cities to evaluate program activities and costs. The team documented readily available information on existing local expenditures and revenues by reviewing local budget spreadsheets and other pertinent information. The team also held in-depth, one- to three-hour interviews with management-level municipal staff familiar with stormwater program budgeting and cost allocation. Interviewees discussed their agency’s staffing and responded to a questionnaire that methodically addressed their program’s funding, as well as the level of effort and associated costs for them to comply with their MS4 permit provisions.
The San Mateo team obtained critically needed information about local program activities and costs. The team found that many cities did not track activity expenditures (and funding) in detail, so it was difficult to accurately estimate present and future expected costs and funding sources. Some participants reported that without accurate accounting of current expenditures and estimates of future costs, it would be more difficult to defend a stormwater fee initiative.
Tracking costs for the NPDES MS4 permit program
Communities regulated by NPDES MS4 permits are routinely required to develop and implement stormwater management programs that include the following common activities, listed here to help create your expense tracking sheet:
- Overall stormwater program management.
- Pollution prevention and good housekeeping for municipal operations.
- Construction site runoff control.
- Post-construction runoff control.
- Illicit discharge detection and elimination.
- Public education and outreach.
- Public participation and involvement.
- Industrial and commercial management programs.
- Activities—including monitoring and modeling—to address water quality issues such as total maximum daily loads (TMDLs) and to protect designated uses such as swimming.
- Watershed activities.
Anticipating future program costs
Future program costs must account for cost inflation for the current program as well as costs of additional or expanded program needs. Future program needs may stem from:
- Regulatory changes (e.g., new requirements to address TMDLs, expanded regulated area resulting from new census).
- Large development or redevelopment plans; keep in mind the additional costs to operate and maintain new infrastructure.
- Opportunities for multi-purpose projects.
- Opportunities to improve resilience to flooding, drought, or other adaptations.
Case Study: Pullman, Washington
In 2009, Pullman, Washington, conducted a gap analysis to compare its stormwater management activities and priorities with future needs. The report can be found here: City of Pullman Final Stormwater Program Funding Alternatives and Financial Plan.
Defining level of service based on program goals
In collaboration with multiple city departments, identify goals that define the level of service and standards for the stormwater program. Your level-of-service goals:
- Can be driven by regulatory requirements, industry best practices (e.g., incorporation of green infrastructure), and community needs (e.g., reduced flooding).
- Should be balanced by financial feasibility.
- May address frequency of routine maintenance, expedience of corrective maintenance, completion of capital projects, replacement rate, or expansion and customer service response time.
- Will directly affect the magnitude of annual operating costs, capital program costs, and associated financing.
- Can be realized iteratively. One approach is to establish two levels of service: moderate and advanced. Future level-of-service goals provide a well-defined target to aim toward.
Resources
Refer to the Developing and Administering a Dedicated Revenue Source page and the following additional resources for more guidance on funding your municipal stormwater management program.
| Article Description | Categories | categories_hfilter |
|---|---|---|
Toolkit to Support Financial Planning for Municipal Stormwater ProgramsAuthor: Environmental Finance Center at Sacramento State | Developed/Updated on Date: Not dated Web Link: http://www.efc.csus.edu/ The Environmental Finance Center (EFC) developed a free toolkit to support asset management and funding for municipal stormwater programs. The toolkit includes a guidance report and worksheets that help record data on system assets, from pipes to gutters to green infrastructure. The toolkit helps prioritize maintenance needs and estimate long-term costs. It also includes spreadsheets for evaluating various stormwater fee options, including a consumer ability-to-pay analysis, and resulting revenues. | Funding: Program Costs, Operations: Asset Management | program-costs asset-management |
Municipal Online Stormwater Training Center (MOST)Author: University of Maryland Environmental Finance Center | Developed/Updated on Date: 2019 Web Link: https://mostcenter.umd.edu/ The Municipal Online Stormwater Training (MOST) Center was established in 2015 to bridge the gap in needed technical and financial stormwater management resources in the Chesapeake Bay watershed. This free, virtual center provides users with tools to better communicate about, build, and enhance local stormwater programs. Through interactive lessons, videos, graphics, and knowledge checks, MOST delivers educational content in an engaging, user-friendly format. In addition, the site features case studies that demonstrate local success, interviews with practitioners around the Chesapeake Bay region, and helpful resources such as manuals, reports, and toolkits. | Funding: Program Costs | program-costs |
Long-Term Performance and Life-Cycle Costs of Stormwater Best Management PracticesAuthor: Transportation Research Board | Developed/Updated on Date: March 23, 2016 Web Link: http://www.trb.org/Publications/Blurbs/171471.aspx The Transportation Research Board of the National Academies developed a spreadsheet-based long-term performance and life-cycle best management practice cost tool that is easy to use and facilitates ‘what-if’ comparisons between best management practice scenarios. | Funding: Program Costs, Management of Post-Construction Site Runoff, Operations: Asset Management, Program Goals and Management: Long-Term Planning | program-costs management-of-post-construction-site-runoff asset-management long-term-planning |
Integrated Decision Support Tool (i-DST)Author: Colorado School of Mines | Developed/Updated on Date: Under development Web Link: http://inside.mines.edu/iDST-home The Colorado School of Mines is developing the Integrated Decision Support Tool (i-DST). It is a decision support tool for managers implementing grey, green, and hybrid water infrastructure. The tool will include the following elements: | Funding: Program Costs, Management of Post-Construction Site Runoff | program-costs management-of-post-construction-site-runoff |
Costs and Effectiveness of Stormwater Management PracticesAuthor: Peter T. Weiss, John S. Gulliver, Andrew J. Erickson | Developed/Updated on Date: June 2005 Web Link: https://www.lrrb.org/pdf/200523.pdf The authors present construction and annual operating and maintenance cost data for several common stormwater management practices, including dry detention basins, wet basins, sand filters, constructed wetlands, bioretention filters, infiltration trenches, and swales. After statistical analysis of historical values of inflation and bond yields, the annual operating and maintenance costs were converted to a present worth based on a 20-year life and added to the construction cost. The total present cost of each stormwater control was reported as a function of water quality effectiveness (removal of total suspended solids and phosphorus). This work can be used by communities to estimate both the total cost of installing a stormwater management practice at a given site and the corresponding total suspended solids and phosphorus removal. | Funding: Program Costs, Operations: Green Infrastructure | program-costs green-infrastructure |
Community-enabled Lifecycle Analysis of Stormwater Infrastructure Costs (CLASIC)Author: Water Environment & Reuse Foundation | Developed/Updated on Date: Under development The Water Environment & Reuse Foundation (WE&RF) is developing a lifecycle cost tool for communities that takes into account the costs associated with planning, designing, acquiring, constructing, operating, maintaining, renewing, and replacing stormwater infrastructure. The results are expected to increase confidence in comparing benefits and costs of stormwater infrastructure alternatives using tools based on cost, design, and performance data sets and a peer-reviewed model. It will be a publicly accessible tool and database and a guide for decision-makers that includes case studies. | Funding: Program Costs, Operations: Asset Management, Operations: Green Infrastructure | program-costs asset-management green-infrastructure |
City of Pullman Final Stormwater Program Funding Alternatives and Financial PlanAuthor: City of Pullman, Washington | Developed/Updated on Date: January 13, 2009 The following financial plan supports the development and implementation of an enhanced stormwater management program for the City of Pullman (City). The funding plan addresses each element of the City’s stormwater management program, including current stormwater regulatory compliance requirements, capital project needs, and operation and maintenance of existing stormwater management functions, as detailed in the City’s Stormwater Program Implementation Plan. Funding alternatives have been developed to illustrate various ways that the program can be financed and implemented. Approximate stormwater utility rates have been estimated, based on recent impervious surface area (ISA) measurement work, to help the City evaluate whether or not forming a utility (which is the recommended approach) should be undertaken. Ongoing efforts, including refinements to the stormwater program budget and initial utility formation work, will provide the basis for determining final rates for the City. It is important for the City to secure regulatory compliance funding soon, since NPDES Phase II stormwater compliance requirements went into effect in February 2007. The financial plan developed for the City’s proposed Stormwater Management Program consists of the following elements: | Funding: Program Costs | program-costs |
Asset Management Programs for Stormwater and Wastewater Systems: Overcoming Barriers to Development and ImplementationAuthor: U.S. EPA | Developed/Updated on Date: March 6, 2017 The purpose of this paper is to identify the critical steps and factors to be considered during asset management program (AMP) development and highlight real-world examples of encountered barriers to AMP development. This paper consolidates and summarizes work done by EPA and others to guide and document early experiences in using AMPs for stormwater and wastewater utility management. It provides guidance on the basics of developing and implementing a new AMP. It touches briefly on the experiences of several stormwater and wastewater utilities during the infancy of AMP development, including barriers they encountered. It also cites various AMP development and implementation research literature and case studies, which can provide valuable insight and tools for utilities that are just beginning the AMP planning and development process. | Funding: Program Costs, Operations: Asset Management | program-costs asset-management |