Some Ideas About Funding Your Phase II Program

Your stormwater program will not be effective unless you have money to pay for it. Before you figure out how to fund your program, you need to estimate your program costs. Here is a list of potential programs to include in your cost estimate:

Operations and management,
Planning,
Capital improvements,
Public education,
Mapping,
Street sweeping,
Household toxin collection,
Illegal discharge detection,
Storm drain marking,
Commercial/industrial regulation.

Once you estimate your program costs, next you need to think about how you will pay for it. Three of the most common options are:

Use existing monies from the general fund
Increase the ad-valorum tax
Establish a stormwater utility

Option 1: The General Fund.

If you do not take action to establish another funding mechanism, you will be competing with other municipal programs for a share of the general fund. One problem with this approach is you may have wide swings in available revenue. After a major flood, public interest is high and public officials are responsive. But interest can drop off considerably when the flood goes away.

Option 2: The Ad-Valorum Tax.

You can go for the a tax increase, with the extra revenue dedicated to your stormwater program. Besides the unpopularity of this approach, there are a few issues. One is that a property’s contribution to the stormwater problem does not necessarily correspond to its value. Note in the photos below: the strip mall has a lower property value than the downtown office building and therefore would pay less additional tax to fund the stormwater program. However, it has a lot more impervious surface and therefore contributes more to the stormwater program. Also, there is the same danger as in option 1 of having money diverted to other programs.

Option 3: The Stormwater Utility.

A stormwater utility has these advantages over options 1 and 2:

It’s a steady funding mechanism.
It’s equitable because based on “contribution to the problem.”
It provides an incentive for businesses to reduce impervious surface.

Some disadvantages are:

It can be hard to get community acceptance.
It takes a lot of time and effort to develop a rate structure and a database of customers and impervious area.

Click here for more information on stormwater utilities.

Download funding training slides here.