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WHJTE PAPER: TUCSON'S OPP ORTUNITY FOR TRANS ITION T O A

STO Rl' 'l "VATER tITILITY A.PPROACll FOR OPERATING A


COl\fl>RETTENSJ VE ST ORIIDVA'J'ER MANAGEMl~NT PROGR AM

u'\'TRODUCTION

Many aSJ>CciS of Tucson's StoanwaterManagcmcnt Program have been recognized for


high-level perfounancc. and an opportunity for improvement upon our success may be
found in a new funding approach. There is n trend around the country toward including
storm water management nmong the services municipalities provide through the structure
and funding mechanism of a public woTks utility. Depending on how broadly it is defined
and bow well ii is funded, ll stonnwate:rutility could enable the Ciry to meet c-0stS at
several different levels. It could simply cover basic stormwaJer quality program
administrative costs (estimated al over $900,000 annually). It could provide for
management, maintenance, and upgrade to the stormY.'llter drainage infrastructure. Or, it
could faeilitate projects as wide-ranging as riparian enhancements and multiple-benefit
improvements to the drainage system.
Federal regulations combined with development pressures demand that municipalities
increase their anention to stonnwater management concC'IDS. Many cities' general fund
resources are becoming strapped. Traditionally, stonnwater activhics and projects have
been difficult to fund, and using an enterprise fund to provide stable funding is quickly
spreading as a common solution to Urls problem. Many municipalities have implemonted
a stonnwater utility to achieve improved performance, better service and consolidated
management of $l01lllwater-related issues for their communities. As stonnwater
management continues ro evolve, urban cities have found that stormwatcr utilities
provide a stllhle, adequate, flCJtible, equitable, and secure funding mechanism.
American cities are increasingly "going green." Future trends in stonnwater management
include green neighborhoods and low-impact, sustrunable development. Cities are now
expected by their citizenry to manage development and in.frastrueture to be consistent
with an environmental ethic; attention to environmental detail inevitably requires
additional staff and budget.
This discussion provides a summary of experiences of other municipalities and guidance

provided by national organizations, like the National Association of Flood & Stomnvater
Management Agencies (NAFSMA), with regard to forming a municipal stonnwater
utility. Others' experience with this national trend may assist Tucson in evaluating the
feasi"biluy of using such an approach to implement its compreh~ve Stonnwater
ManagcmcnLProgram.

POLICY ISSUES

The City of Tucson could benefit from a dedicated funding source for its growing
stmmwater management program. Decisions about how to establish revenue to support
the program engender questions about the necessary scope of services to be covered by

dcdica1c:J funding and the appropriate tldm.iru.strative strucrure for stormwater


management by the City The transiuon to enterprise funding is a ll!Tge project that may
involve a multi-year conurutmcnt of stniT and program resources. le will also reqwre a
stalreholdcr process to gather public input about stormwatennanagernent priorities of the:
commwuty. The City could choose a utility plan similar in scope to the ~mt experience
with the Rcgi!>nal Tran~t Authority (RIA). Alternatively, the City could choose a utility
funding mechanism and structure that is limited in scope. similar to some communities
that use a low. fiat.fee addition to water bills to fund only city :idmmistrauon costs
related tO the federal water quality !'=it for stormwater.
BACKCROUND

Forming Stormwater Uclllties Is n Growing Trend On the National Scene


Municipal stoonwater managemC!!lt has cbanged.dromaticaily over the past several
decades. The pre1,ious single focus of providing wban flood control has grown for many
commurutles into responsibilities forprotectlng water resources and, ultimately,
delegated functions for environmental protection and regulation. Also, since government
budget priorities must rely on general funds for fire, police, and schools, mlllly city
services are becoming partially or mtirely fee-supponcd.
1be national trend began with tho first stormwater utilities developed in Colorado and
Washington in the early '70's. Today, across the country Ihm: arc more than 500
mWiicipal stonnwatcr utilities established. Phase Il of!>As MS4 stonnwater permitting
will be fully implemented by 2008, and in ten y~ it will be a rarity for larger

communlties not to bavo a stom1water utility.


The utility approach IS now prevalent statewide in Florida, where the Flonda Association

ofStormwatcrUulities identified many benefits of this app_roath incl1lding:


Providing a New Funding Source
Ensuring Sustainable Revenues
Having a Bondable Revmue Stream
Secunng Programmatic SUlbility
Promoting a Lang-Term Management View
Fatilitating NPDES Compliance
One attroctive aspt of this approach in many communities is that it exemplifies the
"polluter pays" principle that has dominated public budget discussions for environmental
agencies. A fec-for-~ervice utility places the bill in the hands of those persons most
responsible Cor storm runoff into the public drainagcwuys.
\Vcstern U.S. Eumplu of Stormw:iter Utilities
Examples of stormwarer utilities can be found iasouthwestcrn and western cities such as
Austin, Boulder, fort Collins, Portland, Medford, Billings, Sac:ramcuto, Santa Fe, Still

Diego, San Jose. and Sall Lake City, to nnme a few . Many of these utilities grew ou1 of
administrative structures established to build mid maintain pubtic stormw81ersystems.
Salt Lake City represents one case study in successful formation of a stonnwater utility in
the western U.S. Jnfact, stormwater utilities are used throughout the Salt Lake
metropolitan area mduding Provo, Omn, West Valley City, and many of the smaller
municipalities inlhe Sall Lake area. The imperus for the stormwater utility in this
growing urban area semu to have been EPA 's Clean Water Act regulations, which play a
role in formalizing the responsibilities mumc1palitles carry for managing stollllWatcr in
an urban setting.

Sall Lake City began their change in mid-1990 by moving their drainage maintenance
and improvements division into their Department of Public Utilities. Al about lhc same
time Ibey formed a citizens' committee to study the utility epprollCb and make
recommendations to their Public Utility Advisory Committee. Salt Lake City adopted an
ordinance fom1ing aStonn Water Sewer Utility in July 1991.
Salt Lake City received their Phase [permit under lheNPDES program in 1995. Similar
to Tucson's stounwater quality permit, Salt Lake City has requirements for stormwatcr
monitoring, illicit discharge investigation and control, pub!ic outreacb/educauon
activities and a comprehensive Stonnwater Management Program (SWMP). EPA 's
requirements for a SWMP include items such as drainage standards fornew development
and signiflcanl redevelopment, drainage system and street mninrenancc, flood
management, pesticide controls. spill response, saniuuy sewage spill control, managing
landfill runoff and wastes, and controls on runoff during private and public construction
projects.
'

Sall Lake Cily used a storm drainage basin master plarming process to model and provide
a,long-tem.1 blueprint to direct their Stonn Water Sewer Utility. They identified a
prioritized list of major capital improvement projects, and in the first Live years of the
utility's operation, the city built 150 projects. Flood damage complaints have
significantly reduced. stonndrain maintenance 3Ctivity bas significantly increased, and
municipal good housekeeping practices, such as street sweeping, are improving storm
runoff water quality.
Salt Lake City's stoanwater utility is operated in a department alongside their water and
wastewater utility. It operates primarily on fees, collecting about SS.3 million per year.
The armual fceiora single.family residence with 0.25 acres or less is $36. Single-family
dwellings on Jar~ lots are $50.20 per year. Undeveloped parcels are not charged. Non
residential properties pay a rate based on size measured by "equivalent residential units"
and adjusted for any flow mitigation controls such as mention basins that decrease the
effective iulpetVlous surface area.
Arizona Examples

In Arizona. Flags1affhas operated its stonnwater program as a utility since 2003. Peoria
bas a s1orm Water surcharge'' of S0.50/month (recently raised to SO. 75/momb)

appended to the biJJ for each utility account along \\1\h the f~ for water, sewer, and
sanitation. The City of Mesa collects a similnr Oal fee set at $1.50 per month for each
uulnycustomer. Mesa's description oftheir"Fcdcral Comp1iBDCC Fee" ~ays it will be
used fur stonndrain maintenance. stonnwater sampling, retention basin maintenance
(city-owned faailitics), street sweeping, PM-10 (Dust) stabiliution (city-owned vacant
lots and shoulders), and inspections of constructi<>n and industrial Sitcs (public and
private). Sedona uses de\elopmetU impact fees that vary according to land use und
watershed in order lo fund public stormwater projects associated with new development

The Town of Oro Valley passed llll ordinance m 2001 establishing a stormwater utility
and a Stonnwater Utility Commission. However, the commission is still working to
define the roles and responsibilities of the utility. They have not yet established a fee
structure to fund stormwuter management activities and capital projects. but arc carefully
weighing options end fee rates. Sconsda.Je does not have a uttllty strncrun: for its
stormwater, bm stormwatcr is managed in iL~ Munictpal Services Department that also
handles solid waste, capital project management ruid field services. Tempe does not have
a separate stormwater fee but funds the water quality portion of its stormwater program in
the budget of the Enviroruncotal Division of its Water Utilities Department. Phoenix,
which ts Arizorul's largest city, uses a water meter tax that is posed as a development
impact fee related to stormwater quality. Funds help support its stonnwater program in
the Street Transportation Department.
As 11 case study, flagstaff probably represents the most "cutting-edge" conunuruty in the
state with respect to establishing a utility basis to fund and operate its stonnwater
program. Originally, th.ts city established a feo to meet its NPDES and FEMA regulatory
requirements. The Ciry Council approved a fee ofS0.53lEqui\'alent Residential Unit
(ERU) in 2003, and it was enough lo fund a ''skeletal" program supplemc:med with
general funds. They worlted with 4.5 FTE's and a budget of about $500,000. Flagstaff
found their initial fee to be inadequate ~use of a growing need to provide increased
dnunagc mamtenancc, drainage impro\c:ments, floodplain inspections, and Best
Management Practices (BMP) field inspections for industrial facilities and construction
sites.

Starting last year (2006), fhtgstalT raised the average stormwatC'r fee for residential
property in to S2.76 per month. The average is a billJlble area ofbctweni 3,001 and 4,500
square feet of impenious surface. Flagstnff uses a tiered billing system shown m Table I
Table 1: Flagstarrs Tiered Equivalent Residential Units (ERUs)
Sq. Ft of Impervious Area
200- ISOO
1501 3000
3001 4500
4501 - 6000
6001 7500

#orEROs Fee
I
.92
2
1.84
2.76
3
4
3.68
5
4.60

There is a maximum fee ofS4.60, ur 5 ERU's on single.family residentilll property. Th~


is no m!OOmum cap on con:nnercizl or multi-family property. Commercial and multifamily properties continue in the above paneom with no maximum monthly charge. Last
year's increase in the base ERU rate to S0.92 is expected 10 generate nbout
Sl ,000,000/year. This annual funding level will support drainage maintenance at a level
of S134,000, drainage improvements at SI 00,000, water quality activities al $210,000,
and water quantity activities at S490,000. Also, Flagstaff has structured its fee to increase
by SO 10/ERU each year, for the next S years, with lhese extra funds dedicated to
d.ramagc improvement projects.
CONSIDERATlON OF A STORMWATER UTILITY IN TUCSON
The City of Tucson bas contemplated a stonnwater utility since ihe early stages of
development of the Tucson Stormwater Management Study Master Plan (TSMS) that
was adopted by Mayor and Council in 1996. A part of thel'SMS process involved
preparation of a 1993 report by CDM, Inc. tit.led, Altemarive Funding and Capitaj
Fmanec Mechanisms for Funding the City o(Tucson 's Comprehensive Stormwater
Managiiment Progrnm. This early report recommended using bond funding as well BS
charging a taX on water meters to operate the City's stormwaler program as a special
revenue fund until it could be converted to a fee-based utiliiy. A Mayor and Council
Mcmorandum dated Janumy 10, 1994 recommends three options: treating astormwater
utility with monthly service charges; establishing an environmental excise tax charged
against water services; and negotiating with Pima County Regional Flood Contr0l
District (PCRFCD) for greater city control of project priorities. On June 8, 1999, the
Sto.rmwater Technical Advisory Committee (STAC) sent a memo to Mayor and Council
recommending formation of a separale municipal flood control district or a stoanwater
utility.

Although recc:nl efforts have been successful in securing PCRFCD funds to support some
oflhe large drainage projects within tho City, the district cannot adequately address
priority needs identified in our.30-year comprehensive TSMS Master Plan. PCRFCD's
lllX levy from Tuoson properties could not fund $11 million annualJy for City priority
activities such as watercourse preservation, revegctalion ofdtsturbed washes, capital
improvement projects, andstonndrain and wash maintenance (see Table 2, TSMS
Funding Needs Summary). Furthermore, PCRFCD docs not reoognize their mission as
one that includes local stormwater quality and NPDES permit goals. Getting mo.reof
PCRFCD's resources to be directed toward the City's urban drainage priorities is an
m:iponant objective, but it is only one of the identified funding mechanisms. Tue City's
inability to fully influence PCRFCD should not completelyimpede formation of a City
stormwater utility.

Table 2: T~IS Funding ~etds Summary ror the City or Tucson S1o rmwa1er
:\1anagemen1 Program
Ille Tu= Stonnwater Manag<mrot Study (TSMS) Mas1erJ'lan. adopted by Mayor and
Coundliu 1996, ldrntified 47 >lm\\tltt quantity capital pw;ects. These projects "'OO!d
eddtt\$ utban dninage m tbc most flood prone arcu oftbe Cny. TSMS also Included
plans forpresc:rving ond rcvegeUtting na11m1Uy v~tcd watcrc:oW'lta, cooducnng Flood
Huard Siudlea and remapping fl!MA floodplains. To1tl cost to 1mplcment the TSMS
Muter l'lln, addn:umg S1Dt'tll1''1lla managcmcm, \\'Illa quality prowam. llld tOnDWata
dwuaac syotcm
was estimlttd 111 340 mallion dollan O'er 30 )'QIS.

nwinD211('

Ye11r I

Year?

Year3

Vear4

Years

Total

3,S00,000

3,275,000
500,000

3,ill,000
200,000

3,225,000

3,lli,000

~oo.ooo

200,000

200,000

16,450,000
1,600.000

200,000

210.000

300,000

300.000

300.000

1,310,000

300,000

300,000

300,000

300,000

300,000

1.soo.000

Flood Huard
Studies
B,-dniulk
llfodtl
J\lalnltnaou

25,000

2S,OOO

7S,OOO

1S,000

7S,000

27S,OOO

W1IU('Ourn

670,000

690,000

710,000

730.000

730,000

3,SS0,000

Prutn'ltloa
Rt''tattatlon
of Disturbed

200,000

210,000

220,500

230,000

240,000

1,100.soo

S.395,000

S,210.000

S,030,SOO

S.060,000

S,090.000

25,785.SOO

s.000.000

s.000,000

s.000.000

S,000,000

5,000,000

25,000,000

TOTAL
S'l'ORM WATER
QUA.LJTY
PROCR.AM

925,000

970,000

1.020.000

I, 070,000

1,125,000

s.110.000

COi\1BlND
TOTAL

11.310.000

11,1ro.ooo

ll,OS0,000

11,130,000

11,215,000

SS,895,SOO

Program
Component
UllBAN
DRAINAGE
ClP

f'EMA

ReJDa..nJnft

Bydrotoeic
Modtlln~

Washes

TOTAL li'RBAN

DRArNAC.E
MAJNTENANC&
OF

STORMDRAIN

SYST.'tt

STOAMWATER
l\~'llACE.\tv.T

NUI>l>

Our community is lll.rgcly unaware ofstorruw11ter management, oxccpt when


experiencing flooded road crossings, or flooding problems. These and other sigoificanl
stonnwatcr management needs of Tucson are real and remain llll"gCly unresolved. The
City invested i;evcral million doll~ to develop the TSMS Master Plan to address
Tucson's urban dr.unage needs. Altllough the plan was comple1cd in 1997, no fundrng

source was. identified and the plan n:mams largely unimplemented. None of the benefits
ofa comprthensive $tormwatcrmanagcmcnt plan will be achieved without funding.
These benefits include improved public safety, all-weather access for emergency
vehicles, resolution of drainage cornplainlll, repair of eroded SICaS, maintenance and
preservation ofnonm1lly vegetated watercourses, reduction of stormwater polJulion,_ and
enhanced transportation mobility. Without a mearu of funding stonnwater nl8.Jl.8gement,
rainstcillllS will continue to disrupt life 8.nd nffcci business in Tucson.
In 2003, the City of Tucson commis9oned a study of impact fees by OUDCBn Associates
titled, Cost ofSeryice Studv: Policv Analvsis. Two excerpts of the report arc rdevant to
the stonnwatcr utility issue:

The cost of implementing the Tucson Stonnwater Master Plan and


addressing stormwate;1l13Jlllgcmcmt and druiMge system maintenance is
estimated to be ~bout S 11 million annually, of wlrich only aboul $3.5
million is related to tbe cost of structural improvements. Given the
magnitude of these funding needs, the City might wanl to consider a
stoanwater utility fee instead.. A i;toanwater utility fee is a user fee similar
to a waler or wastewater fee, and is typically included on the monthly City
utility bill. Unlike an impact fee, a utility fee is charged to all existing
development, and can be used for either capjtaJ or operating expenses. A
city-wide slormwater utility fee could help fund remedies to existing
drainage problems as well as on-going maintenance costs. The studies
required to develop a stormwater utility fee would be much simpler and
less expen.si ve than those required to support a stoonwater drainage
impact fee. The main requiremenl for a utility is that "the user fees should
be related to the generation of runoff and that the fees should reasonably
reflect actual costs to iirovide the service.
lfthe City desires to pursue a stormwater utility fee, it would bo advisable
to updale the Tucson Stumrwater Ma11age111e111 Study. The 1993 cost
estimates should be updated to 2003 dollars and should include property
acquisition costs for improvement projects as welJ as for watershed
preservation. In addition. a stoonwater utility study should update.
compile and project maintenance eos1s, estimate stonnwater quality
compliance costs, and develop guidelines for ther.ue strucrure, credits and
appeal process.
In 2004, City Manager James Keane recounted the need for funding action in a Mayor
and Council Memorandum:
(1n 1999) STAC concluded tha1 the City of Tucson lacked the funding to

implement the recommendations contained in the Tucson Stormwatcr


Management Study (TSMS) Master J>lan ....STAC recommended that the
City pursue the cst11hlishment of a municipal flood control district or a
stormwater utility with the authority to levy taxes to meet stonnwater
llllDlllgement needs. Four years later the City still tacks a municipal flood
7

control dismct or a s1onnwater utility to pro"-idc the crucial fundmg


needild 10 1mplemen1 the TSMS \faster Plan. While the City's urban
drainage concerns cominue unabated. escalating Pederal Clean Water Act
regulations to improYe urban stonnwatcr quality continue to drain the
general fund.
Clearly it JS imperative that the City rectify the lack of suppon for its 1dcnti fied
stormwater objectives.
To date, the political impetus 10 pursue a dedicated funding source to suppon a
comprehensive stormwnter management program bu been limited. However, with the
critical support born Mayor and Council and the commumty. the City coulJ proceed to
the next stage. consisting of performing a feasibility analysis for a utiJity. lfTucson elects
to pUT$Ue a stQI1Dwat11r utility. the first stt!p should be to conduct a feas1b1lity srudy to
formulate specific apnons far objectives, administrative structure, and funding
mechanisms. The feasibiliiy study cannot be performed without updating costs of
program l!Dd projecis mentioned above using 2007 dollars and expanding the scope to
include storm water concerns related to newly lllUlCXed land comprising 33 V. square
miles. The feasJ'bility study should also plan a significant public outreach and education
component. Key messages would be identiJied. means ofreaching citi.Rns would be
assessed, and community leaders would be provided with informntlon to answer
constitul:llts' concerns. Stakeholders likely to have concerns could be identified and
brought 111lo the process early, during lhe feasibility stage, to address their concerns and
engender suppon. This philosophy was plll'llphrased 11 thc2003 North American Surface
Water QUBlity Conference: "bring me 10 early, andJ' m your partner. bring me io late. and
I'm your judge.''

UTILITY OBJECTJYES, STRUCTURE AND .FUNCTION

Among the many factors that motivate conununitics to foon a utility for managing urban
runoff arc lhc following possible goals:

Address Flood Protecllon forpublic safety, enhanced transportation, nnd property


protection
Update Aging Infrastructure
Cope with Pre~ures from New Development
Protect and Clenn Op Water Qunlity
Regulatory Mandates (EPA. s NP DES Phase I and Phase U ~184 permit
rcquircmc:nts~ new surface v;ater quabry standards or total maximum daily loads
(TMDLs); or compliance actions and consent orders)
Cre<ltc Administrative Efficiencies with Water, Wastewater, and Other Utilities
Capture and Conserve Water Resources
Consolidate Management ofDispw.11c Programs
Enhance Multiple Benefits or Functions of a Stonn Drainage System (such llS
npari:m values or recreational amenities)
Educate lhe Public About Stoonwaicr Quantity and Qualiry Issues

If a community can define their specific goal$ for creating a utility. it increases both
public acceptance and the likelihood of $Ucccss. Furthermore, well-defined goals aid in
developing realistic cost estimates for budgeting.

A stonnwater utility operates m the same manner as water, wastewater, or fire districts
that are fee-based :md odrninisten:d. separately from general funds. Public perception of
stormwnter programs may be different from other utility services in that the benefit
provided is not as immediately evident as it is for other utility services 5UCb as water
supply. In the arid Southwest, public sentiment typically only recognizes the value of
storm drainage system management when it is raining. However, many municipalities
have successfully integrated stonnwater services into their other public utilities to
"blend" se.rviccs into. a total picture of comprehensive water resource or environmental
service provided by fees.
A stormwater utility may be organized as a stand-alone department, a division within a
deparunent, or based upoo cooperative worlcing relationships among a spectrum of
divisions within separate departments. The scheme sb0\\-11 in Table 3 is adapted from
guidance provided by the National Association of Flood and Stonnwater Management
Agencies (NAFSMA) with gnmt funding from EPA in 2006. The table lists
programmatic elements that might comprise a comprehensive stormwater utility. All, OT
select parts, of these various functions may be funded through utility revenue. There may
be a mix offnmling sources used, as di~ussed below.
FUNDING SOURCES

Mill MEC HN'IISJ\.f S

Most stormwater utilities are funded in a manner that is largely separa.ted from a
municipality's general fund. Taxes and utility fees are lhetwo major categories of outside
revenue for utility funding. Fees-have several clear advantages over taxes:

Fees have greater cqu.icy because they can be structured according to the benefit
by calculating the amount of runoff caused by impervious surfaces.
There is oppOnunity for including incentives for on-site stcmnwater management.
Fees have fewer legal restrictions than taxes.
Revenues increase with growth because development brings more acreage of land
into the service the stonnwater drainage system.
Fees tied to service are proven to be legally defensible.

or

Debt funding through bond issues is often used for capital projects and sometimes used as
a means to fund start-up costs oflhe utility. Revenue bonds rypically require that a rnte
structure be in pince to suppon the payback. Other sources of funding can Include special
assessments. impact fees, plan review or permit fees, inspection fees, fines or penalties,
an enviromnental "check-off." oi: federal and st:ite funding through grants, loans. oT
cooperative programs. These sources arc supplemental and generally will not cover the
overhead costs ofa stormwater program.

TABLEJ: POTEYflAL1 ,EMENTS OF A STQR!\1WATF.R UTTJ,J TY

I. Admln istratloo

2. Billing & Flnauce


Billing Opc."alions
Customer Sen;cc
Financial Management

Management/Leadership
Program Planning &.
Development
Grants & Outside Fi.nancmg

ContnlCts

Repo1ting
3. PubUc Education & lnvolno.ment
Citizen's Advisory Group
Media Rdations
Risk Communication
Public Awareness &
lnvolvc:mcnt Events
Stocmwater QuaJ ity Educat.Jon
Non-profit Integration

4. Operations & Malnteaa:nce of

S. Capleal Ilnpro,emcnt.s

6. Tcd11rlcal Support
GIB Applications
Database Management
Mapping & Imagery
Web Support

Stormwater Drainage Systems &


' Vashes
Maintcmmcc Management Program
Routine Maintenance
Infrastructure Management
Emergency Response Mamrcnanco

Capital Improvement Projccl


Management
Land, Easement Md Right-ofWay
7. Engioel'ring & Planulng
Phm Review
Development Cnteria,
Standanls nnd Gu1danc-e
Field Data Collection
Quantity Master Planning
Quality Master Planning
Design. Field, and Operatiocs
.Engineering
Retrofitting for Water Quality
Hazard }.1Jtigation
Zoning Support

Puhlic Assistance

8. Regulatio n & Enforcement


Code Development & Enforcement

Detection of Illicit Discharge and


Spill Response
Construction General Permit
lospections & Enforcement
Industrial General Permits
Inspections & Enforcement
Zoning & Land Use Regulation

Ol'llinnge System Inspection&.

Regulation
Flood Insurance Programs
Erosion Control Programs
Pesticide, Herbicide, and Fertilizer
Used Oil & Toxics
Sllllitary Sewer O\'erllows

10

A storm waler utility can only cbiu:ge what is necessary to meet the sLonnwater
management needs of the City. The ability to fully fwid stonnwatermanagement is
dependant on a fair, equitable fee structure. tbe willingness of Mayor and Cowicil to
approve lhose fees, and the willingness of thecitiiens to pay them. Costs for stormwater
programs may be figured according ro amount of developed acreage served. A report
provided by NAFSMA in 2006 indicates that a minimally funded program would incur
arumnual cost ofS20/de\elopcd-acre and thar a modest program would be on the order of
$ill/developed-acre. The Cicy of Tucson covers approximately 22:7 square miles, or
l4-5,280 acres, and 59% of this area is developed. Therefore, revenue from a stormwater
utility roe set at a minimal level would yield $1.7 million. A fee set ata level used in
other comparable communities could produce nearly S 11 million for the City.

E'ee rates for stonnwater service around the co1mtry vary widely with the size of the
municipality, scope ofstorm water program services, and mix of funding sources used.
One SIU'\ey ofstormwater utilities in Florida found a range of monthly rates from SO.SO
to SS.33 per equivalent residenoal unit, or ERU - generally lllken to be 2500-3000 ft2 of
impervious area. A 1995 national survey of200 stormwater utilities found an average
monthly rate ofS3.82. Nationally, momhly fees in the range ofS4-5 per ERU will
generally suppon a ''modenne" program. Often fees are structured so that commercial
and industrial propcnies are charged more to reflect higher runoff rates Md greater
pollutam load.
Experience \vith legal challenges to fee suucrures has shown that rees must be designed
Lo defrny program costs, must be linked to the amount ofstormwater runoff at a property,
must result in services directly or indirectly benefiting lbe ratepayer,
must be
uniformly applied to similarly situated residents. Most commonly the fee computation
dclermines how much m:>rmwater leaves a property by Laking into account the amount of
impervious surface and perhaps other factors suc.h as slope. soil type, credits for retention
basins, water harvesting or other treatment.

and

Impervious areas include any structure or surface that is built or laid upon the natural
surface of the land whioh has tbe effect of increasing, colrecting, concent:rnting, redirecting, or otherwise 11.ltering stonnwat.er runoff. Some typical features that constitule
impervious areas include: rooftops, sidewalks, walkways, patios, decks. driveways,
parking lols, storage areas, paved or compacted roads or p:irk.ing areas and other surfaces
which are subject to veltlcle traffic. .-"hen development increases a property's proportion
ofimpcrvious area the effect is increased peak stormwnter runoff rates, increased overall
runoff volume, 1ll1d, perhaps, degradJJtion in runoff water quality. Table 4 shows a list of
Tucson' s land uses nnd c-0rresponding percentages of impervious su.r:fui:e. Many
stounwatcr utility feo systems exempt undeveloped property, and land uses such as
public roads and public lands. However, some systems use a low basernte that applies
even to undeveloped property.

1J

TABLE 4: LAND USE AND SURFACE lM-PF.RVIO USNESS


Thttc thrrnca bydrol~ land U$C IYJlCJ are d6ulbcd ill tbc Tuc..n Stmmw:ta
Mam~111 Sllldy with the rchtne ptl'U'lll J41l'CTVOU1'11CSS 10 !liow lhc propomon of
111io&ll lhl11 the property canmbutca to l'llllOIY' into the City's stonnwattr lnfrastruCtUrc.

ii

LAND USE TYPE

% IMPERVJOUS

13

IWidl

9S

12

Mililllt)'

90

II

lndtntry

90

10

Rr111U

90

OilU

90

High Rcsidrnrial
> S/acrc

CiO

Medium RCJidoorial

3S

Low Residential

IS

7
6

35'=
< 3/ac:n>

Ranch < llacn:

Aculnual

s
s

Vacant

Paik

IS

l'a!IIJ1ll

Exemptions or credits add to the flexibility of a rate structure. The decision 10 exempt
certain ownership categones from the utility fee should be based on lhe community's
percepnon of equity. Examples of ownership categories !hat have been excluded by some
communities arc shown below:

Churches nnd Other 1'ax Exempt Properties


Schools
Public Roads ond Right-o r-Ways
Railroad Right-of-Ways
Tribal Land
Military Bases and Other Federal Faciliues
S1ate,. County and City Owned Faciliues

[I should be noted tbal some communities have Tl1Il into legal challenges over
cxcmpuons. Within 11 fee structure, ii may be more diplom:11ie and fair 10 SCI Iowa fees
for certain categories ml.her than to exempt !hem enurely.

12

Some communities have implemented cre<liling systell1S"as an incentive for property


owners to manage their own slonnwatcr. A.n example would be a nonresidential property
OWDC'r who reduces runofffrom thcir site to less than cstnblisbod city standards. Credits
could be based on reduction in peak flow, tofal runotTvolume, or both. Credits can be
given for certain geographic locations such as properues that drain directly into the Santa
Crui Rjver or the rullito, rstber than using the public stonndrains and washes. Credits
can take into account environmental aspects of the discharge. They can be awarded for
certain good perform~ such llS complying with an industrial multi-sector permit or
ircating stonnwa1cr onsite. Tn one community, schools thar1each stonnwatcr quality as
pan of their environmental education program are fully credited for their utility fee.
Credit systems have merit in encouraging positive ttormwater manag~enl practices, and
can provide relief for groups such as fixed-income or low-income residents, owners of
large properties with poor revenue-producing buildings, tax-exempt properties such as
churches, and public service properties such as schools and hospjtals. High costs of
administering a credit S)'$tel11, including verifying I.hat site conditions continue to warrant
credits, have Led many communities to abandon credits in favor of a m~ simplified rate
structure. A community must consider whether or not it is worthwhile to provide lhe
extra adminislJ"lltivc and teclmical support required to operate a system of crodilS as pan
of lhcir stormwatcr utility's functions.
A stom1water utility must establish some sort of billing mechanism. The most commorr
means ofbillmg is by adding the stonnwater fee to existing bills for utility services
because it reduces billing and coUcction costs. Some communities add lheir stormwater
utility charges to the annual property tax bill, like the charge that is aln:ady established
for the county regionnl fiood conlrOI ilistrict.
Finally, there are many 0th.er opportunities 1111d avenues fur funding that may supplemf!Ill
fees collected by a uulity. As noted above, bond funding may be used as start-up monoy
and for major projects. Partnering with olher jurisdictions or with PCRFCD for ocnain
aspects of stormwater program activities can stretch local resources. Grant funding may
bo pursued for speciali1.ed projects from agencies such as FEMA, EPA, ADWR and
ADEQ.

LEGAL AUTHORITY

In Arizona the legal authority for a municipality to operate a stonnwater utility that is
either bond-funded or fee-funded is provided in A.R.S. 9-5 1l, 9-521, 9-523, and 9
530. The Tucson City CbMter I, Chapter IV, Sec. 1(7) is titled "Acquisition,
estsblishment. etc., or certain public utilities." This portion of the code authorizes broad
powers of Mayor&: Council to provide fur various utility services within tho City.

13

l\fiLESTONES TO A UTII.ITY

There is crnainly no one pathway for establishing a utility, and c.ach community faces its
own special circumstances nnd challenges. However, many of the sw:ccssful \-etltures
have included the following steps.
I. Conceptual Consideration of the Jssue to Identify General Goals to be Met
with a StonnWllter Utilny
a. Appoinl a study commission or public oommitlee to evaluate the
topic
b. Shape a Resolution for Feasibility Study
2. Feasibility Study by a Consu\iant
a. Design an organitationaJ structure that draws on eidsting program
stnmgths
b. Galher data about the stOnnW81c:r system status and project current
and future needs, including any infrastructure upgrade costs
c. ldeniify stonnwater management concepts and priorities, including
assembling 1111 llltnlctive projc:ct portfolio to meet public nee$and
aUmcl public support
d. Create financial structure, including rates, billing and collection
processes, other funding meclwlisms, and a long-term budget
using 11 fee model that ponrays the culTC!lt system starus along with
accurrue future projected growth in funding needs and revenue
e. Develop an eduelltion & outreach program that engenders support
for the unlity approach from the vc:ry beginning
3. Public Input and Revisions to .Fcastl>ilily Srudy
4. Conduct Public Outreach Cl!ltlpaign to Gather Community Input and
Support

S. Set up Legal AulhorityTbrough Public Approval Process


6. Implementation

NAFSMA points out that this process requires creaung a compelling-program concept.
The structure for program govl!T1lllllce must have consensus sta.keholder support from the
communiiy. Thus, a political and pubtic process of stakeholder education is essential conti:nually identifying and responding to the "frequently-asked questions" throughout
the process. important parts of the program are policies, a rnte strucmre, and lll1 ordinance
governing the utility. Data management is crucial 10 system management, customer
service, and billing-II must be in place before implementing the unlity. The overall
process can take 3-S years and may require as much as S350,000 for consulting support to
put a functioning utility in place. NAFSMA points out that it is worth doing B thoro~
job in the first place. \Vhc:n a major effort to launch a stormwater utility has collapsed, it
bas taken5-7 >=to rebuild public suppon.
SPECIAL C'O'ISJDEIU TIO 'S FOR TUCSON
Tucson has some unique circumstances and opportunities thru set 11 apnrt rroro other
municipalities with regard tu its stormwater l1ll1Dllgement prognun. Some of these

14

clmractcristics render success with a utility more likely. and some of them offer
challenges.
The City already has an established stoanwater managcmc:nt program in its
Transportation DepartmenL This group bas over 10 years ofcomprehensiv~maJlllgement
experience in compliance with an NPDES pmniL A r=enl audit by EPA andADEQ
found no significant compliB11ce problems and noted the effective management and
coordination the City achieves among the nwnerous depamnenLS contributing to pcnnit
aativities. The audit report urges the City to expand its excellent work in areas such as
public outreach and measlll'Clllcnt of program effectiveness.
Other jurisdictions in ibe Tucson metropolihm area that operate stonnwater programs
include 'Pima County, Marana, Oro Valley, and South Tucson. ADOT, Davis-Monthan
Air Force Base, and the University of Arizona are institutions that also deal with
stoonwater under the NPDES progwn. Pima County Regional Flood Control District has
countywidc taxing authority. Some regional outreach is already accomplished by Pima
Association of Government's Stormwater Management Working Group. This mix of
stakeholders represents an opportunity to pool efforts io aclueve certain storm water
program elements. if a coh=t regional plan were developed. Consistent utility funding
for some of the jurisdictions could be a part of such a phm. Recent experience in City and
County cooperation in a Regional Transportation Authority to bring about bond funding
for capital projects may be a model fur other regional efforts, like funding stonnwater
programs for all jurisdictions lhat must bold pennits under the Clean Water Act
requirements.
Setting up a workable billing system is one of the cballengfog steps to getting a utility
fully functioning. Linking lhe City of Tucson's stormwater service with Tue.son Water's
hilling structure wonld not be a simple task. Tucson Water's service area extends beyond
the City limits, and there are significant areas within the Cicy that arc served by other
waler providers, such as Flowing Wells 1rrigation District. AJso, there arc properties
within the service area that qualify as public or semi-public water systems because of a
common water meter serving multiple residences or businesses. Recent experience with
tr;ing to create nn additional "check-off' for campaign funding, rather than just one for
open space, on Tucson Water's bills has shown that the billing system 1s not readily
flexible.

POTENTIAL CHALLENGES
The creation of a stormwater utility risks public perception of double taxation because of
the existing property la.~ levy for Pima County RcgionalFlood Control District
(PCRFCD). Although Maricopa County's Flood Control District provides some NPDES
stormwatcr quality work to benefit localjurisdictions in the Phoenix metropolitan nrea,
PCRFCD maintains tb.at their missionmus1 be limited to regional flood control projects.
They will n.o t contemplate water quality responsibilities, and even small. local drainage
projecLS are not within their scope. Tucson's urban stormwatcr mruuigcment needs go
beyond the mission of PCRFCD. and an assertive public education program would be

IS

needed to clarify !his issue for ratepayers considering utility financing. ~ City needs
written clarification tluit disunguishes rcsponstbihrics illld commilments of PCRFCD
from the local \lfban drainage lllld water quality control that the City must support. A
dialogue between City leaders and the public would have to elucidate the distinction
between county regional flood conlnll services and lbe City's MS4 responsibilities.
Funding n stormwater utility creates nn elevated expectation of sen.ice by members of the
community. The City would -need to be ready to address Oood.ing complaints with an
increased level of attention to customer service. Greater attention to response times
requires additional staffing. Fwthennorc, since private property O\mcrs fund the
program, service would be expected everywhere that water flows, not just on public
right-of-way.
Even when a utility rate structure is developed to be fair and reasonable, some ratepayers
will be unhappy. Among those most likely to be dissatisfied with new utility recs are taxexempt property holders, owners of large paved areas, people on fixed income, and some
developers. Many consultants who assist municipalities in stormwater utility
development advise their clients to plan on being sued during the process. Flagsta!I. for
example, is cum:ntly experieocmg legal challenges to their latest rate h.i'kc. F'lagstalrs
legal challenge is a perfect example of why it is critically important to plan future needs
into :i utility funding structure. Additional technical staffing is recommended to address
inevitable citizen concerns about rate: calculations and approvnl and maintenance of
credits, if applicable.
There arc some common miStakes .l11llde by municipalities who have titiled in the process
of trying to imph:ment a stonnwater utility. First among these is lack of a clear
underslJ!nding of the process wilh a detai led. strategy. Some also fai JOO: because of
inadequate community involvcmcmt. lack of clear communication to the public, or failure
lO prepare elected officials for responding lo public concC!ns. Using a rate structure lhat
does not haven concise rational basis can alsu hamper success. Finally, diiliculty with
implementing a utility bas often arisen because a community chose the most convenient
or least expensive options. As m Flagstaff's case, shon-changmg plnnning or financial
underpinnings of a progtam usually costs a community more, down the road.
OPl'ORTUNJTY
At th.is time, the City of Tucson is in a favorable position to stan the process of tranSition
to entC!rprise funding for Ltl.I or part of its slormwater managcuncnt program. A mature and
broad-based progr:un is in place with a major component of future plamring

accomplished through development oflhe TSMS. Only minor reVJ.Sion of the TSMS is
necessary to nddress recent growth: trends and annexed areas. The major missing clement
for full TSMS implementation is a dedicated source of financial support. lo addition to
the need for suppor1 ofTSMS. increased stom1water responsibiliti~ and accompanying
increased expenditures ere on the bori.a)O, since the City's NPDES pttmit is likely to be
rcissued with expanded r~cmcnu m th.:: coming year.

16

The citizens of Tucson are generally aware of the need for storruwotermanagement by
the City. Flooding issues are fresh in many people's minds after last year's record now
events during monsoon season. In addlrion, wnsh protection and environmental
sustainability issues remain preeminent whenever a project featuring these issues receives
public anention. Recent expcnence with RTA has shown that the public can be receptive
and supportive of public improvements that are well planned nnd clearly presented.
REC OM11fENDATIONS
ICA with PCRFCD

The City should work to resolve the long-standing issue of clarifying the r~onsibilities
of the Pima County Regional Flood Control District (PCRFCD) with respect to
stonnwalcr management within the City. An intergovClllJllental agreement (lGA)
between the City llDd PCRFCD should be established lhat aeates public und~mnding of
lhe roles of both entities. Elaving an IGA would aid lhe City's future pllllllling for
stormwater management and support the City's case for establishing a stormwater utility
structure to address specifically identified City stormwater management responsibilities.
Also, in this manner Pima Collllty can be credited as a partner with the City in certain,
identified, stormwatcr management activities or projects. A carcfu!Jy drafted IGA could
go a long way toward alleviating potential public concern lhat there could be a "dual
taxation" aspect to charging stormwnter utility fees.
Feasibility Study
The path to a stonnwater un1ity may involve 3-5 )'CilTS md an expenditure <ll about
S350,000. The first sigmficant step on this path is to engage a major natio~ consulting
firm thru is eicperie.oce<l with developing municipal stormwater utilities to draft a
Feasibility Study tallored to the specific needs of Tucson. The City should request that
tlieir consultanl delineate three di fferenl options according to the ex tent of the Cily's
stom1water management activities that would be supported by a utility ~tructure: basic,
moderate, and comprehensive. Budget estimates a.od projected fee frameworlc.s could be
provided for each of the lhree types of program. The Feasibility Study would create a
number of alterruitives. identifying strengths and weaknesses, so that the public and City
leaders could envision which scenario is likely to be the best fit for Tucson.
A committee should be established to provide oversight and input for lhe Feasibility
Study. The Stormwatcr Advisory Committee (SAC) could serve in this capacity, or a
separate committee could be designated with this specific objective.
One-da) Scoping Workshop
A synoptic evaluation of the stormwaler unlity potential for the City of Tucson could be
achieved with a one-day workshop. An infuanative workshop, designed to creste a
dialogue between a knowledgeable consultant and City stakeholders, could elucidate
some of the key advantages, concerns, and data gaps surrounding the stonnwoter utility
options for our community. \Vorksbop participants should include representative City
leaders, neighborhood association members, environmentalist3, engineering experts,

17

stakeholders with development interests. PCRFCD man:igers, and City employees from
departments with stoml\\ater management responsibilities.
There are a number of engineering and environmental consulting !inns that specialize in
stonnwarcr program development that mJght be able to lead such en activity. The
workshop could rnclude follow-up fact checking, compilation of information into a
rq>er1, and a cost estimate for a Ftasibility Study. Cost to the City would be on the order
ofSI 0,000, or less.

18