Filling the gap: A comparative analysis of stormwater utility fees and stormwater program budgets in the Puget Sound watershed

Abstract

AbstractStormwater utility fees (SUFs) are one way to fill the growing gap between stormwater management needs and available funding. However, there is a lack of data on the overall role they play in stormwater program budgets. This paper presents an evaluation of SUFs across multiple jurisdictions to understand their contributions to overall revenue, the uses of revenue, and the extent to which ratemaking is equitable within and between jurisdictions. We compiled data on SUFs for 124 jurisdictions and program budgets for 80 jurisdictions to describe the composition of revenues and influence of municipal stormwater permit status. We also calculated SUFs applied to individual parcels in 11 jurisdictions to assess two equity outcomes: proportionality and affordability. Results indicate that SUF revenue contributed 91% of the $537.7 million in total 2019 stormwater program operational revenue. There was enormous variation among jurisdictions in annual SUF revenue per capita ($17–328), per housing unit ($42–1007), and on an area‐normalized basis (<$0.01–2.70 per ft2 impervious surface). SUFs in some cities were large enough to burden low‐income households, and the way they are billed may preclude assistance for renters. In the context of escalating costs driven in part by new regulatory requirements, these results illustrate the tension between achieving full cost recovery for stormwater services and ensuring prices are affordable for ratepayers.