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Stormwater Utility Fees and Credits: A Funding Strategy for Sustainability

*,†,‡, †,‡ and †,‡
Humphrey School of Public Affairs- University of Minnesota, 301 19th Ave S, Minneapolis, MN 55455, USA
*
Author to whom correspondence should be addressed.
Current address: Hubert H. Humphrey School of Public Affairs, 301 19th Avenue South, Minneapolis, MN 55455, USA.
These authors contributed equally to this work.
Sustainability 2019, 11(7), 1913; https://doi.org/10.3390/su11071913
Received: 13 February 2019 / Revised: 26 March 2019 / Accepted: 26 March 2019 / Published: 30 March 2019
(This article belongs to the Special Issue Sustainability and Innovation: Concepts, Methodology, and Practices)
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Abstract

Lack of stable and dedicated funding has been a primary challenge for municipalities in the United States to implement effective stormwater management programs. Stormwater utility fees (SUFs), as user fees, are an alternative dedicated revenue source to fund stormwater management. When complemented with stormwater utility credits or discounts, SUFs provide greater flexibility to adopting best management practices and reducing stormwater runoff at a lower overall cost to the community. While SUFs have been increasingly used, there is little systematic research on this topic. This paper reviews literature on how SUFs work, discusses the mechanisms for setting the fees, and provides examples of different rate structures from across the U.S. Then, we use the findings of the literature to evaluate SUFs as a funding strategy for stormwater management based on four revenue evaluation criteria of efficiency, equity, revenue adequacy, and feasibility. Overall, the literature indicates that stormwater utility fees are a more efficient and environmentally sustainable source of revenue that allows for long-range planning of capital improvements and operations, but their high political visibility and legal obstacles can affect their effective implementation. However, more empirical research is needed to assess these propositions. There is a lack of literature on effective SUF designs, equitable fee types, the extent to which SUFs lead to change in public behavior and their impact on business and stormwater management investments in a municipality. View Full-Text
Keywords: stormwater management; stormwater finance; stormwater user fees; revenue evaluation; infrastructure finance stormwater management; stormwater finance; stormwater user fees; revenue evaluation; infrastructure finance
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Zhao, J.Z.; Fonseca, C.; Zeerak, R. Stormwater Utility Fees and Credits: A Funding Strategy for Sustainability. Sustainability 2019, 11, 1913.

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