By Brant D. Keller, Ph. D.
Across the nation and in Georgia, progress in the creation of stormwater utilities has been remarkable and encouraging. It was as recent as 1998 that the city of Griffin became the first government in Georgia to create a stormwater utility, its intent to hold property owners accountable for runoff and provide a stable, equitable funding source dedicated to managing a watershed approach to water quality and quantity challenges.
Curiosity recently sent me back to my 2001 dissertation and research to examine the validity of my projections through 2020 on the increase in stormwater utilities. The nation, according to my 2001 model, was expected to see an increase of 1,500 to 2,000 stormwater utilities through this period. Just four years later, the empirical data indicate a rate of increase on track to add nearly 2,500 utilities nationwide by 2020. And time and again, the driving force is reported to be the National Pollutant Discharge Elimination System (NPDES) Permitting Program, established by the federal government to control point-source discharges of water pollution.
In Georgia, pioneer Griffin has been emulated by stormwater utilities in Columbia County, the city of Decatur, Rockdale County, the Douglasville-Douglas County Water and Sewer Authority, the city of Fayetteville, Fairburn, DeKalb County, Athens-Clarke County, Covington, Stockbridge and Conyers.
Local governments activating stormwater utilities in 2006 are the Clayton County Water and Sewer Authority, Gwinnett County, Warner Robins and Peachtree City. Feasibility studies are officially under way or have been completed in Cobb, Cherokee, Fulton, Effingham, and Fulton, Glynn, Henry and Newton counties and in the cities of Americus, East Point, Gainesville, Logansville and Perry.
Milestones along this road include the defeat of the city of Atlanta’s stormwater utility, after the Fulton County Taxpayers Association successfully argued in court that the city did not follow appropriate procedures, and the court decision regarding Columbia County’s proposed stormwater utility, in which the court agreed that the stormwater utility was a service fee and not a tax.
With the evolution to stormwater utilities, the cycle of the “Trilogy of Water” is complete: Stormwater utilities have established viable roots along with water and wastewater. Water and wastewater at one time were embedded in the general fund tax base, as was stormwater. Conveyance and treatment are now all equated in the watershed process: Over time the quantifiable unit of measurement has proved to be equitable in determining the contribution of runoff from each parcel of property.
Despite remarkable progress, challenges remain for stormwater utilities. One hurdle is a movement to create legislation to tag the fee onto the annual property tax bill. Water, wastewater, electric, phone and cable utilities bill monthly for services provided, and rightfully so. The concept behind a utility is to establish a user fee database and bill users appropriately for services rendered. Add a stormwater fee to a tax bill, however, and the implication is that it is a tax and not a utility.
The Columbia County case affirms that a stormwater utility is truly a user fee-generated utility, based on services rendered not on assessed value. Any subsequent legislation must demonstrate due diligence by elaborating on the process and determination by which the user fee is calculated. Leaving the process open to interpretation increases the potential for litigation.
Supporters suggest that the fee should be itemized in the tax bill, just as a street light would be. But a street light is assessed, not a user fee. Utilities do not place liens on property to collect monies due. To be a utility, one must act like a utility, do due diligence, create a billing system and send bills on a regular basis based upon consumption or services used.
Another growing concern is the premature entrance of consulting firms seeking a role in the development of these stormwater utilities. Inexperienced firms will complicate the development and implementation of a stormwater utility. Privatization can help toward cost-effective implementation, but only when governments operate cautiously, considering firms with a proven track record, and with staff and technical resources that facilitate the development of an effective strategic framework to develop your program.
Griffin’s stormwater utility, now 7 years old, was able to secure an exceptional amount of outside funding. Competition for funds grows as more players enter the game, and the pot of money is not only shrinking but in some cases drying up. The city merged water, wastewater and stormwater into a combined utility. There are still three enterprise funds, but the combined utility fares better in the revenue bond market.
There has never been enough funding for water and wastewater infrastructure replacement and repair, and it will be no different for stormwater. Customers now have a stormwater utility bill, and that creates higher expectations, which means higher levels of service. These expectations are likely to lead to higher rates and potentially a tap-in fee for new customers tying onto the stormwater management system.
The process over the next few years promises to be interesting as stormwater management evolves and improves. A well-defined stormwater utility is a priceless tool in managing water quality and quantity in a watershed. Not only can it become a financial incentive for environmentally responsible property development and management, it can also help government create an informed stakeholder in every resident, contractor and developer.
Brant D. Keller, Ph. D, director of Public Works and Utilities for the City of Griffin, wrote this commentary for the Georgia Public Policy Foundation.The Foundation is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.
© Georgia Public Policy Foundation (November 18, 2005). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.