An Ounce of Prevention: The Value of Stormwater Utilities Under a Changing Climate

February 18, 2022 / Blogs

This funding mechanism is widely used nationwide but has seen limited adoption in Illinois. It can help communities prepare before disaster strikes, if we see the value of a crisis averted.

In July of 1996, a major storm swept across northeast Illinois, with rainfall in some areas exceeding 16 inches in 24 hours. The massive flooding in the days that followed resulted in the loss of eight lives and an estimated $645 million in damages. At the storm’s epicenter, the City of Aurora received a record-breaking 16.9 inches of rainfall in a 24-hour period.

A stormwater utility is a tool used to streamline stormwater management at the local or regional scale and authorizes the collection of a fee to finance its activities.

In response to the disaster, Aurora established a stormwater utility in order to streamline stormwater management services and create a dedicated stream of funding with which to implement them. Established in 1998, revenue generated by this fee has helped improve drainage systems and made the city more resilient to future storm events.

What is a stormwater utility?

A stormwater utility is a tool used to streamline stormwater management at the local or regional scale and authorizes the collection of a fee to finance its activities. It is similar to other utility fees, such as water and sewer charges, and revenue is used for the specific purpose of addressing stormwater needs. The average monthly stormwater utility fee for a single-family residence is $5.94.

According to an annual survey conducted by Western Kentucky University, there are nearly two thousand stormwater utilities nationwide. They are found in 41 of 50 states, as well as the District of Columbia, and in communities as large as Los Angeles (population: 4 million) and as small as Indian Creek Village, Florida (population: 88).

Minnesota currently has the most stormwater utilities with 204, with Florida just behind at 187. There is no discernable pattern as to which states have more or fewer stormwater utilities, and even neighboring states differ dramatically. Illinois, for example, has only 30 stormwater utilities statewide, while neighboring Indiana has 99.

Why wait?

Consistent funding for stormwater management activities is a perennial problem for communities big and small. Many communities, like Aurora, set up stormwater utilities in response to a catastrophic flooding event. However, utility-funded stormwater management activities can help communities prepare for when major storms hit while also helping them address preexisting problems. That is, proactively establishing a utility to improve stormwater systems can make communities more resilient before a disaster strikes and help manage normal seasonal precipitation.

Of course, establishing a utility is not the only approach. For example, the City of Elmhurst successfully manages stormwater through existing funding sources (e.g., property taxes, grants, loans) and through thoughtful stormwater policies. For many communities, though, having a dedicated source of funding devoted to stormwater management expands the community’s ability to address stormwater needs and maintain existing infrastructure.

And with more rain in the forecast, communities need to prepare now.

How?

Establishing a stormwater utility and implementing a fee can require considerable effort on the part of the municipality, particularly in low-income communities where questions of affordability and equitable implementation can pose a not-insignificant challenge. It often requires an in-depth analysis of a community’s stormwater needs and the costs thereof. But, ultimately, it comes down to a tradeoff between those needs and what community members can reasonably be expected to pay.

The political support for action doesn’t require that communities wait for catastrophe. But it requires strong leadership to help residents and other stakeholders see the value of a crisis averted.

The City of Aurora charges a simple flat fee, as do many other stormwater utilities. Others’ (most) rates are based on the impervious area of a property – e.g., driveways, patios, and rooftops. Fee structures based on imperviousness generally offer credits that allow property owners to reduce their individual payments by removing hardscape and replacing it with rain gardens and other types of green stormwater infrastructure. In this type of partnership, both parties benefit: property owners get a discount (and less flooding), and there is less demand placed on municipal sewer systems by capturing and treating a portion of the rain where it falls. Further credits for non-residential properties and affordability programs for low-income residents have also been successfully implemented by some utilities.

What’s next?

The political support for action does not require that communities wait for catastrophe. But it requires strong leadership to help residents and other stakeholders see the value of a crisis averted. And transparency and thoughtful engagement are vital during every step of the process.

Stormwater utilities are a proven way for municipalities to address localized flooding and water quality challenges and to maintain existing investments in stormwater infrastructure. They can be a vital tool in helping communities adapt to a changing climate and be prepared to face the storms on the horizon.

We are deeply grateful to the Gaylord and Dorothy Donnelley Foundation for supporting this work, as well as all those who make MPC’s robust water agenda possible, including the Charles Stewart Mott Foundation, Crown Family Philanthropies, Grand Victoria Foundation, the Joyce Foundation, McDougal Family Foundation, and the Prince Charitable Trusts.

This blog’s co-author, Olivia Blasi, is a Research Assistant with MPC’s Water Resources program. They are a graduate of Seattle University where they were part of the women’s rowing team and involved in the university’s Center for Environmental Justice and Sustainability.