Public attention will pay off, but educating city council is always job one.

By Harold E. Clarkson

Establishing a new user fee for stormwater management isn't something you just "pull out of a hat and spring on people," says Charles Martin, city administrator for North Augusta, SC. It's a process that requires long-term education and relationship building - with city leaders and the public - to foster acceptance of the concept.

North Augusta Mayor Lark Jones shares information about the needed stormwater utility with citizens at a public meeting.

Martin should know. He began informing North Augusta's City Council about the need for better stormwater management back in the early 1990s, right after the latest amendment to the Clean Water Act was issued.

"As soon as we knew that our community was going to be directly affected by these new federal regulations, we started talking to city council about it, and we've talked about it every year since then," Martin reports. "So when the time came a few years ago to do something about it, council members did not necessarily relish the idea of a new user fee, but they certainly understood why we had to do it. And they were able to explain to their constituents why we had to do it."

Instead of being defensive and fighting the law, which other communities have done, North Augusta took the offensive. City leaders put their energies into finding ways to make the law work for their community. Tom Zeaser, who became the city's director of engineering in 1998, realized that North Augusta needed a plan for implementing a stormwater management program focused on water quality. He also realized the city needed a new revenue source to begin paying for the program before the March 2003 National Pollutant Discharge Elimination System (NPDES) Phase II permit application deadline. Martin supported Zeaser's charge by emphasizing the need for a stormwater program and revenue source in his annual budget messages to city council. "Charles Martin was the early champion [of] stormwater funding," Zeaser says. "So when we created the utility, it was not a surprise to the press or to the public."

Even before North Augusta—population 18,000—was designated as an NPDES Phase II community, the city needed stormwater funding to solve minor local flooding problems and make capital improvements to replace aging stormwater infrastructure. The NPDES Phase II regulations made it clear that North Augusta had to address water-quality issues as well.

The city hired national design and engineering firm Woolpert LLP in 2001 to conduct a stormwater program needs assessment and utility feasibility study to prepare for NPDES Phase II program implementation. Woolpert recommended a utility as a feasible and appropriate revenue source for North Augusta. By year's end, a preliminary rate structure, based on a property owner's contribution to runoff, had been determined. And by July 2002 the first stormwater utility bills were in the mail.

After two complete billing cycles, the city had logged only three citizen inquiries about the new stormwater utility. Residential and nonresidential property owners alike seemed to take it all in stride. In North Augusta, utility implementation was a nonevent.

"Other municipalities have attempted to establish stormwater utilities, and they've had all kinds of problems along the way," notes Gary Sick, Southeast director of the Soil and Water Conservation Society. "They've failed to accomplish the things that North Augusta accomplished."

Political problems are to blame for many utility failures. For example, elected officials might have misunderstood the need for stormwater funding and thus might not have supported it. The public may have opposed stormwater funding, especially if they perceived that the city was simply finding a new way to increase taxes. In other cases, poor timing—implementing a stormwater utility after a different tax has just come on-line—has resulted in public protests.

"We did not experience the great amount of opposition that many other communities have experienced," Zeaser explains. "We developed our utility in a manner that we thought would stand up to close scrutiny."

Educating City Council

North Augusta, known as South Carolina's Riverfront for its location across the Savannah River from Augusta, GA, spans more than 18 mi.² North Augusta property owners enjoy many big-city amenities, as well as a strong sense of history, tradition, family, and community. Current projects include revitalizing the downtown and enhancing the city's riverfront location. These and other city initiatives are discussed at the city's annual retreat, called North Augusta Forward, each May. At this forum in 1999, Zeaser made his first presentation to city council about the pending NPDES Phase II stormwater regulations.

"We explored the history of the Clean Water Act, educated council on the law, described activities required to obtain a permit, and tried to put a dollar figure on all that," he relates. "We definitely had to sell it to them; few thought it was great."

The council was concerned about how the city would charge its residents for stormwater and how fairness and affordability could be ensured. "Council cautioned us not to minimize our efforts but not to go overboard either," he says.

The council asked Zeaser to explore funding options and outline the next steps at the next retreat. He responded, giving the council the specifics about NPDES Phase II regulations and presenting an implementation timeline. "We tried to present a greater sense of urgency in 2000," he recalls. "We focused more on stormwater fees instead of taxes or assessments based on lot frontage. We laid out what the fees might look like for the average homeowner and business owner and the revenues that would be generated."

Zeaser says the council was concerned that the proposed fees might be too burdensome on the average homeowner and business owner. "We were asked to streamline our program as much as possible." The council and Zeaser agreed that a consultant should evaluate the city's existing stormwater management activities and determine what additional activities were required to comply with EPA regulations.

At the 2001 retreat, Zeaser presented the proposed stormwater management program in detail, outlined existing efforts to hire a consultant, and invited three council members to serve on the consultant selection committee. "That was another way to educate council about stormwater management," he says. "These three council members heard presentations about stormwater management from outside sources and asked questions so they could share more information with their fellow council members later."

Woolpert was selected, began work in July 2001, and presented results to the city council by year's end. Woolpert and Zeaser made the proposed rate structure easy to understand by giving the council several sample rate scenarios for different types of property owners in North Augusta.

"We spent a lot of time making sure city council fully understood the technical aspects of the proposed rate structure, even reviewing concepts like the hydrological response of the ground to rainwater and how development affects that response," Zeaser explains. "The rate structure had to be understandable to the average person, yet grounded in science. We knew this structure would be more defensible than an arbitrary, simplistic formula."

So when the city council had to make a final decision about utility implementation, not much selling was required. The council could proceed with confidence because its members had been educated right from the beginning and had reached a consensus. Elected officials fully understood why North Augusta needed a utility, how revenues would be used, and what the program would cost.

Insisting on a Simple, Fair Rate Structure

A utility stands a greater chance of success if the rate structure is both fair to all and easy to understand. Citizens must understand how their bill is calculated. And the rate structure must generate sufficient revenue to cover the projected budget for stormwater management.

There are two primary approaches to rate structure design: (1) adopting a very simple, straightforward method that allows a utility to get up and running quickly but might result in questions and appeals upon implementation and (2) adopting a very detailed rate structure, which takes longer to implement but ultimately results in fewer questions from the public.

If exceptions or too many credits are built into the rate structure, or if flat rates are adopted, the rate structure won't be perceived as fair and a municipality could set itself up for public opposition and appeals. To avoid this problem, North Augusta took a hybrid approach—correlating rates to property size, land use, and percentage of impervious area—and kept the number of factors in its rate structure to a minimum. To determine the charge for each customer, a base unit of measurement, called the Equivalent Residential Unit (ERU), was established. An ERU is the average-size residential lot and its corresponding runoff coefficient ("C" factor), which indicates the quantity of runoff for an average-size lot with a home. The ERU in North Augusta is one-third of an acre with a C factor of 0.35. All single-family residential customers are charged at one ERU per month, set at $4. Multifamily residential customers pay less.

Nonresidential customers, including businesses, churches, and schools, typically have a much greater percentage of impervious area than do residential customers. In North Augusta, a nonresidential customer's charge is based on the number of ERUs the property represents. All nonresidential customers were assigned one of 14 categories of developed land use; the land use and its associated C factor, and the number of acres in the property determine the number of ERUs.

"North Augusta's rate structure is fair because it calculates how much runoff a property will contribute compared to other properties," Zeaser points out. Fairness was not sacrificed for the sake of simplicity.

All Contribute, All Must Pay

North Augusta's utility implementation succeeded because city leaders never wavered from their initial philosophy: Since all property owners—including residents, churches, schools, and large and small businesses—contribute to stormwater runoff, all must pay to help manage stormwater.

Some of the largest contributors to runoff, however, such as churches and schools, are usually organizations with the perceived least ability to pay. Communities that try to exempt such entities from a stormwater user fee often get themselves into legal trouble. North Augusta avoided this potential pitfall.

"We equate the user fee for stormwater to the taxes we pay for schools," Martin says. "Everybody has to help pay for public education whether they have children in the school system or not. Likewise, because everyone contributes to water-quality degradation through their everyday activities, everyone should have to pay to find solutions to water-quality problems. Property owners can't be exempt from their water and sewer bills, and they can't be exempt from stormwater charges either."

Educating the Public

North Augusta's newsletter informed the public about Phase II requirements and the need for stormwater management.

If job one is educating elected officials, then job two is educating the public about the need for stormwater management, the law, how funds will be used, and program costs. Not only must the rate structure be fair and easy to understand, but the public also must perceive that it is fair and easy to understand. "You don't want the public to perceive that the city is implementing a ‘rain tax,'" Martin says. "That's a real negative and should be avoided."

The better a city knows its community, the more effective its public education process can be. North Augusta's citizens learned about the program in multiple ways:

Stories in the City's Newsletter (North Augusta Forward). Two of the earliest stories coincided with the completion of Woolpert's program needs assessment and feasibility study. A story titled "Unfunded Federal Mandate" described how EPA is requiring North Augusta to develop and implement a stormwater management program to meet the municipal stormwater permitting requirements of the South Carolina Department of Health and Environmental Control. Citizens learned that existing programs must be revised and new programs added for the city to fully comply. The story warned citizens that no federal or state funding is available and that funding needs will go beyond what the city currently budgets for stormwater management. Citizens also learned of the consequences to the environment and to public and private property if the city's stormwater management program is inadequate.

A second article discussed the city's stormwater management budget, introduced the utility fee concept, projected that each household would pay between $3 and $4 monthly to provide revenues to the Stormwater Utility Fund, described the basis for fee calculations, and explained that credits and an appeals process would be available.

"We wanted to make citizens aware in 2001 that we were anticipating a utility fee," Zeaser says. "We had done enough research and felt we had enough information to answer questions. This was the appropriate time to really bring the public into the process."

Another story, "Stormwater Management: Protecting Land and Water," ran in the newsletter's March 2002 edition. This story discussed the impact of stormwater runoff, described how the city's program would reduce the discharge of pollutants into the Savannah River and meet the water-quality requirements of the Clean Water Act, listed some citizen do's and don'ts for reducing the amount of stormwater pollution discharged into local waterways, and announced an upcoming public hearing.

Bill Stuffers. Before the public hearing on March 18, the city included an official Public Hearing Notice in customers' water utility billing statements announcing the date, time, and purpose of the meeting. The notice explained why the city needed a stormwater management program, how the city planned to pay for the program, the basis of the rate structure, and proposed fees and ranges for residential and nonresidential property owners.

Public Hearing. During the public hearing, city officials presented the plan to pay for stormwater activities required by EPA mandate. City officials received public comments and answered questions about the proposed rate structure. The public learned that two sources outside the city, Woolpert and the South Carolina chapter of the Soil and Water Conservation Society, supported the utility and the soundness of the rate calculations.

Notes the society's Gary Sick, "It was a relatively calm meeting. That shows the city did its homework by sharing information with the public beforehand. Those who attended were well informed."

"Dummy" Bill. For the two months before the stormwater bills were sent, Zeaser notified customers right on their existing water utility bills that they would be charged for stormwater management beginning July 1, 2002. These two water utility bills included a zero in the stormwater service charge column so citizens could begin recognizing where and when the new charge would appear. Citizens didn't seem surprised with the advance notice of the upcoming charge; Zeaser received fewer than a half-dozen phone calls from property owners questioning the information.

The city sent customers a "dummy" bill before the actual stormwater bills were mailed to show where the new fee would appear and when charges would begin.

Brochure and Rate Notification to Nonresidential Customers. In spring 2002, a trifold brochure on stormwater management was mailed to nonresidential customers to explain the program, the service charge, how it's calculated, and the process for credits and appeals. Customers were advised of their monthly fee and what credits already had been applied. The city told customers they had the right to contest their fee if they believed it was calculated in error and the right to submit written documentation of any additional stormwater management activities that might result in credits.

Some nonresidential customers questioned how their service charge had been calculated. Acreage calculations had been based on data in North Augusta's geographic informational system (GIS).

"We did go back and verify some of the fees," says Zeaser, who extracted new acreage measurements from actual site plans instead of from the GIS, reworking rate calculations by hand. Some properties were in the wrong land-use classification; adjustments were made as necessary and revised fees calculated. "It was worth us making that extra effort to look at those parcels individually and update the rate calculations," he adds.

Zeaser did similar manual reviews for public school sites, looking for every possible opportunity to reduce their fees. Some were adjusted accordingly as allowed by law.

Web Site. Citizens were encouraged to visit North Augusta's Web site to learn more about the city's stormwater management program and its benefits. Through the Web site, citizens learned that the program would pay for building and maintaining drainage systems to alleviate local flooding problems; inspecting, cleaning, and maintaining the drainage systems; providing streambank protection; monitoring construction sites to ensure that erosion control is maintained; and creating public awareness programs that help protect and improve water quality.

"North Augusta didn't miss any opportunities to share information with customers," Sick observes. "They gave as much information as they could to those affected by the utility. The whole effort was well organized. They engaged the public at every opportunity."

Throughout the public education process, citizens were informed about appeals. If a customer can document that the ERU calculation for a property has been applied in error, the customer can follow a step-by-step appeals procedure.

"Citizens must have a formal appeals process to follow," Zeaser stresses. "A formal process can make sure everyone is treated fairly and also reduce the number of fruitless complaints."

North Augusta's Web site features FAQs and information about the rate structure, credits, and appeals process.

Predicting Potential Opposition and Preparing Positive Responses

Even if a municipality does everything possible to ensure that the public understands the need for stormwater management, concerns and questions are still likely. North Augusta's public hearing generated much citizen input:

• One citizen was concerned that a monthly fee might be unreasonable for people on fixed incomes.
• Another citizen said he preferred a property tax to a user fee because property taxes could be deducted from income tax returns.
• Some businesses mentioned the irony in the city's recent requirement that parking lots be paved, thus creating more impervious surfaces, and that the stormwater user fee was based on the amount of impervious surfaces.
Another citizen said the city should refuse to comply with the government's unfunded mandate.
• Citizens who claimed they had no drainage problems questioned why they should pay. (Citizens were told the fund was designed to address water-quality issues and that those who create runoff should pay to manage it.)
• A school district representative urged the city to be as lenient as possible with public schools and questioned why schools should pay since many already have storm drainage controls. Certain businesses with retention ponds also asked why they should pay. (The city explained that retention ponds meeting normal standards would not be eligible for credit; credits would be allowed if a nonresidential customer implemented controls beyond minimum requirements of the law.)

"We came out of that meeting realizing we'd have to take a closer look at credits for nonresidential properties," Zeaser says.

The resulting credit system, outlined in the city's Stormwater Management Service Charge Credits Technical Manual, allows businesses to gain credits of up to 50% for water-quality control practices (such as implementing a stormwater pollution prevention plan, sweeping parking lots regularly, maintaining a retention pond, or using porous pavement) or water-quantity reduction (keeping peak runoff rates on a developed property at or below the predevelopment rates).

Public and private schools can gain credits of up to 50% if they teach "Action for a Cleaner Tomorrow," a South Carolina Department of Health and Environmental Control - approved environmental science curriculum for grades K-12. Schools can gain additional credit for water-quality control practices or water-quantity reduction for a maximum total credit of up to 75%.

Zeaser says that although the credits slightly reduced the total overall revenue that the utility would generate, the city council was pleased because these efforts showed the public that the program was being streamlined and kept under control.

Getting Attention From the Local Press

Because the press routinely covers the annual North Augusta Forward retreats, information about the upcoming stormwater management program was reported during coverage of the 1999, 2000, and 2001 meetings. Coverage then increased. A local newspaper account on December 16, 2001, after the council approved utility development, stated, "The city has budgeted more than $300,000 in 2002 to comply with EPA's mandate and estimates it will cost up to $240,000 a year to stay within the guidelines.The cost of compliance likely will be a utility fee for North Augusta residents as early as this summer."

Another story ran on February 21, 2002, before the public hearing. This story outlined the events of a city council study session that resolved details about how the rates would be determined, gave examples of different rate calculations based on different property types, stated that the revenues collected could be used only for stormwater management, and remarked that the EPA mandate was unfunded.

In March 2002, a newspaper story on the public hearing captured a variety of public comments about the user fee. In April 2002, another newspaper article explained how businesses and schools could earn credits. But in July 2002, when the first bills were mailed, no newspaper story appeared. This seemed to indicate that in North Augusta, implementing a stormwater user fee was publicly acceptable.

Results

Once the groundwork had been laid and the decision made to establish a stormwater utility, North Augusta proceeded swiftly. Woolpert helped the city develop the rate structure, set the budget, analyze GIS data to determine parcel acreage, calculate rates, design the utility billing system using existing databases, educate the public, prepare ordinances, and implement the utility.

Throughout the process, city leaders listened - and responded - to every citizen who expressed a concern or had a question. No one's comments were dismissed. No excuses were given. And no exceptions to utility compliance were made. "The customers seemed to appreciate our responses to their comments and requests," Zeaser observes. "Overall, the citizen input helped us because we've gained a certain level of trust from the public. They know we're trying to keep this as fair as possible."

North Augusta proved that a stormwater utility, with a solid, defensible rate structure, can be established successfully in small communities. Throughout utility planning, development, and implementation, city leaders remained united in their efforts and in their messages to citizens. "We learned that you sometimes have to sit down one-on-one to explain how much money is needed, why the rate structure is fair, and that nonresidential properties can earn reasonable credit for their stormwater management activities," Zeaser says.

In January 2003, North Augusta won a Special Achievement Award from the South Carolina chapter of the Soil and Water Conservation Society for "exemplary leadership and innovative planning and community involvement to meet stormwater guidelines." Sick says Zeaser and Martin not only educated themselves about stormwater utilities and how they function but also learned the rules, regulations, and laws of the utility business.

"North Augusta's city officials became stormwater management experts," Sick remarks. "They gained a keen understanding of the technical concepts of stormwater management and spoke with authority. They not only talked to citizens but also listened and got their input."

Author Harold E. Clarkson, P.E., C.F.M., is a project manager with Woolpert LLP in Columbia, SC.

SW - July/August 2003

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