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How Municipalities in the Wyoming Valley are Cutting Stormwater Management Costs by up to 90%

This article is an excerpt from the December 2017 issue of The Authority, a magazine produced the Pennsylvania Municipal Authorities Association (PMAA). Contact us if you’d like a copy of the entire article.

Justify your rates with asset management

Thirty-one municipalities in Luzerne County are piloting a regional approach to MS4 compliance that may revolutionize the way Pennsylvania responds to the growing challenges posed by stormwater.

They have signed cooperative agreements with the Wyoming Valley Sanitary Authority, which will serve as MS4 permit coordinator for the entire region. The following are just a few of the ways that partnership will save them money over the next 20 years:

 

Less paperwork.

Because the municipalities are submitting their permit requirements as part of a regional approach, the Department of Environmental Protection (DEP) is allowing them to submit just one Cheasapeake Bay Pollution Reduction Plan (PRP) for the region and a single PRP for each impaired watershed (for a total of seven Pollution Reduction Plans).

If each municipality had chosen to work alone, the region would’ve submitted more than 100 Pollution Reduction Plans to DEP. When the cost of producing one Pollution Reduction Plan can be more than $20,000, the cost to produce more than 100 would simply have been out of reach for this region.

But, by working together, the municipalities reduce the amount of paperwork that must be produced to comply with state requirements.  Fewer plans cost less money, and that lower cost is then divided among the participating municipalities.  At the end of the day, each municipality’s share of the Pollution Reduction Plan preparation cost is just $3,000.

 

 

Fewer, more efficient construction projects

Submitting the Pollution Reduction Plan is just step 1 of the compliance process. Once the plan is accepted by DEP, municipalities must implement it, and that typically involves the construction of Best Management Practices (BMPs) that reduce the quantity and/or improve the quality of stormwater runoff.

The most expensive part of constructing BMPs is acquiring the land on which to build them. When municipalities work alone, they are limited to constructing their BMPs within their own borders, and most municipalities don’t have an abundance of publicly owned land available for BMP construction. If they partner with other municipalities on a regional approach, they can get credit for constructing BMPs anywhere within the watershed.  With that flexibility, communities can install projects that yield the greatest pollutant load reduction for the lowest cost.  This often means they can meet their goals with fewer construction projects.

According to our analysis, municipalities in the Wyoming Valley would’ve had to construct approximately 200 projects to meet the pollution reduction goals individually (at a cost of $69 million). As a group, the municipalities will only need to construct 65 projects to meet those goals (at a cost of just $12 million).  This will save the municipalities more than $50 million on the cost of implementing their Pollution Reduction Plans.

 

 

Lower O&M costs through economies of scale

There are a lot of fixed costs in managing stormwater.  When you spread those costs over a larger number of users, the cost to each user gets smaller.  A feasibility study conducted by WVSA’s engineer determined that, as a group, cooperating municipalities would save $274 million on operations, maintenance, and improvements over the next 20 years by working together on a regional approach to stormwater management.

 

 

Increased purchasing and borrowing power

Generally, you can negotiate lower unit costs for items when you buy them in larger quantities, so, for example, pipelines could be replaced or slip lined for a lower cost if the work was completed as part of a larger, regional project.

 

 

Increased access to government grants and loans

Funding agencies tend to favor entities that are cooperating regionally to streamline costs, and politicians tend to support projects benefitting a larger constituent base.  Therefore, funding applications submitted by a regional cooperative are more likely to be awarded a grant or loan than those submitted by individual municipalities. These funding awards can save a community significant sums of money versus funding a project out of its own revenues.

 

When municipalities save money like this, it stands to reason they can pass those savings on to residents and business owners. In a follow-up post next week, we’ll discuss how the regional partnership model being pioneered in the Wyoming Valley is benefitting taxpayers in the region.  In the final post of this series, we’ll discuss how regional cooperation prevents water pollution more effectively.


Jim Tomaine has more than 30 years of engineering experience. He holds a bachelor’s degree in civil engineering from The Pennsylvania State University and a master’s degree in business administration from Wilkes University. He is the executive director of the Wyoming Valley Sanitary Authority and has been at WVSA for twenty seven years.  Prior to the WVSA, Mr. Tomaine worked in the private sector as a design engineer. He currently holds his A-1 Wastewater Treatment Plant Operators Certification in Pennsylvania and is also a registered professional engineer.

Adrienne Vicari is the financial services practice area leader at Herbert, Rowland & Grubic, Inc. (HRG). In this role, she has helped the firm provide strategic financial planning and grant administration services to numerous municipal and municipal authority clients. She is also serving as project manager for several projects involving the creation of stormwater authorities or the addition of stormwater to the charter of existing authorities throughout Pennsylvania.

How to Mitigate Flood Risk (and How to Get Funding to Support the Effort)

Erin Letavic, a project manager in HRG’s civil group, published an article in the July issue of Borough News magazine about flood control entitled “Mitigating Flood Risk in Your Borough.”  In it, she discusses the costs municipalities face when flooding occurs and offers  tips for how to minimize the risk of flood damage as much as possible.

Topics she discusses in the article include

  • Understanding your community’s flood risk
  • Improving floodplain management in your community
  • Expanding vegetation that absorbs flood waters and filters pollutants
  • Promoting the construction of green infrastructure
  • Obtaining funding for flood mitigation measures
  • Gaining public support for flood mitigation measures

Here’s a preview of the tips she offers in the video below:

Severe floods can happen in any community, and, when they do, they can wreak serious havoc: destroying homes and businesses, threatening people’s safety, temporarily shutting down the economy, and damaging infrastructure.

Communities can manage flood risk by implementing a flood mitigation strategy. The first step in flood control is to determine what areas of your community are most vulnerable to flooding and model exactly how those areas would be impacted by particular flood events. The next step is to make sure your ordinances and codes limit development in flood-prone areas and promote the planting and preservation of vegetation that will absorb flood waters and reduce flood intensity.

Successful flood control plans require cooperation among all stakeholders in a community, so it is essential to involve them throughout the planning and implementation stages. Obtaining grants and loans to support the initiative will help reduce opposition and lessen the impact on tight municipal budgets.

While the risk of flood damage cannot be completely eliminated, municipalities can greatly enhance the safety of their communities with a forward-thinking approach. The planning a municipality does today is key to weathering the storms tomorrow may bring.

Read the entire article here or in the print edition of Borough News magazine.

 

 

 

HRG and Land Studies to Prepare Paxton Creek TMDL Plan

Paxton CreekHRG is partnering with LandStudies, Inc., to prepare a TMDL plan for Paxton Creek beginning in the spring of 2017.

The Paxton Creek TMDL Plan will be like a “pollution diet” for the watershed. It will outline how much sediment is in the creek now, identify potential sources of that pollution, and provide strategies for reducing sedimentation to safer levels by a specified deadline. The overall goal of the TMDL plan is to help municipalities within the watershed comply with relevant state and federal regulations while improving the health of Paxton Creek.

HRG was involved in the preparation of the Paxton Creek Watershed TMDL Strategy in December 2015 and is the retained engineer for CRW, Susquehanna Township, and Lower Paxton Township. These experiences provide HRG with historical knowledge of the pollution issues within the watershed that other firms do not have. LandStudies has the state’s first Certified Professional in Municipal Stormwater Management (CPMSM), who is well-versed in writing TMDL plans and assisting municipalities with their stormwater pollution problems.

Read the full press release on Land Studies’ website.

HRG Named NFWF Chesapeake Bay Stewardship Fund Technical Capacity Provider

NFWF Chesapeake Bay Stewardship Fund

As an approved provider for the National Fish and Wildlife Federation’s (NFWF) Chesapeake Bay Stewardship Fund Technical Capacity Grant Program, Herbert, Rowland & Grubic, Inc. (HRG) is now qualified to provide technical services to local governments, nonprofit organizations, and conservation districts for projects that enhance local capacity to more efficiently and effectively restore the habitats and water quality of the Chesapeake Bay and its tributaries.

These technical capacity grants are designed to fill a strategic need or gap for planning in larger watershed restoration or conservation projects. The program is not to be relied upon to implement on-the-ground-work and is not a substitute for securing implementation funding to successfully complete a project.

The Chesapeake Bay Stewardship Fund awards $8 million to $12 million per year through two competitive grant programs, the Innovative Nutrient and Sediment Reduction Grants (INSR) and Small Watershed Grants (SWG) Programs. Entities interested in applying for funding for these grants should also consider the Technical Capacity Grants Program as an opportunity to better develop project ideas and enhance the technical merits and competitive status of their future INSR or SWG grant applications.

Local governments, conservation districts, or 501(c) non-profit organizations that believe they have an eligible project for this grant program should contact Matt Bonanno, our civil services practice area leader, at mbonnano@hrg-inc.com or 717.564.1121.


Eligible Applicants: Only NFWF-approved Technical Assistance Providers. HRG is approved for five years (through 2021). HRG must complete the application on behalf of the eligible beneficiary.

Eligible beneficiaries: Local governments (including conservation districts) and non-profit 501(c) organization.

Eligible Projects: Technical capacity grant projects are available in the three priority investment areas listed below.

  • Agricultural Conservation: Agricultural conservation for water quality and habitat improvement.
  • Restoration and Community Stewardship: Including watershed planning, habitat restoration, land conservation and land use, public access, diversity initiatives, environmental literacy, and leadership development.
  • Stormwater Management: Including design of regional stormwater servicing models, sustainable financing and management strategies, and targeting of stormwater improvements for water quality, resiliency, and community benefit.

Available Funding: Up to $50,000 per project. Each year, NFWF plans to award approximately 25 grants for a total of $1 million in awards. Total funding for awards will be determined based on the quality and quantity of applications received.

Application Deadline: Grant opportunities are announced throughout the year in three application cycles: agricultural conservation (spring); restoration and community stewardship (summer); and stormwater management (fall).

Tips Municipalities Can Use to Prepare for Flooding

by Erin Letavic, P.E.
Flooded Street

More than 83,000 homes in Pennsylvania are at risk of property damage from hurricane storm surges, according to a report from a California company specializing in financial and property related business intelligence.  The company, CoreLogic, estimates reconstruction costs for these properties could be as high as $11 billion if all the properties were destroyed.  This makes Pennsylvania the 13th highest-risk state for hurricane property damage.

Though Americans primarily associate hurricane damage with coastal states like Florida and Louisiana, Pennsylvania can also be inundated with storms related to hurricane activity (as anyone who survived the severe flooding of Tropical Storm Lee in 2011 can attest).

In addition, researchers at Penn State University who have been studying weather patterns predict that heavier storms are expected to occur more frequently in the coming decades. For example, a storm with a 24-hour rain total that used to occur once every 20 years is predicted to occur every 12-16 years by the year 2050.  This means, flood events that used to be rare will happen more frequently.

Accordingly, Pennsylvania municipalities should be prepared for heavy storms and the flooding and property damage they can bring. This means every municipality should have a flood preparedness program and should examine its infrastructure construction standards to make sure it is mitigating the risk of more frequent flooding.

The first step in preparing for flood risk is to identify where flooding is most likely to occur and what infrastructure will be affected.

Do you know what parts of your community are in the FEMA floodplain?

Do you know how that floodplain is predicted to change in the coming years?

Do you have critical infrastructure related to your water and sewage treatment system located within that floodplain? What about your power grid?  High-traffic roadways or public transit routes?  Petroleum or chemical storage facilities?

Are your critical community centers located within that floodplain such as the police and fire facilities? Hospitals?  City hall?  Public works facilities?  Shelters?  Communications centers?

Do your sanitary and storm sewer systems have the capacity to handle heavy storms without overflowing polluted water into your local waterways?

A civil engineer with knowledge of floodplain mapping and municipal land planning can help you answer these questions. Then, once the risks have been properly identified, your engineer can help you minimize the risk by upgrading infrastructure and amending codes and ordinances to promote wiser land use.  For example, he or she can examine your local floodplain regulations to confirm they conform to those recommended by FEMA and that they are being properly enforced during the land development and building permit process.

Though it will cost money to take the steps outlined here, the cost of repairing the damage done by a lack of preparation could be much greater. By preparing for storm surge impacts today, municipalities can save lives and money tomorrow.


Erin Letavic, P.E., Erin Letavic is a project manager in HRG’s Civil Group. She helps municipalities throughout Central Pennsylvania manage their stormwater permits and assists with various other municipal engineering tasks such as zoning and subdivision and land development plan reviews.

Building Voter Support for Stormwater Fees

Hand vote

Many local officials realize the need to improve stormwater management to protect water quality, but fear constituents would oppose a new fee for stormwater services. Experience shows a transparent approach that involves community stakeholders can build consensus.

by: Adrienne Vicari, P.E.
 

(These tips are excerpted from an article we published in the October 2015 issue of Pennsylvania Township News magazine and are used here with their permission. Reprints of the entire article are available upon request.)

Increasingly stringent stormwater regulations are causing municipalities to think about how they can fund badly needed stormwater system improvements in their community. Many municipalities are considering funding their program through user fees charged by a municipal authority, as authorized by Act 68 of 2013, but some municipal leaders worry that a new fee may be unpopular with residents and businesses.

Though stormwater utility fees are still largely unchartered territory in Pennsylvania (less than a dozen communities have established one here), the use of dedicated stormwater utilities and stormwater fees is a nationwide movement that has seen steady growth over the past four decades. Western Kentucky University reports that there are more than 1,500 stormwater utilities throughout the United States and Canada, serving communities as small as 88 people to more than 3 million. Their success in building consensus among constituents for stormwater fees can show local municipalities a path to approval in their own community.

HRG has used information from the Western Kentucky University study, the nationwide non-profit Water Words That Work, and several case studies published by the EPA (along with our own experience implementing stormwater authorities) to come up with several tips on how municipalities can build local support for stormwater user fees.

 

  1. Make sure you have identified and involved all the potential stakeholders – even those who oppose the formation of a utility – and form a stakeholder advisory committee. If you don’t attempt to address the concerns of your opposition in these committee meetings, they can come back to haunt you later when it comes time to pass the resolution. According to the EPA case studies, this is what happened in Dover, New Hampshire, and Huntsville, Alabama. Both communities had small advisory committees, but they did not engage all community groups. Though there was unanimous consent among the committee members to form a stormwater utility, the opposition of certain community groups who had not been represented on the committee ultimately drowned out their voices, and the municipal leadership declined to pass the resolution.
  2. Make the stakeholder committee an open forum where people feel comfortable expressing all points of view. Again, you want to deal with any potential obstacles proactively, rather than be blindsided by them in the final stretch. Stakeholder advisory committee meetings are more conducive to problem-solving and negotiating in a deliberative way than public meetings are. By including your opposition early in the process and giving everyone a chance to speak freely, you ensure that major obstacles to support will have been addressed before a public vote.
  3. Have your stakeholder committee discuss the stormwater program and what it can accomplish first. Don’t bring up funding till you’ve established a need for improvements and motivated people to support them. People need to know what they’re getting before they can be motivated to hand over their money.
  4. Clearly define the benefits of the program in all public outreach efforts. Tell people exactly what improvements you intend to make with the money you raise, and quantify the benefits of those improvements whenever possible. For example: “This project will reduce the likelihood of flooding along Main Street by 75%.”
  5. Show, don’t just tell. Visuals are particularly persuasive. Water Words That Work found that showing people photographs of how the fee would be used had the single most dramatic effect of any information provided in gaining approval of the fee.
  6. Choose your words carefully. Name the fee to clearly convey the service you are providing. “Stormwater management” is too vague and largely meaningless to the average person, but “clean water protection” has obvious value. In the Water Words That Work survey, “pollution control and flood reduction fee” tested better than any other term containing the words stormwater, authority or utility.
  7. Emphasize fairness. People generally believe that those who use a service most should pay more for it, so show them how your fee ensures that is the case. Explain why it’s important that non-profits pay the fee because they, too, contribute to stormwater discharges (often more than residents because of their large impervious parking areas). Tell them about credits that people can receive if they lower their stormwater impact by installing green infrastructure on their property. In general, people perceive fees based on actual impervious area to be the most fair and equitable (as opposed to a flat rate), but some of the communities EPA studied did successfully enact flat rates with effective public education about the reasons why that option was chosen.
  8. Demonstrate cost-effectiveness and be transparent about finances. If a stormwater utility is truly the best approach for your community, the numbers will convey that, and detailed economic studies are always an integral part of the planning process. Use those numbers to prove that the stormwater fee will better accomplish program goals than general fund revenue or any other option available. Voters can often be mistrustful of a government’s ability to use funds wisely. Being transparent about program finances (how the fee was determined, how it will be used) eases minds and reduces the chance of a legal challenge.
  9. Define this as a local solution to a local problem. Avoid talk about state and federal mandates or general environmental goals. If flooding is a recurring problem in your community, show how this program will reduce that problem. If pollution is a concern, talk specifically about keeping local waterways clean: the stream families teach their children to fish in, the lake where they go swimming.

Determining whether a stormwater utility is the most effective way to fund infrastructure needs in your community is a complex process that requires dual expertise in civil engineering and financial consulting. Unfortunately, some communities are afraid to even investigate the option because they believe their constituents will never approve of a stormwater fee.   In communities where utilizing general tax revenue is not the best fit approach, research by EPA and others cited in this article shows that an effective public outreach program, which includes key stakeholder groups in the earliest planning stages, can be successful in persuading people to accept stormwater management fees.


VicariAdrienne Vicari, P.E., is the financial services practice area leader at HRG. In this role, she has helped the firm provide strategic financial planning and grant administration services to numerous municipal and municipal authority clients. She is also serving as project manager for several projects involving the creation of stormwater authorities or the addition of stormwater to the charter of existing authorities throughout Pennsylvania. Contact Adrienne about stormwater authorities.

The Potential Advantages of a Stormwater Utility for Financing Your Stormwater Management Needs

by: Adrienne Vicari, P.E.

West Clarion University Pond

Two years after the passage of Act 68, many municipalities still have legitimate concerns about whether a stormwater authority would be right for their community. In a previous article, HRG addressed concerns about public opposition, up-front costs, and a loss of control over the infrastructure covered under the MS4 permit. In today’s article, we discuss the potential advantages of stormwater authorities to municipalities searching for ways to finance their stormwater management programs.

Advantage #1: Stormwater authorities enable you to collect money from tax-exempt users.

Churches and non-profit organizations like hospitals contribute a lot of stormwater runoff to the local watershed, but a tax would never collect any revenue from them because they are tax-exempt. By using the stormwater authority structure, you can charge fees to these users and collect their fair share contribution to stormwater management efforts.

Advantage #2: Stormwater authorities can collect fees from multiple municipalities who may be contributing runoff to their watershed; municipalities cannot charge anyone outside their own borders.

Political boundaries and watersheds seldom coincide. Stormwater is not neatly contained by political boundaries, and watersheds often cross through more than one municipality. But townships and cities cannot charge other local governments for stormwater management under state law. A multi-municipal (or joint) stormwater authority, however, can be set up to serve an area that extends beyond the boundaries of a single municipality, which enables everyone within a particular watershed to contribute to the stormwater management services it requires.

Advantage #3: Stormwater authority fees are more equitable than a property tax.

As stated in #1 and #2, stormwater utility fees ensure that everyone who contributes to a community’s stormwater pays for the services they use (even tax-exempt organizations, particularly if a utility is set up on a watershed-wide basis).

But stormwater fees are also much more flexible and responsive to the true nature of stormwater than a straight property tax would be. The value of someone’s land has little to do with how much stormwater it creates, so a property tax is inherently unfair for this purpose. A property could be appraised at a high value and contribute very little to stormwater, but an experienced financial consultant can help set up an authority’s rate structure based on the quantity and/or quality of runoff a property creates (rather than charging a flat fee or basing it on acreage).

A municipality can also offer credits to property owners who install best management practices for controlling runoff. (This has the added bonus of encouraging good behavior: inspiring people to install stormwater control measures like rain gardens, buffers, etc. on their property.)

Thus, a well-designed stormwater utility ensures everyone pays according to how much he or she uses the service.

Advantage #4: Stormwater authorities provide a dedicated revenue stream for stormwater improvements.

Relying on general tax revenue for stormwater improvements isn’t practical for some communities. There simply isn’t enough money to cover all of the needs the municipality must address, and stormwater often falls to the bottom of the list because money is allocated to more high profile projects such as a bridge replacement or pavement rehabilitation. Unless there is major flooding, stormwater is often forgotten and doesn’t receive the financial attention it needs.

With a dedicated stormwater fee, the money is there to maintain, repair and replace stormwater infrastructure on a proactive basis, rather than waiting till flooding causes expensive damage or impacts public safety.

Advantage #5: A dedicated revenue stream for stormwater can improve the finances of a municipality.

It can do so in several ways. First, now that the municipality no longer directs tax revenue to stormwater management, it has more tax dollars available for its other priorities.

Second, debt associated with stormwater improvements is no longer considered direct municipal debt because it can be self-liquidated by the authority’s revenue stream. Therefore, the stormwater debt doesn’t count towards the municipality’s borrowing limit, and its impact on the municipality’s bond rating is reduced. (Since municipal authorities are not subject to the same restrictions on borrowing and bond rating concerns as municipalities, they are often able to implement larger projects or make improvements in a timelier manner than a municipality could.)

Third, many agencies that offer grants and loans expect the municipality to put up matching funds, which is hard to do when you don’t have a dedicated stormwater revenue stream. Even if matching funds are not an official requirement of the grant or loan, most funding agencies place a higher preference on recipients who have money available for the infrastructure because they have a greater confidence in their ability to complete the project if there are issues and to maintain it after it’s done.

Advantage #6: Stormwater authorities are better positioned to raise rates than municipalities are to raise taxes if stormwater obligations increase.

Tax increases are not popular politically, and they are hard to pass. As stormwater infrastructure needs change, municipalities may need a revenue source that is flexible enough to meet those changing demands.

Every municipality’s financial situation and stormwater needs are different, so it’s wise to seek the counsel of a consultant with dual expertise in engineering and financial consulting to determine if a stormwater utility is right for your community. If it is, your consultant can help you organize a program that maximizes an authority’s potential advantages: providing a dedicated revenue stream for stormwater management that is more equitable than other funding sources and freeing up the municipality’s tax dollars for other priorities without adding to its direct debt or negatively impacting its bond rating.

 


VicariAdrienne Vicari, P.E., is the financial services practice area leader at HRG. In this role, she has helped the firm provide strategic financial planning and grant administration services to numerous municipal and municipal authority clients. She is also serving as project manager for several projects involving the creation of stormwater authorities or the addition of stormwater to the charter of existing authorities throughout Pennsylvania. Contact Adrienne about stormwater authorities.

Overcoming Concerns About Forming a Stormwater Authority

by: Adrienne Vicari, P.E.

pond

Act 68 gave municipal authorities the ability to finance, own, operate and lease stormwater facilities, but, two years later, many municipalities still have questions about whether an authority is right for their community. Aging infrastructure and increasing regulatory obligations from the state and federal government have put a heavy burden on towns across Pennsylvania, and they are searching for ways to finance stormwater management beyond general tax revenue. However, concerns about the upfront investment creating an authority would require and the possible backlash from members of the community give them pause.

Every municipality’s financial situation and stormwater needs are different, so it’s wise to seek the counsel of a consultant with dual expertise in engineering and financial consulting to design a custom solution tailored to those unique needs. If forming a stormwater utility is indeed a good fit for your community, your consultant can help you overcome the typical concerns through a strategic approach built upon sound financial and engineering principles.

Concern #1: The community will be against new fees for stormwater.

It is true that residents, business owners, and non-profit organizations will initially question the need for another bill; no one likes paying new fees. However, municipalities can win public support with extensive community involvement and educational outreach. It’s important to communicate that the new fee will be used exclusively for stormwater management and will not be “raided” for other purposes. It’s also important to show the community exactly how their money will be invested: list the specific improvements you intend to make and use photographs and illustrations whenever possible. Emphasize the fairness of the fee: that everyone pays for the services they use based on the stormwater they contribute to the system (and not simply the value of their property). Accentuate the positive by naming the fee after the benefits it provides to the community (such as a “Clean Water Management Fee”), as opposed to the problems it addresses. Invoice the fee separate from taxes, similar to water and wastewater billing.

Concern #2: It will cost too much to get the authority up and running.

Most municipal budgets are stretched to their limit as it is, so investing money in the start-up costs associated with a new authority is a hard sell when that money could be used for maintenance and repair of ailing infrastructure. But, even though the results are not physically tangible like new culverts or pipe repairs, the money you spend on a new stormwater authority is a true investment in your community’s future. The authority will cost money to get up and running, but it will create revenue in the future that can be used to proactively address stormwater needs before they become costly emergencies. What’s more, that dedicated revenue stream makes you eligible for grants and low-interest loan programs that otherwise would’ve been out of reach because of the need for matching funds.

Speaking of funding, some programs will help defray the start-up costs associated with organizing an authority. For example, West Goshen Township, Chester County, has entered into a 50/50 cost-share with the Army Corps of Engineers for technical assistance with mapping and inventory of their stormwater infrastructure. This step is necessary to develop the Stormwater Management Program and ultimately determine the revenue requirements necessary to establish and justify the stormwater rate.

Depending upon whether the municipality sells its stormwater assets to the authority or leases them, the municipality can also receive an upfront or annual payment from the authority for the transfer of facilities, which will help to absorb some of the start-up costs, as well.

However, municipalities may be able to avoid a lot of the start-up costs associated with an authority by simply adding stormwater to the charter for their existing water or wastewater utility. If they do, the structure and administrative functions (the board, billing, etc.) will already have been set up; the articles of incorporation will just need to be amended.

Concern #3: We don’t want to give away authority over our stormwater infrastructure, especially considering the liabilities we have from our MS4 permit.

Though the municipality can appoint people to its board, ultimately, the authority is an independent body that makes its own decisions. Yet currently the municipality – not the authority – is responsible for any fines incurred from not complying with MS4 permit requirements. This arrangement can easily seem dangerous to many municipal officials, but solutions are available.

A knowledgeable financial consultant can assist in structuring the authority in many different ways to give the municipality flexibility in deciding which powers and purposes it wishes to assign. One option is to set up an operating authority and pair it with a management and services agreement. Under this arrangement, the municipality transfers its facilities to the authority, who collects a rate and charges from local users to finance their operation, maintenance and improvements. The authority then “hires” the municipality to conduct operations and maintenance and perform administrative functions such as billing.

Another option is the reverse leaseback authority. Under this arrangement the municipality continues to own the facilities and finance capital improvements, but it leases the system to the authority for operation, maintenance and the setting of rates and charges.

Hybrid versions of these examples can also be established based upon the priorities and goals of the municipality.

In addition, PA DEP is currently working through amendments to its program which may allow municipalities to transfer their MS4 permits to a stormwater authority along with the drainage and stormwater facilities. By transferring the permit, the municipality would also transfer the legal obligations and liabilities that go with it.

As you can see, the concerns that municipalities have about stormwater authorities can be alleviated through joint financial and engineering planning. Though municipalities typically think of their stormwater infrastructure as an issue for their civil engineer, municipal authorities are primarily financial organizations, so a thorough understanding of finance is important to ensure financial and legal obligations are met in the most advantageous way to the municipality as possible. With fears allayed, municipalities are then able to see the many advantages a stormwater authority offers. In our next post, we discuss these advantages of forming a stormwater authority.

 


VicariAdrienne Vicari, P.E., is the financial services practice area leader at HRG. In this role, she has helped the firm provide strategic financial planning and grant administration services to numerous municipal and municipal authority clients. She is also serving as project manager for several projects involving the creation of stormwater authorities or the addition of stormwater to the charter of existing authorities throughout Pennsylvania. Contact Adrienne about stormwater authorities.

Threet Receives Rising Tide Award from American Water Works Association

Erin Threet, P.E., was given the Rising Tide Award by the Pennsylvania section of the American Water Works Association at its annual conference in Hershey, Pennsylvania, on April 22, 2015. Ms. Threet is a water and wastewater engineer and manager of Herbert, Rowland & Grubic, Inc.’s (HRG) Lewisburg, PA, office.

The Rising Tide Award is given each year to young professionals for their commitment and contributions to the water industry. Ms. Threet has nine years of experience in water and wastewater facilities planning, design, and permitting.

 

ABOUT HRG

Originally founded in 1962, HRG has grown to be a nationally ranked Top 500 Design Firm, providing civil engineering, surveying and environmental services to public and private sector clients. The 200-person employee-owned firm currently has office locations in Pennsylvania, Ohio, and West Virginia.