Stormwater Utilities in Wisconsin October 18, 2016 Steve Kemna, Public Service Commission stephen.kemna@wisconsin.gov
Overview Case Study 1. Overview of stormwater utilities in 2. Wisconsin 3. How to create a stormwater utility 4. Regulation of stormwater utilities 5. PSC complaint process 6. Credit policy is the key
Case Study Acme complains that it shouldn’t pay any stormwater fees because: o Acme built the detention basin as part of development agreement with City. o Detention basin accepts runoff from City roadway. o Acme is a riparian property, so they don’t discharge to the City’s stormwater system. City argues that everyone has to pay stormwater fees because: o Keeps roads free from flooding. o Meets MS4 permitting requirements of the DNR. City offers riparian credit of 50%. Acme rejects offer.
Case Study Acme complains that it shouldn’t pay any stormwater fees because: o Acme built the detention basin as part of development agreement with City. o Detention basin accepts runoff from City roadway. o Acme is a riparian property, so they don’t discharge to the City’s stormwater system. City argues that everyone has to pay stormwater fees because: o Keeps roads free from flooding. o Meets MS4 permitting requirements of the DNR. City offers riparian credit of 50%. Acme rejects offer.
Overview Case Study 1. Overview of stormwater utilities in 2. Wisconsin 3. How to create a stormwater utility 4. Regulation of stormwater utilities 5. PSC complaint process 6. Credit policy is key
Stormwater Utility (definition) A financial tool that creates an enterprise fund within a local government for addressing nonpoint source pollution and flooding.
1998, Wisconsin legislature allowed municipalities to collect charges for constructing and operating stormwater collection and treatment systems.
Wisconsin has 120 stormwater utilities http://wisconsin.apwa.net
Statistics of WI Stormwater Utilities Single Family Residence (1 ERU) pays: Min = $10 per year Max = $155 per year Median = $60 per year
Why create a stormwater utility? Generates a dedicated funding source that does not compete with schools or public safety. Forces tax exempt properties to pay for stormwater services. Corrects the fact that stormwater funding through property taxes may result in residential customers subsidizing large commercial, industrial, and institutional customers.
Generates funds needed to meet MS4 stormwater permitting requirements (sampling, modeling, BMPs) without exceeding levy limit.
WDNR identies 200+ municipalities in Wisconsin that require MS4 stormwater permits under NR 216, Wis. Adm. Code. 77% of Wisconsin’s stormwater utilities have an MS4 permit
Overview Case Study 1. Overview of stormwater utilities in 2. Wisconsin How to create a stormwater utility 3. 4. Regulation of stormwater utilities 5. PSC complaint process 6. Credit policy is the key
Steps to create a stormwater utility Educate elected officials and the public about 1. stormwater utility benefits and costs. 2. Establish steering committee. 3. Develop a stormwater management plan. 4. Develop the annual utility budget (Admin costs, O&M expenses, and capital costs).
Steps to create a stormwater utility Educate elected officials and the public about 1. stormwater utility benefits and costs. 2. Establish steering committee. 3. Develop a stormwater management plan. 4. Develop the annual utility budget (Admin costs, O&M expenses, and capital costs).
5. Develop a rate structure. Typically use impervious area as a proxy for stormwater quantity and quality (easy to measure and easy to administer). 6. Compute the average impervious area for single family residences. This becomes the definition of one equivalent runoff unit (ERU). Average Impervious Area = 5,230 sq ft
Residential properties are assigned 1 ERU. 7. 8. Non ‐ residential properties are assigned ERUs in proportion to their total impervious area. Example: An industrial customer with 80,000 SF of imp area = 80,000/ 5,230 = 15.3 ERUs. Source: “Report Summary for the Village of Caledonia Storm Water Utility District Proposed Rate Structure”, 2013, R.A. Smith National
9. Add up total number of ERUs in the community. 10. Divide the total annual budget by the total number of ERUs to compute the fee per ERU. $500,000 budget / 15,328 ERUs = $33 per ERU
9. Add up total number of ERUs in the community. 10. Divide the total annual budget by the total number of ERUs to compute the fee per ERU. $500,000 budget / 15,328 ERUs = $33 per ERU
11. Develop an appeal and credit policy. 12. Adopt a stormwater utility ordinance. 13. Compute the stormwater fee and bill each customer. 14. Annually adjust stormwater fees to account for appeals and credits issued.
11. Develop an appeal and credit policy. 12. Adopt a stormwater utility ordinance. 13. Compute the stormwater fee and bill each customer. 14. Annually adjust stormwater fees to account for appeals and credits issued.
Overview Case Study 1. Overview of stormwater utilities in 2. Wisconsin 3. How to create a stormwater utility 4. Regulation of stormwater utilities 5. PSC complaint process 6. Credit policy is the key
Agencies DNR Wis. Admin Code NR216 Regulates MS4 stormwater discharge permits for municipalities and industry (WPDES / Clean Water Act). PSC Wis. Statute 66.0821 Secondary complaint jurisdiction of rates, rules, and practices of stormwater utilities.
Agencies DNR Wis. Admin Code NR216 Regulates MS4 stormwater discharge permits for municipalities and industry (WPDES / Clean Water Act). PSC Wis. Statute 66.0821 Secondary complaint jurisdiction of rates, rules, and practices of stormwater utilities.
PSC regulates stormwater utilities by complaint only . The standard of review is not whether the rates, rules, and practices are the best, most reasonable, or ones that the PSC would require if they regulated the utility, but rather if they are reasonable and not unjustly discriminatory . PSC reviews an average of 3 stormwater complaints each year. Typically only 1 of these becomes a formal complaint.
Overview Case Study 1. Overview of stormwater utilities in 2. Wisconsin 3. How to create a stormwater utility 4. Regulation of stormwater utilities PSC complaint process 5. 6. Credit policy is the key
Complaint Process Complainant files legal petition. 1. PSC has 60 days to either open an 2. investigation or dismiss the complaint. If PSC opens an investigation then 3. hold prehearing conference. 4. Discovery Direct, rebuttal, and surrebutal 5. testimony Hearing 6. Briefs 7. Commission Decision 8. 6 to 12 month process 9.
Complaint Process Complainant files legal petition. 1. PSC has 60 days to either open an 2. investigation or dismiss the complaint. If PSC opens an investigation then 3. hold prehearing conference. 4. Discovery Direct, rebuttal, and surrebutal 5. testimony Hearing 6. Briefs 7. Commission Decision 8. 6 to 12 month process 9.
Overview Case Study 1. Overview of stormwater utilities in 2. Wisconsin 3. How to create a stormwater utility 4. Regulation of stormwater utilities 5. PSC complaint process 6. Credit policy is the key
Credit policy is key Stormwater utilities rely on a crude system of allocating costs. Rely heavily on “system ‐ wide averaging” of costs. Credit policy helps rates better reflect “cost causation”. Credit policy should: o Based on numerically defined hydrologic criteria (reduction in peak flow, volume, pollutant load) o Published in ordinance o Separate out admin, O&M, and capital costs
Sample Credit
o Very few PSC decisions and circuit court decisions regarding stormwater rates since 1998. o 2001 Case Study ‐ Plainwell Tissue complaint against City of Eau Claire (Docket 9500 ‐ SS ‐ 100) – CO found that Plainwell Tissue should pay general admin/management costs of the stormwater utility, but not any capital or O&M costs.
PSC survey of WI stormwater utilities found: o 85% claim to offer stormwater credits o 60% offer credits based on numerically defined hydrologic criteria o 20% offer a max available credit that includes all costs other than admin expenses (Plainwell Tissue)
PSC survey of WI stormwater utilities found: o 85% claim to offer stormwater credits o 60% offer credits based on numerically defined hydrologic criteria o 20% offer a max available credit that includes all costs other than admin expenses (Plainwell Tissue)
Summary 120 stormwater utilities in Wisconsin Pays for MS4 permitting Rates typically based on % impervious area May lead to unreasonable rates (not enough cost ‐ causation) PSC has secondary complaint jurisdiction over rates, rules and practices Credit policy is key to reasonable rates PSC needs to provide guidance for developing reasonable credit policies
Recommend
More recommend
