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This is the first of a two-part blog series on North Carolina stormwater updates for 2021-2022.

 

In June, the Environmental Finance Center (EFC) published a report identifying over $10 billion in planned water and wastewater capital projects across North Carolina. Like water and wastewater, stormwater is a capital-intensive service. We recently completed a Pilot Stormwater Needs Assessment  identifying over $430 million in planned stormwater infrastructure within 49 municipal Capital Improvement Plans (CIP).

Estimated 15-Year Stormwater Needs

Over the next 15 years, municipalities with populations over 2,500 people are expected to have $2.76 billion in stormwater needs. Approximately 60 percent of estimated needs are in the seven largest cities with populations greater than 100,000 people, representing about $1.67 billion. Of the remaining $1.09 billion, we identified $667 million in medium-sized municipalities (10,000-100,000 people) and $432 billion is in small municipalities (<10,000).

Our Methods

We collected 49 CIPs from municipalities across the state that included stormwater spending. We used two separate extrapolations in our methodology:

  1. Extrapolation out to 15-years within our sample: Since most of the municipalities for which we had CIPs did not project spending beyond 5 years, the first extrapolation projected needs out to 15-years within these 49 municipalities.[1] This extrapolation averages spending in the years for which we have data and assumes future spending will be the average spending over the course of the CIP.

 

  1. Extrapolation of needs to municipalities outside our sample: For the second extrapolation, we used a stratified statistical sampling methodology to group the 49 sample municipalities into three strata by population: large (>100,000 people), medium (10,000-100,000) and small (<10,000). Since we had CIPs for all seven large municipalities, we did not have to extrapolate to other municipalities within this stratum. Using per capita stormwater needs, we extrapolated needs from the 42 medium and small municipalities with CIPs to the 179 medium and small municipalities without CIPs. [2]

 

Are actual needs higher or lower than our estimate?

While it’s true that our model uses extrapolation methods that introduce uncertainty, our estimate excludes unincorporated county areas or municipalities with fewer than 2,500 people. The 228 municipalities in our estimate represent 54 percent of North Carolinians by population. While unincorporated county areas and smaller municipalities may have less stormwater needs associated with regulatory requirements, needs also exist related to flooding and stakeholder demands. Additionally, annual needs throughout the state may increase over time as local governments respond to urbanization, regulatory pressures, and climate change. Therefore, despite the uncertainty in our model, total needs are likely higher than $2.76 billion over the next 15 years.

Funding stormwater needs

Understanding total needs in the state can inform statewide funding strategies for stormwater infrastructure. Currently, North Carolina local governments pay for most stormwater capital improvement projects with stormwater fee revenue and general fund dollars. However, grants and debt financing are a common.[3] Federal and state loans and grant programs may be crucial for local governments to meet stormwater needs in the future. Nationally, the Clean Water State Revolving Fund has provided more than $2.6 billion in funding for stormwater infrastructure since its inception in 1988.[4] Moreover, American Rescue Plan funding can and likely will be used to pay for stormwater infrastructure in North Carolina.

Additional Resources

The EFC recently completed a stormwater fee survey for fiscal year 2022 for North Carolina and updated our North Carolina Stormwater Fees Dashboard. We also completed a survey of stormwater management practices in the state. Visit our North Carolina Stormwater Resources page to learn more.

 

image of the stormwater dashboard

2021-2022 North Carolina Stormwater Fee Dashboard

 

[1] We chose a 15-year analysis so as not to predict needs more than 5 years past the longest CIP in our sample.

[2] We used stormwater needs per capita so that we could normalize the total stormwater needs by population.

[3] https://efc.sog.unc.edu/resource/results-of-the-2021-north-carolina-local-government-stormwater-management-survey/

[4] https://www.epa.gov/sites/default/files/2021-02/documents/us20.pdf

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