Stormwater Utility Fees in North Carolina: Now and Then

On March 11, 2019, the Environmental Finance Center at the University of North Carolina at Chapel Hill (EFC) will host a free, interactive webinar on the current state of stormwater fees and finance in North Carolina. In addition to a brief trend analysis to show how stormwater fees have changed in the state since 2010, the webinar will include an update on the recently released Table of Stormwater Fees and Fee Structures in North Carolina for the 2018-19 Fiscal Year and a demonstration of the upcoming 2019 North Carolina Stormwater Rates Dashboard. You can sign up for the webinar here.

If you’re new to the world of stormwater, you may be interested in reading our NC stormwater fees survey update blog from last year. In it you will find a more in-depth explanation of some of the terminology used in this blog. Read on for a preview of what will be discussed in our upcoming webinar:

Fee and Fee Structure Summary Updates

Bill Amount

In completing the 2018-19 survey, EFC collected 88 unique stormwater fee structures from 80 municipal and five county stormwater utilities throughout the state. In some cases, a single stormwater utility applies different fee schedules to different geographic areas. For example, Person County charges a different fee for customers inside versus outside of Falls Lake Watershed.

As of July 2018, the amount charged for stormwater services for a residential property with 3,000 square feet of impervious surface in North Carolina ranges from $0.50 to $15.44 per month, with a median charge of $4.00. Of the 83 fee structures collected in the 2017-18 survey, 13 (15.6 percent) raised their residential fees and one (1.2 percent) lowered their residential fees at 3,000 square feet of impervious surface. The table below shows the distribution of stormwater fees for the 88 fee structures collected in this survey.

It is important to point out that the figure above shows fees charged by different utilities without taking into a utility’s level of service or regulatory mandate. Some utilities serve a relatively small population and others serve hundreds of thousands of residential properties. On average, a residential property served by a stormwater utility in North Carolina will pay $6.68 per month for 3,000 square feet of impervious surface.^[1]

Fee Structures

Of the 88 fee structures, 80 have separate nonresidential stormwater fee structures. While 62 of the 88 (70.5 percent) residential fee structures are flat fees (all properties pay the same fee), just 11 of the 80 nonresidential fee structures are flat fees (13.8 percent). This may be because there is far more variation in the size of nonresidential properties, and there are administrative costs associated with calculating the impervious surface on properties.

Charging a flat fee for all residential property customers greatly lowers this administrative cost. However, charging the same flat fee for both residential and nonresidential customers, may mean a large nonresidential customer, such as a big box store, pays the same as the owner of a modest home.

Five of the 11 fee structures with nonresidential flat fees charge the same for nonresidential as they do for residential.

The second most common residential fee structure in North Carolina consists of a tiered flat fee with 27.3 percent. Under this structure, the utility has established a number of tiered fees that residential properties pay based on their estimated impervious service. An example tiered flat fee is below. In this example, the utility uses images to present the reasoning for charging a tiered flat fee for residential customers so that small homes are charged less than large homes.

Nonresidential fee structures primarily consist of a charge per equivalent residential unit (ERU), where the property pays a fee equal to the number of equivalent residential units of impervious surface multiplied by the ERU unit price. 61 nonresidential fee structures (76.3 percent) charge a per ERU fee. See the table below for a breakdown of structure type by bill type.

NPDES MS4 Permits

Of the 107 municipalities in North Carolina that have MS4 NPDES[2] permits^[3], 66 have stormwater fees (65.3 percent). All six phase I permit holders charge fees, while 60 of the 101 phase II permit holders charge fees. There are 17 utilities that charge fees but do not have an NPDES stormwater permit, two of which have received a waiver.

NPDES permits, among other requirements, require municipalities to implement minimum control measures (MCMs) including public education and public involvement. In some cases, the non-MS4 programs are located in areas that have other stormwater regulatory programs, including the Falls Lake rules, the Jordan Lake rules, and state TMDL designations; however, the table below does show that MS4 permitted communities have both higher median and weighted average fee for a 3,000 square foot impervious residential property.

MS4 Permit Designation	Count	Median (3,000 sq. ft.)	Weighted Average (3,000 sq. ft.)
Phase I	6	$5.50	$8.90
Phase II	60	$4.00	$5.13
None	19	$3.25	$2.91

 

Trends in Residential Stormwater Bills

This is the third consecutive fiscal year, and the fifth year overall, in which the EFC has published the North Carolina Stormwater Fees and Fee Structures survey. The EFC has completed surveys in 2009-10, 2011-12, 2016-17, 2017-18, and 2018-19. In all five of these surveys, 44 stormwater fee structures have been included. Eight of the 44 utilities (18.2 percent) have not raised their fees since we began collecting data. Only one utility has raised fees in every year that we have surveyed.

Of the 36 utilities that have raised fees at least once since 2010, eight have raised them at a rate slower than the CPI inflation rate^[4] of 15.2 percent since 2010. Sixteen of the 44 fee structures (36.4 percent) for which we have data in all five surveys have residential fees at 3,000 square feet that, when adjusted for inflation, are lower today than in 2010.

Other Resources

Want to keep up with stormwater related issues? Sign up for the stormwater listserv. The main goal of the stormwater listserv is to provide financial, administrative, and management assistance to individuals and organizations involved with managing stormwater programs.

Recently updated: Download the 2018-19 North Carolina stormwater fees and fee structures tables here for stormwater fee information around the state as of July 2018.

Don’t miss: The free EFC webinar, 2019 North Carolina Stormwater Fees Update, on March 11 from 1-2 p.m. to learn even more about the current state of stormwater fees and finance in North Carolina. In addition to a brief trend analysis to show how stormwater fees have changed in the state since 2010, the webinar will include:

• An update on North Carolina stormwater utility fees for the 2018-19 fiscal year
• An update on the NC stormwater utility financial trends for the 2017-18 fiscal year
• A question and answer session in order to better understand stakeholders’ concerns and interests to better serve them in the future.

Register for the webinar here.

Evan Kirk has been with the EFC since 2016. He graduated from UNC in 2016 with a BS in Environmental Science and earned a master’s certificate in GIS from the Deptartment of Geography at UNC in 2017. He is currently a master’s candidate in City and Regional Planning at UNC with a concentration in land use and environmental planning. Evan works on the EFC’s water and wastewater rate surveys and the UNC Nutrient Management Study as a research assistant. Evan enjoys basketball, camping, and bluegrass music.

With funding from the NC Division of Water Infrastructure, the EFC works to better understand stormwater finance practices and to support the development of funding programs and strategies that support local efforts to improve stormwater management.

^[1] This is calculated using a weighted average bill, which reflects what the average customer pays for their stormwater fee by weighting the stormwater fees in proportion to the utility’s service population.

[2] Municipal separate storm sewer system (MS4) permit and National Pollutant Discharge Elimination System (NPDES) permit

^[3] https://deq.nc.gov/about/divisions/water-resources/water-resources-permit-guidance/npdes-phase-i-phase-ii-stormwater-guidance

^[4] Based on Bureau of Labor Statistic national consumer price indices for 2010 and 2018:  https://www.bls.gov/cpi/tables/home.htm