TY - JOUR
T1 - Stormwater utility fees and credits
T2 - A funding strategy for Sustainability
AU - Zhao, Jerry Zhirong
AU - Fonseca, Camila
AU - Zeerak, Raihana
N1 - Publisher Copyright:
© 2019 by the authors.
PY - 2019/4/1
Y1 - 2019/4/1
N2 - Lack of stable and dedicated funding has been a primary challenge for municipalities in the United States to implement effective stormwater management programs. Stormwater utility fees (SUFs), as user fees, are an alternative dedicated revenue source to fund stormwater management. When complemented with stormwater utility credits or discounts, SUFs provide greater flexibility to adopting best management practices and reducing stormwater runoff at a lower overall cost to the community. While SUFs have been increasingly used, there is little systematic research on this topic. This paper reviews literature on how SUFs work, discusses the mechanisms for setting the fees, and provides examples of different rate structures from across the U.S. Then, we use the findings of the literature to evaluate SUFs as a funding strategy for stormwater management based on four revenue evaluation criteria of efficiency, equity, revenue adequacy, and feasibility. Overall, the literature indicates that stormwater utility fees are a more efficient and environmentally sustainable source of revenue that allows for long-range planning of capital improvements and operations, but their high political visibility and legal obstacles can affect their effective implementation. However, more empirical research is needed to assess these propositions. There is a lack of literature on effective SUF designs, equitable fee types, the extent to which SUFs lead to change in public behavior and their impact on business and stormwater management investments in a municipality.
AB - Lack of stable and dedicated funding has been a primary challenge for municipalities in the United States to implement effective stormwater management programs. Stormwater utility fees (SUFs), as user fees, are an alternative dedicated revenue source to fund stormwater management. When complemented with stormwater utility credits or discounts, SUFs provide greater flexibility to adopting best management practices and reducing stormwater runoff at a lower overall cost to the community. While SUFs have been increasingly used, there is little systematic research on this topic. This paper reviews literature on how SUFs work, discusses the mechanisms for setting the fees, and provides examples of different rate structures from across the U.S. Then, we use the findings of the literature to evaluate SUFs as a funding strategy for stormwater management based on four revenue evaluation criteria of efficiency, equity, revenue adequacy, and feasibility. Overall, the literature indicates that stormwater utility fees are a more efficient and environmentally sustainable source of revenue that allows for long-range planning of capital improvements and operations, but their high political visibility and legal obstacles can affect their effective implementation. However, more empirical research is needed to assess these propositions. There is a lack of literature on effective SUF designs, equitable fee types, the extent to which SUFs lead to change in public behavior and their impact on business and stormwater management investments in a municipality.
KW - Infrastructure finance
KW - Revenue evaluation
KW - Stormwater finance
KW - Stormwater management
KW - Stormwater user fees
UR - http://www.scopus.com/inward/record.url?scp=85064081290&partnerID=8YFLogxK
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U2 - 10.3390/su11071913
DO - 10.3390/su11071913
M3 - Article
AN - SCOPUS:85064081290
SN - 2071-1050
VL - 11
JO - Sustainability (Switzerland)
JF - Sustainability (Switzerland)
IS - 7
M1 - 1913
ER -