Staying Up to Date with North Carolina Stormwater Utility Fees

Published for Environmental Finance on November 29, 2017.

In order to better understand the stormwater finance and governance landscape, the Environmental Finance Center at the University of North Carolina at Chapel Hill recently inventoried and analyzed the stormwater fees used by 74 municipalities and three counties charging stormwater utility fees across North Carolina . These fees are used to fund programs and activities that improve surface water quality, help meet regulatory requirements, and address a variety of critical stormwater and drainage management needs.  Before a deep dive into North Carolina stormwater fees, we’ve provided a review of some relevant terminology:

  • Impervious Surface refers to the areas of a parcel that do not absorb water. These surfaces contribute to increased water velocity. The water picks up sediment and pollution, such as spilled automobile fluids, before making its way to stormwater drains, and ultimately  directly into surface waters.
  • Equivalent Residential Unit (ERU) is a typical unit used to assess stormwater fees and its equivalent to the average impervious surface area of a single family residential parcel within a given jurisdiction.  Non-residential properties are often converted to a specific number of ERUs based on their size for billing purposes. If a utility determines their ERU area is 2,000 square feet, a church with 20,000 square feet of impervious service would be billed for 20 ERUs.
  • Municipal Separate Storm Sewer (MS4) is the conveyance system operated by a public entity that captures stormwater runoff for discharge. MS4 and utility are often used interchangeably.
  • National Pollution Discharge Elimination System (NPDES) is a permit program of the Environmental Protection Agency which regulates discharge into waters of the United States. Certain municipalities must apply for (and receive) a NPDES permit in order to operate an MS4. These NPDES permits are categorized as Phase I or Phase II. There are six Phase I and 105 Phase II MS4s in North Carolina.

Regulations

The NPDES permitting regulations require specific efforts by permit holders to improve water quality. There are six “Minimum Control Measures” that are meant to accomplish that aim. They include such categories as public education, public involvement, and good housekeeping. Some of these measures involve programming that cost the permittee money. For example, a city might expand its street sweeping operations and repair drainage systems in order to meet the good housekeeping requirement. To fund these improvements, some permit holders have implemented a stormwater fee charged to property owners in the jurisdiction. Not all NPDES permit holders in North Carolina charge fees. In addition, some jurisdictions without NPDES designation charge stormwater utility fees to fund stormwater system operations and repairs.  Two North Carolina counties charge fees in order to fund practices that contribute to meeting the Falls Lake Rules, a state regulation adopted in 2011 to protect the resources that the lake provides.

Single Family Residential Properties

Fees for single family residential home properties for different utilities tend to be either flat fees or tiered flat fees (e.g. all properties are placed into a small number of groups with each group paying a different flat fee). For example:

Sometimes utilities will charge tiered flat fees based on lot size rather than impervious surface area. Most utilities in North Carolina and across the country simplify their billing by creating a small number (typically two to six) flat fee groupings.

Commercial Properties

Most utilities assign a number of ERUs to each of their commercial properties based on the exact amount of impervious surface. However, there are some utilities that use flat or tiered flat rates similar to what is done for most residential customer billing.   These properties can include schools, churches, shopping malls, and supermarkets. These properties often contain expansive impervious surface areas, like parking lots. Because these fees can become relatively expensive, some utilities have developed credit programs to allow commercial properties to reduce their fees by installing stormwater control measures on the property in order to capture stormwater that would otherwise end up with minimal treatment before leaving the property. Property owners are guided by a credit manual, which is typically developed by a stormwater professional.

Some utilities have decided to raise fees for the fiscal year beginning on July 1, 2017, and running through June 30, 2018. Fees are increased to keep up with costs for maintaining storm systems.

Other Resources

To learn more about stormwater fees in North Carolina, visit the EFC at UNC’s stormwater rates project page, where users can access the 2017 North Carolina Stormwater Rates Dashboard and sign up for the Stormwater Listserv. Two previous blog posts on stormwater are also available, The State of Stormwater Fees in North Carolina and Five Communication Tips for Stormwater Incentive Programs.

Josh Fernandez is a first year graduate student in the Master of Public Administration program. He works with the EFC at UNC on the topics of green infrastructure and collecting data on municipal stormwater utility fees in North Carolina. Josh completed his undergraduate coursework at the University of North Carolina at Asheville, where he obtained a degree in Environmental Studies and a minor in Economics.

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Topics - Local and State Government