The idea behind a stormwater utility is that stormwater management is like other public services, such as wastewater and electricity, which are priced based on use. In a stormwater utility, fees are collected from residents and businesses and used for water resource improvement projects and for implementing BMPs on a local level. Sometimes the fees are used to keep up with the costs of replacing and repairing aging stormwater infrastructure. Typically programs assess a fee based on the amount of impervious area on a site.
Since a fee is charged on the basis of use, it is not a tax and therefore tax exempt land owners are still held responsible. Stormwater utility fees were contested by a group of twelve churches in the Rock Island, Illinois area. Case No. 3-04-0480 of the Illinois Appellate Court dealt with this particular issue. The court found that under Illinois law the stormwater utility was in fact a fee, not a tax. This case has allowed other municipalities in Illinois to develop their own ordinances and collect fees from tax exempt land owners.
The city of Bloomington, Illinois implemented a stormwater utility plan that charges fees to single family homes based on the total overall size of the lot. The City divided homes into three categories: small, medium and large. The owners were then assigned a fee based on the assigned category. Industrial, commercial, multifamily dwellings and government areas are charged in Impervious Area Units (IAU), where 1 IAU is equal to 1,000 square feet of impervious area. The fees have been used to educate the public, implement controls on stormwater runoff during construction, investigate illicit discharges and increase street sweeping. So far the utility has been successful and has been fairly well received (City of Bloomington).
The town of Fishers, Indiana also has a stormwater fee in place. The fee was implemented to cover the costs to develop a stormwater management plan and to manage the stormwater ordinance currently in place. The program is based on Equivalent Runoff Units (ERUs). An ERU is approximately equal to 3,318 square feet, which is the average amount of impervious area on a residential lot in Fishers. All residential properties are charged 1 ERU a month. Other properties are charged based the number of ERUs on site. The current rate in Fishers is $4.95 per ERU (Town of Fishers: Stormwater Fees). Overall, since the program has been implemented, it has been well-received. There was a general resistance to another bill but the town preceded the bill with a letter explaining why the fees were necessary and where the money would go. The fee is billed quarterly to help distribute the costs over the year.
DuPage County has extensively looked at implementing such a program. The main problem the County encountered is that the properties with the largest impervious areas are schools, churches, and government owned buildings. As mentioned before, these properties would still be subject to the fee. According to the School Siting Strategy Paper, schools are being built on larger sites and farther away from the students. This is creating a number of traffic and stormwater issues. The paper suggests that minimum acreage requirements be reduced for schools therefore reducing the schools footprint and amount of impervious area.
Another worthwhile note is that within the state of Illinois, a non-home rule local government wishing to implement a stormwater fee would have to pass a state statute to do so. Depending on the structure of the organization a referendum may need to be proposed to the public in order to get the fee passed.
Stormwater utility fees can provide funding for infrastructure updates and if necessary replacements. The fees can also fund special projects like stream bank restorations and the implementation of BMPs.