Stormwater Utility Guidance

 

Establishing a Stormwater Utility

The information provided below is an overview of the process for establishing a stormwater utility (also referred to as SWU), and includes links to the guidance webpages on other key topics, such as stormwater asset management plans, and various rate structure options for setting fees and credits.

Depending on the unique circumstances in each community, the process to establish an SWU may take up to 5 years or more. Also, the steps outlined below may not always flow from one to the other in such an orderly fashion and they may need to be revised, rearranged and/or combined to meet those individual circumstances.

Throughout the entire process, transparency and public engagement in discussions will foster a richer appreciation of the problems and proposed solutions. It is important that the public understands the scope and costs of SWU program development and implementation.

When the community has a fuller understanding of the need to improve local stormwater management and the value that a dedicated funding program an SWU provides, the likelihood of public cooperation and collaboration along the way is increased.

group of people

After gaining community support, stormwater program needs and goals should be established via the feasibility study process, discussed below. If the information gathered through these discussions supports the formation of a stormwater utility, the idea would next be presented to the governing body(ies) for consideration.

To get started, one of the early decisions that will need to be made is what type of stormwater utility will be formed. There are multiple options, and the one chosen early on can certainly change, but at least a tentative decision needs to be made to start the process. The Act allows for certain entities to form a stormwater utility, which is explained further in the “Who Can Establish a Utility?” section on the SWU home page.

Steps to Establish a Stormwater Utility

The information presented in this section is primarily meant to provide guidance on the steps that may be taken when working through the development of a stormwater utility. However, the Act does contain some mandatory requirements that pertain to both establishing a stormwater utility as well as the operation of one. These requirements are indicated throughout this website with a scroll icon. The applicable regulatory and municipal separate storm sewer system (MS4) permit requirements and Combined Sewer Overflow (CSO) permit requirements have also been included where appropriate.

  • Begin an open discussion with the manager(s) to establish an understanding of the SWU concept, how utility/user fees differ from property taxes, and the pros and cons of an SWU in your community (or service area).
    • Present initial concepts about forming a stormwater utility.
    • Encourage decisionmakers to solicit input from environmental groups and other interested parties.
  • Discuss which form(s) of stormwater utility would be viable options for your community (see Who Can Establish an SWU?).
  • The manager(s) may opt to confer with other Divisions/upper management to gather additional information and determine if it there is support to explore the idea of an SWU further.
Conduct an investigation of stormwater program needs and goals, and prepare to share this information with management and the public.


    Although this step is particularly important to understanding the basic pros and cons of establishing a SWU in your community and continuing with the SWU evaluation process, a more detailed Comprehensive Feasibility Study will likely be needed and is detailed later in Step 4.

  • Once general support to move forward within this group is obtained, an inventory of current stormwater facilities that support stormwater management in the municipality, or larger potential service area, needs to be developed. Since much of this information should have already been developed in order to comply with the Tier A MS4 permits, or CSO permits, it would be helpful to review the municipalities’ current Combined Sewer System (CSS) maps, municipal stormwater management plan(s) (MSWMPs), and Stormwater Pollution Prevention Plan(s) (SPPPs), as applicable. This step will be important when conducting the Comprehensive Feasibility Study discussed below and when developing the Asset Management Program for the SWU.
  • This inventory should include all stormwater facilities, including those that qualify as green infrastructure in accordance with the Stormwater Management rules at N.J.A.C. 7:8-5, and their condition, which includes but is not limited to:

      • MS4 outfalls*
      • storm sewer manholes
      • storm drain inlets*
      • catch basins*
      • retention basins*
      • detention basins*
      • vegetative filter strips*
      • riparian buffers
      • infiltration basins
      • sand filters*
      • constructed wetlands*
      • wet pond*
      • bioretention systems*
      • low flow bypasses
      • cisterns
      • green roofs
      • blue roofs
      • pervious pavement
      • manufactured treatment devices (MTDs)*
      • stormwater conveyances (channels, pipes, ditches, etc.)
      • CSO outfalls
      • CSS infrastructure
      • and any other less common stormwater related facilities, such as stormwater pump stations, flood control devices, etc. 

    • Note that stormwater facilities with an “*” are included in the NJDEP stormwater infrastructure mapping tool. The Department has developed this free mapping and inventory tool for users to develop an inventory and map of their stormwater facilities. This tool utilizes mobile devices such as tablets and smart phones to allow the user to collect stormwater infrastructure feature locations and descriptive information. Information regarding logging inspections, routine maintenance, needed upgrades, and repairs can also be added via this tool. Much of this information is also required under the NJPDES MS4 general permit. For details, please visit https://www.state.nj.us/dep/dwq/msrp_map_aid.htm.

      cart map app map app2


    • Depicted above is a ‘generic’ example of a stormwater facility inventory. A ‘complete’ stormwater facility inventory should include relevant information for all stormwater facilities within the utility’s service area. Please visit the link to the mapping tool above for more information and to access templates created by the Department.

  • Based on this inventory, a preliminary determination of what infrastructure maintenance, repairs, and upgrades will be necessary over the next year, 5 years, 10 years, and beyond.
  • Consider operational needs, including staffing needs. Be sure to also include staffing needs at maintenance yards where materials and equipment used for stormwater management are kept.
    • Determine if staffing and resources are sufficient to support the proper operation of the current stormwater program.
  • Determine if the stormwater program is in full compliance with NJPDES MS4 stormwater/CSO permit requirements, and if not, what additional resources are needed to become compliant.
  • Determine if there are any additional needs or goals of the stormwater program beyond the regulatory requirements.
    • Consider those, for instance, that may need to be conducted more specifically to alleviate Harmful Algal Bloom (HABs) in the area
  • Determine if the current funding program (property taxes, etc.) is sufficient to meet the stormwater program needs and goals identified above.
  • Characterize the potential service area regarding pervious and impervious areas of residential and non-residential properties to determine if a stormwater utility will benefit the community.
    • There are many reasons to pursue the establishment of an SWU, but one question that is at the center of the financial concern is often answered by asking the question, “Are there tracts of land in the service area that are not paying a proportionate amount of property taxes relative to the size of the property/amount of runoff generated?”  These can be properties with large parking lots, large amounts of grassed areas, and tax-exempt properties.
  • Share with the local governing body, planning board, environmental commission, or other local agency to engage and inform the public of the results.

THE PRELIMINARY FEASIBILITY STUDY IS A KEY STEP!

This information will establish if current funding is sufficient to support permit compliance, infrastructure, maintenance, staffing needs and if a Stormwater Utility would be beneficial.

Bring well organized materials developed in Steps 1 & 2 above to illustrate your goals.

  • Presentation to local government officials should include the following:
    • Overview of stormwater utility concept, including summary of the difference in the funding mechanisms;
    • Summary of the current stormwater program and status of funding, including CSO program information if applicable;
    • Summary of additional needs and goals in the potential service area, including funding needs, to address MS4, and CSO, permit compliance as applicable, as well as other outstanding issues, e.g. stormwater flooding, HABs, long term proactive infrastructure maintenance, CSO Long Term Control Plan projects, etc;
    • Ideas regarding how a stormwater utility can be implemented for the community, noting which entities can establish a SWUs;
    • Preliminary estimate of user fees – both for residential and meetingnon-residential/commercial – based on the initial impervious cover analysis;
    • High level description of implementation steps; and
    • Examples of similar Stormwater Utilities outside of New Jersey to reinforce the message.

If there is support to move forward toward forming a SWU, a decision as to whether to hire a consultant or assign in-house staff to conduct a formal Comprehensive Feasibility Study should be made at this time.

 




This step should also include developing and identifying who will be in charge of public outreach, as well as when and how the public will be informed of the process and given the opportunity to provide feedback.

Man in front of cartsThis type of study provides a holistic evaluation of the current stormwater program and future needs as well as organizational, legal, and financial issues (including operational facets, e.g., the billing system). It will also provide a plan for the robust engagement of stakeholders, which has often been vital to the ultimate success of such efforts in communities where SWUs have already been successfully implemented.

This study will provide in-depth information, surface the critical issues, and inform a multi-year financial roadmap for long term stormwater management and funding resilience. The review should also include an in-depth, parcel-level analysis of impervious area that can be used for billing purposes and robust stakeholder engagement. Such a comprehensive study typically requires a minimum of 8 to 10 months depending on the time needed for an in-depth analysis of impervious area. It will also be more costly than the preliminary feasibility study.

Some items that the Comprehensive Feasibility Study should address are as follows:

  1. Identify the Project Team & Process

    It will be beneficial to have members on the project team with expertise in the following areas:

    • Engineering
    • Accounting
    • Economics
    • Finance
    • Watershed Planning
    • Regulatory Compliance
    • Public Outreach Facilitation
    • Program Funding Strategies

  2. If there are no project team members that possess the expertise in these areas 'in house', it would be appropriate to hire professional consultants for those portions of this exercise. In fact, this step is often outsourced to professional consultants.

    When selecting a professional consulting firm, it is advisable to select a group that specializes in developing stormwater management programs. It would also be helpful if the firm were familiar with local issues. An initial meeting, or series of meetings, will need to be held to establish the scope of work to be performed. Primary contacts to act as liaisons between the prospective utility and the project team should also be established at this point. The agendas for these earliest meetings should cover the overarching needs and goals of the stormwater management program, including MS4 permit requirements and compliance needs, stormwater projects already planned and/or underway for the municipality/service area, as well as other general stormwater concerns, such as those related to stormwater-related flooding, Combined Sewer Overflow (CSO) Long Term Control Plans, and Harmful Algal Blooms (HABS), if applicable.

    Then, throughout the process, the prospective utility group should meet frequently on a predetermined schedule with project team to discuss progress being made toward milestones and outstanding questions/concerns that may have arisen from either party.

    As you begin this process and begin setting goals, you may be interested in researching other communities across the country that have experience with conducting these types of Comprehensive Feasibility Studies. As of the end of 2020, there were nearly 2,000 SWUs that have been established across the country and Canada. As we have noted in other locations on this website, Western Kentucky University performs an annual survey of SWUs across the country and Canada and summarizes this information each year in Table A-1 of the survey posted here. Here is just a small sample of SWUs who have provided details on the process they followed to determine whether a Stormwater Utility was the right choice for them:

     

  3. Take Inventory

  4. As noted above, this Comprehensive Feasibility Study should expand in much greater detail and precision on these issues mentioned in the Preliminary Feasibility Study above in Step 2.

    During the conceptual discussion phase noted above, a preliminary high-level inventory of all stormwater assets including stormwater facilities and infrastructure, and other ancillary assets including equipment and personnel needs should have been conducted. At this step in the process, it is essential that the Comprehensive Feasibility Study include a complete inventory of all stormwater facilities owned or operated by the municipality(ies) within the potential service area.  The same information should be gathered for privately owned facilities as well. This information is necessary to determine the current and future needs of the stormwater program. 

    As a reminder, the MS4 permits require municipalities to ensure proper operations and maintenance of all privately owned facilities. 

    Inventory details should include location, age, size/dimensions, material, as well as ownership information for the following:

    • This inventory should include all stormwater facilities, including those that qualify as green infrastructure in accordance with the Stormwater Management rules at N.J.A.C. 7:8-5, and their condition, which includes but is not limited to:

      • MS4 outfalls*
      • storm sewer manholes
      • storm drain inlets*
      • catch basins*
      • retention basins*
      • detention basins*
      • vegetative filter strips*
      • riparian buffers
      • infiltration basins
      • sand filters*
      • constructed wetlands*
      • wet pond*
      • bioretention systems*
      • low flow bypasses
      • cisterns
      • green roofs
      • blue roofs
      • pervious pavement
      • manufactured treatment devices (MTDs)*
      • stormwater conveyances (channels, pipes, ditches, etc.)
      • CSO outfalls
      • CSS infrastructure
      • and any other less common stormwater related facilities, such as stormwater pump stations, flood control devices, etc.

    • Note that stormwater facilities with an “*” are included in the NJDEP stormwater infrastructure mapping tool. The Department has developed this free mapping and inventory tool for users to develop an inventory and map of their stormwater facilities. This tool utilizes mobile devices such as tablets and smart phones to allow the user to collect stormwater infrastructure feature locations and descriptive information. Information regarding logging inspections, routine maintenance, needed upgrades, and repairs can also be added via this tool. Much of this information is also required under the NJPDES MS4 general permit. For details, please visit https://www.state.nj.us/dep/dwq/msrp_map_aid.htm.

      cart map app map app2

    • Depicted above is a ‘generic’ example of a stormwater facility inventory. A ‘complete’ stormwater facility inventory should include relevant information for all stormwater facilities within the utility’s service area. Please visit the link to the mapping tool above for more information and to access templates created by the Department.

    Additional needs related to stormwater management should also be considered, including but not limited to:

    • salt storage
    • maintenance yards and buildings
    • cameras
    • vacuum trucks
    • computers, smart phones, and/or tablets, etc.

    This information is also essential to the functioning of the stormwater utility and is important to account for in your Asset Management Program and to be factored into the utility’s fee calculation.

    As inspections are conducted to verify inventory, it is also advisable to conduct assessments at that time of the condition of those stormwater facilities as that information will be necessary for the next step of the study.

    For each stormwater facility in your inventory listed above, identify and describe how they fit into any of the following categories, if applicable:

    • green infrastructure
    • combined sewer system (CSS)
    • CSO long-term control plan
    • owned, operated, or used by another entity (be sure to include the name of that other entity).

     

  5. Identify Needs & Expenses

  6. Based on the information gathered through the previous steps, it is necessary at this point to review the stormwater operations (as they relate to any MS4 requirements, CSO permits or any LTCP requirements, and community stormwater goals) and identify gaps to determine the resources needed to bridge them.

    Areas to review to identify these gaps include, but are not limited to:

    • What new infrastructure or infrastructure repairs, upgrades, or replacements are overdue, as well as those that will likely be necessary for the next 5 years, 10 years, and beyond.
    • What continuing and additional maintenance activities will be needed for each facility.
    • What areas in the town(s) experience stormwater-related flooding (be sure to consider a residential complaint log).
    • What additional resources will be necessary to address the following, if applicable:
      • MS4 and CSO Permit Requirements
      • CSO Long Term Control Plans
      • HABs
      • Total Maximum Daily Loads (TMDLs)
      • Other water quality impairments in the potential service area
      • Community stormwater goals

    For more information about HABs, please visit https://www.state.nj.us/dep/hab/. For more information on TMDLs, please visit https://www.nj.gov/dep/dwq/msrp-tmdl-rh.htm.

    Now, you will need to evaluate whether current staffing and associated budget levels are sufficient to support the operation of stormwater program,  including the concerns noted above, and meet community goals. If these current resources are not sufficient, what additional resources are needed to bring the stormwater management program into compliance with the MS4 (and/or CSO) permit requirements and/or to meet the full goals of the community?

    Define the current status of all the aspects of the stormwater program (including those aspects to meet the MS4 permit requirements, CSO permit requirements and community stormwater management goals) by detailing:

    • the age and condition of all the infrastructure noted above
    • the required routine maintenance activities
    • current and upcoming capital projects
    • standard operating procedures
    • community stormwater goals
    • current and future compliance needs with regulatory/MS4 permit requirements and/or Combined Sewer Overflow Long Term Control Plans (CSO LTCPs)
    • associated budget and staffing

    You should carefully review the MS4 Stormwater Permit and the CSO permits and contact NJDEP to determine if the stormwater program is in full compliance with those permit requirements.

    Much of this process is also part of developing an Asset Management Program. See Asset Management for additional information .


  7. Analyze Impervious/Pervious Surface:

    As discussed in further detail in the Determining Fees and Credits, the Act requires fees to be based on a fair and equitable proportion of the amount of stormwater runoff from properties in the service area. To develop an appropriate Rate Structure, this portion of the feasibility study will need to at least include an analysis of the impervious surface coverage of properties in the service area, including a breakdown of various residential property sizes, as well as commercial and other non-residential properties.


  8. Develop Level of Service Options

    The project team should then establish at least 3 levels of service along with multiple options for fees and credits to see which approach is best suited to the municipality potential service area.

    The first “basic” level should be based on providing a Level of Service that will meet all permit requirements noted above and address stormwater flooding in the service area. Old car

    At least one mid-level option should be developed to include all the services included under the basic level, but also some of the less costly but more desirable options noted in the top level.

    Picture of Subrau
    The top Level of Service should provide all of the services under the basic level, but also include additional options that will further enhance the quality of life in the community by speeding up projects to remediate stormwater problems/flooding, and/or go beyond the regulatory requirements, such as creating open/green space that include rain gardens and other aesthetically pleasing green infrastructure. Picture of a Lambo

     

    The associated funding needs for each of these options will need to be developed to be presented, along with various rate structure and fee options (as discussed below), for the decision-makers and community stakeholders to evaluate.

    Prepare materials to share with the public in the municipality, or larger service area, that will show how the fees will be utilized to pay for various aspects of the stormwater utility.  See Using SWU Fees to determine the allowable expenses. Be sure to include:

    • costs to get the program started
    • capital expenses
    • ongoing operations and maintenance
    • asset management
    • activities related to permit compliance for the MS4 permit, and the CSO permit, if appropriate
    • costs for public education/outreach

    Click here to read more about utilizing fees appropriately.


  9. Fee & Credit Structures

  10. Once the Levels of Service have been laid out, next the Fee and Credit/Rate structure options need to be developed to match the budgets for those levels of service discussed above. Remembering, of course that regardless of which Rate Structure option is chosen, fees must be based on a fair and equitable proportion of the amount of stormwater runoff from properties in the service area.

    As noted in step E above, the Comprehensive Feasibility section, there will be different fees associated with the different Levels of Service. Prospective SWUs should also consider developing more than one Rate Structure option to demonstrate how the different options affect fees for various types of property owners.

    The municipal or service area executive(s) will examine the results of the feasibility study and come to agreement about how to proceed. If the study outcome demonstrates that A) there is a need for funding beyond what is available through the current stormwater management budget and B) a Stormwater Utility is a potentially viable option to the problem, then this information should be developed into materials to proceed with engaging all stakeholders,  including governing body(ies) and other municipal commissions, boards, or councils (planning boards, environmental commissions, etc.) and community members.

    Prepare matierals to share with the governing body(ies) and other municipal commissions, boards, or councils (planning boards, environmental commissions, etc.).

The key to successfully forming and implementing a stormwater utility is a transparent and ongoing public education and outreach program.   This section provides guidance about creating and implementing a successful public engagement process.  The public should be engaged early and often and planning for this involvement should coincide with the steps of determining the feasibility, efficacy, and necessity of forming a stormwater utility.  The Department suggests that an external Advisory Committee be established.

  • Invite "trusted voices" from the community to make up the external Advisory Committee. This could be an already existing group that is representative of the community, such as a green team, environmental commission or planning board or a combination or sub-group of any of them.
    • Consider including business and civic leaders, community organizers, church groups, and those who represent residential, commercial, educational, governmental and/or religious affiliations, etc.
    • The group should be representative of the community(ies) (i.e., racial, cultural, political, etc.) and supportive of finding the best way to manage stormwater issues within the community(ies).  
      • Depending on the size of the service area and the level of concern within the community, this group may need to be larger or smaller to reach and address concerns.  If there is a large number of community members that are eager to join, it may be helpful to assign members to smaller topic-focused work groups, with a representative(s) from each group presenting that work group’s input on the Advisory Committee.

  • Inform the Advisory Committee on the concept of the SWU. Share the relevant information that was presented to the managers in the Discuss Concept step, and the findings and options explored in the Preliminary and Comprehensive Feasibility Studies.
    • Provide information about current stormwater related problems in the municipality(s) and options for correcting them, such as:
      • Reducing/eliminating stormwater flooding
      • CSO controls
      • HAB reductions
      • Improved water quality
      • Stream erosion control

    • Explain the MS4 and CSO (if applicable) permit requirements, why they are important, and the related resources required to implement them, such as:
      • Street sweeping
      • Leaf collection
      • Catch basin, and other stormwater facility cleaning and maintenance
      • Illicit discharge elimination
      • Stream scouring
      • Pollution prevention, etc.

    • Describe the resources necessary to support these requirements.
    • Provide information regarding areas where the municipality(ies) is/are not in full compliance with those permit requirements.
    • Highlight the fact that traditional stormwater programs do not typically receive dedicated funding in municipal budgets.

  • Continually meet with and seek input from the Advisory Committee. Use this feedback to address community concerns as appropriate. The Advisory Committee and their feedback should be used to form and implement the ongoing public outreach plan(s).
    • Identify improvements that will be a benefit to many, if not all in the service area, such as:
      • Reducing/eliminating stormwater flooding
      • CSO controls
      • HAB reductions
      • Improved water quality
      • Stream erosion control

  • Discuss in detail the possible rate structure/fee and Level of Service options, including those evaluated in the Comprehensive Feasibility Study.

With guidance and input from the committee, develop a public outreach plan that uses clear, consistent messaging about stormwater utilities and the positive impact one would have on the community(ies).

Prepare informative materials to present to the public in a variety of ways, such as town meetings, webpage announcements, mailings, etc. The information to be presented should be prepared in layman’s terms and should address all aspects of the development of the SWU, from inception through implementation, as follows.
  • Present the SWU concept to the public with educational materials for reference. Highlight key findings of the feasibility studies and any additional information and resources that were developed through feedback from the Advisory Committee.   
  • Target additional residential and non-residential stakeholders beyond those involved with the Advisory Committee, such as neighborhood groups, faith-based organizations, other municipal boards, commissions, etc.
  • Present information regarding:
    • Choices of SWU Levels of Service
    • Differences in service provided by traditional stormwater management versus SWU management

  • Use as much factual data from the final Comprehensive Feasibility Study as possible, while still presenting the material in a user-friendly way.
  • Provide technical information in a format that is understandable by the community and/or translate information into different languages.
  • Host events via different avenues (in-person/virtual town meetings, open houses, fairs, when appropriate, etc.) for the general public.

With general public support, continue to draft an ordinance/resolution to establish the stormwater utility and schedule a vote.

The Stormwater Utility ordinance will need to be adopted at this point prior to moving forward. 

Establish an Implementation Team to set up the utility and move towards launch and implementation.  The team members should include key individuals that have been involved in the SWU process to date, since this team will be building on the ideas and vision that have been discussed and agreed to. The Implementation Team should prepare or coordinate–

  • Updated information to present at discussions and workshops
    • Include opportunities for receiving and sharing customer feedback, creating two-way communication. (See NJDEP’s CSO Public Participation Guidance)
    • Community outreach materials explaining what property owners can expect going forward, including what it will cost,
      • how they can earn credits, and what projects are being considered by the SWU.  Remember, these materials should be updated at least annually.
        • Ongoing public education is essential for a successful stormwater utility and may also help municipalities fulfill MS4 and CSO permit requirements.  For more information and resources on public education click here.  For more information on MS4 stormwater permit requirements click here.  For more information on CSO permit requirements, click here.

  • Plans for the development and ongoing management of the Stormwater Utility
    • Rules/Regulations
    • Administrative & Organization chart - distribution of responsibilities
    • Staffing/resource needs, including training requirements  
    • Asset Management database
    • Customer billing database
      • Management of delinquent bills
    • Budget preparation
    • SWU Service Agreements
    • Annual reporting requirements
    • Website
    • Ongoing public outreach
      • Provide a Frequently Asked Questions (FAQ) page on the SWU website as well as an email and phone number designated for customers to contact the SWU with questions.
      • Arrange periodic communications (face-to-face when possible) to share news about SWU-funded projects on the horizon and to solicit feedback from rate payers to improve the utility’s operation