Stormwater Utility Guidance

Using Utility Fees

The Act allows SWUs to use the monies collected from fees and other charges for various activities related to stormwater management.  More specifically, the Act states the following:

 

These are the ten categories related to stormwater management that are specified in the Act to which stormwater utilities may disburse funds raised from SWU fees or other charges. However, if an SWU has a use for funds that does not appear to fall under these categories, but is believed to be related to stormwater management, the SWU may contact the NJDEP to determine if that use may be approved as related to stormwater management.  

Storm sewer systems, as with any infrastructure, need continuous proactive Asset Management in order to achieve maximum longevity and reduce the need for more costly reactive repairs over time. And, as with all infrastructure, a storm sewer system requires mapping, ongoing monitoring and inspections to ensure that any problems are identified and corrected promptly. There are also many administrative tasks associated with running an effective stormwater management program and SWU, such as customer service, completing and filing reports by the required due dates, maintaining proper records, logs, and billing systems, among other typical business functions.

While every municipality is currently responsible for many of these tasks, not every municipality has allocated sufficient funds to address these issues in accordance with their MS4 permit requirements and the Stormwater Management rules. .  Municipalities with Combined Sewer Overflow (CSO) permits and Long Term Control Plan (LTCP) requirements may also need additional funding sources to reach the LTCP goals.  

A stormwater utility is currently the only mechanism that would be able to dedicate these funds directly to stormwater management, thus allowing a utility to properly operate, maintain, repair, and improve their storm sewer system as necessary.

  As development continues over time, more land is converted from pervious coverage to impervious coverage, creating more stormwater runoff along with it. Additional stormwater management facilities will be installed to control stormwater quality and quantity as part of that development. This will also increase the burden on the existing stormwater infrastructure and increase maintenance needs due to the additional amounts of stormwater reaching the MS4.  

In addition to the maintenance, repair, and upgrade of existing and failing infrastructure, municipalities will also have to incorporate and maintain green infrastructure projects and other stormwater management facilities to reflect amendments to the Stormwater Management rules.

It should also be noted that if an SWU has a service area larger than a single municipality, an SWU service agreement will need to be developed between the SWU and the member municipalities. This should not be confused with the MS4 shared service agreement that would be required if the SWU were performing MS4 permit required tasks on behalf of the municipality(ies).

There are many tasks associated with the initial Establishment of a Stormwater Utility and the costs to complete them are considered allowable expenses (please refer to the link for additional information regarding establishing an SWU).  These expenses can include staff salaries or consultant fees for conducting various activities related to the preliminary or comprehensive feasibility studies, such as mapping and inventory of the stormwater facilities and establishment of that database system.  Allowable expenses also include establishment of the customer database/billing system, and development of education and outreach programs.  Some SWUs may purchase equipment to properly operate and maintain the storm sewer system, such as sewer cameras, street sweepers, sewer jet and vacuum trucks with funds collected from fees and other charges.  The SWU may also incur allowable expenses to acquire new or additional property for adequate office space, maintenance equipment and supplies, as well as potential expenses due to acquisition of private stormwater facilities. 

The SWU will also have many allowable ongoing administrative costs once it has commenced operations, as staff will be needed to maintain documentation in a database of inspections and maintenance activities performed, in addition to normal office functions such as managing billing operations and providing customer service to residents.  Office supplies and building maintenance costs are also examples of ongoing allowable expenses. 

The funds collected by the SWU fees and other charges can be used to cover these expenses or cover the percentage of these expenses (if services or equipment is shared) that are incurred for stormwater management under those 10 items listed in the scroll above.  In other words, if a SWU is sharing equipment with another entity, such as sharing a street sweeper with another entity, the SWU must have a shared services agreement with that entity and maintain accurate records to ensure they only pay for the proportionate amount of the sweeper costs based on the amount of time the sweeper was assigned to the SWU. 

Capital expenditures are allowable costs incurred by the SWU related to design and construction of improvements to the stormwater management system, and acquisition of new stormwater facilities.  For example, if a SWU is designing a project to add green infrastructure to an existing stormwater management system, the SWU fees can be used for all of the steps between the planning stage and final construction, such as planning, designing, engineering, and construction work.  Implementation forecasting, evaluating the project process, reviewing designs, editing, and administrative fees all qualify as allowable costs.

Fees may also be used to modernize infrastructure, whether it is old pipes, failing culverts, etc.  Outdated infrastructure is an issue plaguing towns across New Jersey and America.  Retrofitting and/or replacing old infrastructure is an expensive, but often necessary, process and should be guided based on a strong, proactive Asset Management Program.  SWUs may also opt to upgrade or enhance their stormwater management system in order to increase its effectiveness.  

Communities with a combined sewer system also have large financial obligations due to the need to install combined sewer system improvement projects as per their approved Long-Term Control Plans, in addition to the routine repairs and replacements noted above.

Expenditures for the proper maintenance of stormwater facilities are allowable uses of funds under the Act.  Preventative maintenance and repair of stormwater facilities is a core component of any stormwater management program and is required by both the MS4 and CSO permits, as well as the Stormwater Management rules at N.J.A.C. 7:8 to ensure this infrastructure maintains its efficacy over time.  Although pollution prevention measures, such as street sweeping or litter ordinances, are required to reduce pollution sources, stormwater management measures become the repositories for the remaining sediment, nutrients, trash, debris, and other pollutants.  For this reason, stormwater management measures share some maintenance requirements with more mundane everyday items such as pool and water filters, vacuum cleaner bags, car motor filters and floor mats, all of which require regular inspection and cleaning, and sediment and debris removal, along with periodic replacements. 

Operation and maintenance tasks include the cleaning of inlets, catch basins and other stormwater facilities, as well as repairing facilities, street sweeping, and regular inspections to ensure proper operation.  Green infrastructure also requires specific maintenance to ensure long-term operation.  It should be noted that regularly sweeping the street helps reduce the frequency necessary to keep the catch basins operating properly, thus preventing organic material, sediment and other pollutants from entering downstream stormwater basins, as well as surface and ground waters of the state.  In addition to these tasks, other maintenance tasks that need to be performed, depending on the type of stormwater facility include, but are not limited to:

  1. Removal of sediment, trash, and debris
  2. Mowing, pruning and restoration of vegetation
  3. Restoration of eroded areas
  4. Elimination of mosquito breeding habitats
  5. Control of aquatic vegetation
  6. Repair or replacement of damaged or deteriorated components

Failure to perform necessary maintenance can lead to flooding which many communities across New Jersey experience during rain events. In addition to flooding, inadequate maintenance can lead to other health and safety problems, such as creating mosquito breeding and vermin habitats, and areas with the potential for drowning. Excess organic material and other debris can also raise nutrient levels in streams and lakes and cause Harmful Algal Blooms (HABs), eutrophication, or other water quality impairments. Proper maintenance of the stormwater infrastructure, such as repairing an outfall pipe or keeping a stormwater basin free of excess vegetation will likely be much cheaper in the long run than replacing those facilities entirely.  

Many stormwater management systems may also receive large volumes of stormwater from interconnected systems that are owned and operated by different entities.  If those upstream systems are not maintained properly, it can cause undue burdens on downstream communities by overwhelming their storm sewer systems with excess stormwater, as well as sediment and other debris present in runoff.  Downstream stormwater facilities in need of maintenance and repair can compound the effects that excess stormwater can have, leading to more rapid deterioration.  Forming a stormwater utility would allow fees to be assessed on those upstream entities that discharge into their system in order to compensate for the maintenance necessary to accommodate that additional stormwater.

The Stormwater Management rules adopted in March 2020, and effective March 2, 2021, require the use of green infrastructure best management practices (BMPs) to meet certain standards for stormwater management.  Most green infrastructure BMPs are intended to mimic how stormwater would naturally flow and disperse while others, such as rain barrels or cisterns, aim to collect stormwater for reuse.  Rain gardens, pervious pavement, and grass swales rely more on vegetation and soil to treat and infiltrate stormwater than traditional stormwater management methods.  Green infrastructure, as with all BMPs, will require certain maintenance activities be conducted at specific times and frequencies to ensure they continue to perform properly.

Easements and rights-of-way are also important to maintain as they provide access to stormwater infrastructure that may not be accessible except through private property.  If the easement is not maintained properly, access points to stormwater infrastructure may become overgrown with vegetation need to be cleared to allow full access for inspection, maintenance and repairs of the stormwater infrastructure.

More operations and maintenance information can be found in the links below.

NJDEP New Jersey Department of Environmental Protection (njstormwater.org)
Microsoft Word - NJ_SWBMP_8 print.doc (njstormwater.org)
NJDEP- Division of Water Quality- Bureau of Nonpoint Pollution Control- Tier A Guidance

Costs associated with the development and maintenance of Asset Management Programs are allowable under the Act.  One of the first steps in managing stormwater utility assets is developing an Asset Management Program and Plan.  This will include completing a comprehensive inventory of system components (i.e., pipes, inlets, catch basins, detention/infiltration basins, pumps, outfalls, storage tanks, and any other stormwater management facilities that make up the system, including combined sewer system components, if applicable).  Once identified and catalogued, the next critical steps are to locate or map the assets, determine their approximate age (date of installation) and condition, and establish the remaining useful life of each identified and catalogued component.  Keeping a current inventory of assets that includes both spatial location and condition will help inform future management and capital project decisions.  

This endeavor serves as the essential bridge that can demonstrate how the utility arrived at priorities within its Operations and Maintenance and Capital Improvement Plans and financial management strategy.  Additional information on these may be found at https://www.nj.gov/dep/assetmanagement/lifecycle.html.  These are the mechanisms that guide a utility’s operation and long-term planning.

A SWU is able to use their funds to review and implement Municipal Stormwater Management Plans (MSWMPs) and Stormwater Control Ordinances (SCOs) for their service area.The Municipal Stormwater Regulations at N.J.A.C. 7:14A-25, and the Stormwater Management rules at N.J.A.C. 7:8, require municipalities to develop, implement and keep their MSWMPs and SCOs current. When implemented and observed accordingly, these are effective tools for preventing and controlling stormwater issues caused by land development.  

The MSWMP details the strategy for addressing stormwater-related issues such as water quality pollution, flooding, and groundwater recharge in new development and redevelopment projects.  They are designed to help the municipality understand how the geography and development of their town impacts stormwater runoff and quality.  Other details in the MSWMPs include land use, zoning, and Hydrologic Units (HUC14s) as well as pollutant loading information and mitigation plans.  This information helps the municipality and SWUs understand how and where control measures can be implemented to better manage stormwater pollution and runoff.  The MSWMP is also a component of the Municipal Master Plan (MMP), and as such is required to be reviewed concurrently with the Master Plan.

SCOs are the legal foundation used to implement the MSWMP and the Stormwater Management rules and establish the municipality’s minimum standards for stormwater management and control in major development. The SCO establishes thresholds for major development and defines how to properly design and implement the necessary stormwater management measures and controls. SCOs and MSWMPs will need to be reexamined and updated periodically to reflect changes in the Stormwater Management rules. Additionally, the municipality’s land use and zoning may also evolve over time. It is important to keep MSWMPs up-to-date to reflect current conditions.  

Any action related to stormwater management and required under a New Jersey Pollutant Discharge Elimination System (NJPDES) MS4 permit may be funded with fees or other charges collected by the stormwater utility.  Some requirements in the MS4 and CSO permits are similar, such as:

  • GIS mapping of outfall pipes and stormwater/CSO facilities
  • Street sweeping
  • Storm drain inlet labeling
  • Routine maintenance of stormwater/CSO facilities
  • Recordkeeping
  • Public education & outreach

As mentioned above, mapping the storm and combined sewer infrastructure and where these discharges ultimately enter our waterways is necessary for a successful stormwater management program. Mapping of the stormwater outfall pipes and the combined sewer systems is already required through MS4 and CSO permits, but mapping of additional existing and new infrastructure should also be undertaken.

As noted elsewhere on this website, the Department has developed a free mapping and inventory tool for users to create an inventory and map of their stormwater facilities. Information regarding logging inspections, routine maintenance, needed upgrades, and repairs can also be developed from the inventory.  

As noted elsewhere on this website, the Department has developed a free mapping and inventory tool for users to create an inventory and map of their stormwater facilities.  Information regarding logging inspections, routine maintenance, needed upgrades, and repairs can also be developed from the inventory.

MS4 permits also require permittees to inspect outfall pipes for any stream scour and if any is discovered, remediate the problem as quickly as possible.  Stream scouring from a storm sewer occurs when an excess volume of stormwater is discharged through an outfall, causing erosion of the stream or material around the outfall.

Another key MS4 permit requirement for municipalities is the Illicit Discharge Detection and Elimination Program. Illicit discharges occur when an illegal connection to the storm sewer is made through dumping substances illegally, by entities accidentally or deliberately connecting wastewater pipes from businesses or houses to the storm sewer, or unintentionally from breaks in wastewater pipes that cause seepage into the storm sewer pipes. Each permittee is required to create and implement a program to perform routine dry weather inspections, evaluate any flow or other evidence found, and eliminate the illicit discharges.

SWU funds may be directed toward compliance with approved combined sewer overflow (CSO) LTCPs, in addition to the NJPDES permit requirements noted in Section 6 above.  Under the EPA’s National Combined Sewer Overflow (CSO) Policy, the NJDEP’s CSO rules and the CSO permits, owners or operators of a combined sewer system (CSS) are required to develop and implement an LTCP to mitigate the impacts from combined sewer overflows.  As per the 2015 renewal of the NJPDES CSO permits, the LTCPs were required to be submitted to the Department by June 1, 2020, however the submittal deadline was extended until October 1, 2020 for most of the LTCPs due to the COVID 19 pandemic. 

As the LTCP CSO control alternatives are approved and those schedules proceed, the owners or operators will have extensive financial needs in order to implement their LTCPs.  There are currently 21 urban New Jersey municipalities that have combined sewer systems, which routinely overflow and discharge untreated wastewater and stormwater into the State’s waters, contributing to water pollution and impairing the use and enjoyment of those waters.  Reduction of the CSOs and improvements to the storm and combined sewer systems will improve the stormwater management capability of the system, thus reducing overflows and pollution. 

Monitoring

Monitoring is another activity that qualifies for allowable use of SWU funds, and can be an expensive undertaking.  In the event a permittee detects an illicit discharge, monitoring actions must be taken to determine the nature and frequency of the discharge, and where it is originating from.  There are numerous types of sources of illicit discharges, and as such, investigations can demand time and resources from a stormwater management program.  Suspected illicit discharges may need to be sampled for certain pollutants as specified on the Illicit Connection Inspection Report Form to narrow down the potential sources, and many of these samples will need to be sent to a laboratory for analysis.  CSO permits also carry requirements to routinely monitor rainfall, number of discharge events and the amount of solids and floatables removed per monitoring period.  With a dedicated source of funding, a stormwater utility could greatly improve their monitoring capabilities.


Inspection

Routine inspections are a fundamental component of any stormwater program and are allowable expenses under the SWU.  The MS4 and CSO permits require inspections of stormwater and combined sewer facilities to ensure proper operation and maintenance .  Stormwater facilities need to be inspected regularly to identify issues such as general maintenance needs, structural damage, debris build up, illicit connections, and stream scouring.  Catching problems early prevents more costly repairs and maintenance in the future.  Storm sewer systems can consist of thousands of facilities and require an active inspection program to manage these issues effectively.

As noted above, owners of MS4s are also tasked with conducting inspections to detect any illicit connections or stream scouring.  Illicit connections are any physical or non-physical (i.e. leak, flow, or overflow into the municipal separate storm sewer system) connection that discharges to a municipal separate storm sewer system (unless that discharge is authorized under a NJPDES permit).  Examples of illicit discharges include wastewater from commercial car washes, illegal dumping of oil into storm drain inlets, sanitary sewer connections to the MS4 (not CSS), or improper disposal of waste.  Illicit connections to stormwater management systems will result in pathogens, toxic chemicals or other pollutants entering waterbodies and degrading water quality.
Stream scouring is the erosion or removal of streambed or bank material by the physical action of flowing water and the sediment that it carries.  A common cause of stream scour is an excess volume of stormwater being discharged from an outfall, possibly stemming from poor maintenance of stormwater facilities.  

These inspections must be conducted at least as often as required in the MS4 and CSO permits and encompass all the stormwater facilities owned or operated by the permittee.  I f illicit connections or stream scouring are found, measures must be taken in accordance with the permit to rectify the situation.


Enforcement

Enforcement of stormwater related matters is also an allowable expense under the Act.  Municipalities have a number of community wide ordinances, such as those noted below, in addition to those for stream scouring and illicit connections discussed above, that are designed to prevent pollutants and debris from entering the storm sewer systems and ultimately, our groundwater, streams and lakes.  

  • Pet Waste and Wildlife Feeding ordinances are targeted at preventing pathogens from entering our waterways
  • Requiring containerized yard waste and collection programs prevents excess nutrients from organic matter
  • Litter Control and Improper Disposal of Waste ordinances are aimed at preventing solid and household waste and regular garbage from ending up instreams and lakes
  • Illicit Connection ordinances prohibit illegal discharges such as chemicals or sanitary waste in order to prevent water quality degradation, as discussed above

These ordinances also minimize the potential impacts that citizens can have on the state’s waters by discouraging wildlife feeding so as not to attract wildlife in unnatural numbers, and cleaning up litter and solid waste that can be carried by stormwater.  In addition to the time and labor involved in monitoring and inspecting for compliance, enforcement of these ordinances also requires dedicated resources to issue violations, usually by the code enforcement arm of the MS4 municipality. 

Other enforcement actions required by MS4 municipalities may include those required to ensure that the owners and operators of private stormwater facilities, such as a Homeowner’s Association or the owner of a commercial plaza, are properly operating and maintaining their stormwater infrastructure as required.  Additionally, SWUs may need to enforce payment on unpaid SWU bills owed by property owners/occupants.

Funds would also be eligible for use on public education and outreach materials and activities regarding stormwater and CSOs.  There are existing public education and outreach requirements included in the MS4 and CSO permits. 

The MS4 permits contain public education requirements that permittees must meet by acquiring a certain number of points from different categories.  Successful stormwater programs utilize ongoing outreach efforts and educational opportunities to inform residents and business owners of rule changes, local issues, or other stormwater topics.  Note that some of these tasks may also be accomplished with the help of local organizations or other public involvement which lessens the financial burden on permittees.  The CSO permits also contain requirements for public outreach and education to keep an open dialogue regarding the LTCPs and the implementation phases.  Public engagement strengthens community awareness of water quality issues and shows how peoples’ actions contribute to stormwater pollution and how in return that impacts them. 

MS4 permits require a certain number of points to be acquired each year in order to complete the public education component.  Permittees have to conduct a minimum number of activities every year to earn their points, guaranteeing there will be costs for materials, administrative tasks, and wages that factor into their stormwater program.  These public education requirements are met through general and targeted public outreach, which can include media advertisements, mailing campaigns, murals or other public displays relating to stormwater, or other community activities.  Towns can hold rain barrel workshops for residents, mail out educational flyers about stormwater pollution, or host a stormwater booth at a local event.  Other examples of public education are hosting web resources for stormwater management and pollution related topics (green infrastructure, disposal of leaf/yard waste, application of fertilizers/pesticides).  Hosting educational resources online creates a centralized location where residents can easily access information about their local stormwater issues.  Additional information on Public Outreach and Education can be found under Resources here.

The CSO permits require those permittees to engage the public regarding the implementation of their LTCPs.  The affected public, such as rate payers (including rate payers in the separate sewer sections), industrial users of the sewer system, persons who reside downstream from the CSOs, and persons who use and enjoy the downstream waters, must be invited to be involved in this process.

After establishment of the SWU, there will likely still be continuing stormwater related concerns from the public.  Continuing public education and outreach from the stormwater utility will be needed to keep the public involved and aware of stormwater issues while promoting transparency.

The Act allows for the use of SWU fees for other stormwater management purposes not specifically identified above as authorized by the Department, or the Office of Local Government Services  at DCA, or the Local Finance Board. If a stormwater utility has another potential stormwater related use for their funds that they do not believe is covered under one of the aforementioned categories, please contact the Department of Environmental Protection, Bureau of Stormwater Permitting, to determine if that use may be authorized pursuant to any rules, regulations, or permits.  Emails may be directed to stormwaterutility@dep.nj.gov, or by phone (by leaving a voicemail at this time) at 609-633-7021.

The Act also includes these other provisions regarding transfer of surplus revenue to local budgets, as well as required annual remittance to the State’s “Clean Stormwater and Flood Reduction Fund.”