Developing More Equitable Stormwater Utility Fees with Geospatial Data

In a modern municipality, residents are accustomed to paying for essential services like electricity and water. However, among these familiar charges lies a lesser-known yet crucial fee: stormwater utility fees (SUFs). While quick to recognize utilities like electricity and water, residents are not always as familiar with SUFs and the vital role they play in creating, maintaining, and improving stormwater infrastructure to help bolster climate resilience in communities. However, not all SUFs are created equal, and ensuring fairness in their application is essential given their significant impact on both the environment and the overall well-being of the community. This blog explores the different types of stormwater utility fees in the context of equity.

The importance of stormwater utility fees

While not every municipality has a SUF program, with some opting to fund stormwater improvements through general property taxes, there is a rising trend of municipalities adopting SUFs. This trend reflects a growing recognition of the need to enhance climate resilience in light of climate change. Funds generated from SUFs provide a dedicated source of funding to support the establishment and upkeep of stormwater infrastructure and sewer networks which are essential for mitigating flooding risks during heavy rainfall events, an increasingly common occurrence in certain parts of the US due to climate change. They also facilitate the implementation of green infrastructure projects like permeable pavements, green roofs, and rain gardens, which play a vital role in reducing the effects of stormwater runoff. They support research and innovation efforts aimed at developing advanced technologies and strategies for more efficient stormwater management. Additionally, these funds can enable education and outreach programs to raise community awareness about stormwater issues and advocate responsible water management practices.

Examining equity in stormwater utility fees

In order to understand the different types of SUFs and how they are calculated, it is important to understand how land cover impacts the behavior of stormwater. Impervious surfaces, which are surfaces that do not absorb water like concrete and parking lots, lead to higher levels of runoff in stormwater scenarios which increases the likelihood of flooding. 

Certain types of SUFs use land cover layers with detailed impervious and pervious data. Generally speaking, SUFs that account for impervious surfaces tend to be more equitable than those that do not. This is because properties with larger impervious surfaces, such as those with large parking lots, contribute more runoff into the stormwater system. In an equitable scenario, these properties would typically face higher fees compared to properties with fewer impervious surfaces. 

Equitable SUFs can help fairly allocate the costs of stormwater management among property owners according to their impact on stormwater runoff. Implementing equitable stormwater fees not only ensures the fair distribution of stormwater management costs but also encourages property owners to adopt practices that mitigate the impacts of runoff on the environment and infrastructure. In the following sections, we examine the four types of SUFs that municipalities may consider within the context of equity.

Types of stormwater utility fees

Flat or fixed fees

Some municipalities in the US opt for a flat or fixed fee structure applicable to all properties within a community. This approach entails a uniform fee for all property types, irrespective of their impervious area. While flat or fixed fees are easier to implement for municipalities since they typically do not consider land cover, impervious surfaces, or property size, they are not equitable. Municipalities using flat or fixed fees can overcharge or undercharge for properties leading to several consequences including insufficient revenue for infrastructure investment and an unfair burden on residents who may end up paying more than they should.

Tiered fee system

A tiered system creates fees based on the quantity of impervious surface on each property, applying a fixed fee for specified ranges of impervious area organized into tiers. This type of SUF relies on precise land cover data to determine impervious surface levels corresponding to the various fee tiers. Implementing a tiered fee structure necessitates thorough, precise, and up-to-date geospatial data to ensure fees accurately represent a property's impervious surface, both in the present and over time.

While a tiered fee system is considered more equitable than flat fees, how tier ranges are defined can significantly affect its fairness. Poorly established tier layers may result in overcharging for smaller properties and undercharging for larger ones. Generally, a tiered fee system with more tiers is likely to be more equitable.

Equivalent residential units (ERUs)

The most common method for calculating SUFs is the equivalent residential unit (ERU) system, which accounts for more than 80% of all stormwater utilities in the US. ERU fee structures typically work by determining the average or median impervious surface cover present on single-family residential properties within a community to establish a baseline ERU. 

Once the ERU is determined, it serves as a unit of measure to compare the runoff generated by different size properties with different amounts of impervious surface fees. Single-family residential properties will typically face a standardized fee, whereas non-residential properties are evaluated according to their parcel size in relation to the ERU. 

In situations where an ERU structure bills a flat-rate fee to all single-family homes, equity can be lost at the residential level as homeowners with different amounts of impervious surfaces will pay the same fees, failing to account for the different amounts of stormwater runoff coming off of each property. However, this method is far more equitable than flat or fixed fees. It redistributes costs away from residents towards commercial entities, which tend to have far more impervious surfaces and stormwater runoff. In order to establish and maintain ERUs, municipalities need access to high-precision, up-to-date land cover data, which can be difficult for a municipality to acquire and maintain through manual digitization.

Residential equivalency factors (REFs)

Residential equivalency factors (REFs) consider the variability among properties in terms of their impact on stormwater runoff. They are determined using impervious surfaces and other variables, like slope and local hydrological conditions, to calculate the amount of stormwater runoff from each property in order to establish a fee. Specifically, municipalities calculate the average runoff during a standard storm for the average single-family residential and non-residential properties, which then defines a ratio of runoff per acre that is used as a multiplier for the size of the property to determine its SUF rate.

While equitable and accurate for stormwater runoff, the REF system requires extensive data on all properties, their land use, and runoff rates, requiring a municipality implementing a REF to perform complex hydrological modeling.

Promoting equity in existing stormwater utility fee programs

Engaging stakeholders is crucial when implementing stormwater utility fees (SUFs) or adjusting their calculation methods. Community involvement can help create a better understanding of the diverse needs and circumstances of a municipality. It can also promote transparency and help build support for the program. For example, if a municipality has a SUF system based on the amount of impervious surface located on each property, providing a user-friendly website displaying impervious surface data alongside billing details, charge breakdowns, and educational content can foster better understanding and support of the program. The City of Detroit’s public viewer program is a great example of this. 

There are additional things that municipalities can do to promote equity regardless of the type of SUF they have in place. This might include establishing assistance programs, such as subsidies, to support low-income property owners who may face challenges in affording stormwater fees, thereby ensuring that the burden is not disproportionately borne by vulnerable communities. Additionally, municipalities could offer incentives, such as credits, to properties that adopt stormwater management measures like green roofs or permeable pavement, which aid in mitigating stormwater runoff.

Acquiring geospatial land cover data for stormwater utility fees

While the geospatial data requirements may vary for different types of SUFs, tiered systems, ERUs, and REFs all require detailed land cover data. Even municipalities operating on a flat fee basis can benefit from data to help inform their fee calculations. However, obtaining comprehensive, accurate, and up-to-date geospatial land cover data can be challenging. Traditional geospatial data creation methods are extremely resource-intensive, requiring GIS teams to manually digitize all land cover features from imagery before further analysis to support their fee structures. 

Thankfully, advancements in technology are making it easier than ever before to get the detailed land cover data needed to support SUF programs. At Ecopia AI (Ecopia), we help municipalities keep their land cover databases up-to-date using the power of artificial intelligence (AI). Our AI-based systems ingest geospatial imagery to create highly-precision land cover features at scale, with the accuracy of a GIS professional. 

Our AI-powered mapping data is updated annually, ensuring municipalities have access to the freshest data for SUF calculations. This empowers them to detect any land use changes that have transpired within the past year. Take the City of Detroit, for instance. Before collaborating with Ecopia, the time-consuming process of manual digitization meant that they relied on outdated impervious surface data by the time it was actionable. This led to inaccurate SUF calculations, resulting in over $5 million in missed annual revenue. Ecopia was able to quickly provide Detroit with a comprehensive dataset encompassing distinct pervious and impervious surfaces, including buildings, paved and unpaved roads, driveways, sidewalks, parking lots, bridges, grass, tree canopy, bareland, water, and more.

Our mapping technology allows us to map an entire city in a matter of weeks while traditional solutions take 12-18 months. Not only does Ecopia’s technology enable municipalities to get the highly accurate land cover data they need quickly, but is also very cost-effective. For example, Ecopia provided the in Duval County, Florida with detailed impervious and pervious land cover data in just four weeks, at a cost that was 84% lower than competitors per parcel.

Powering equitable stormwater utility fees with AI-powered geospatial data

If you're looking for detailed land cover data to support a new or existing SUF program, Ecopia is here to help. Our team can provide comprehensive, accurate, and up-to-date land cover data to power your SUF and help you explore funding opportunities to bolster your program. Reach out today.