Westover, Kelly, Westover

Kelly Westover is with Stantec in Sarasota, FL. Kelly creates innovative funding strategies for local government clients throughout the US by...

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About Westover, Kelly

Kelly Westover is with Stantec in Sarasota, FL. Kelly creates innovative funding strategies for local government clients throughout the US by developing sustainable financial plans for their communities. Kelly's focus is on the wet weather sector, working primarily with stormwater programs. Before joining Stantec, Kelly was with Sarasota County Stormwater Utility for 13 years and was responsible for securing funding to implement infrastructure projects.

Westover, Kelly

Titles from this speaker

Evolution of Stormwater Utility Funding in St. Petersburg

Abstract

The number of communities in the United States that have established stormwater utilities continues to experience steady growth. As stormwater management increases in complexity, localities are realizing that a dedicated funding source and equitable recovery of costs from within the community are essential for sustainable management of stormwater. The City of St. Petersburg, FL (City) has maintained a stormwater utility with revenues generated from user fees, based upon the amount of impervious surface area measured on each utility customer's parcel, The City has used a 'one-size-fits-all' approach to charging residential customers for stormwater service since its inception. While charging the same fee for all residential parcels has limited the complexity and administration, key stakeholders within the City expressed concern over the fairness and equity of the approach. City Council was asking for ways to incentivize green infrastructure to reduce the volume of stormwater entering Tampa Bay. Stantec assisted with the evolution of the City's stormwater utility by creating a statistically sound tiered rate structure for residential customers thereby increasing equity. A menu of green infrastructure options based on a cost of service analysis was created to address the Council's desire to offer a credit and incentive program. Since transparency and fairness were a priority for Council, Stantec helped develop a Stormwater Review and Appeals Portal to allow customers to review impervious area and billing tier in advance of rate adoption. This was a successful collaboration between Stantec and the City which resulted in adoption of a new rate structure and credit policies.
There are several challenges that precipitated this comprehensive review of the City's current stormwater fee approach and underlying data: (1) impervious area measurements were mostly collected in 1989 and were not representative of current conditions; (2) revenue requirements increased due to CIPs needed to address flooding and water quality issues; (3) current flat rate fee structure for residential properties reduces equity between residential parcels with large variation of impervious area; and 4) Non-Single Family Residential parcels were charged on their impervious surface area measurement.
The City outlined the following key objectives: 1) Digitally map impervious area for all parcels in the City limits to establish a master Geographical Information System (GIS) and analyze and calculate area; 2) Revenue Sufficiency Analysis including a ten-year financial management program; 3) Cost of Service Analysis to allow development of new rates by customer class; 4) Develop a tiered rate structure and update fee calculation methodology; 5) Integrate utility billing system with updated impervious area; and 6) Update the Stormwater Mitigation Credit Program to recognize onsite stormwater management systems and incentivize green infrastructure.
Prior to developing a more equitable rate structure, implementation of City-wide Single-Family Residential Parcel's (SFRP) impervious area data by parcel was needed. Impervious surface area for non-SFRP was based on measurements calculated in 1989 (in most cases). Stantec utilized existing high-resolution aerial imagery and GIS image classification techniques to create a geodatabase with an estimate of current impervious area by parcel for the City limits. Stantec explored a modernization of the SFRP fee structure that will serve to enhance equity by recognizing impervious area differentials across the single-family residential parcels. Stantec performed a detailed revenue sufficiency analysis (RSA) to evaluate the sufficiency of current stormwater rate revenues over a multi-year projection period, and provided the basis for a plan of annual stormwater rate revenue adjustments necessary to satisfy all financial requirements identified during the projection period from Fiscal Year 2020 through FY 2029, including: 1) Operating and maintenance costs; 2) Capital improvement program costs; 3) Existing and new debt service expenses and corresponding net income to debt service coverage ratios; and 4) Adequate operating reserves. The City was anticipating $2 million in borrowing in Fiscal Year 2020 with additional debt needed in future years to support the capital needs. As such, the RSA identified the need for an increase in stormwater revenues of 9.09% in FY 2020 to satisfy the identified cost of service. The detailed cost of service and revenue requirement results from the RSA were used as the basis of the stormwater fee and credit/incentive programs calculated. Two separate fee structures were recommended for SFRP and Non-SFRP based upon the distribution of impervious area. A tiered fee structure was recommended for SFRP which provided simplicity, while recognizing impervious area differentials. See Figure 1 for a distribution of tier breakpoints. Tiers allow the City to recognize differentials in SFRP impervious area that are of statistical importance and provide administratively efficient price signals across more than 75,000 individual parcels. A four-tier configuration was created that conforms to the underlying distribution of impervious area, while accomplishing the enhancement of equity in this customer class over the current fee structure. Configuring the tier breakpoints based on statistical distribution ensures that the tier break points at the underlying property data are not arbitrary and capricious. A parcel-specific fee structure is recommended for Non-SFRP, based on the actual measured impervious area per parcel expressed in terms of SFU. A review of the City's existing credit program was performed to identify opportunities to encourage installation of green infrastructure. To determine the appropriate monetary value of the stormwater fee credit or incentive, it was necessary to estimate the reduced costs incurred by the City as a result of the property owner's on-site management activities. Stantec performed a cost of service analysis to determine those costs that are incurred regardless of the use of and contributions to the stormwater system (often termed base costs) and those that are related directly to stormwater contributions (often termed quality and quantity costs). The values of the incentives were developed based on the potential reduction in costs associated with reduced stormwater contributions from parcels implementing the control activities and are outlined in Figure 2. Once the tiered rate structure was developed based upon the new impervious area data and the revenue requirements, extensive public outreach was performed by the City to inform the public about the new tiered system, share ways property owners could review their impervious area, and address concerns regarding the new methodology before new rates would become effective. Stantec and the City designed a Web Portal for citizens to easily review their impervious area, see frequently asked questions and submit an appeal, comment or question. See Figures 3 and 4 for examples of the Web Portal functionality. The ArcGIS based Portal was linked directly to the parcel for City research and response. We learned the stormwater fee structure needs to not only be easy for the community to administer, but more importantly, easy for the community to understand.

An evolution of the City's stormwater utility was needed to address issues of fairness, equity, and transparency. It began with creation of impervious area data to build a statistically sound tiered rate structure for residential customers. An updated fee structure provided a fair and reasonable apportionment of the revenue requirements. A menu of green infrastructure options was created to address Council's desire to offer a robust incentive program.

SpeakerWestover, Kelly

Presentation time

09:00:00

09:25:00

Session time

08:30:00

10:00:00

TopicIntermediate Level, Public Communication and Outreach, Stormwater and Green Infrastructure

Author(s)

Westover, Kelly

Author(s)Kelly Westover1; Andrew Burnham1

Author affiliation(s)Stantec Consulting Services Inc.1; Stantec Consulting Services Inc.2

SourceProceedings of the Water Environment Federation

Document typeConference Paper

PublisherWater Environment Federation

Print publication date Oct 2022

DOI10.2175/193864718825158527

Volume / Issue

Content sourceWEFTEC

Word count9

Funding Resiliency Through Unique Stormwater Fees

Abstract

CASE STUDY: FORT LAUDERDALE, FL STORMWATER USER FEES A successful collaboration between Stantec and the City of Fort Lauderdale resulted in adoption of a new stormwater fee structure that represents an innovation in the apportionment of stormwater cost to parcels in relation to the benefit of services received. Passing all required legal tests in 2022, it will provide resources for the City to enhance the resiliency of its stormwater systems in light of a changing climate. The project included a detailed revenue sufficiency analysis to evaluate stormwater rate revenue needs over a multi-year projection period, cost allocation effort and fee design, as well as robust stakeholder engagement. STORMWATER USER FEES: A PROGRAMMATIC APPROACH For coastal cities ' especially those on the gulf and south Atlantic ' hurricanes, tropical storms, and heavy rains are part of a resident's everyday weather vocabulary. Many areas are experiencing weather extremes ' record high and low temperatures, more frequent flooding and droughts, and larger storms. No matter the location, events like these place constraints on municipal flood control systems, cause erosion, and disrupt fragile ecosystems essential to healthy waterfront living. Add in aging infrastructure, urban sprawl, and changing stormwater regulations and you've got water-related pain points for any city management team. Without a dedicated funding source, it becomes difficult to manage stormwater and even more difficult to do so proactively. Many communities have begun looking for ways to fund new systems and improvements to existing ones. Historically, funding for stormwater programs has come from property taxes, but it's not a perfect system. This has led some municipalities to establish a stormwater utility that incorporates charging a separate stormwater fee. These communities recognize that an organized approach to stormwater allows for proactive management of the system, provides an increased level of service, and addresses aging infrastructure. A dedicated funding source makes future planning possible. Doing so equitably from a fee perspective, however, doesn't have to be challenging. STORMWATER USER FEE DEVELOPMENT Fort Lauderdale is known as the 'Venice of the Americas' for its coastal proximity and extensive canal systems. In the face of rising sea levels, this presents a key challenge as the community looks to adapt and become more resilient to changes in the environment. Doing so requires generational investments in stormwater infrastructure. The first group of which was set to occur in Fiscal Year 2021 and cost $200M. These investments would provide stormwater pump stations and new passive systems in the most vulnerable neighborhoods. The City has had a stormwater utility and fee since the early 1990s. Over time, periodic adjustments to the fee have been made to generate more revenue ' although the fundamental structure has remained the same. To build consensus in the community for a new approach, the City undertook a multi- year effort to raise awareness, define the critical issues, and ultimately enact a stormwater fee structure to provide the resources needed to meet the community issues head on. The first component of this study was to perform a revenue sufficiency model in which all projected cost requirements of the utility are calculated year-by-year, then a plan for the rate adjustments necessary to support the expenditures was devised. In the case of Fort Lauderdale, the City needed 54% more revenue in the next fiscal year to satisfy their near-term capital and debt service needs. This presented a significant challenge and precipitated the next step in the analysis, which looked at the metrics used to assign cost to parcels that benefit from the stormwater program. Impervious area or gross area of the parcels served are commonly used as a basis for stormwater fees. The Fort Lauderdale stormwater utility used impervious area. However, as each city is different, it is often prudent to consider the options and alternatives that best match the underlying developmental characteristics of the community to make this decision. INNOVATIVE, AFFORDABLE, AND MOST IMPORTANT, EQUITABLE Fort Lauderdale's stormwater issues were being acutely felt in the roadways, with much of the utility's efforts going into keeping roads unblocked and passible. As part of a tiered hybrid rate structure, Stantec determined that a trip generation rate would reflect the estimate of a given parcels' roadway utilization. Exploring the link between motor vehicles and water quality degradation would better (and more equitably) connect the cost of service and the underlying cost of managing stormwater with the unique benefit that each parcel receives. Using the Institute of Transportation Engineers (ITE) survey data, the trip rate component is based on ITE traffic calculations reflecting the average usage for a given parcel type. For instance, a single- family home has 9.44 trips per day on average. This number was then multiplied by a cost per trip to determine a component of the new stormwater fee for each parcel. Trip generation rates were used to recover 20% of the overall revenue requirement. Given the substantial amount of cost and acute organizational focus on keeping roads clear and passible, this had the desired effect of distributing the utility's cost more in proportion to the benefit conveyed to parcels. The remainder of the cost (80%) was recovered in conventional impervious area-based fees. Applying trip generation rates to stacked vertical development such as condos enhances equity as it requires those customers to pay for their beneficial use of the roadway system. A key component of the study was ensuring that the fee could meet all legal requirements. This was especially important given that the City was transitioning from stormwater being billed on a monthly utility bill to an annual non ad valoerm special assessment. Additionally, the innovative form of the fee structure was one the City didn't want to take chances. To validate the fee, the City went through the bond validation process by which the City sued itself and the judicial system made a ruling as to the validity of new fee and the City's ability to impose it. This effectively set a judicial precedent and ensured that the City could use the revenue source to bond against. Given the magnitude of the investments contemplated in the study ' $200M in 2020 and an additional $200M five years later ' the ability to access credit markets was of paramount importance. Ensuring that the stormwater fees placed into service would meet the applicable legal tests was factored into each step of the analysis. LESSONS LEARNED FROM CUSTOMER ENGAGEMENT The new stormwater fee structure needed to not only be easy for the community to administer, but more importantly, easy for the community to understand. Once the new fee was developed, extensive public outreach was performed to inform the public about the new trip component, share ways property owners could review their assessment, and address concerns regarding the new methodology before the new fees became effective. Multiple mechanisms were used to advertise six public meetings, including the City's social media pages, City website, neighborhood meetings, and the neighborhood app Nextdoor. A very thorough web portal was designed to allow citizens to easily review their billed units and review frequently asked questions. In the end, this successful collaboration between Stantec and the City resulted in adoption of a new fee structure with credit policies. The newly modernized stormwater fee structure enhances equity by recognizing the full benefit of service that parcels receive. While stormwater management can be costly, it is a necessary investment. Stormwater utilities are becoming increasingly vital for communities to have a dedicated funding source for proactive management and the financial responsibility can be distributed fairly.

This paper was presented at the WEF Stormwater Summit, June 27-29, 2023.

SpeakerWestover, Kelly

Presentation time

09:00:00

09:30:00

Session time

08:30:00

10:00:00

SessionSession 07: Funding and Financing

Session number07

Session locationKansas City Convention Center

TopicOperations and Maintenance, Funding and Financing

Author(s)

A. Burnham

Author(s)A. Burnham1; K. Westover1;

Author affiliation(s)Stantec Consulting Services Inc.1;

SourceProceedings of the Water Environment Federation

Document typeConference Paper

PublisherWater Environment Federation

Print publication date Jun 2023

DOI10.2175/193864718825158926

Volume / Issue

Content sourceStormwater

Word count7

Base text size -

Westover, Kelly

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