Expanding Fee-In-Lieu Programs to Provide Greater Opportunities for Cost-Effective Compliance
Fee-in-lieu programs provide attractive compliance options for land-disturbing activities and benefits to municipal governments. Compared to onsite projects, they can provide cost-effective retention, detention, hydromodification control, or water quality treatment benefits. For municipal governments, they can provide revenue to finance long-term control plans, watershed management plans such as EWMPs and WQMPs, capital improvement programs, and other project-based strategies.
Fee-in-lieu programs also face challenges, but strategies exist to overcome them. For example, most fee-in-lieu programs are designed to finance public projects and do not take advantage of the potentially lower-cost projects available on private properties. Further, since fee amounts are often based on average capital and maintenance costs, they can rise overtime and cause financial risks for municipalities when revenue is not sufficient to achieve expected water quality benefits or other performance criteria. Fortunately, however, market-based alternative compliance programs that allow private sector participation can address these challenges by increasing access to cost-effective projects and alternative project delivery mechanisms. Among other benefits, market-based alternative compliance programs are sustainable, facilitating increases in the “supply” of compliance projects as “demand” from land-disturbing activities continues into the future.
This presentation will describe how two municipalities, Washington, DC and Chattanooga, TN, have paired fee-in-lieu and stormwater credit trading approaches to realize triple bottom-line benefits from both types of alternative compliance strategies. The presenters will also describe research completed by the San Francisco Public Utilities Commission (SFPUC), including the environmental and financial rationale, for expanding its existing modified compliance program. This research explored using SFPUC’s capital program as the bases for creating a fee-in-lieu program, in addition to potential offsite mitigation and stormwater credit trading options. Presenters will engage the audience with questions to explore how fee-in-lieu and credit trading could help to address their stormwater management challenges.
Jeremy Sokulsky founded Environmental Incentives in 2006 to pioneer Performance-Driven Conservation as an approach to align public and private sector objectives to create resilient water, land and wildlife resources. Jeremy combines lessons as a water quality regulator with over a decade of experience enabling program managers to maximize the results from limited budgets. Jeremy is leading the adaptation of performance-based payment mechanisms to enable innovative financing and public-private partnerships for stormwater and conservation. Jeremy earned a BS from UC Berkeley in Chemical Engineering and an MBA from the Stanford Graduate School of Business.
Eric Zickler is a civil engineer and sustainable infrastructure specialist. He has 19 years of experience working in water quality policy, water resource planning and infrastructure design. He has worked in the US, Latin America, and Asia leading multiple efforts in developing alternative water resource and stormwater management solutions at a variety of scales in locations facing challenging regulatory and environmental conditions. Eric is a registered professional engineer in the State of California, a LEED Accredited Professional, holds an MS in Environmental Engineering from Cal Poly San Luis Obispo and a BS is Civil Engineering from Colorado State University.
Sarah Minick manages the Utility Planning Division for the Wastewater Enterprise at the San Francisco Public Utilities Commission, working toward infrastructure that enhances the city’s sewer system, manages stormwater as a water resource, and restores ecological function to the city’s urban watersheds. Sarah led the development and implementation of San Francisco’s Stormwater Management Ordinance, Urban Watershed Stewardship Grant Program, and Rainwater Harvesting Program, and is the client representative for the SFPUC’s green infrastructure capital projects. Sarah holds a BS from Stanford University and two masters degrees from UC Berkeley in City and Regional Planning and Environmental Planning.