The Stormwater Finance Game II - Paying for Success
The next round of NPDES permits will subject urban jurisdictions to increased tracking requirements but could open the door to Pay-for-Success contracting as described in the December 2015 Presidential Memorandum (https://www.whitehouse.gov/blog/2015/12/17/pay-success). This conference session uses a fast-paced game format to demonstrate a performance-driven approach to stormwater program development and permit compliance. Participants will leave this session with clear understanding of how to enhance a stormwater program’s design, use contracts that pay for success rather than ineffective actions and implement an annual learning process so that permittees comply with TMDL and permit requirements at substantially lower costs over time. Quantitative permit requirements make it clearer when jurisdictions are in (or out of) compliance, suggesting the value of harnessing focused numeric data for effective planning, tracking and reporting. A stormwater jurisdiction in Lake Tahoe used performance-driven approaches to reallocate funding to a project that gained many times more pollutant reduction towards the county’s TMDL load allocation by shifting funding towards a hydrologically-connected project. This Tahoe story exemplifies lessons learned in other environmental programs and within the business field: good use of performance metrics substantially increases return on investment. Studies have shown that hundreds of times higher value can be achieved when environmental investments are prioritized based on the highest value for the money (Pannel 2013, Fuller 2010). Such large heterogeneity in cost-benefit ratios demonstrates that selecting the best projects can make a huge difference in how much load reduction can be achieved for a given budget. This session engages and challenges participants in a live simulation where they have an active decision making role as stormwater managers. It allows them to see how their decisions make a real difference in permit compliance, cost to government and environmental conditions. Participants will be able to take home new ideas for: (1) selecting projects with the greatest return on compliance investments, (2) reporting progress numerically for funders and regulators, and (3) structuring a learning process so that compliance becomes easier over time. The Stormwater Finance Game itself is an engaging, interactive tool that can be used gain the attention of supervisors and political supporters, showing them how a program is cost conscious but needs real resources to succeed. The concepts underlying the game (quantitative program evaluation/reporting as well as pay-for-success contracting) are on the cutting edge of program and policy development- they underpin new regulatory approaches used for determining credits in stormwater utilities and enabling market-based trading policies.