Sustainable Stormwater Program Funding

Comprehensive stormwater programs include all aspects of operating systems and planning for the future. Activities such as operations, maintenance, planning, engineering, regulatory compliance and other administrative tasks, as well as capital improvement programing, must all be incorporated into a program. These are ongoing functions that, with planning, occur at a steady and predictable pace, and require ongoing and predictable (i.e., sustainable) funding. This section focuses on the challenges and opportunities for sustainable funding for stormwater programs. For information on projects and other one-time or limited funding resources, refer to the Project Funding section.

Stormwater management services are an important component of modern cities, similar to water or sewer system utilities. Stormwater utility operations include services to property owners (collecting, conveying, and managing stormwater runoff from properties) and the infrastructure and management systems to deliver those services. A utility approach also implies identifiable costs and corresponding revenues (user fees), which can be restricted to those services and costs to create a self-supporting fiscal enterprise.

A primary barrier in developing a stormwater utility approach (more commonly known as an “enterprise fund” in California) is the required voter approval for local fees and taxes in California pursuant to Proposition 218. A secondary barrier in developing a stormwater utility with dedicated funding (not just in California, but across the nation) is the historic view of stormwater management as a secondary function – often managed as part of the road system – for which no dedicated funding source has been needed – usually subservient to the streets and roads under which the pipes lie. Together, these two barriers mean that sustainable utility programs for stormwater take planning to meet challenges.

Driven by regulations and recognized needs, municipalities are increasingly viewing stormwater management as a primary function. Regulatory requirements for municipal separate storm sewer systems – or “MS4s” – have especially driven this shift.  

Creative municipalities are developing solutions to these barriers as part of establishing sustainable programs and revenue streams. Funding sources are varied, and successful stormwater utilities become skilled at piecing together funding sources strategically, capitalizing on the advantages of each type. An overview of California stormwater funding can be found as part of a recent funding options report prepared for the Town of Moraga.

Many resources exist to identify funding. For instance, funding opportunities were presented through a series of presentations in April 2017 during an all-day forum hosted by the Environmental Protection Agency (EPA) in Oakland, CA.

This section provides a cumulative list of resources that stormwater managers in California can use to build sustainable programs and funding streams. Many of the strategies for overcoming funding barriers are discussed in more detail on the following pages:

Stormwater Utility Fees

Stormwater fees successfully implemented under Proposition 218 procedures become restricted fees, which must be kept separate from other municipal revenues and can only be used for stormwater services. Stormwater utility fees can be set up as an enterprise fund, which is a self-contained financial structure for an enterprise that charges fees for goods or services delivered to the public. Examples are garbage services or other utilities such as water, sewer, or electric. Many municipalities throughout California and across the nation are considering creating stormwater utilities as a way to fund stormwater activities. Here are the steps for creating a stormwater utility (which includes a voter-approved fee).

Realignment of Services

Proposition 218 stipulates that property-related fees require voter approval, unless they are for water, sewer, or trash collection services. As a result, some municipalities may consider paying for qualifying stormwater activities under those service funds, realigning costs or revenues to pay for the specific relevant activities. Realignment examples can be found on this page.

Local Development Impact Fees

Stormwater quality is one potential impact of new development, which can be tied to a fee. Most new development is already subject to NPDES permit requirements for permanent controls, which mitigate many of the direct stormwater pollution impacts for a particular site. On this page you can read aout some municipalities that have successfully implemented a stormwater impact fee to jointly support NPDES and green infrastructure needs.

Special Taxes

Without providing a dedicated funding stream, stormwater services may compete with other general funded services such as police, fire, and parks. This page provides examples of parcel taxes that have been successfully implemented for stormwater services in some California cities.