It's About Time: Recent Developments to Close the Stormwater Funding Gap, Including Innovative Stormwater Financing Approaches

Stormwater infrastructure is as important to quality of life as wastewater and water infrastructure, roads, and electricity. While solutions to address stormwater problems are rather clear, paying for those solutions is more uncertain. WEF's Stormwater Institute (SWI) 2020 National Stormwater Survey (published February 2021) indicates that lack of funding is one of the top challenges of municipalities and utilities across the country. The survey is also helping the stormwater sector improve the understanding of — and quantify of — the 'stormwater funding gap.' This paper will describe the funding gap and recent developments to close it. America's Water Infrastructure Act of 2018, Section 4101, directed EPA to create a Stormwater Infrastructure Funding Task Force. EPA formed a task force of expert consultants through the Environmental Financial Advisory Board (EFAB). The Task Force prepared a report titled 'Evaluating Stormwater Infrastructure Funding and Financing', published in March of 2020. The report addresses the following areas: 1.Identifys funding sources for stormwater infrastructure and describes how funding from such sources is made available and used in each state to address stormwater infrastructure needs, 2.Identifies how the source of funding affects affordability of infrastructure, including consideration of financing costs, and 3.Evaluates whether such sources of funding are sufficient to support capital expenditures and long-term operation and maintenance costs. The EFAB report is expected to go to Congress later this year. This paper will provide information and recommendations of the Task Force's effort and how these recommendations can be used at the utility and local levels. Identifying and implementing funding sources has become a necessary activity for utilities and local governments that are charged with managing stormwater programs. WEF's SWI and other professional organizations, such as the National Association of Clean Water Agencies (NACWA), the National Association of Flood & Stormwater Management Agencies (NAFSMA), and others, have developed publications and held workshops on how to develop and implement funding mechanisms. Their advocacy efforts have also elevated the discussion on the need for funding and the importance of affordability. Perhaps more importantly, conversations in recent years have shifted from how to develop stormwater utilities to the need for innovative funding strategies that include public-private partnerships, incentives for private property owners to implement stormwater controls, green bonds, and trading frameworks. Innovative funding mechanisms, coupled with reliable traditional mechanisms (such as stormwater utilities, fees-in-lieu-of, and drainage and taxing districts) provide local programs with reliable alternatives to fund their stormwater needs. This paper will summarize these innovative stormwater funding approaches and will provide information on a process to develop a stormwater financing strategy. Case studies from Virginia and Pennsylvania will be used to illustrate these innovative funding approaches. This paper will also provide information on a process to evaluate existing stormwater funding programs and how to use a scorecard approach to identify areas of the programs that need improvement. Case studies from Virginia and Washington DC will be used to describe how this process has been used. All infrastructure needs funding. And stormwater infrastructure has been neglected and inadequately funded for too long. All the efforts described in this paper and industry involvement with stormwater programs will help the stormwater sector close the funding gap. Through this presentation the audience will gain an understanding of: 1.The stormwater funding gap, including findings from EPA's Stormwater Infrastructure Funding Task Force, and recent developments in stormwater funding. 2.An overview of innovative stormwater funding approaches and information on processes to develop a stormwater financing strategy. 3.Processes to evaluate existing stormwater funding programs using a scorecard approach to identify areas of the programs that need improvement.