A Multi-Jurisdictional Environmental Compliance Approach Saves Money in North Carolina

In 2011 in Central North Carolina, Granville and Person Counties, the Towns of Butner and Stem, and the City of Creedmoor all became newly regulated under a nutrient management strategy designed to protect a downstream drinking water lake.The governments are located northwest of Raleigh, North Carolina, the state’s capital, and they drain to Raleigh’s water supply, Falls Lake. The lake was added to the 303(d) list in 2008 for exceeding the chlorophyll a standard. Instead of waiting on the federal government to impose one-size-fits-all clean up requirements upon the areas that drain to the lake, Falls Watershed jurisdictions, stakeholders, and state regulators worked together to formulate a nutrient reduction strategy. The jurisdictions and others in the watershed have been working with one another and the state for the last five years to negotiate the most favorable rules possible. The rules are very stringent, but were viewed as a better alternative than an EPA-imposed Total Maximum Daily Load, or TMDL.The rules require the local governments to impose requirements on new development and to reduce nitrogen and phosphorous loading from existing development through means such as stormwater retrofits, stream restoration, and land conservation. These costly compliance requirements, the significant tax increase it would take to fund the costs through general fund monies, and the comparative fairness and stability of a stormwater fee pushed the governments toward implementing a stormwater fee. Concurrently, the jurisdictions recognized that ongoing compliance costs, which are requiring changes to the local regulatory process and specialized technical services, could be reduced through a joint compliance approach.All five jurisdictions implemented a joint compliance program in June 2012, and four of the five implemented stormwater fees July 1, 2012 to fund their component shares of the compliance and their other stormwater management costs. The fifth jurisdiction implemented similar fees one year later. The jurisdictions passed identical stormwater rate structures but each has different rates because the costs and rate bases among the jurisdictions differ. The Counties passed different Falls watershed and non-Falls watershed rates as well. The rate structure comprises fixed, impervious, and gross parcel area components, each of which maps to the jurisdictions’ cost causation.Each jurisdiction has a separate enterprise fund and different rates (which helps to preserve autonomy and independence), but all jurisdictions work cooperatively on stormwater issues and they share resources (to take advantage of efficiencies). The costs for shared resources, such as a stormwater utility services manager, are split among the jurisdictions on an equitable basis determined by the relative populations and land area and use of the particular service. The jurisdictions have signed interlocal agreements that define the terms for their cooperative work. Each year the jurisdictions adopt work plans that lay out the shared services and costs as well as jurisdiction-provided services and costs. RFC worked with the jurisdictions and their counsel to develop the ordinances and interlocal agreements necessary for the cooperative effort.About one year into fee-based funding and cooperative compliance the jurisdictions are working well together. Although it is still early in the arrangement, a few observations can be made about why it is working:○ The cooperative effort is founded on saving money and it is demonstrable that money is being saved○ The interlocal agreements afford each jurisdiction autonomy but provide enough structure that each jurisdiction can plan ahead and share resources wisely○ Although each jurisdiction has its own stormwater rates to accommodate variability in service levels, the rate structure and billing system are the same for all○ Because nonpoint source nutrient control is mostly a new activity for each jurisdiction, cooperative effort did not require disassembling any existing compliance approaches.