How important is adequate financing to a successful stormwater program?

Adequate finance is essential to achieving the nation's water quality goals.  Officials have wrestled with financing drainage and flood control projects for decades, and experts have long known that pollutants in urban runoff have serious effects on water quality, but federal requirements for local jurisdictions to develop programs to manage stormwater quality are relatively new.  Although there is argument about the actual costs of these new programs, there is no doubt that they will carry hefty price tags.  Some examples illustrate these facts clearly. 

In 1992, at the time EPA was considering regulations governing municipal separate storm sewer systems, consultants to the American Public Works Association (APWA) estimated capital and operations and maintenance (O&M) costs for regulated municipalities (James M. Montgomery Associates, 1992).  Depending on assumptions about level of treatment required (such as whether advanced treatment plants would be needed to treat runoff), capital costs ranged from $147 million to more than $406 billion dollars.  Annual estimated O&M costs ranged from approximately $1.1 billion to more than $542 billion.  Because advanced treatment was not specified in regulations, proponents of regulations criticized these estimates as unrealistically high.  Setting aside these differences of opinion, the relevant issue is that costs for stormwater will increase and will be significant. 

More recently, in a report to Congress to determine costs eligible for state revolving loan fund programs, EPA (1998) estimated costs of 266 Phase I permits for 850 municipalities.  EPA's cost estimates, which were limited to capital costs and did not include O&M costs, costs of land acquisition, permitting costs, or the costs of developer-financed best management practices (BMPs), totaled $7.4 billion.  Although this estimate is well below the APWA higher capital cost estimates and is by definition is an underestimate of the total costs that will be incurred to address the nation's stormwater quality problems, it nevertheless is substantial.  Phase II regulations, which will require stormwater programs in medium and small-sized communities, will increase costs substantially. 

Local examples of costs for stormwater management place these national estimates in perspective and provide additional evidence that new financing will be crucial to achievement of water quality goals.  For example, the Wisconsin Department of Natural Resources (1992) has estimated costs for urban nonpoint source controls in the Menomonee River watershed in southeastern Wisconsin.  goals for the 136 square-mile watershed, which includes sections of four counties and 18 municipalities and is 60 percent urbanized, are to decrease loadings of sediment, phosphorus, and lead between 35 and 70 percent.  total costs, which include core, or source, controls such as street sweeping and increased maintenance, and capital improvements to serve both existing and new development, were estimated to be between $110 and $200 million, depending on the level of investment required to retrofit existing areas of development. 

Similarly, in Indianapolis, Indiana, current annual expenditures for drainage and flood control programs are approximately $2.8 million and $2.9 million, respectively (Clark Dietz, Inc., 2000).  To address deferred maintenance and drainage complaints, engineers estimate that annual expenditures on drainage need to be increased between a factor of five to eight, to $15.6 to $23.4 million annually, depending on periods for amortization of bonds.  Similarly, to address existing flooding problems, engineers estimate that annual flood control expenditures need to be increased to $16.2 to $25.8 million annually.

These two examples frankly are typical:  local governments across American face significant costs to address problems related to stormwater runoff and they face these costs at the same time they face rising costs for a host of other infrastructure systems and public services such as public safety and education.  Although reasonable people can disagree about the magnitude of costs that will be required, the only reasonable conclusion is that costs will be significant and will require new financing.  Without new investments, stormwater related problems will persist.