Title
Storm and Surface Water Financial Incentives
Report
UAC Deliverable:
Review and provide feedback to staff
Staff Contact:
Andy Haub, Water Resources Director, 360.753.8475
Background and Analysis:
The Utility Advisory Committee has briefly discussed the potential of incentivizing Storm and Surface Water Utility rates to better encourage contemporary best management practices and innovation. The incentives could foster commercial developments and residential homes to exceed current development regulations in exchange for a reduction in monthly utility charges.
Incentivizing utility rates is a complex issue dictated by State guidelines and public financial best practices. RCW 90.03.510 authorizes the City to "provide a credit for the value of stormwater control facilities or improvements that a person or entity has installed or located that mitigate or lessen the impact of storm water which otherwise would occur." It does not explicitly define how to value those facilities or improvements. Incentives can be based on both the cost of public services provided by the utility and the potential to reduce or eliminate costs as a result of innovation.
The ongoing update to the Storm and Surface Water Plan provides the opportunity for a comprehensive financial evaluation of the Utility. This work is well underway by an independent financial consultant. The consultant is also investigating alternative rate structures and potential incentives. The incentives work is based on a cost of service analysis that delineates utility costs between "base costs" that do not vary with potential onsite mitigation and "use costs" that may vary with onsite mitigation. For example, onsite water quality treatment could reduce public costs to treat runoff downstream of the site.
For the past fifteen years or so, the Utility has used a tiered rate structure for residential and commercial accounts. The commercial tiers acknowledge that newer developments provide more onsite s...
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