Need for Private Investment

Transcription

1 Need for Private Investment Most municipal retrofit investments tend to be largescale and on publicly-owned land Often high capital costs Limited efficiencies due to geographic locations Limited opportunities To meet implementation demands, stormwater management needs to include private property Impervious Breakdown in DC Other Impervious, <1% Alley, 2% Paved Drive, 2% Sidewalk, 5% Parking Lot, 5% Road, 13% Pervious, 58% Building, 15%

2 Barriers to Private Investment Lack of awareness of stormwater problems and solutions Perception that stormwater management is a municipal problem High up-front capital costs and limited borrowing options for retrofits Difficulty with or fear of municipal bureaucracy (permitting) Concerns about risk to property and giving up space Lack of local trained contractors and designers

3 How to Spur Private Investment First step is to require it Development requirements Redevelopment requirements This will only get you so far, so fast Some redevelopment projects won t trigger thresholds Pace of redevelopment is glacial Next steps are financial and programmatic motivations Portland BES market research (BES 2008) The strongest motivators to participate in stormwater programs were (in order): desire to help improve the health of water bodies, belief in civic duty, the City performing all of the work and/or paying the bill, and personal commitment to the environment.

4 How to Spur Private Investment Portland BES market research (BES 2008) Common incentives preferred by participants included: making the program easy, providing permitting assistance, having a single point of contact, and ability to obtain financing, tax credits, or a direct cash payment. Most motivating direct incentives were lump sum checks (50 percent), tax credits (35 percent) and discounts (11 percent). Owner willingness to pay for stormwater retrofit

5 How to Spur Private Investment Potential incentive or motivational mechanisms Financial Incentives Stormwater Utility Fees and Discounts Grants and Rebates Credit Trading Reverse Auction Financing and Loans Programmatic Incentives Education and Outreach Award and Certification Property Assessment Development Incentives

6 Stormwater Utility Fees and Discounts Stormwater utility fees: Levied by cities, towns, counties, sewer districts, and watershed conservation districts Are proportional to the property s contribution and impact of stormwater runoff and pay for the service provided Are voluntary most programs include credits to the fee based on a property owner s efforts to mitigate stormwater runoff Provide a dedicated funding stream for stormwater program management

7 Stormwater Utility Fees and Discounts Nationwide surveys Western Kentucky University Black and Veatch Stormwater utilities are becoming more ubiquitous 600 utilities identified in ,479 in in Oregon in 2014 No community is too small

8 Stormwater Utility Fees and Discounts Most widely used funding method is the Equivalent Residential Unit (ERU) Average gross or impervious area on residential parcels Fees for non-residential properties are proportional to the ratio of the parcel impervious area to the ERU Other funding methods include: Residential Equivalent Factor Water use Rates are typically set by funds needed to be raised annually for stormwater program

9 Stormwater Utility Fees and Discounts Monthly Fee per ERU Max % Discount Golden Beach, FL $50.00 NA Sunnyside, WA $ % Mercer Island, WA $30.64 NA Seattle, WA $ % Portland, OR $ % Puyallup, WA $22.01 NA Lynnwood, WA $20.43 NA Washington, DC $2.67/$ %/4% Philadelphia, PA $ % Lake Oswego, OR $11.76 NA St. Helens, OR $ % Gresham, OR $ % Oregon City, OR $9.04 NA Fairview, OR $8.78 NA Frederick, MD $ NA National Avg $3.98 Oregon Avg $4.17 B&V survey: 62% did not have adequate funding to meet most of their utility needs 17% indicated funding is not sufficient to meet even the most urgent needs 31% indicated not having any rate increases since % indicated having a stormwater fee discount program

10 Stormwater Utility Fees and Discounts Most are poor inducements for private investment in stormwater infrastructure Still a cornerstone of many successful stormwater programs with many benefits: Providing sustainable and dedicated funding Raising awareness Helps build stormwater economy NRDC Study in Philadelphia (Valderrama 2013) Looked at optimizing rate and discount structure to maximize participation Utilizing avoided stormwater fees as only measure of project payback: Current fee/discount structure would achieve full payback within 10 years for only 7% of properties needed to reach goals. Adding $3.50/sq ft subsidy increases qualifying affordable projects to 73% of city s goal.

11 Grants and Rebates Programs are typically differentiated by funding allocation and terms and timing of payment Can target specific property types or practices Can be competitive or first-come first-served Can include cost-share as skin in the game Can involve reimbursement or upfront payment Can include third-party administrator or design/installation contractors Should require maintenance agreement or covenant with property owner Long-term effect should be to create local market through demand, which ultimately increases efficiencies and lowers costs

12 Grants and Rebates Washington, DC RiverSmart Grants Started in 2008 as pilot (RiverSmart Homes) Cost-share grant up to $1,200 (homeowners pay 10% of cost) for one of five BMPs DDOE inspector meets with property owners, assesses the property and recommends appropriate landscaping enhancements DDOE partners with local contractors who completed LID training course Program subsequently expanded RiverSmart Communities RiverSmart Schools RiverSmart Rebates RiverSmart Targeted Watersheds RiverSmart Rooftops

13 Grants and Rebates Philadelphia Stormwater Grants Stormwater Management Incentives Program (SMIP) Provides retrofit grants directly to non-residential property owners To be competitive, applicants must manage at least the first 1 of runoff for $100,000 per impervious acre or less Greened Acre Retrofit Program (GARP) Provides grants to contractors, companies or project aggregators who can build large-scale stormwater retrofit projects across multiple properties (>10 acres) Limited to combined sewer area To be competitive, applicants must manage at least the first 1 of runoff for $100,000 per impervious acre or less Rain Check Program Targets residential property owners city-wide BMPs include rain barrels, permeable pavement, downspout planters, and rain gardens Pay $25 deposit, attend workshop, schedule site visit PWD pays contractor up to $2000

14 Grants and Rebates Montgomery County, MD RainScapes Rewards Offers rebates to property owners for rain gardens, rain barrels, conservation landscaping Each parcel can receive multiple rebates for different projects until the lifetime rebate maximum is reached ($2,500 residential; $10,000 non-residential) Funds are awarded on a first-come-first-serve basis Rebate issued after the project passes a final inspection Seattle Rainwise Rebates Rebates up to 100% of costs for residential cisterns and rain gardens Only properties within a target CSO basin are eligible Work must be completed by a trained and licensed contractor Rebate issued after the project passes a final inspection