Stormwater Fees: Is Your Municipality Ready?

StormwaterNew technologies, new rules and new practices in stormwater management are spurring changes in infrastructure, urban design and development.

In part, these are spurred by climate change – heavy rainfalls are becoming more frequent in many areas – and in part by growth and development that creates more runoff. Existing infrastructure is often hard-pressed to cope with the increase.

However, those changes are seldom matched by increases in funding or capital.

While most Canadian municipalities fund their stormwater facilities through property taxes, many are turning to additional stormwater fees to help pay for rising infrastructure and operational costs.

In a report to the Credit Valley Conservation Authority (1), consultants Zizzo Allan wrote:

Recent flooding events in Ontario have brought significant attention to stormwater management. As flooding-related damage increases, interest in the legal liability associated with flooding and other stormwater events has grown as well. In light of predictions that climate change will make extreme weather events more frequent and intense, physical damage and liability concerns may prompt municipalities to ask whether, and to what extent, they should adapt their stormwater management policies and infrastructure.


Toronto, Halifax and Mississauga are among those municipalities that brought in a separate stormwater fee in 2015. Prior to that, London, Aurora, Kitchener/Waterloo, Richmond Hill, Markham and Hamilton had established such fees. It’s a trend that will continue through 2016 and beyond.

One of the questions municipalities must consider is whether to charge customers a fixed rate or a tiered rate. This can become quite complex and unwieldy.

It is not practical to measure stormwater runoff on every property, so estimates will be made based on the amount of pervious versus impervious (asphalt, roof coverage, cement, etc.) material. This, however, can require individual property assessments – an expensive challenge for municipalities – and may be subject to challenge.

It might also require a stormwater master plan be developed, if your municipality doesn’t already have one: a plan that takes into account not only current, but future conditions and potentially severe events, as the world’s climate changes. Those once-rare 100-year events are happening more often today.

A 2011 report – Toronto’s Future Weather and Climate Driver Study – predicted both a significant increase in average temperatures over the next three decades, and also more than 220mm additional rainfall on the city by 2040.(2)

Similarly, the Insurance Bureau of Canada (IBC) released its report, The Economic Impacts of the Weather Effects of Climate Change, in late 2015 (3). It estimates the costs of severe weather events. Stormwater flooding in Mississauga, for example, could cost $32 million a year, but severe flooding could cost as much as $195 million.

Toronto City Council identified stormwater as “a growing concern and priority.” A report to council predicted stormwater infrastructure costs would increase from 17% of the city’s 2015 capital budget to 38% by 2024 (4). The city already increased water rates to cover stormwater, but a new billing line was approved in December, 2015; it will not likely be implemented before 2018 (5).

A 2014 survey of US municipalities by Black and Veatch (6) showed 67% of respondents used a flat fee service; 28% a tiered service and only 6% had individual assessments. More than 80% of those with tiered systems had three or more tiers. Kitchener, Ontario, has 16 tiers (7).

Such tiered systems have the advantage, however, of making the system appear more fair to users: the large parking lots, heavily-paved zones pay more for their impervious area than the small homeowner.

Mississauga (8) charges what has been called a what has been called in the media a “McMansion tax,” rated according to the “amount of impervious area, and property sizes and types.” Credits can then be applied for based on customers implementing “stormwater management practices or measures on their property.”

In Halifax, a flat fee was challenged by residents demanding the utility moved to a tiered system (9). But they also had other protests from rural and septic users. By the end of 2015, more than 1,400 rural users had successfully appealed the charge – at a cost to the municipality of $835,000 (10).

Reusing stormwater is also a rising trend in municipalities, especially in areas which have been suffering droughts. However, that often means rebuilding infrastructure to capture and process stormwater rather than redirect it, and separating wastewater and stormwater drainage. While reuse may mean cost and water savings in future, the initial capital costs are prohibitive. A stormwater fee can help build reserves for such projects.

Stormwater fees are not without controversy. Taxpayers see them as another burdensome tax or user fee, and the inevitable protests have emerged against it. In response, municipalities often attempt to encourage best practices for stormwater by offering credits for bio-swales, catchment basins, rain barrels, ditches, green roofs, pervious paving, etc. There may also be credits or incentives offered to developers for low-impact development (LIDs).

Once politicians are brought onside, public consultation will help both inform ratepayers and engage them in the process to develop a fair fee structure. Educated, well-informed consumers are more likely to understand the need for the charge, and less likely to protest it.

Kitchener took it even further, with community-based social marketing, workshops, demonstrations and partnerships to engage the populace and develop local champions (11).

The Zizzo-Allan report identified one of the significant challenges municipalities as the “lack of dedicated funding for stormwater management.” Stormwater fees seem increasingly inevitable for most municipalities.

Because they will require changes to billing and information-gathering systems (which may be subject to errors and public protest (12)), the sooner you start the public conversation, the better.

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References:

  1. www.creditvalleyca.ca/wp-content/uploads/2014/05/Stormwater-Management-in-Ontario_Legal-Issues-in-a-Changing-Climate_2014.04.29.pdf
  2. www1.toronto.ca/city_of_toronto/environment_and_energy/key_priorities/files/pdf/tfwcds-chapter5.pdf
  3. www.canadianunderwriter.ca/news/ibc-study-estimates-future-costs-of-specific-severe-weather-events-stemming-from-climate-change/1003936301/?&er=NA
  4. www.toronto.ca/legdocs/mmis/2015/ex/bgrd/backgroundfile-77554.pdf
  5. www.metronews.ca/news/toronto/2015/12/13/new-stormwater-charges-coming-to-toronto.html
  6. bv.com/docs/default-source/management-consulting-brochures/2014-stormwater-utility-survey
  7. www.kitchener.ca/en/livinginkitchener/Stormwater_Utility.asp
  8. www7.mississauga.ca/documents/bylaws/Stormwater_Fees_and_Charges.pdf
  9. www.cbc.ca/news/canada/nova-scotia/utility-charge-stormwater-1.3297536
  10. www.cbc.ca/news/canada/nova-scotia/halifax-water-urab-ditch-tax-1.3370571
  11. www.raincommunitysolutions.ca/wp-content/uploads/2014/03/RAIN-KW-SWI-CASE-STUDY2.pdf
  12. www.ksat.com/news/defenders/some-billing-mistakes-rolled-out-with-new-storm-water-fee
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