If you’ve been watching the financial news in the past few
weeks—and who hasn’t been watching, and checking their mutual fund and 401(k)
balances more often than is good for their sanity?—you’ve probably thought about
the implications of the economic crisis on stormwater funding, and potentially
on your own job.
The editor of our sister publication, Water
Efficiency, wrote this week about how the current financial
situation might affect repairs, retrofits, and rehab of our water and wastewater
infrastructure. And even before the Wall Street meltdown, some parts of the
country had been in dire trouble. Drought in the Southeast has caused loss of
revenue to some water utilities, for example (see Brant Keller’s blog
on the subject), and thus limited their
ability to carry out capital improvements.
Let’s look at the situation specifically with respect to
stormwater funding. We know that the tax base—the major source of revenue for
most stormwater programs—is shrinking in many areas, particularly those with
high rates of home foreclosures. After all, fewer homeowners to tax, and a lower
market value for those homes that are not in foreclosure, mean less property tax
revenue. In addition, for those communities that relied on sales taxes, such as
a special purpose local option sales tax for designated projects, reduced
spending by financially strapped citizens is shrinking that revenue stream as
well. And the rising interest rates on municipal bonds is hampering cities’
ability to borrow money.
What does this mean for the outlook for stormwater utilities?
An increasingly popular—and, as they become more widely understood, an
increasingly viable (read: less likely to trigger a lawsuit)—method of funding a
stormwater program, utilities have been growing rapidly in number. Brant Keller
is the director of Public Works & Utilities for the city of Griffin, GA,
dealing not only with stormwater but with the whole gamut of water services, and
he also was responsible for launching that state’s first stormwater utility. His
prediction, published in the October 2008 issue of Stormwater, is that, as EPA’s
enforcement of NPDES regulations gets stricter in the coming years, more
stormwater utilities will be formed to fund expanding programs and services.
Is that still a likely scenario, given the likelihood of
stronger competition for all types of funding? Or is it more plausible than
ever, as many stormwater programs will have fewer alternatives and will try
harder to put utilities in place? Has your own program’s plan for a stormwater
utility been affected either way (or has the current situation prompted you to
dust off once-shelved plans)? Let us know how the national financial picture is
affecting you locally.