Financing Stormwater Retrofits in Philadelphia and Beyond

SOURCE: NRCS - Stormwater runoff is a principal cause of urban waterway pollution nationwide, fouling rivers, lakes, beaches, and drinking water supplies. To reduce the environmental and public health threats posed by polluted stormwater and to comply with the Clean Water Act, cities nationwide are making significant investments to reduce stormwater runoff. However, traditional solutions that rely solely on fixing or expanding existing sewer and stormwater infrastructure can be extremely expensive and fail to address the root cause of the problem: impervious spaces in the built environment that generate 10 trillion gallons of untreated runoff per year.

Executive Summary

This is why some cities have embraced green alternatives to help solve stormwater problems. Whereas traditional solutions involve expanding and adding to existing cement and pipe systems that convey rainwater away from where it falls, green infrastructure manages stormwater onsite through installation of permeable pavement, green roofs, parks, roadside plantings, rain barrels, and other mechanisms that mimic natural hydrologic functions, such as infiltration into soil and evapotranspiration into the air, or otherwise capture runoff onsite for productive use. These smarter water practices also yield many important co-benefits, such as beautifying neighborhoods, cooling and cleansing the air, reducing asthma and heat-related illnesses, lowering heating and cooling energy costs, and creating jobs. Green infrastructure techniques, while more cost-effective than traditional gray infrastructure, still require significant financial investment, if they are to be implemented at the scale necessary to protect urban waterways. Fortunately, the use of green infrastructure practices—in combination with stormwater fee and credit systems that reward investment in retrofits—creates tremendous opportunities for private investment to underwrite much of the cost.

More than 400 cities, towns, and utility districts nationwide utilize parcel-based stormwater billing practices that charge property owners stormwater fees based entirely or in part on the amount of impervious area on their property. Those which provide property owners the opportunity to obtain a credit, or discount, on their stormwater fees by installing stormwater management practices can motivate private property owners to manage much of their own stormwater onsite. This reduces stormwater runoff into municipal sewers and local waterways, reducing stormwater management costs for the city or utility district.

Philadelphia has taken the lead among cities nationwide by establishing a parcel-based stormwater billing structure that provides a very significant credit (up to nearly 100 percent) for non-residential owners who can demonstrate onsite management of the first inch of rainfall over their entire parcel. Philadelphia’s fee and credit structure and the incentive it creates for private property owners to install stormwater retrofits complements the city’s Green City, Clean Waters program, which recently received approval from state
regulators. That program requires the city, over the next 25 years, to retrofit nearly 10,000 impervious acres of public and private property to manage an inch of stormwater runoff onsite.