Using Incentive Programs to Promote Stormwater BMPs

Stormwater Management Utility

Municipalities are facing increased urban development that traditionally results in a greater percentage of impervious surfaces (e.g., streets, rooftops, driveways, and parking lots), causing an increase in stormwater runoff volume and flow rates. The increase in stormwater runoff can cause flooding resulting in potential threats to public safety and property. In the past, stormwater management funds were collected from developer fees or taxes to property owners. Also, the typical fee structure for potable water use did not directly correlate to the amount of stormwater runoff generated, causing inadequate compensation from the property owner for infrastructure needs. Recognizing the need to mitigate stormwater runoff impacts through an equitable means that manages infrastructure and provides environmental protection, municipalities have started implementing stormwater utility fees.

Establishing a stormwater utility provides dedicated revenue for stormwater management through equitable measurements and billing, similar to the commonly used metering for drinking water and wastewater. The stormwater utility fee is calculated by analyzing aerial photographs using a geographic information system (GIS) to estimate the percentage of imperviousness. Since the calculation is based on individual parcels, the polluter pays for the amount of runoff leaving the site and the municipality is not responsible for financing all of the efforts that are designed to mitigate environmental impacts of stormwater runoff. Various financial incentives may be offered that provide property owners with the opportunity to earn a discount on their monthly stormwater utility charge based on the extent and effectiveness of on-site stormwater BMPs that control flow rate, pollution, and disposal.

Reward Innovation

Stormwater BMPs can be implemented on both public and private properties as an alternative to conventional stormwater management. Incentive programs provide municipalities with flexible decision-making tools to target priority areas and allow for introduction of innovative technology without creating mandates. Many municipalities do not have an ordinance requiring stormwater BMPs on private property, but providing incentive programs or grants can result in an increase in the number of practices installed for new construction and retrofit applications. Successful utilization of incentives may be improved through outreach efforts that encourage the private sector to provide input on what incentive programs they would like to see in their community. Incentive programs may be implemented separately or in conjunction with regulation.

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Types of Incentives

Municipalities with successful stormwater BMP programs have demonstrated that there is more than one solution to managing stormwater. Infrastructure improvements, restoration, incentives, and regulations can be combined to develop a successful stormwater management program. Six types of incentive programs might be used by local governments in an effort to reduce the volume of runoff that is discharged to the municipal storm sewer system. These incentives include:

  1. Fee Discount: When a municipality's stormwater fee structure is based on calculation of impervious cover that closely reflects the costs incurred in managing stormwater from each property, a discount may be offered if a project reduces impervious area by including stormwater BMPs and managing stormwater runoff on-site. One example, Chicago's Floor Area Premium Program, is described below.
  2. Development Incentives: Municipalities may offer special zoning exceptions, expedited permitting, or modified stormwater requirements during the permitting process. For example, providing an expedited permit review for new development projects that include stormwater BMPs will encourage the use of innovative techniques reducing the burden on the storm sewer system and subsequently delaying the need for pipe sizing upgrades to the storm sewer system. One example, Philadelphia's Fast Track Permitting Program, is described below.
  3. Rebates and Installation Financing: By providing tax credits or funding that encourages innovative and creative solutions for reducing stormwater runoff, a municipality can reduce stormwater management costs while passing on savings to the community. One example, Portland's Clean River Rewards Incentive and Discount (CRID) Program, is described below.
  4. Awards and Recognition Programs: Municipalities may increase implementation of stormwater BMPs by offering grant awards or recognizing unique efforts that reduce impacts on the storm sewer system. This not only encourages participation, but also establishes partnerships by working with the public and private sector to strive towards the common goal of improving water quality and reducing stormwater runoff. One example, Portland's Clean River Rewards Incentive and Discount (CRID) Program, is described below.
  5. Green Landscaping Requirements: Municipalities can create additional incentives for stormwater BMPs by implementing permit requirements that encourage increased quantity and quality of planted areas within affected zones. This requirement provides developers and designers with flexibility in meeting development standards through mechanisms that are complementary to other stormwater management programs within the zone. One example, Seattle's Green Factor Program, is described below.
  6. Cool Roof Exemptions: A municipality may provide exemptions, or waivers, for an existing cool roof requirement when a green roof is installed. This allows for cost-effective stormwater and environmental management while increasing energy-efficiency and reducing energy costs. One example, Chicago's Cool Roof Provision, is described below.
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Examples of current incentive programs include:

  • Philadelphia, Pennsylvania: Projects with 95 percent or more of the impervious area disconnected from the combined or separate storm sewer can qualify for a fast track review process in which the stormwater management section of the project will be reviewed within five days of submittal. This option provides time and cost savings for the project and comes at low or no cost for the City.
  • Chicago, Illinois: A floor area premium is granted to developments that include public amenities such as green roofs by allowing an increase in the Floor to Area Ratio (FAR). The FAR is the relation of the total floor area of a building to the size of the land. This allows the developer to increase the amount of square footage that can be developed while mitigating urban heat island effect and reducing stormwater runoff. In order to qualify, at least 50 percent of the roof area or a minimum of 2,000 square feet must be covered with vegetation. The density bonus is calculated as follows:

    Bonus FAR = (Area of roof landscaping in excess of 50 percent of net roof area Lot area) x 0.30 x Base FAR

    In 2001, as part of an effort to mitigate urban heat island, increase energy-efficiency, and reduce energy costs, the City of Chicago added a cool roof provision to their Energy Conservation Code requiring varying initial and three years post-installation solar reflectance values depending on roof slope. The following table provides details of the current (as of 1/1/2009) standards.

Roof Slope Ratio of Rise:Run Initial Solar Reflectance Solar Reflectance 3 Years After Install Thermal Emittance
Low (installed by 12/31/08) < 2:12 ≥ 0.25 ≥ 0.50 Standard Eliminated
Low (installed after 12/31/08) < 2:12 * ≥ 0.65 * ≥ 0.50 Standard Eliminated
Medium > 2:12 &
≤ 5:12
≥ 0.15 ≥ 0.15 Standard Eliminated
Photovoltaic, solarthermal, or roof-garden systems Exempt Exempt Exempt Standard Eliminated

Table 2. City of Chicago Solar Reflectance Code in 2009 (Source: H. Akbari. 2007. Evolution of cool-roof standards in the United States. Originally cited in City of Chicago Energy Conservation Code Chapter 18-13).
*Products are required to qualify for the U.S. EPA Energy Star™ label.

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  • Portland, Oregon: The Clean River Rewards Incentive and Discount (CRID) Program provides property owners with the opportunity to earn a discount on their monthly stormwater utility charge by treating stormwater runoff onsite. Discounts are available to property owners based on the extent and effectiveness of on-site stormwater management practices that control flow rate, pollution, and disposal. The CRID has a simplified discount program for residential properties based on roof runoff management, and a more complex commercial property program that requires management of runoff from all impervious areas.
  • Seattle, Washington: The Density Bonus Incentive allows downtown commercial, residential, and mixed-use developments which gain LEED Silver or higher certification to build to a greater height and/or floor area than would normally be permitted.

    The Green Factor Program in Seattle was instituted in 2007, and requires 30 percent of a parcel in the Neighborhood Commercial Zone to be either vegetated or functionally equivalent to a vegetated area, as determined by completing a Green Factor Scorecard. This is the first such regulatory requirement in the US. The scoring system was created to promote the implementation of BMPs in areas visible to the public, such as along streets and sidewalks while offering developers and designers flexibility to meet development standards. Larger plants, permeable paving, vegetated walls, preservation of existing trees, and layering of vegetation are preferred measures, with bonuses provided for food cultivation, native and drought-tolerant plants, and rainwater harvesting. These aesthetically attractive elements will simultaneously improve air quality, create habitat for wildlife, and alleviate urban heat island effects. They also reduce stormwater runoff, protecting receiving waters and decreasing public infrastructure costs.

    Graph showing Seattle Green Factors.

    Seattle Green Factors. Click to view larger image.

    Natural Drainage Systems (NDS) is Seattle's name for its innovative Green Infrastructure approach to stormwater management. NDS uses alternative street designs and vegetated BMPs to reduce the volume and rate of stormwater runoff, striving to replicate pre-development site hydrologic function. In order to expedite the achievement of its water quality and flood mitigation goals, the City of Seattle has taken a proactive approach, retrofitting existing city streets using vegetated stormwater BMPs.

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