February 12, 2005

Wilmington is tiptoeing into an area where the state and New Castle County are thinking about going. City Council is expected to establish a stormwater utility as soon as its Feb. 17 meeting.

While a gubernatorial taskforce is preparing recommendations about how best to manage surface drainage, city government has decided that a utility is the way to go. Its plan has been crafted down to deciding what the initial fees will be and how to apportion them.

The situations, however, are different. The taskforce was convened in response to flooding in several places in New Castle County during heavy rainstorms in Septembers of 2003 and 2004. Wilmington is faced with having to pay for federal- and state-mandated measures to reduce and eventually eliminate discharge from its combined sanitary and storm sewer system into the Delaware River of untreated overflow when heavy rain inundates the system.

In both cases, however, the cause of the trouble is the same -- development which has resulted in an expanse of impervious surfaces. Water which lands there cannot be absorbed into the ground and flows into the sewers.

In seeking a new source of revenue to pay for maintenance and improvement of its system, Wilmington officials concluded that the present water-sewer rate system is both inadequate and unbalanced. The plan now is to correct the latter condition first and then deal with the former.

Kash Srinivasin, commissioner of public works, explained that the approach is to add a third component, drainage, to the rate that city residents and businesses pay for water and sewer service.

"The cost of managing drainage is [now] funded by the water-sewer fee, which has nothing to do with runoff," he said. As a result, "those who contribute the most to stormwater runoff pay the least."

Black & Veatch, the engineering consulting firm hired to help devise the utility, found that the city's current annual wastewater cost is $9,095,000. Of that, $4,635,000 is attributable to drainage. To take an extreme situation, the owner of a large parking lot which buys very little water does not pay any fee but that property obviously dumps a lot of water into the sewer.

To better apportion the fee -- which will continue be a single combined assessment due quarterly -- the utility will use the approach which has become the standard around the nation. The drainage component will be levied on the basis of 'equivalent runoff units'. A unit is calculated on the estimated amount of runoff from the most common least impervious properties. In Wilmington's case that is a residential property less than a tenth of an acre in size, which describes more than 90% of all residential property.

The rate structure defines three kinds of properties -- residential, nonresidential and properties not connected to the sanitary sewer system. Within each type, there are seven property classes, based on size. The larger the property the more 'equivalent runoff units' for which it will be charged.

Initial charge for each unit will be $77.43 a year.

Wilmington has 21,000 residential and 3,000 business or commercial properties.

To make the change more compatible, it was decided to keep it revenue neutral; that is not take in more money from the three-component fee than the present two-component fee yields. To do that, the sewer component of the combined fee will be cut in half.

A typical residential property with average water consumption will end up paying somewhat less than at present; larger commercial properties will, in most cases, have to pay considerable more than now.

Srinivasin acknowledged that the rate is set arbitrarily, but said it is fair. "We're doing this because we believe there is a fundamental problem of equity," he said.

Areas outside the city, such as southwestern Brandywine Hundred, which buy Wilmington water will continue to pay just the water component. Owners there pay separately for New Castle County sewer service and will likely end up with some kind of drainage fee, depending upon what the state taskforce recommends and the General Assembly and County Council do.

Properties in the city that are owned by public agencies and nonprofit organizations will have to pay the fee, just as they do now for water and storm service.

William Montgomery, the second-ranking official in the city administration, indicated there is an 'other shoe' element involved. Although it will start off generating revenue at the present level, the idea behind a stormwater utility is that it provide a sustained revenue stream able to keep pace with the cost of stormwateer management.

"Obviously these [initial] rates will have to be raised in the future," Montgomery said. "We have to get something in place first and then improve it." He did not indicate how long revenue neutrality is likely to last.

On the other hand, Srinivasin said it is likely that, in the future, credits will be offered to property owners who voluntarily undertake measures to control runoff.

Montgomery acknowledged that city government will likely tap into the water-sewer-drainage fund, as it does now into the water-sewer fund, for other purposes. "It's not unusual for a city to take some 'profit' [from selling water] to offset other costs. ... That's all right as long as those transfers are set at a reasonable level. We're not looking for that to carry the rest [of city spending]," he said. The current level is about $1 million a year. It ran as high as $6 million during Mayor James Sills's previous administration, he said.

"Wilmington is required to do certain things that will cost money," Srinivasin said. If nothing else, he added, federal anti-pollution standards will get more stringent.

There are about 1,000 stormwater utilities of various kinds around the nation. Unlike what is considered the standard form, a separate autonomous entity, Wilmington's will be a unit of the Department of Public Works.

2005. All rights reserved.

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