What Is a Stormwater Credit?

Stormwater fee programs, or stormwater utilities, have been implemented by local governments across the United States since around 1964. In Pennsylvania, stormwater fees are newer, and their popularity only recently began to grow after the City of Philadelphia implemented Pennsylvania's first stormwater fee in 2010 (Chalfant 2018).

Stormwater fees are recurring fees that are billed to property owners. The money goes towards funds dedicated to stormwater management, which include improvements and maintenance of aging infrastructure, flood prevention, watershed protection, environmental compliance, and other stormwater services. The billing structure is commonly a set fee per Equivalent Residential Unit (ERU) for residential properties, and nonresidential properties are billed multiples of ERUs based on total impervious area. You may read more about the general overview of stormwater fees in a previous Extension article: "What is a Municipal Stormwater Fee?"

However, stormwater programs go beyond just charging a fee—most stormwater fee programs offer a stormwater credit policy. The details of these credit policies vary by municipality, but all include a list of eligible practices, an application that eligible property owners must usually complete, and a compliance process. Stormwater credits also play a role in protecting water quality and possibly, also your wallet.

What are Stormwater Credits?

Stormwater credits are opportunities and incentives to reduce your stormwater fee. Credits encourage property owners to implement stormwater management strategies that reduce water pollution, which ultimately will help the municipality that is granting the credit to achieve its State mandated stormwater permit requirements. Credits are often granted for stormwater best management practices (BMPs) that reduce impervious surface area and stormwater runoff. To earn a stormwater fee credit, property owners can construct new stormwater BMPs or receive credit for something already installed as long as the practice meets the criteria defined in the municipality's credit policy. Some municipalities offer credits for non-structural practices, such as fertilizer management on non-residential properties with lawns or landscaped areas (Hampden Township, Cumberland County), or for providing community engagement opportunities and educational courses on stormwater in schools (City of Allentown) and Hampden Township.

In some municipalities, the BMPs that qualify for credits can be anything outlined in the Pennsylvania Stormwater BMP Manual or set by the municipality in their credit policy or potentially their stormwater management ordinance. Examples may include stormwater basins or swales, trees planted near pavement, rain gardens, subsurface infiltration, rain barrels, flow-through planters, porous pavements, and green roofs. In other places, the BMPs are specified, and owners can only earn credits from a select list, which is the case in Wyoming Valley Sanitary Authority's credit policy in Northeastern PA. WVSA offers 16 available credits to properties with at least 0.1 acres (4,356 square feet) and 500 square feet of impervious area.

The amount of credit a property owner may be eligible for depends on the reductions in stormwater runoff rate and volume achieved with the BMPs they install. These are often calculated by assessing the size of the property's impervious area, the peak flow of a particular storm, and the capacity for a BMP to detain and infiltrate stormwater. Certain practices, such as installing a rain barrel, offer a one-time credit, while other practices provide ongoing credits, such as a stormwater basin. Most municipalities cap credit at a maximum 50% of the bill. The City of Meadville in Crawford County allows credit reduction up to 40%, and in the City of Philadelphia, property owners can reduce their bills to what the city terms the minimum monthly charge (Table 1). Municipalities cap credits because their stormwater fees are also used to pay for administration and regulatory compliance expenses (Chagrin River 2017). In addition, since stormwater fees must cover the cost of stormwater management and infrastructure maintenance throughout the entire municipality, the total credits provided can't shrink revenue beyond the point that the municipality could no longer cover the installation and maintenance expense of stormwater management services required on public properties (Valderrama and Levine 2012).

Eligibility and Application Process

Stormwater fee programs usually apply to a variety of property types including residential, commercial, educational, industrial, non-profit, and municipal. In most communities, all property types are eligible for some level of credit. However, in some municipalities, such as the City of Philadelphia and Hampden Township in Cumberland County, credits are limited to only non-residential properties because they are typically larger and have greater potential to implement BMPs. A municipality's capacity to administer and manage credits may also constrain the number of eligible properties for credits.

To apply for stormwater credits, property owners most often are required to fill out a form and provide design documents, an operation and maintenance plan, and photographs of the site or BMP. Materials are submitted to their municipality's stormwater program office via mail or in person. Derry Township in Dauphin County currently offers a fillable credit application on their website that is submitted online.

Some places, such as Derry Township, require a pre-application meeting or field review as part of the application process. In addition, a municipality official or professional engineer may be required to visit the property and approve the BMP's functionality. There may also be an application fee.

Compliance: Inspection and Maintenance

To hold property owners accountable for their credits, owners must sign an agreement with the municipality allowing it to check and inspect the accredited BMPs as necessary. Owners must also agree to regularly monitor the operation of the BMP and to keep a maintenance log. If the municipality were to find any inaccuracies, the owner would be notified and typically given a period of time to make corrections to stay in compliance. In most municipalities, BMP inspection is a condition of credit issuance.

Credit Renewal

Credits have an expiration date set by the policy. Credits can be easily renewed by submitting a renewal application and, if required, maintenance log reports, current photographs of the site, and documentation from a professional engineer. A professional engineer, landscape architect, or other professional recognized by the City may need to certify that the facility is operating as designed and is in proper working order (Wyoming Valley Sanitary Authority).

Credit policies provide incentives for owners to implement BMPs, manage stormwater, save money by reducing their bills, and keep waters clean. Credits encourage people to reduce pollution and to engage in community watershed protection efforts. While stormwater fees and credit policies may require more management and work by the municipal authority and property owners, the benefits to the environment and the community can be felt and seen by the improvements to the quantity and quality of the community's creeks and rivers.

¹ Wyoming Valley Sanitary Authority’s fee is based on the square footage of impervious area (IA) on a property parcel. The fee is split into four flat rate tiers for the monthly bill: Tier 0 $0.00 fee (IA Range 0 to 99 square feet); Tier 1 $1.00 fee (IA Range 100 to 499 square feet); Tier 2 $4.80 (IA Range 500 to 6,999 square feet); and Tier 3 $4.80+ (IA Range 7,000 square feet and beyond).
² Non-residential properties include multi-family residential properties with five or more dwelling units.
³ The non-residential minimum charge is $16.33 effective September 1, 2019 to August 31, 2020.

References

Brooks, C. (2010). Measuring the Success of Stormwater Credits Programs through the Implementation of Credit Utilization Ratios. MPA/MPP Capstone Projects. 121.

Chagrin River Watershed Partners. (2017). Stormwater Utility Literature Review.

Chalfant, B.A. (2018). Paying for the rain: the emergence, diffusion, and form of stormwater fees in the United States, 1964-2017. University of Pittsburgh.

Doll, A., and Lindsey, G. (1999). Credits Bring Economic Incentives for Onsite Stormwater Management.

Valderrama, A., and Levine, L. (2012). Financing Stormwater Retrofits in Philadelphia and Beyond. Natural Resources Defense Council.

Zhao, J.Z., Fonseca, C., and Zeerak, R. (2019). Stormwater Utility Fees and Credits: A Funding Strategy for Sustainability.