Stormwater Funding Options Report
by Ken Farfsing and Richard Watson, May 2014
Stormwater Funding Options:
Providing Sustainable Water Quality Funding in Los Angeles County
City Managers, California Contract Cities
and The League of California Cities, Los Angeles County Division
The Los Angeles region faces critical, very costly, and seriously underfunded stormwater and urban runoff water quality challenges. The Los Angeles County Flood Control District (LACFCD) led a multi-year effort to develop a sustainable revenue source for municipalities to manage stormwater programs and implement water quality improvement projects. This effort included special legislation and development of a proposed parcel fee, the “Clean Water, Clean Beaches Measure,” to fund clean water programs. At extended protest hearings on a proposed parcel fee in January and March of 2013, the Board of Supervisors heard concerns about the fee and the fee program from public schools, the business community, other stakeholders and the public. The Board moved to close the public hearing and determined to “not proceed at this time with the Clean Water, Clean Beaches measure as proposed.” In June 2013, the Board adopted a motion requesting collaborative participation with the County Sanitation Districts of Los Angeles County (LACSD) and other wastewater management agencies to evaluate methods, assess the a potential model governance structure, and to help identify and secure other sources of funding.
In response to the Board’s actions, the City Managers Committees of the California Contract Cities Association (CCCA) and the League of California Cities, Los Angeles County Division (League) convened a City Managers meeting with representatives from public schools, environmental organizations, and the business community on June 27, 2013 to hear stakeholders’ concerns and suggestions directly. The City Managers attending the meeting authorized a Work Group to review stormwater funding options after the County’s proposed Clean Water, Clean Beaches funding initiative failed to move forward. The City Managers Work Group actively sought the input of key stakeholders from the environmental, public education, and business communities, and prepared this report to assist the Board, local decision makers, stakeholders, and the public in reaching a common understanding of the issues at hand and the potential solutions. The Managers found that to fully understand the issues, improved communication and education is necessary.
This report describes the stormwater regulatory requirements specific to the greater Los Angeles area, the complexities of funding stormwater programs, and the LACFCD’s funding initiative. It examines the regulatory framework for stormwater management, including the requirements of the National Pollution Discharge Elimination System (NPDES) MS4 permit (stormwater permit) and the total maximum daily load (TMDL) programs. The report also summarizes the impacts of the federal TMDL Consent Decree for the Los Angeles Region signed in 1999, which has indirectly regulated the LACFCD, 85 cities, and the unincorporated County since that time. Further, it reviews estimated stormwater program compliance costs, the “pros and cons” of various funding options, and evolving opportunities. The report concludes with a series of recommendations agreed upon by the City Managers. Suggestions from an Elected Officials Committee and individual City Attorneys are also included in this report.
The Work Group found that funding urban runoff programs is so complex and dynamic, and the solutions so costly, that the County and the Cities cannot follow a single funding strategy at this time. One option, for example, is to examine institutional roles to determine whether other agencies, such as the County Sanitation Districts, either provide a useful governance model or could play a new or different role in managing stormwater in the future. During the report development process, the Sixth Appellate Court clarified the application of Proposition 218 regarding the imposition of fees for the capture and use of stormwater for groundwater recharge (Griffith v. Pajaro Water Management Agency). This ruling could have major implications on funding options. These are only two examples of the changing nature and complexities in charting a path forward. “… funding urban runoff programs is so complex and dynamic, and the solutions so costly, that the County and the Cities cannot follow a single funding strategy at this time.” The City Managers Work Group recommends a “multi-pronged” approach to address urban runoff funding issues, since our communities may encounter several dead-ends. A number of the recommendations require active management and a higher degree of organization by local government.
The recommended actions are voluntary. The report is not advocating that any city, group of cities, or the County adopt stormwater fees. The managers are committed to local control; if a regional fee moves forward, each community should make its own decision whether or not to participate in the regional effort. However, there are steps that local governments can take that will assist in funding the new stormwater mandates. For example, cities should organize and be active in the water bond discussions. This report suggests a voluntary framework through Contract Cities and the League to organize those communities that desire to engage in implementing the recommendations found in this report.
It should be noted that the recommendations involving California Contract Cities, the Los Angeles County Division of the League of California Cities, and the State League of Cities have not been officially endorsed by these organizations at this stage of the process. The City Managers Work Group and the Elected Officials Committee held detailed discussions with staff from both organizations in order to reflect their input and concerns. Recommendations involving these organizations, such as changes in State legislation, would need to be reviewed and approved by each organization.
