City leaders are considering updating the residential stormwater fee of $7 per month to be more equitable to the actual amount of stormwater runoff homes generate because of their impervious surface.
An impervious surface is an area that water cannot be absorbed by, such as a building or paved area or other hard surfaces that prevent rainwater from being absorbed by the soil. In the case of residential stormwater management, the city defines “impermeable space” as the building’s footprint, or the area of land a building occupies.
While Fayetteville’s stormwater fee remains the same for those who have homes regardless of their impervious space, the other five of the six largest cities in North Carolina — Charlotte, Durham, Greensboro, Raleigh and Winston-Salem — all use a tiered rate structure for stormwater fees, with larger impervious surface areas resulting in higher monthly payments. In the context of stormwater permitting, these cities are known as “Phase 1 MS4” communities.
At the Fayetteville City Council work session on April 7, stormwater management experts from Woolpert, an environmental engineering consultant firm hired by the city to conduct research on its stormwater fees, presented recommendations for a tiered residential stormwater fee structure in Fayetteville. A tiered structure already exists for commercial properties in Fayetteville.
Molly Brown, a Woolpert consultant who worked on the study, said the researchers collected new aerial imagery and conducted an impervious area analysis and a stormwater utility rate evaluation to determine recommendations.
“We wanted it to be fair and equitable, simple and understandable, easily applied, and make it more similar to other Phase 1 communities in North Carolina, and then of course generate sufficient revenue to support all of the stormwater program goals,” Brown said.
The city needs additional stormwater revenue to pay for $500 million in planned stormwater projects, as well as expenses as a result of expected inflation and system growth, Brown said. Other expenses include system maintenance, regulatory compliance and administrative support. Fayetteville’s stormwater expenses are currently outpacing revenues, with a deficit of about $72,000, according to Brown’s presentation.
Breakdown of current fee structure
Both the city’s residential and commercial property owners pay for a monthly stormwater fee.
Generally, the proportion of stormwater fee revenue generated by a property type aligns with its contribution to the city’s total impervious area, Brown said. For example, commercial properties pay more in stormwater fees than residential properties, but they also have more impervious surfaces, like parking lots.
Here’s a breakdown of the current fee structure:
- All residential property owners pay a flat rate of $7 per month ($84 a year), while commercial property owners pay a rate of $7 per 2,266 square feet of impervious surface.
- Residential properties account for 37% of the city’s impervious area and fees from residential property owners account for 40% of the city’s stormwater fee revenue.
- Commercial properties account for 63% of the city’s impervious area and fees from commercial property owners account for 60% of the city’s stormwater fee revenue.
- The vast majority of those who pay stormwater fees are owners of residential properties, constituting 64,000 accounts and 92% of payers. Commercial property owners account for 6,000 accounts, or 8% of payers
Fayetteville Assistant Public Services Director Byron Reeves said that although commercial properties generally pay more in stormwater fees, the amount of runoff they generate can put a considerable strain on the city’s stormwater management system. He gave an example of Cross Creek Mall.
“If you look at the percentage of the revenue, the mall would be paying thousands of dollars in stormwater utility fees,” Reeves said. “But they have a large impervious area footprint that they are discharging into Buckhead Creek that we then have to convey down and manage the flow of that stormwater. So that’s just kind of a real-world example where they’re one account, they pay a lot of money, but they are discharging a lot of stormwater off their parcel.”
Recommendations for improved fee structure
The city is already planning to increase the stormwater fee from $7 to $8 in fiscal year 2027 and again to $9 in fiscal year 2029. However, this increase is still not enough to generate additional revenue for planned stormwater projects necessary to mitigate the impacts of flooding in the city, Brown said.
In order to pay for the city’s stormwater expenses and generate additional revenue for projects, while also making the fee structure more equitable, the researchers presented three options for changes to the residential fee structure.
Option A
- Tier 1:
- Impervious Area: Up to 2,266 square feet
- Parcels Included: 67%
- Monthly Rate: $7
- Tier 2:
- Impervious Area: 2,267 to 3,399 square feet
- Parcels Included: 27%
- Monthly Rate: $10.50
- Tier 3:
- Impervious Area: 3,400 square feet or more
- Parcels Included: 6%
- Monthly Rate: $14
Option B
- Tier 1:
- Impervious Area: Up to 1,600 square feet
- Parcels Included: 26%
- Monthly Rate: $5.25
- Tier 2:
- Impervious Area: 1,601 to 2,300 square feet
- Parcels Included: 42%
- Monthly Rate: $7
- Tier 3:
- Impervious Area: 2,300 sq ft or more
- Parcels Included: 31%
- Monthly Rate: $10.50
Option C
- Tier 1:
- Impervious Area: Less than 2,500 square feet
- Parcels Included: 77%
- Monthly Rate: $7
- Tier 2:
- Impervious Area: 2,501 to 4,800 square feet
- Parcels Included: 22%
- Monthly Rate: $14
- Tier 3:
- Impervious Area: More than 4,800 square feet
- Parcels Included: 1%
- Monthly Rate: $21
While the researchers did not recommend increasing the commercial stormwater fees, they did recommend updating the impervious area amounts for those properties based on their study’s findings. This would generate about $1 million in additional revenue per year, Brown said.
Next steps
Council members expressed interest in shifting to a tiered fee structure.
“I hate to increase anything — I would hate for my family to have to pay additional,” Council Member Courtney Banks-McLaughlin said. “But at the same time, I look at it like we’re trying to provide a great service. And we saw just from previous [presentation] slides where we have a flooding issue, and the only way to help with that is to increase it. If there’s another way, I would like to know. But I don’t think that there’s another way because we need the funding to improve the flooding throughout our city.”
Council Member Mario Benavente praised staff’s recommendation of the tiered fee structure, particularly Option C, and suggested the city look into other possible city service fees where implementing a tiered structure could work.
“I just think this is really interesting and we should consider how to apply this in several different ways across the board,” Benavente said.
Following the discussion, the council expressed support for the tiered stormwater fee model and agreed to discuss the options at a work session in the coming months. They also approved updating the commercial property database to reflect the accurate impervious areas of these properties.
Government accountability reporter Evey Weisblat can be reached at eweisblat@cityviewnc.com or 216-527-3608.
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