Filling the Gap: An Analysis of Stormwater Utility Fees in the Puget Sound Watershed, Washington, USA

The Puget Sound region was an early adopter of funding local stormwater management programs via stormwater utility fees (SUFs). This paper presents a case study characterizing the use of SUFs in this rapidly growing watershed with over 5 million people. We systematically compiled and evaluated data on SUF rate structure for 124 jurisdictions and program budgets for 80 jurisdictions to describe the overall composition of revenues, the distribution of expenditures between capital and operating expenses, and the influence of National Pollutant Discharge Elimination System (NPDES) municipal stormwater permit status. We also calculated SUFs applied to individual parcels in 11 jurisdictions to assess two equity outcomes: proportionality and affordability. Results indicate that SUFs are a funding source for 82% of jurisdictions located in the region. SUF revenue contributed 91% of the $537.7 million in total stormwater program operational revenue documented for 80 jurisdictions. The regional average annual total revenue per capita was $112, nearly double the national average of $63 reported by Black and Veatch in 2021. Per capita revenue results indicate that regulatory status influences SUF rates. SUF rate increases occurred in 66% of jurisdictions between 2019 and 2020. Stormwater program expenditures were about evenly split between capital and operations and maintenance expenses in 7 of 14 jurisdictions evaluated. There is enormous variation among jurisdictions in annual SUF revenue on a per capita ($17 to $328) and a per housing unit ($42 to $1,007) basis. Combined water service utility costs have the potential to overburden low-income households in Seattle; SUFs represent a large enough percentage of Lowest Quintile Income that they exacerbate this inequity. Our results address recognized gaps in the literature and the conclusions drawn are broadly applicable to those administering or researching SUFs in other regions of the United States.