Storm water funding makes waves in Lexington, Ky.
Expecting a consent decree, the city of Lexington, Ky., implemented a water quality management fee in 2010. With it, the Stormwater Quality Projects Incentive Grant Program was created to reduce storm water runoff, improve water quality, educate citizens and offer rate payers the opportunity to reduce their fee. Ten percent of the revenue from the water quality management fee would go into the Stormwater Quality Projects Incentive Grant Program to fund it each fiscal year.
The grant program is divided into two main categories: Class A and Class B. Class A properties are defined as single-family residences, duplexes and farm properties. Class B properties are defined as any property not classified as Class A, with a few minor exceptions. Class A properties are billed a flat rate of one equivalent residential unit (ERU) per month no matter how large the parcel or how much impervious area is on that parcel. The fee for Class B properties is based on impervious area of the parcel with every 2,500 sq ft of impervious area counted as one ERU. The fee for one ERU is based on cost modeling and consensus of the task force.
In 2010, the program’s inaugural year, the cost was $4.32 per month per ERU. To address increases in the fee, the city ordinance allows for an automatic annual increase based on the consumer price index. For the 2018 fiscal year, the fee is $4.78 per ERU. The incentive grant program is overseen by the water quality fees board, which is made up of five citizens appointed by the mayor. The fees board decides the overall direction of the grant program, reviews grant applications, determines which grants receive funding, and coordinates with other local government divisions. The daily activities are handled by the grant administrator, administrative staff and others in the Division of Water Quality.
Class B Infrastructure grants typically are awarded for design and construction projects at commercial properties.
More than 200 grants, totaling close to $11 million, have been awarded over the last eight years. The incentive grant process was opened to the public for Lexington’s 2011 fiscal year after collecting the water quality management fee for nearly six months. Twenty-eight recipients were awarded approximately $1.475 million in the first round of grants. Since then, the program funding has consistently been between $1.2 million and $1.35 million per year, with all available funds awarded to projects in Lexington. Of the two main program categories, the Class B category was later divided into two subcategories: education and infrastructure.
Class A neighborhood grants typically fund projects involving stream cleanups, invasive species control, riparian buffer establishment, rain gardens, permeable pavement in residential areas and more. The neighborhood organizations also provide education and hands-on experience to the citizens through opportunities, such as work days, training, and disseminating storm water quality and quantity information to neighborhoods. However, experience has shown it takes more administrative assistance to help these groups.
Class B education grants typically fund projects involving local schools installing rain gardens for outdoor classrooms and curriculum, universities implementing water quality awareness and education programs, media outlets producing and airing water quality educational material, nonprofit organizations developing and implementing curriculum and activities related to storm water issues, and more. While these grants do not normally install infrastructure to address water quality or quantity, the educational benefit derived from children and citizens passing along the learned information to their parents and neighbors has been valuable.
“This is a great program for students,” said Kristin Kelly, teacher for Fayette County Public Schools. “The students have enjoyed the hands-on aspect of planting the garden and helping with maintenance. Overall, this was great experience for our students and our school as a whole.”
Class B infrastructure grants typically fund design and construction projects involving permeable pavement systems, stream bank restoration, rainwater harvesting and reuse, proprietary water quality devices, underground detention, constructed wetlands, and more. These grants have been awarded to international corporations, midsized companies and small local businesses in Lexington. The grant program cannot be utilized to address a regulatory requirement, so there often is close coordination between the grant administrator and Lexington’s Division of Engineering to review all plans for new and re-development to ensure the Engineering Design Manuals’ requirements are met.
Currently, the yearly budget for the three grant categories is split so approximately 17% of available funds goes to Class A neighborhood, 6% goes to Class B education, and 77% goes to Class B infrastructure. However, these percentages can be and have been adjusted by the water quality fees board to fit the direction of the program and trends relating to the number of applications submitted. Additionally, the current allocation between Class A and Class B grants generally aligns with the water quality management fee revenues, because Class B rate payers generate the majority of the fee’s revenue.
Each grant category has a mandatory cost share component. Currently, the minimum cost share for Class A neighborhood grants and Class B infrastructure grants is 20%. Class B education grants have two tiers: grants up to $2,500 do not require a cost share, and grants of more than $2,500 require a dollar-for-dollar cost share for anything more than $2,500. When the program was originally implemented, the Class B infrastructure grants had a 10% cost share requirement for the design and feasibility components of projects, while the construction component did not require a cost share. Due to the flexibility of the program and the competitive nature of the Class B infrastructure grant applications each year, the water quality fees board decided to adjust the cost share requirements for this category. This change allows the board to leverage more projects to provide a greater storm water benefit for the same monetary investment from the fee payers.
This program is gearing up to accept applications for the ninth year. Originally, it was envisioned that less than one full-time employee would be needed to administer and operate the program; however, it became apparent that there needed to be a larger presence of administrative support oversight than originally planned. With the flexibility of the program, the water quality fees board and city staff have been able to listen to comments from grant applicants and recipients and have had the authority to refine the program, allowing for continued success.
In addition, the community has been receptive of this program. The buy-in started when many sectors of the community were represented in the work groups assigned to set up and work through the initial details of the program. This program also has allowed citizens and organizations to address issues on private property that would not have typically been eligible for assistance from local government. Because the fee payers are the grant applicants and are involved at the beginning of each grant, most projects can be completed quickly and inexpensively. Applications have been competitive each year.
Lexington has prospered from this program. The Incentive Grant Program created an avenue for the city to help residents burdened with storm water issues that the government otherwise might not have had jurisdiction to address. Lexington also has been able to utilize the program as a mechanism to address portions of its consent decree and MS4 permit requirements.
With future maintenance of the completed projects falling to the property owner, the citizens have an additional vested interest in keeping projects visually appealing and in good working order, as the government is not responsible for upkeep. The most important attribute is that more than 200 projects have been awarded throughout Lexington to address water quality, water quantity and storm water education, which is a benefit to the entire community.