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Lesson plan Grade 12 Social Studies & Civics

Pricing Fenwarren's Stormwater Fee: From Budget to Bill

A grade 12 lesson in which students set a stormwater fee for a fictional city using hard-surface billing units and compare it with the property tax it would replace.

Objectives

  1. Students will calculate a stormwater fee per billing unit from a utility's annual revenue need and its measured hard surface.
  2. Students will compare what a home, a business, and a tax-exempt parcel pay under a property tax and under a hard-surface fee.
  3. Students will evaluate the intended and unintended outcomes of funding storm drains with a user fee.

Vocabulary

Impervious surface
An impervious surface is any hard surface, like a road, roof, or parking lot, that rain cannot soak through. The more impervious surface a town has, the more stormwater rushes off it.

Also: equivalent residential unit, stormwater utility, user fee, tax exemption, fee credit

Teacher overview

Storm drains are usually paid for out of the general property tax, which means the bill tracks what a parcel is worth rather than how much runoff it sends into the pipes. Hundreds of communities have moved that cost into a separate stormwater utility that bills by measured hard surface instead. This lesson puts students in the finance office of the city of Fenwarren, a fictional city of about 35,000 people, as it prices such a fee and tests it against the tax it would replace. The misconception worth naming before students begin is that a parcel's tax bill already reflects its drainage cost: a large asphalt lot with a low assessed value can generate more runoff than an expensive house on a wooded lot, and students who assume value and runoff move together will misread every comparison in the handout.

Procedure

Framing the problem (6 min): Project a simple parcel map of four properties in the city of Fenwarren: a house, a grocery store, a church, and a freight warehouse. Sketch the four parcels in advance, or use aerial images of comparable local properties, showing the roof and pavement on each. Ask students to rank the four by how much rainwater each sends to the storm drains, then to rank them by property tax paid. Record both rankings without correcting them.

Direct instruction (12 min): Explain how a stormwater utility bills. Define the equivalent residential unit, or ERU, as a fixed amount of hard surface that stands in for one typical home. Explain that residential parcels are usually billed a flat one ERU for administrative simplicity, while every other parcel is billed by measured hard surface divided by the ERU size. Point out that a fee for a service reaches parcels that hold a property tax exemption, which is one of the main reasons cities adopt them, and that most programs offer a credit to parcels that detain their own runoff.

Guided practice (9 min): Work one parcel together at the board. Using the city of Fenwarren figures on the handout, find the citywide ERU count, then the monthly charge per ERU, then the annual bill for a parcel with 45,000 square feet of hard surface. Ask students to state in one sentence why the ERU count, not the number of parcels, is the denominator.

Independent work (20 min): Students complete the Student Handout individually or in pairs. Circulate and check that students are dividing by 3,000 square feet before multiplying by the monthly rate, which is where most errors appear.

Discussion and exit check (8 min): Take answers to items 9 and 10 from three or four students. Then collect a one-sentence exit response to this question: "Name one Fenwarren property owner who would pay more under the fee than under the tax, and say why." A class is ready to move on when at least three quarters of the exit responses name a low-value, heavily paved parcel rather than an expensive house.

Pricing Fenwarren's Stormwater Fee: From Budget to Bill — Grade 12 Social Studies & Civics
Name: ____________________________ Date: ______________

Student Handout

The city of Fenwarren is a fictional city that spends $2,400,000 a year on its storm drain system. Surveys of the city find 60,000,000 square feet of hard surface, meaning roofs, pavement, and other surfaces that rain cannot soak through. Fenwarren defines one billing unit, called an equivalent residential unit or ERU, as 3,000 square feet of hard surface. Every single-family home is billed exactly one ERU no matter its size. Every other parcel is billed for its measured hard surface divided by 3,000. Today the storm drains are paid for out of the property tax at a rate of $0.90 for every $1,000 of assessed value. Use these figures for all items.

  1. Divide the city's 60,000,000 square feet of hard surface by 3,000 square feet per ERU. How many ERUs can Fenwarren bill?
  2. Fenwarren must raise $2,400,000 a year. Using your ERU count from item 1, calculate the monthly charge per ERU. Divide the yearly need by the ERU count, then divide by 12 months.
  3. The Halgate Market parcel has 66,000 square feet of hard surface. How many ERUs is it billed?
  4. Calculate the Halgate Market's annual stormwater bill at $10.00 per ERU per month.
  5. The Bellinger Street Church parcel has 24,000 square feet of hard surface and pays no property tax. Calculate its annual stormwater bill at $10.00 per ERU per month.
  6. A freight warehouse has 120,000 square feet of hard surface. It built a detention basin that earns a 40 percent credit on its bill. Calculate its annual bill after the credit, using $10.00 per ERU per month.
  7. A single-family home in Fenwarren is assessed at $180,000. At the property tax rate of $0.90 per $1,000 of assessed value, how much does that home pay each year toward storm drains today?
  8. That same home would be billed one ERU, or $10.00 a month, under the new fee. How much less would it pay each year than your answer to item 7?
  9. The church parcel pays nothing toward storm drains today and would pay a bill under the fee. Explain why a tax exemption does not exempt a parcel from this charge.
  10. Name one outcome the council did not intend that could follow from adopting this fee, and explain how the council could plan for it.

From Water for Schools (waterforschools.org). This material is in the public domain (CC0) and may be copied, edited, and shared freely.

Answer Key
  1. Answer: 20,000 ERUs. 60,000,000 square feet divided by 3,000 square feet per ERU equals 20,000 billing units.
  2. Answer: $10.00 per ERU per month. The annual need of the fictional city of Fenwarren, $2,400,000, divided by 20,000 ERUs is $120 per ERU per year, and $120 divided by 12 months is $10.00 per month.
  3. Answer: 22 ERUs. 66,000 square feet divided by 3,000 square feet per ERU equals 22.
  4. Answer: $2,640 per year. 22 ERUs times $10.00 per month is $220 per month, and $220 times 12 months is $2,640.
  5. Answer: $960 per year. 24,000 divided by 3,000 is 8 ERUs, and 8 times $10.00 times 12 months is $960.
  6. Answer: $2,880 per year. 120,000 divided by 3,000 is 40 ERUs, so the full bill is 40 times $10.00 times 12 months, or $4,800. A 40 percent credit leaves 60 percent of that, and 0.60 times $4,800 is $2,880.
  7. Answer: $162 per year. An assessment of $180,000 contains 180 units of $1,000, and 180 times $0.90 is $162.
  8. Answer: $42 less per year. The fee costs $10.00 times 12 months, or $120 a year, and $162 minus $120 is $42.
  9. Answer: A property tax exemption applies to a tax, which is charged on value and paid into the general fund. A stormwater charge is a fee for a service the city delivers to the parcel, so it is charged on the hard surface that uses the drainage system. Accept any answer that separates a tax on value from a fee for a measured service.
  10. Answer: Answers vary. Reasonable responses include churches and schools opposing the fee because their budgets have no line for it, owners paving less or seeking credits in ways the city must now inspect and verify, or the city losing the flexibility to spend the money on anything except drainage. A strong answer pairs the outcome with a specific step, such as phasing the fee in over three years or funding a credit inspection position.

Differentiation

Support

Give students a partially completed calculation strip for the city of Fenwarren with items 1 and 2 already worked, so they begin at item 3 with the $10.00 per ERU rate in hand. Provide a two-column conversion frame labeled "square feet" and "ERUs" and let students fill it in before computing any bill.

Extension

Ask students to redesign the fee so that single-family homes are billed by measured hard surface in three tiers rather than a flat one ERU each. They must state the tier boundaries, show that the fictional city of Fenwarren still raises $2,400,000, and explain what administrative cost their design adds.

ELL supports

Pre-teach "hard surface," "billing unit," "credit," and "exemption" using the projected parcel map, pointing to the roof and pavement on each image. Provide sentence frames for items 9 and 10: "A tax is charged on ___, while a fee is charged for ___." and "One outcome the council did not intend is ___, which the council could plan for by ___."

Extensions

Have students research how their own community pays for storm drains by locating the drainage line on a local utility bill or the stormwater page of the municipal budget, then write a one-page memo comparing that method with the fictional Fenwarren fee. Students who cannot find a local figure may compare two published stormwater rate structures from any two cities and explain which one treats a large paved parcel more like the Halgate Market case in item 4.