Federal environmental regulations, the implementation of such regulations by the Indiana Department of Environmental Management, and the general need to control heavy rainfall events have forced many communities to consider various improvements to their storm water management systems. The purpose of these improvements is to limit the amount of water pollution resulting from "wet weather" runoff into natural waterways and to control flooding problems generally. In some, but not all, instances these concerns are related to combined sewer overflow (CSO) issues.
Cities and towns in Indiana Code 36-9-23 and 36-9-25, respectively, or through Indiana Code 8-1.5-5, first enacted in 1987.
Many cities and towns have or are in the process of establishing a seperate rate for "users" of storm water management systems. A number of communities have set rates based on the amount of impervious area e.g. buildings, parking lots, etc. on a parcel of land, because impervious land increases the amount of ground water polution reaching natural waterways. This rate setting approach typically uses an equivalency factor known as an "ERU" (which stands for equivalent residential unit) with the amount of impervious area on a parcel containing a typical single-family house equaling one ERU and other properties paying some multiple of one ERU based upon the total amount of impervious area on each parcel of land.
From a financing point of view, municipalities that operate their storm water management systems under Indiana Code 36-9-23 generally must fund improvements through the issuance of revenue bonds. Municipalities using a sanitary district must issue special taxing district bonds, although the bonds may be payable from revenues of the sewage works as well.
Finally, municipalities that establish a department of storm water management under Indiana Code 8-1.5-5 may issue either special taxing district bonds or revenue bonds, or any combination thereof.
