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Beacon Economics Report Reveals Staggering $10.8 Billion Impact on San Bernardino County and Cities From Proposed Stormwater Rules

New regulations being discussed Sept .13 by the Santa Ana Regional Water Quality Control Board would increase housing costs and harm disadvantaged communities

An analysis by Beacon Economics shows that proposed revisions to stormwater regulations could impose $10.8 billion in costs on San Bernardino County and 16 of its cities over the next 20 years, creating an unprecedented financial burden while impeding new road construction, potentially increasing housing costs and disproportionately impacting disadvantaged communities.

The Regional Municipal Separate Storm Sewer System (MS4) Permit overseen by the Santa Ana Regional Water Quality Control Board regulates water quality of stormwater runoff from urban areas — a process that has been in place since 1990.

“The revised regulations, as proposed, target storm water quality and will effectively require counties to develop costly watershed management plans.  This could require the permittee counties to adopt higher property taxes, as LA County did through Measure W, to pay for capital and ongoing O&M costs,” said Niree Kodaverdian, PhD., Research Manager at Beacon Economics. 

The strict proposed regulations affecting San Bernardino, Riverside and Orange counties will be discussed at the Water Board workshop at Cypress City Hall at 9 a.m. on Friday, Sept. 13.

“Everyone desires improved stormwater quality, but these proposed rules will result in increased costs to taxpayers by pulling from the general fund of San Bernardino County and 16 local cities. Additionally, the rules will hinder new transportation improvements and drive up the cost of new affordable housing,” said San Bernardino County Supervisor Curt Hagman.

“These proposed regulations require the construction of 13,300 bioretention sites, with an estimated cost exceeding $7 billion. San Bernardino County already meets clean stormwater monitored water quality compliance standards to 98%. Spending billions of taxpayer dollars on an unproven methodology to secure a marginal improvement is not fiscally prudent,” Hagman said.

The County is urging the Water Board to continue working with the three counties and our cities to create effective rules that improve stormwater quality without creating a financial disaster, Hagman concluded.

The 16 impacted cities include Big Bear Lake, Chino, Chino Hills, Colton, Fontana, Grand Terrace, Highland, Loma Linda, Montclair, Ontario, Rancho Cucamonga, Redlands, Rialto, San Bernardino, Upland, and Yucaipa.

Key findings of the Beacon Report include:

• Rising Costs and Economic Burdens: These mandates are expected to cost the County and its permittee cities approximately $10.2 billion in capital and operational expenses for Water Quality Numeric Limits or Watershed Management Plan (WMP) development and compliance alone. This figure does not account for all potential costs, raising concerns about the sustainability of these mandates.
• Impact on Housing Costs: The changes will have a direct impact on housing affordability, potentially increasing the cost of constructing a single-family home by up to $25,000 by requiring the installation of added stormwater measures. These rising construction costs will come at a time when residential construction has already slowed dramatically, exacerbating the county’s low housing supply and contributing to escalating home prices.
• Disproportionate Impact on Disadvantaged Communities: Disadvantaged communities will bear the brunt of the proposed regulatory changes by deterring investment in new housing and needed infrastructure. Cities like San Bernardino, Ontario, Colton and Fontana are expected to experience the most significant financial impacts. With 33% of the county’s population living in disadvantaged communities, the redirection of funds to meet these new regulatory requirements could undermine ongoing efforts to alleviate economic hardships.
• Stringent Development Requirements: New development requirements will more easily trigger a Water Quality Management Plan (WQMP) for public and private transportation projects, potentially adding 5% or more to the project costs. This could slow the construction of new roads, ADA-compliant sidewalks and other transportation-related infrastructure.
• Strain on Public Services: The financial demands of the proposed regulations will force the county and cities to make difficult choices between regulatory compliance and maintaining essential public services. Some cities, such as Grand Terrace, Highland and Yucaipa may face capital costs exceeding 300% of their annual general fund budgets, leaving little to no funds available for other critical public services, including law enforcement, public works, and recreation.
• Environmental Concerns: While the intent of the proposed regulations is to improve stormwater runoff quality, the new mandates could have adverse effects on local aquatic life. The proposed regulations appear to conflict with ongoing conservation efforts by the San Bernardino Municipal Water Department, which is working to protect habitats for federally threatened species such as the Santa Ana Sucker Fish along the Santa Ana River.

The report can be viewed and downloaded via this link.

Beacon Economics, a renown economic research and consulting firm, was engaged by the County and Cities to conduct an independent, data-based analysis of the proposed regulations.

Media Contacts:

San Bernardino County

David Wert, Public Information Officer: 909-387-4082 or dwert@sbcounty.gov

Beacon Economics

Niree Kodaverdian, Research Manager, Niree@beaconecon.com