Water Management Districts

Guidance for Creating and Implementing Water Management Districts

What is a water management district?

It is an optional mechanism for funding specific watershed projects. The water management district must first be established, then a project must be ordered through formal hearing and adoption processes.

Who can establish a water management district?

A watershed district.

How does it work?

The watershed district (WD) develops a fee structure based on who contributes to a specific pollution problem or to a water resource issue.  For example, the fee can be based on land contribution of water volume if it is a flooding or water storage issue or it can be based on phosphorus contribution if it is a water quality issue that is being addressed in the project.

A water management district (WMD) must be created through a plan amendment or revision and can only be utilized for projects that are initiated and ordered to be implemented through formal hearing and adoption processes. A WMD should be closely tied to hydrologic boundaries, but watershed districts may consider ecological, economic, social, geopolitical and land use factors for creation purposes. A WMD should be defined by an area of project need or benefit.

Key Statutes

• Water management districts and their charge systems must be established under MINN. STAT. Chapter 103D.729.

• Water management district charges may only be used to pay the costs of projects initiated under MINN. STAT. Chapters 103B.231, 103D.601, 103D.605, 103D.611, or 103D.730. Stormwater projects under MINN.STAT. Chapter 103D.730 must be initiated and ordered to be implemented through formal hearing and adoption processes.

• The mechanisms and principles of MINN.STAT. Chapter 444.075 must be followed for the development of water management district charges established through MINN.STAT. Chapter 103D.729.

How to create water management district

1. Amend watershed district plan to create a water management district. The amendment must include:
   1. A description of area to be in the water management district (recommend supporting with maps).
   2. The amount to be raised by charges (total amount is necessary if fixed time for water management district to be in force, otherwise annual maximum (cap) amount, if water management district is established in perpetuity).
   3. The potential methods that will be used to determine the charges (should utilize a contribution basis as the mechanism for fee structures).
   4. The length of time the water management district will be in force (for water management districts established in perpetuity, watershed districts are strongly encouraged to establish a local appeal process and evaluate the water management district in each ten-year plan amendment).
2. Approval of Plan amendment under MINN. STAT. Chapter 103D.411 or as part of a revised Plan under MINN. STAT. Chapter 103D.405, or MINN. STAT. Chapter 103B.801.
3. 1. WD plan amendment process
   2. WD plan revision process
   3. Comprehensive Watershed Management Plan (One Watershed, One Plan) process

How to establish a project in the water management district

The following steps can be completed any time during the 10-year watershed district plan cycle.

1. Watershed district establishes project(s) in the water management district following appropriate statute (MINN.STAT. Chapters 103B.231, 103D.601, 103D.605, 103D.611, or 103D.730).
   1. Projects implemented must be ordered by the Watershed District managers.
   2. Order for project must specify funding method(s).
   3. Watershed district must notify counties, cities and towns within the affected area at least 10 days prior to a hearing or decision on projects implemented under this section of statute.
2. Watershed district refines methodology for computing charges based on final project scope.
3. Watershed district determines and sets charges for all properties within the water management district after identifying scope of the project and deciding method(s) of funding the project.
4. Watershed district develops collection mechanism:
   1. Request county to collect.
   2. Contract with private vendor (e.g. electric cooperative).
   3. Billing and collection by watershed district.
5. Watershed district establishes a separate revenue fund for proceeds collected from the fee or stormwater utility charges.

Resolution of Disputes

Local governments may request BWSR to resolve disputes pursuant to MINN. STAT. Chapter 103D.729, Subd. 4, except a local appeal process is encouraged to address disputes involving water management districts established in perpetuity.