UPDATED: Coming to a Locality Near You - Stormwater Remediation Fees in Maryland
This article is one in a series presenting the current status of legislation implementing local stormwater fees in each of the ten jurisdictions across Maryland required by state law to establish a Watershed Protection and Restoration Program and associated fee structure by July 1, 2013. The information in this article is current as of April 8, 2013.
Highlight: Maryland has new stormwater fees that are being implemented in certain counties by this upcoming July 1st.
Background: In late 2010, the EPA issued the Chesapeake Bay Total Maximum Daily Load (“TMDL”), effectively establishing a “pollution diet” for nitrogen, phosphorus and sediment discharges to surface waters that the six Bay watershed states and the District of Columbia must meet by 2025. The Maryland Department of the Environment determined that stormwater runoff contributes about 18% of the nitrogen and 22% of the phosphorus loads flowing to the Bay from our state. In order for Maryland to follow its “pollution diet”, the state's plans call for improvements to stormwater management practices contributing about 17% of nitrogen reductions and about 45% of the phosphorus reductions necessary to meet the TMDL goals. Current estimates of the cost to implement these stormwater improvements are approximately $7.4 billion statewide through 2025. Failure of a state to meet its pollution diet may result in the EPA withholding federal funding for state water management programs, the withdrawal of state authority to manage and issue all water discharge permits, and potentially significant fines.
Purpose: The purpose of the law is to establish the local means and dedicated funding source to implement local stormwater management plans and upgrade and maintain stormwater management facilities, streams and creeks in the most heavily-developed areas of Maryland.
The Law: On May 2, 2012, Governor O’Malley signed into law House Bill 987. In short, the law requires those jurisdictions within Maryland that are subject to a federal Municipal Separate Storm Sewer System ("MS4") Phase I permit to establish a local Watershed Protection and Restoration Program, including a local stormwater fee to fund its operations, by July 1, 2013. A last-minute push to postpone the implementation of the stormwater fees to July 2015 failed in the Maryland House of Delegates on the final day of the 2012 General Assembly session.
Counties and property owners affected: Counties and municipalities impacted by this mandate include Anne Arundel, Baltimore, Carroll, Charles, Frederick, Harford, Howard, Montgomery, and Prince George’s counties and Baltimore City. The only properties within those ten jurisdictions exempted by state law from paying the fee are those owned by the state, counties, municipalities and volunteer fire departments.
How the fees are calculated: While the state law provides a general broad outline of what is required in the Program, it leaves the structure and operational details up to each individual jurisdiction, including exactly how they may generate the necessary funds. They are authorized to charge property owners flat rate fees, graduated amounts based on impervious surface or any other approach they prefer. The law does require that the local jurisdictions give some credit to property owners for measures that reduce the quantity or improve the quality of stormwater discharged from their property, and that the fees be adjusted for owners experiencing substantial economic hardship.
Where the Counties are now: A general summary of the current status of legislation in each of these jurisdictions follows and a one-page comparative spreadsheet of their respective programs may be found here. With the July 1st deadline looming, many localities are now in the process of developing their local Programs and fee structures. Please note these are fluid issues; sources used in compiling this summary may not necessarily reflect the most up-to-date information and the details of each jurisdiction’s plans are subject to change.
Anne Arundel County
Introduced before the County Commission on January 22, 2013, Bill No. 2-13 would establish the required program and implement the fee. As introduced, the bill proposes to charge an annual flat fee ranging from $34, $85 or $170 per dwelling unit for certain residential zoned properties. A fee of $85 per 2,800 square feet of impervious area would be charged annually for any business, commercial or industrial-zoned property, including apartment buildings.
Since its introduction, over 40 amendments have been offered on the legislation. During a County Council hearing on April 1st, the following significant changes were made:
- The stormwater fee charged to non-residential properties would be capped at 35% of their base real property tax bill;
- Nonresidential property owned by a religious group or organization would be charged a flat $1 fee, regardless of the amount of impervious surface on the property;
- Multifamily residential and nonresidential properties charged more than $500 per year will be charged 60% of the calculated fee during the first year and 100% of the calculated fee in the years thereafter;
- Nonresidential property owned by homeowners associations may not be charged more than the number of property tax accounts owned by that HOA multiplied by 40% of the subject property’s base real property tax bill;
- Certified “Clean Marinas” receive a discount for impervious surfaces greater than 7.5 acres; and
- Private non-profit schools would be charged a rate equal to two times the base real property tax rate it would otherwise pay.
The County Department of Public Works would be tasked with establishing regulations specifying the steps that most property owners could take to reduce stormwater from their property and get a credit against the fees of up to 50%. Property within the City of Annapolis would be exempt from this County fee as the City already charges a municipal stormwater utility fee.
A final vote on the bill and its amendments is expected as early as April 15, 2013, with implementation by July 1, 2013.
Bill 20-13 was introduced to the County Council on March 18, 2013. This bill establishes a general framework for the County’s Program. A separate Executive Order, yet to be formally issued but circulated in draft format, would set the specific fees charged under the program authorized by the bill.
While not finalized, initial drafts of the Executive Order specify that the fee charged to residential properties would typically be $18, $29 or $36 per year. Institutional, non-residential property (i.e., private schools, churches, etc.) would be charged $36 annually per every 2000 square feet of impervious surfaces. Other commercial and industrial property would be charged $69 per every 2000 square feet of impervious surface. Credits generated by recognized best management practices (“BMPs”) may not reduce the fee charged by more than 26% of the initial calculated rate.
A vote on the legislation is likely to occur on April 15, 2013.
At this time, no bill has been introduced by the Board of County Commissioners to implement the Program. The Board has charged the County’s Environmental Advisory Council (“EAC”), an established citizen stakeholder group, to study the available options and to make recommendations to the Board of County Commissioners for legislation to implement a Program and associated fee structure. The EAC has been meeting and is scheduled to meet twice a month between now and June, with the intent of allowing the County to implement its program by July 1, 2013.
On April 2, 2013, County staff briefed the Charles County Commissioners on the County’s specific financial needs, an outline of a proposed plan, the studies underpinning its calculation of impervious surfaces in the County, and the basis for a conceptual fee structure that would enable Charles County to collect the fees it feels are necessary to meet its obligations. The staff presentation included proposed annual residential fees of $11, $16 or $32 based on the dwelling type and a rate of $32 per every 3,255 square feet of impervious surface for nonresidential property.
Legislation implementing the program and an annual budgetary resolution establishing the fee structure is expected to be introduced in the coming weeks and in place by July 1, 2013.
Frederick County is currently preparing a draft ordinance to adopt the required Program that will be introduced to the Board of County Commissioners in the coming weeks. A Division of Community Development staff presentation was made to the Commissioners on March 7, 2013, during which various proposals were presented to establish a funding system similar to those introduced in other counties. In response, the Board of County Commissioners directed its staff to develop a plan charging a flat rate of cent ($0.01) per parcel. County staff anticipates that a public hearing on the program will occur on or before June 4, 2013, with a program implemented by July 1, 2013.
It is unclear how the County anticipates fully funding work that may be required for its stormwater management program and whether or not a different fee structure may eventually be approved by the County Commissioners. It should be noted the Frederick County legislative delegation was the only one to introduce bills during the 2013 General Assembly session that would have specifically exempted Frederick County from the House Bill 987 mandate. However, this legislation did not make it out of the respective chamber committees.
Note that the City of Frederick has a pre-existing fee program dedicated to stormwater management so properties within the City limits will not be subject to the County Program once implemented.
Bill No. 13-12 to implement the required program was introduced to the County Council on February 19, 2013. A public hearing on the bill was held on March 19, 2013, and voting on the legislation may occur as early as April 9th. The bill proposes to charge an annual flat fee of $125 for any property zoned for residential (except for apartment buildings) or agricultural use. A fee of $7 per 500 square feet of impervious area would be charged annually for any business, commercial or industrial-zoned property, including apartment buildings. Credits of up to 50% of the initial stormwater fee calculated for a property may be applied based on the use of BMPs.
The fee will not apply to properties within the city/town limits of Aberdeen, Bel Air or Havre de Grace as they are not subject to the County’s MS4 permit.
Bill No. CB8-2013 was formally introduced to the County Council on February 4, 2013, to implement the required Program. A separate Resolution, CR21-2013 was presented to the County Council to establish rates charged to property owners under the County program established by CB8-2013. Initially, the bill and resolution would have established an annual fee of $7.80 per 500 square feet of impervious area to be charged to every residential, commercial and industrial property owners in the County. However, on March 28th the County Council voted to approve the bill and resolution, and amended it to increase the rate charged to $15.00 per 500 square feet of impervious surface.
The County program will apply a 50% reduction to the impervious area assessed for a property subject to a Site Development Plan that was filed with the County on or after January 1, 2003. A one-time annual credit for the use of various specific stormwater treatment practices on properties will be available for properties not eligible for this automatic reduction.
Montgomery County currently charges a stormwater utility fee for the residential properties in the jurisdiction. However, Bill 34-12 was introduced in the County Commission on November 27, 2012, to expand the existing program to all other non-residential properties. The proposed bill, together with proposed Executive Regulations, would establish a new fee program with annual single-family residential rates ranging from $31 to $278. Multifamily, commercial and industrial properties would be charged annually based upon a rate of $93 per 2,406 square feet of impervious area on the property. The bill would provide that one-third of the fees charged would be applied in the first year, two-thirds in the second year and the full amount in the third year.
One distinction observed in the Montgomery County program is the more-expansive specific definition of what exactly constitutes “impervious area.” For instance, Montgomery County’s proposed bill specifies that it also includes “any surface that prevents or significantly impedes the infiltration of water into the underlying soil”, and includes “compacted gravel,” “artificial turf” or “any areas used by or for motor vehicles or heavy commercial equipment, regardless of surface type or material.” In contrast, House Bill 987 and many of the other county bills simply define “impervious surface” as “a surface that does not allow stormwater to infiltrate into the ground,” including “rooftops, driveways, sidewalks, or pavement.”
Montgomery County's fee would not apply in the Cities of Rockville or Takoma Park as they have their own existing stormwater programs. The City of Gaithersburg elected to have the County’s existing program apply within its boundaries.
Prince George’s County
Prince George’s County already charges a stormwater utility fee that would potentially satisfy certain requirements of House Bill 987. However, the County and local municipalities that would otherwise be subject to House Bill 987’s requirements have been in discussions to determine if and how the County program should be adopted by those local municipalities. In addition, County staff are evaluating how the existing program should be amended, its fee structure and system of charges. This final program will require legislative approval from the County Council prior to enactment by July 1, 2013.
Bill No. 12-0155 was introduced to the City Council on November 19, 2012, to implement the required program. A public hearing on the bill was held on April 2, 2013; additional hearings are scheduled for April 9th and 17th. The bill proposes to charge a flat fee of $48, $72 or $144 per year for single-family residential zoned properties based on the amount of impervious surfaces they contain. A fee of $72 per 1,050 square feet of impervious area would be charged annually for other properties in the City. These non-residential rates are the highest of any of the ten jurisdictions when compared on an equivalent basis.
Draft regulations to implement the City’s program were provided for stakeholder and public review on April 1st. The draft regulations provide that credits may be applied in amounts not to exceed 45% of the initial calculated fee. While standard stormwater best management practices apply to account for credits generation, Baltimore City is unique in allowing residential property owners to participate in events such as stream cleanups, tree plantings and de-paving events in order to reduce the fees they are charged.
M. Trent Zivkovich advises clients and handles appeals and credit applications for local stormwater fees, known by some as the “rain tax”, on behalf of commercial and industrial clients throughout the state of Maryland. For additional information please contact him at 410.347.8778 or email@example.com.