recent updates in municipal storm water management

© 2017 McNees Wallace & Nurick LLC www.mcneeslaw.com

Recent Developments in Municipal Storm Water Management

August 31, 2017

PENNSYLVANIA STATE ASSOCIATION OF BOROUGHS

Timothy Horstmann

Adeolu Bakare

Kathy Pape


Recent Developments in Municipal Storm Water Management

Covered Topics:

Recent Developments in PA Law and Pending Legislation

Storm Water Fee Structure – Legal Concerns and Litigation

Funding Opportunities Through Pennvest – Finding those Extra Dollars

2


Recent Developments

Recent Changes to Authorities Act

Act 68 of 2013 – amends Authorities Act to explicitly permit the creation of an authority for the purpose of “storm water planning, management and implementation” as defined by the articles of incorporation

Act 68 also gave retroactive blessing of any authority that was operating storm water controls as part of a combined water/sewer/flood control project

3


Recent Developments

Recent Changes to Authorities Act

Act 123 of 2014 – amends Authorities Act to explicitly permit the imposition and collection of “reasonable and uniform rates” in connection with the performance of storm water planning, management and implementation

Rates must be “reasonable and uniform” and based in whole or in part on property characteristics, which may include installation and maintenance of best management practices approved by authority

4


Recent Developments

Must I Use a Municipal Authority?

Boroughs are currently authorized to acquire, operate and maintain areas for the “infiltration, detention or retention” of storm water and for other methods of storm water management authorized by DEP

But, under current law, if you house storm water management under the Borough’s “roof”, you are limited in how you finance its operations

5


Recent Developments

Why Form a Storm Water Authority?

Regionalization – if talking with other municipalities, an authority is ideal vehicle to build a multi-jurisdiction solution

(Political) Liability Isolation – transfer responsibility to implement (and pay for) plan to separate entity

Spread the cost among more properties

But Consider the Drawbacks:

Loss of municipal control

Greater litigation risk

6


Recent Developments

Must I Use a Municipal Authority?

Funding of storm water expenditures under the Borough Code is currently tied to special assessment process (can only assess benefited properties)

No authority to impose a broad, flexible storm water management fee like in the Authorities Act

7


Recent Developments

Pending Legislation

House Bill 914 – would explicitly authorize boroughs to enact ordinances to govern and regulate the planning, management, implementation, construction and maintenance of storm water facilities

Would authorize Boroughs to impose storm water fees

HB 914 provides further guidance than Authorities Act on the limits of the fee that may be imposed

8


Recent Developments

Pending Legislation

HB 914 substantially similar to Act 62 of 2016

o Extended storm water powers to second class townships

HB 914 was part of a package of bills (913-916) tracking language of Act 62 and covered boroughs, towns, first class townships and third class cities

o Bills were introduced in March and were already the subject of a markup session

HB 913-916 approved in House; awaiting action by Senate

9


Recent Developments

Fee Structure under House Bill 914

Fees must:

o be “reasonable and uniform” based “in whole or in part” on the characteristics of the property benefited by the facilities, systems and management plans

o include “appropriate exemptions or credits” for properties that have installed and maintain facilities meeting best management practices

o be used only for storm water purposes (no reallocation to Borough general fund)

10


Recent Developments

Fee Structure under House Bill 914

Three Methods of Fee Assessment:

o Assess all properties in the Borough

o Assess all properties benefited by a specific project

o Assess all properties located in a storm water management district established by the Borough

11


Storm Water Fee Structure

12

Two basic rate structure options

Flat Fee – Simple per-parcel fee for all

Dual Fee – Separate fees for Non-Residential and Residential

o In dual-rate situations, Residential parcels typically pay a flat fee

o Non-Residential parcels may pay a higher flat fee or a fee based on the individual parcel area, as determined by Geographic Information System (“GIS”) measurements


Storm Water Fee Structure

13

More detailed variants Equivalent Residential Unit (“ERU”)

o ERU = average impervious area for a single family residential parcel

Equivalent Hydraulic Unit (“EHA”)o EHA = combined impact of impervious and pervious

areaso Fees based on estimated runoff flows, with a higher

per-unit rate for impervious area and a lower rate for pervious area

Tiered/Development – Fees based on sliding scale from vacant/light development to heavy development


14

Legal Concerns

Litigation over storm water fees generally concerns three issues Statutory/Regulatory Authority to form storm water

utility Distinction between fees properly collected by the

utility and taxing power limited to the state Rate allocation to customers

Although many municipalities have created storm water utilities without litigation, some have faced significant legal challenges


15

Legal Concerns

Statutory authority to establish storm water utility Northeast Ohio Regional Sewer Dist. v. Bath Twp.,

44 N.E.3d 246 (Ohio 2015)o Supreme Court of Ohio rejected Bath Township’s

allegation that the Northeast Regional Sewer District lacked statutory authority to implement a storm water management program and collect storm water fees

o The court found the governing statute defined “wastewater” to include storm water, thereby authorizing the Sewer District to regulate and assess fees for both services


16

Legal Concerns

Fee v. Tax City of Lewiston v. Gladu, 40 A.3d 964 (Me. 2012)

o Supreme Court of Maine found the City of Lewiston’s storm water assessment charge to be a valid fee and not a tax

o Court applied the following four-factor test:o Regulatory purpose or revenue generator?

o Direct or indirect relationship between fee and benefit?

o Voluntary or involuntary fee?

Court found credit program allowing for 100% fee

reduction conferred voluntariness

o Fair approximation of costs and benefits?


Legal Concerns

Fee v. Tax Jackson County v. City of Jackson, 836 N.W.2d 903

(Mich. Ct. App. 2013)o Court of Appeals of Michigan found the storm water

management charge implemented by the City of Jackson met no regulatory purpose and was intended primarily to increase revenue

o Court also found the charge did not reflect usage of the storm water sewer system and therefore constituted a tax for the public benefit rather than a fee for services rendered

17


Legal Concerns

Rate Allocation to Customers Mint Mgmt. v. City of Richmond, 2017 Ind. App.

LEXIS 66 (Ind. Ct. App. 2017)o Court of Appeals of Indiana upheld a storm water

service charge imposed by the City of Richmond on all property owners regardless of whether storm water runoff from each parcel flows into the City’s storm water system

o The court determined that all parcels benefit from the City’s storm water infrastructure because the storm water infrastructure included combined sewers carrying both storm water and sanitary sewer flows

18


Legal Concerns

Rate Allocation to Customers City of Key W. v. Key Golf Club Homeowners’ Ass’n, 2017

Fla. App LEXIS 7804 (Fla. Dist. Ct. App. May 31, 2017)o Court of Appeals of Florida overturned a lower court

order authorizing the City of Key West to recover storm water fees from a group of customers

o Court initially found that storm water runoff from customer properties did not flow through the City’s storm water system and that assessing a storm water fee to such customers would shatter the distinction between a tax and a utility fee

o On rehearing, the court found in favor of a voluntary fee because properties could receive an exemption if the owners improved the property to retain all storm water

19


Legal Concerns

20

Lessons Learned? To minimize potential for legal challenges to storm

water fees, municipalities must:o Develop equitable fee structures based on

customers’ use of storm water infrastructureo Engage in extensive customer outreach campaigns

to secure public supporto Educate key local leaders and media outlets on the

cost drivers and ultimate purpose of storm water fees


FUNDING OPPORTUNITIES FROMTHE PENNSYLVANIA INFRASTRUCTURE

INVESTMENT AUTHORITYa/k/a PENNVEST

21


Storm Water Projects (Flow or Quantity)

Transport

Storage

Infiltration

Best Management Practices (BMPs)

Sanitary Sewer Separation

Other Techniques

Source: PA Rural Water Assn. , 2017 Annual Conference, Presentation by PennVest, March, 2017

22


Non-Point Source Projects (Quality)

Ag Best Management Practices (BMPs)

Urban Run-Off

Abandoned Mine Drainage

Brownfields

Greyfields


23


Green Infrastructure Projects

Installation of porous pavement, green roofs and other approaches to managing wet weather run-off

Street tree and urban forestry programs

Installation of riparian buffers and wetlands

Downspout disconnection programs to eliminate storm water from combined sewer systems

Installation of water meters

Purchase of leak detection equipment

Energy efficiency – retrofits and upgrades to pumps and treatment processes

Installation of water efficient fixtures, fittings, equipment and appliances


24


PennVest Funded Projects

PA Environmental Council – Ohiopyle Green Infrastructure Projects

County/Municipality: Fayette/Ohiopyle Borough

Grant Amount: $1,312,718.00

Approval Date: 7/21/2009

Type: Storm Water

Description: Installation of 22,780 square feet of pervious paving, 132 gallon rain barrels, 500 and 1,200 gallon cisterns, and 3,083 linear feet of concrete curb within OhiopyleBorough that will reduce the storm water run off impact on the Borough's sewer system

25



Delaware Valley Reg PC/PHS – Multi-Municipal Water Quality & Community Enhancing Tree Planting Project County/Municipality: Delaware/Chester City


Total Project Cost: $2,729,324.00


Type: Non-point source

Program: Urban run-off

Description: Planting of 3,355 trees in seven municipalities in Southeastern Pennsylvania; two of which are financially distressed. The primary project site is the City of Chester, served with an antiquated combined sewer system.

26



York County Rail Trail Authority – Northern Ext. of HRTCP Phase 2 Trail & Parking Lot

County/Municipality: York/Springettsbury Township

Grant Amount: $921,656.00





Description: Construction of a 2.5 mile long infiltration system along the Codorus Creek and a parking lot with infiltration system in Springettsbury Township, York County

27



Sellersville Borough Water Quality Enhancing Tree Planting Project County/Municipality: Bucks/Sellersville Borough

Loan Amount: $112,031.00


Term of Loan: 240 months

Total Project Cost: $314,490.00




Description: 500 trees planted at various sites in Lake Lenape Park, a 61-acre natural area along the East Branch of the Perkiomen, located in the Borough of Sellersville. The tree plantings are designed to maximize impact on erosion and sediment reduction as well as reduce storm water run-off.

28



Marklesburg Fire Water Collection and Recharge Project County/Municipality: Huntingdon/Marklesburg Borough


Total Project Cost: $370,050.00




Description: Installation of a 10,000 gallon cistern, construction of 15,300 square feet of permeable pavement and necessary appurtenances. Marklesburg Fire Company is a volunteer fire company located in Marklesburg Borough, Huntingdon County.

29



Philadelphia City – Green Infrastructure Tree Plantings at Philadelphia Recreation Centers





Program: Urban Run-off

Description: Planting of 2,500 trees at 39 of the City of Philadelphia's Parks and Recreation Department's recreation centers, playgrounds, and parks, and on the residential streets adjacent to them in North Philadelphia

30



Erie County Conserve District - rural road storm water improvements County/Municipality: Erie/Conneaut Township




Type: Storm Water

Description: Reconstruction of 7 dirt and gravel roadways that transverses 6 municipalities in Erie County. Estimated 110,325 square yards of road will be stabilized by using full depth stabilization. Approximately 96,000 linear feet of ditch line will be stabilized in such a manner to slow down storm water runoff.

31



Mt. Carmel Municipal Authority - Butternut Box Culvert Replacement

County/Municipality: Northumberland/Mount Carmel Borough



Type: Storm Water

Description: Replacing 420 linear feet of storm water box culvert along Butternut Street and elimination of two combined sewer overflows within the Borough of Mount Carmel. The population impacted by this project has a household median income far below the state median household income level. Currently, the Borough does not charge a user fee for the storm water system.

32


Tips on Funding

Expand Partners

Borough to Partner with a Private Entity such as Wal-Mart or another big box store or warehouse to green-up roof or parking area

Funds can be awarded to private companies but help municipalities to meet MS4 requirements

Expand Geography

Rather than pay for assets on site, fund Best Management Practices upstream

Borough may not have space to employ BMPs but adjacent areas may

o Forested buffers upstream

o Ag BMPs upstream33


Questions?

Timothy Horstmann [email protected]

Adeolu Bakare [email protected]

Kathy Pape [email protected]

34

mailto:[email protected]

