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Policy & Program Options:
Montgomery County
Stormwater Management
CONTENTS:
EXECUTIVE SUMMARY
I. INTRODUCTION
AND BACKGROUND
II.
WORKING GROUP POINTS OF AGREEMENT
III.
EXPERIENCE OF OTHER JURISDICTIONS
Table
1. Municipalities with Stormwater Maintenance Utility Fees
IV.
THE COUNTY'S CURRENT MAINTENANCE/FUNDING APPROACH
Table
2. Property Ownership and Structure Type of Montgomery County Stormwater
Facilities
Table
3. Estimated Costs of Stormwater Facility Maintenance Program
V.
SUMMARY CHARACTERISTICS OF THE CURRENT SYSTEM
VI.
PREVIOUSLY IDENTIFIED FINANCING OPTIONS
Table
4. "Impervious Area" User Charge
Table
5. Equivalent Residential Unit (ERU) User Charge
Table
6. Ad Valorem Tax User Charge
Table
7. Total Revenue Shares for Three Financing Options
Table
8 . Summary of Financing Options
Table
9. Pros and Cons of User Fee vs. Ad Valorem Tax
VII. OPTIONS
Option 1 - County Inspection with Property
Owner Maintenance
Table
10. Cost Estimate for Option 1
Option 2 - Stormwater Utility with Voluntaryt
Multiple Subdistricts
Table 11. Cost Estimate for Option 2
Option 3 - Mandatory Countywide Stormwater
Comprehensive User Fee/Tax
Table 12. Annual Cost Estimate for Option
3
VIII. NEXT STEPS
APPENDICES
Public
Participation Program
Estimate
of Costs to Maintain Conveyance Systems
Working
Group Membership
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Policy and Program Options for Montgomery County Stormwater
Management
October 1999
Prepared by the Stormwater Financing Options Working Group
at the Request of County Council President Isiah Leggett
and County Executive Douglas Duncan
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EXECUTIVE SUMMARY
For a number of years, policy makers have struggled with the daunting
task of equitably funding the maintenance and construction needs of the
Countys stormwater management facilities. These facilities provide
critical water quality and quantity functions, and are an essential tool
in the effort to protect and preserve the environment. Many of the facilities
have been constructed according to changing design standards. Many are
privately maintained, and there has not been consistent maintenance and
inspection of these facilities. As a result, many are in a state of disrepair
and need various levels of restoration and/or maintenance.
County policy regarding who should bear maintenance responsibility
determined at the time of subdivision has varied greatly
over the past 30 years. As a result, there is often only a limited nexus
between the beneficial users and the financially responsible party. In
some cases, the burden falls disproportionately on the taxpayer, who through
the general fund, supports facilities that benefit a discrete, identifiable
group of private property owners. In other cases, the burden falls on
the private property owners, often a homeowners association. In some cases
these property owners are financially responsible for facilities that
benefit other private or public users, yet, they have no practical recourse
to collect a proportional share of the maintenance expense from others
who may benefit from the structure. In yet other cases, the taxpayer and
the private owners share maintenance expenses through "participation
agreements" where the County pays for costly structural maintenance
such as dredging and pipe replacement, and the owners pay for routine
maintenance such as mowing and trash removal. The variability in funding
sources has resulted in some citizen objections to the inequity of the
revenue system.
Over the years, there have been a number of attempts to identify
solutions that would both preserve the environment and resolve funding
issues. In 1990, OLO Report 90-4 indicated that the maintenance of public
and private stormwater facilities was problematic. Again, in 1996, recognizing
the existing organizational arrangements were not achieving the desired
outcome, the Montgomery County Council adopted Resolution 13-467, to establish
a Stormwater Financing Options Working Group. The Group was charged by
the Council with developing an analysis of financing options for stormwater
management programs in the County. This group issued a report in July
1996 that proposed rates and revenue burdens by land use categories for
three funding options. Discussions followed but no concurrence was reached
as to which recommendation to implement.
In March 1996, as required by the Clean Water Act, the Maryland
Department of the Environment issued a National Pollutant Discharge Elimination
System (NPDES) permit to the County. This permit requires that all stormwater
facilities be inspected at least once every three years and requires proper
construction and maintenance of new facilities. This permit, as well as
recognition that this long-standing funding equity issue had to be addressed,
prompted the Council President and the County Executive to form another
Stormwater Financing Options Working Group.
The Group was charged with assessing the current system with
regards to maintenance and environmental protections for equity and public
benefit. The group was composed of representatives
of agencies and organizations with a common interest in the implementation
and financing of the stormwater management programs in the County, and
met approximately every two weeks from January through October, 1999.
While there was considerable data and information already available, much
of it needed to be updated. It was also necessary to expand the Working
Groups knowledge base to allow full consideration of all options.
In addition, the group reviewed how other jurisdictions have funded their
stormwater management programs.
The Working Group was also charged with finding a sustainable
and equitable source of revenue for state and federally mandated stormwater
facility maintenance activities. The Group framed the
assignment by identifying the stakeholders, examining the existing inequities,
studying other jurisdictions, defining an appropriate level of service
to be provided by the County, and estimating the approximate cost of providing
these services. Various management options were evaluated in terms of
implementation difficulty, equity and benefit distribution, political
acceptability and reliability of the funding sources.
There was considerable deliberation regarding the scope and the
appropriate mechanisms for funding and maintenance. Early on, the Working
Group came to the consensus that stormwater management facilities and
storm drainage systems must be considered as parts of a comprehensive
system for handling of stormwater. Then, the Working Group agreed that
a user fee was a more equitable measure for financing this unified program
than an ad valorem tax, thereby eliminating the present storm drain tax.
Therefore, the Working Group recommends a comprehensive Stormwater
User Fee be instituted for property owners in Montgomery County set at
a level to adequately fund the inspection and maintenance of all public
and private stormwater management and storm drain facilities in the County.
This is Option#3 in the text of the report.
This recommendation recognizes the broad public benefit that results
from proper management of stormwater and storm drain facilities and, therefore,
suggests broad-based funding sources. Both public and private facilities
(including residences, businesses and County property) are encompassed
by this solution.
The User Fee concept, which is widely employed by other jurisdictions,
assigns shares of costs to landowners based on each propertys contribution
to the amount of impervious surface area for the property type. Revenue
generated by the fee is used to clean and repair public and private stormwater
conveyance and storage facilities throughout the county. This recommendation
ensures that all pay a fair and reasonable rate, reduces reliance on general
fund tax monies, and, by providing credits, encourages reductions in stormwater
quantity as well as improvements in quality controls. The Working Groups
recommendation also ensures that the County will be in compliance with
its National Pollutant Discharge Elimination Discharge System (NPDES)
permit.
Under the current stormwater management program, four county agencies
- the Department of Environmental Protection, the Department of Permitting
Services, the Department of Public Works and Transportation, and the Maryland-National
Capital Park and Planning Commission all share some responsibility
for the maintenance, construction, and or inspection of stormmwater and
storm drain facilities. The Working Group believes that both types of
facilities are included in a comprehensive stormwater system, and believes
that inspection and maintenance may be the responsibility of one department
or agency. However, the Working Group did not conclude which department
or agency should assume these responsibilities, and believes that a consultant
working with the County Agencies should address this issue.
The Group also identified and discussed many issues that were
outside its original mandate, and will require further consideration,
analysis and implementation to ensure a successful management of stormwater
facilities maintenance and construction program. These issues include:
- Identify and make the necessary statutory and regulatory changes
to implement the proposal.
- Develop an organizational structure for implementing the recommendations.
- Develop and implement a billing procedure for the fee.
- Coordinate the implementation of this program with the State
authorized municipalities and special taxing districts within the County.
- Map all impervious surface in the County on the Geographic
Information System.
- Develop a public information program to receive public input
on the proposed changes.
The Working Group believes that the County would be best served
by contracting out many of the remaining tasks to consultants with prior
experience in these highly technical areas to ensure implementation of
the Working Group recommendations. These consultants would work closely
with a group of staff from the necessary County departments and agencies.
I. INTRODUCTION AND BACKGROUND
Stormwater management facilities throughout Montgomery County
perform multiple beneficial water quality and quantity functions including
water storage and settling, bio-filtration, nutrient and sediment removal,
groundwater recharge, as well as infrastructure preservation. Together,
these functions are essential to preserve viable aquatic habitats in the
County's streams, and to protect public safety by providing flood control
throughout the region. Montgomery County, along with Counties across the
United States, is required by the authority of the Federal Clean Water
Act to insure that all stormwater management facilities are inspected
and maintained in accordance with the conditions mandated in the National
Pollutant Discharge Elimination System (NPDES) permit. Montgomery County's
NPDES permit was issued March 1996 by the Maryland Department of the Environment.
State and Federal legislation recognize the evolution of stormwater management
technologies from simple quantity control to a more sophisticated combination
of quantity and quality control.
There are approximately 2,300 stormwater management facilities
in the county (dry ponds, wet ponds, infiltration trenches, oil grit separators,
open ditch lines, infiltration and sand filters and underground storage
structures) that are either publicly or privately owned. Additionally,
there are over 800 miles of enclosed storm drain systems, over 1,000 miles
of ditches, and thousands of inlet structures within the public right
of way. While public facilities are inspected and maintained by the County,
existing law (Chapter 19 of the County Code) requires that private property
owners perform maintenance on their own management structures.
Many of the Countys stormwater and storm drain structures
have not been adequately inspected nor maintained. The average age of
the stormwater management facilities within the county is 15-20 years
old, and the majority of the enclosed storm drains are over 40 years old.
This lack of oversight has resulted in continued deterioration of the
system, and therefore significant and costly reconstruction. Clogged and
failed storm drain systems also negatively impacts private properties
and streambeds. Delays in adequate maintenance to the stormwater and storm
drain management systems ultimately produce erosion to the roadway infrastructure.
This too contributes to the increase of overall reconstruction and repair
costs. Some stormwater management structures have never received maintenance.
Without consistent and comprehensive inspection and maintenance, stormwater
facilities cannot accomplish their design goal of water quality and quantity
control. If maintenance does not occur, the law specifies that the County
can enter a facility, perform the maintenance and place a lien on the
property to recover costs.
Unlike the water/sewer and stormdrain systems, which are supported
by user fees and ad valorem taxes, stormwater management facilities lack
a dedicated source of revenue to ensure consistent and responsive performance
of inspections and maintenance. Throughout the county and its subdivisions,
these facilities constitute a silent infrastructure with a significant
financial liability. The area of stormwater management maintenance and
inspection is one of many unfunded federal mandates.
County policy regarding who should bear maintenance responsibility
determined at the time of subdivision has varied greatly
over the past 30 years. As a result, there is often only a limited nexus
between the beneficial users and the financially responsible party. In
some cases, the burden falls disproportionately on the taxpayer, who through
the general fund, supports facilities that benefit a discrete, identifiable
group of private property owners. In other cases, the burden falls on
the private property owners, often a homeowners association. In some cases
these property owners are financially responsible for facilities that
benefit other private or public users, yet, they have no practical recourse
to collect a proportional share of the maintenance expense from others
that may benefit from the facility. In yet other cases, the taxpayer and
the private owners share maintenance expenses through "participation
agreements" where the County pays for costly structural maintenance
such as dredging and pipe replacement, and the owners pay for routine
maintenance such as mowing and trash removal. The variability in funding
sources has resulted in some citizen objections to the inequity of the
revenue system.
In 1990, OLO Report 90-4 indicated that the maintenance of public
and private facilities was problematic. Again in 1996, recognizing the
existing organizational arrangements were not achieving the desired outcome,
the Montgomery County Council adopted Resolution 13-467, to establish
a Stormwater Financing Options Working Group. The Group was charged by
the Council with developing an analysis of financing options for stormwater
management programs in the County. This group issued a report in July
1996 that presented proposed rates and revenue burdens by land use categories
for three funding options. Policy discussions followed, but no consensus
was reached as to which recommendation to implement.
Another attempt to respond to the newly issued municipal stormwater
permit program was made through proposed legislative revisions. An interagency
task force was formed in 1998, to provide a legislative solution to the
stormwater management challenge. This group of 11 departments met for
a year and proposed revisions to Chapter 19 of the County code that would
have explicitly privatized the inspection and maintenance components of
the stormwater program. The proposed revisions met with considerable controversy
from the Commission on Common Ownership Committees, who felt there were
issues of equity and fairness that the revisions did not address.
During this same period the Council appropriated $700,000 to the
Department of Environmental Protection (DEP), as a temporary fix, to hire
a contractor to perform the initial round of inspections and to develop
an automated records system. This effort is currently ongoing, funded
at $300,000 for 2000 and scheduled be completed in 2001. In addition to
the actual inspections, this funding was used to leverage a federal grant
for public education and outreach. The importance of this educational
effort was recently highlighted in a study by the Center for Watershed
Protection. The study revealed the extent of misconceptions among the
general public:
- Few residents are aware that stormdrains empty directly into
creek and rivers.
- Many residents do not know or whether or not they own a stormwater
management facility
- Few residents are aware that stormwater facilities require
maintenance.
- Without a common understanding of stormwater management, compliance
and cooperation are unlikely.
In search for a fair and sustainable solution, County Council
President Isiah Leggett and County Executive Doug Duncan, in January 1999,
convened a Working Group to investigate options for financing stormwater
maintenance activities. The Working Group consisted of members from various
County government agencies including: the Department of Environmental
Protection (DEP), the Office of Legislative Oversight, the Office of the
County Attorney, the Department of Permitting Services, the Maryland-National
Capital Park and Planning Commission (M-NCPPC), County Council Staff,
and the Department of Public Works and Transportation (DPWT). A cross
section of interested stakeholders such as the Sierra Club, Montgomery
County Taxpayers League, the Commission on Common Ownership Communities,
the development community, a large Homeowner Association (HOA), and a
stormwater management engineer/contractor were also group members.
Mr. Leggett and Mr. Duncan recognized that the problem of maintaining
of stormwater management facilities had long been neglected and required
final resolution. The issue has also provoked concern in many County residents
because of the high costs involved and because of the increase in inspection
and enforcement activities by DEP to adhere to NPDES permit requirements.
Mr. Duncan and Mr. Leggett charged the study group with examining
the recommendations made by the previous Stormwater Financing Options
Working Group and determining a sustainable source of revenue for stormwater
maintenance activities. The group met approximately 15 times from January
through October. Initial Working Group meetings were dedicated to understanding
the regulations, structure inventory, ownership arrangements, and costs
of maintaining stormwater management facilities in the County. The Group
also examined how these structures fit into the overall stormwater management
system. In addition, the Group reviewed previous work on possible financing
approaches and discussed many of the equity issues that need to be addressed
to produce a long term financing solution.
II. WORKING GROUP POINTS
OF AGREEMENT
There were a number of basic points of consensus that provided
the basis for the development of the Groups recommendations. These
are:
- Maintenance of storm drains and stormwater management facilities
is a basic countywide service that yields broad public benefits in the
form of flood control and stream protection.
- The County's lack of appropriated funds for an inspection and
enforcement program has allowed some property owners to ignore significant
maintenance needs.
- In some cases inequities exist because either public funds
are paying for maintenance of private land, or a private individual
property owner is paying for maintenance that benefits other private
individuals.
- The existing program will not result in compliance with the
NPDES permit, potentially exposing the County to fines under the Clean
Water Act.
- The challenge of providing adequate stormwater financing increases
annually as the County permits an average of 254 new facilities per
year (averaged over the last 3 years) and approximately 20,000 feet
of new storm drains.
- If the stormwater facilities are to be optimally maintained
and comply with the NPDES permits, thereby protecting water quality,
the County should assume responsibility for both maintaining and inspecting
the facilities.
- If the County decides to take over maintenance responsibility,
it should require public easements and that the facilities be in working
order and meet the standards and operating conditions set forth in the
original approval. If the County decides to re-build a facility to standards
that exceed the original approval, the previous responsible party may
pay a fee in lieu to the County equal to the amount that would have
been needed to bring the facility into compliance with the original
approval.
III.
EXPERIENCE OF OTHER JURISDICTIONS
Traditional governmental funding sources have proven problematic
for programs for the management of stormwater. Allocation from local taxes
is often an unreliable means of generating revenue because leaders find
it difficult to divert adequate general funds from more politically popular
uses to stormwater management. Many local governments have turned to alternative
funding strategies, such as charging inspection and permit fees, collecting
dedicated contributions from land developers, taxing new development at
increased rates, forming regional management districts and creating stormwater
utilities. Table 1 is a compilation of lists from the "Report on
National Stormwater Utility Survey" prepared by Black and Veatch
in 1995. The table indicates that over 300 local governments throughout
the United States now fund both inspection and maintenance of stormwater
facilities through a dedicated utility fee.
In nearby Virginia, Fairfax County funds its stormwater work through
the general fund. An attempt to pass a Stormwater Utility Tax was unsuccessful
in Fairfax County but passed in Prince William's County, Virginia.
Locally, Prince George's County and Mount Airy, Maryland provide
inspection and maintenance services to all stormwater facilities that
serve two or more properties. These programs are funded through an ad
valorem tax. In other parts of Maryland, the Baltimore Metropolitan Council
(which includes Baltimore City, Baltimore, Anne Arundale, Hartford, Carroll
and Howard Counties) has recently evaluated funding options for stream
restoration and stormwater facility maintenance and has determined that
a stormwater tax, in the form of a utility is necessary. Due to the inherent
controversy of proposing new taxes, member jurisdictions are uniting to
implement the revenue proposal concurrently, rather than by individual
municipality. Based on a recent self-assessment the Environmental Finance
Alternative Committee of the Baltimore Metropolitan Council estimates
that an average tax increase of $43 per household per year is necessary
to ensure a dedicated revenue for approximately 8100 stormwater management
facilities.
Within Montgomery County, some municipalities have opted to perform
their own stormwater maintenance. Takoma Park passed a stormwater utility
tax in 1996. It is defined as a utility because a measurable public service
is provided. Takoma Park switched from an ad valorem property tax to a
user fee system to address equity issues. The Utility covers construction
and maintenance of the stormwater drainage system, review of stormwater
management plans, inspection and enforcement activities, watershed planning,
and water quality monitoring. In the Takoma Park program, tax-exempt properties
such as churches, schools, State and Federal Government facilities are
included as service users.
Fees in Takoma Park are based on the extent to which each property
contributes to stormwater runoff, the amount of impervious surface on
each property and the cost of program implementation. Non-residents and
multifamily properties are charged a fee based on actual impervious area.
The annual fee for single family residents is a flat fee of $24. Owners
of undeveloped property pay no fee. This program has produced an equitable
and dedicated stormwater management funding source for the City of Takoma
Park.
TABLE
1. MUNICIPALITIES WITH STORMWATER MAINTENANCE UTILITY FEES
|
| California |
Delray Beach |
North Miami |
Kansas |
Medford |
Anacortes |
| Berkeley |
Deltona |
Oakland Park |
Topeka |
Portland |
Auburn |
| Chino |
Dunedin |
Ocala |
Wichita |
West Linn |
Bellevue |
| Los Angeles |
Edgerwater |
Ocoee |
|
|
Clark County |
| Modesto |
El Portal |
Oldsmar |
Kentucky |
South Carolina |
Everett |
| Monterey |
Eustis |
Opa-Locka |
Louisville |
Aiken |
Federal Way |
| Ontario |
Fort Lauderdale |
Orlando |
|
Charleston |
King County |
| Palo Alto |
Fort Meade |
Ormond Beach |
Maryland |
Greenville |
Lacey |
| Richmond |
Fort Myers |
Oviedo |
Takoma Park |
|
Lynnwood |
| Sacramento |
Fort Pierce |
Palm Bay |
|
South Dakota |
Mercer Island |
| San Jose |
Gainesville |
Plant City |
Michigan |
Sioux Falls |
Olympia |
| Santa Clarita |
Golden Beach |
Pompano Beach |
Ann Arbor |
|
Pt. Orchard |
| Santa Cruz |
Hallandale |
Port Orange |
Detroit |
Texas |
Pt. Townsend |
| Stockton |
Hialeah |
Port St. Lucie |
Marquette |
Allen |
Redmond |
| Tracy |
Hialeah Gardens |
Safety Harbor |
|
Arlington |
Spokane |
| |
Homestead |
Sanford |
Minnesota |
Austin |
Seattle |
| Colorado |
Hillsborough |
Sarasota County |
Roseville |
Bedford |
Tacoma |
| Aurora |
County |
Satellite beach |
St. Paul |
Colleyville |
Vancouver |
| Boulder |
Holly Hill |
South Daytona |
|
Dallas |
|
| Denver |
Jacksonville |
South Miami |
Missouri |
Euless |
Wisconsin |
| Fort Collins |
Beach |
St. Augustine |
Columbia |
Gainesville |
Glendale |
| Longmont |
Jupiter |
St. Petersburg |
Kansas City |
Garland |
|
| Loveland |
Key Biscayne |
Sunrise |
St. Louis |
Irving |
|
| |
Kissimmee |
Surfside |
|
Lubbock |
|
| Florida |
Lake Mary |
Sweetwater |
Montana |
Mesquite |
|
| Altamonte |
Lake Worth |
Tallahassee |
Billings |
North Richland |
|
| Springs |
Largo |
Tamarac |
Great Falls |
Hills |
|
| Atlantic Beach |
Leesburg |
Tampa |
|
Piano |
|
| Auburndale |
Leon County |
Tavares |
North Carolina |
San Antonio |
|
| Bay Harbor |
Longwood |
Titusville |
Charlotte |
|
|
| Island |
Margate |
Venice |
Greensboro |
Utah |
|
| Boca Raton |
Medley |
Volusla County |
|
Provo |
|
| Boynton Beach |
Miami |
West Miami |
Ohio |
Salt Lake City |
|
| BrevardCounty |
Miami Beach |
West Palm |
Cincinnati |
|
|
| Cape Coral |
Miami Shores |
Beach |
Columbus |
Virginia |
|
| Casselberry |
Miami Springs |
Wilton Manors |
|
Chesapeake |
|
| Clearwater |
Miami-Dade |
Winter Garden |
Oklahoma |
Hampton |
|
| Clermont |
County |
Winter Park |
Edmond |
Newport News |
|
| Cocoa |
Miramar |
Winter Springs |
Oklahoma City |
Norfolk |
|
| Cocoa Beach |
Mount Dora |
|
Tulsa |
Portsmouth |
|
| Collier County |
Naples |
Indiana |
|
Prince William |
|
| Coral Gables |
North |
Fort Wayne |
Oregon |
County |
|
| Dade County |
Lauderdale |
|
Corvallis |
Virginia Beach |
|
| Daytona Beach |
North Miami |
Iowa |
Forest Park |
|
|
| Deland |
Beach |
Des Moines |
Hillsboro |
Washington |
|
|
|
The Cities of Rockville and Gaithersburg have legislation and
programs that require property owners to be responsible for their own
facility inspection and maintenance and storm drains. Other municipalities
rely on the County for inspection, including the Town of Barnesville,
Chevy Chase Village, Chevy Chase Section 3 and 5, the Town of Chevy Chase,
the Town of Garrett Park, the Town of Glen Echo, the Town of Laytonsville,
Village of Martin's Addition, the Town of Poolesville, the Town of Somerset,
and the Town of Washington Grove. Half of these towns pay the storm drain
tax. The Towns of Barnesville, Brookeville, Garrett Park, Laytonsville,
Poolesville and Washington Grove manage their own storm drain systems.
The Town of Kensington inspects the construction of stormwater facilities
and provides its own storm drainage program. It uses the County for stormwater
maintenance inspections. Property owners in the Special taxing District
of the Village of Friendship Heights do not pay the Countys storm
drain tax. The village built and maintains its own storm drains.
The Phase II NPDES Interim Rule requirements (CWA section 402(p)(6)
will require permits for discharges from Municipality Separate Storm Systems
(MS4s) serving urban populations of 50,000 to 100,000. These municipalities
will be required to obtain their own permit or join the County permit
program. The Final Report, due October 1999, stipulates that states will
have 1-2 years to change their regulations and one year for program implementation.
Five municipalities within Montgomery County will be influenced by this
new requirement: Takoma Park, Kensington, Rockville, Gaithersburg and
Chevy Chase Section 2. This legislative modification may result in an
additional financial burden on the County if any or all of these jurisdictions
opt into the Countys program.
IV.
THE COUNTY'S CURRENT MAINTENANCE/FUNDING APPROACH
According to the 1996 OLO report, the County spends about $10
million annually on all stormwater management operations and capital projects.
Approximately $5 million of this is programmed for retrofit and capital
projects. Under existing legislation, the Montgomery County Department
of Environmental Protection is responsible for inspection (but not the
maintenance) of stormwater management structures countywide. The Department
of Public Works and Transportation is also responsible for the maintenance
of all storm drains in the public right of way, and the stormwater maintenance
facilities built to support its projects. There are 21 independent incorporated
municipalities within Montgomery County. The County has stormwater management
authority in each municipality, with the exception of the cities of Rockville,
Takoma Park, Gaithersburg, the Town of Kensington, and the Town of Chevy
Chase Village. Throughout the County, individual property owners, including
business owners, homeowner associations (HOAs) and individual homeowners,
are responsible for the funding and completion of ongoing preventative
and structural maintenance stormwater management facilities. The sources
of funds for maintenance include:
- private money - usually set aside in a reserve fund for facilities
that serve HOAs and commercial properties, and
- the General Fund ( generated by property taxes and income taxes)
The level of funding required for proper maintenance varies, depending
on the type and age of a facility, the history of its upkeep, and the
ownership arrangements. Table 2 provides a breakdown of structure type
and ownership for facilities within the County. County permits do not
indicate transfer of ownership, hence the column labeled "unknown"
ownership. Field verification is currently under way to determine ownership
of these facilities. Table 3 provides an estimate of inspection and maintenance
costs. The costs reflect inspections performed at the frequency dictated
by the NPDES permit. The average cost per inspection is $480; this again
varies with the size and condition of the structure.
TABLE
2. PROPERTY OWNERSHIP AND STRUCTURE TYPE OF MONTGOMERY COUNTY STORMWATER
FACILITIES (CURRENT AS OF JUNE, 1999)
|
| Ownership |
HOA |
Commercial |
County 1 |
Unknown 2 |
Total |
| Number of
Facilities
|
Ponds 402 |
329 |
180 |
180 |
1,091 |
| Oil Grit 97 |
245 |
120 |
|
462 |
| Infiltration
Trenches 61
|
303 |
116 |
|
480 |
| Underground
Structures 15
|
144 |
28 |
|
187 |
| Total |
575 |
1021 |
444 |
180 |
2,220 |
|
|
Footnotes:
1. Numbers include MNCPPC , MCPS, MCDFS, facilities that belong to
the County, including Participation Facilities.
2. Permits do not indicate transfer of ownership. Field verification
required to determine ownership
TABLE
3. ESTIMATED COSTS OF THE STORMWATER FACILITY MAINTENANCE PROGRAM
|
| ANNUAL INSPECTION |
COSTS |
ANNUAL MAINTENANCE |
COSTS3 |
TOTAL FOR INSPECTION
AND MAINTENANCE COSTS. |
| Initial Inspection of 3641 Ponds
X $480 |
$174,720 |
1,091 ponds X $24002 (not all
ponds require maintenance every year) |
$2,618,400 |
$2,793,120 |
| |
|
1,091 ponds X $1500 for non structure
maintenance
|
$1,636,500 |
$1,636,500 |
| Initial Inspection of 1129 Underground
Structures X $480 per inspection. |
$541,920 |
462 oil/grit separators X3 $1200
(oil/grit separators require annual maintenance) |
$554,400 |
$1,096,300 |
| |
|
187 underground storage structures X
$30003 (underground storage structure require annual
maintenance)
|
$561,000 |
$561,000 |
| |
|
480 infiltration trenches, and other structures
X3$250 |
$120,000 |
$120,000 |
| Inspection of 254 new structures each year
254 X $480 |
$121,920 |
254 X $3000 |
$762,000 |
$883,920 |
| Salary (2 field staff) for
final inspection, 1 Program Manager |
$202,000 |
|
|
$202,000 |
| Total |
$1,040,560 |
Total |
$6,252,3000 |
$7,292,8404 |
|
|
ASSUMPTIONS:
1. Ponds are inspected once every 3 yrs., 364 represents 1/3 of the total.
All other structure types are inspected yearly. Total number of structures
is estimated and will increase over time.
2. Maintenance costs for ponds were taken from Prince George's County
records.
3. Costs are estimated. Individual costs will depend on size, capacity,
previous maintenance and structure type.
4. Costs include 254 new facilities anticipated each year.
5. Cost per inspection is $480. Lawn mowing and trash removal costs assumed
to be $1500 per pond.
Based on the inspections and maintenance work already completed,
and using the figures in Tables 2 and 3, DEP estimates that a routine
stormwater management program, conducted at the frequency dictated in
the NPDES permit, will cost approximately $7.5 million per year. In addition,
it is estimated that the average commercial property owner pays $1,600
per year, per facility.
Similarly, DPWT staff estimates an approximate cost of $6.8 million
per year to adequately inspect and maintain its storm drain systems. This
figure includes approximately $3.5 million necessary to implement the
Federal Clean Water Act, which requires the County to increase the level
of inspection and maintenance activities related to stormwater. The remaining
$3.3 million would be required to perform routine maintenance on the system
itself. This maintenance program is based on a 10-year, proactive maintenance
cycle, and includes all aspects of storm drainage work, including: erosion
repairs, roadway ditch/channel repairs, cleaning of enclosed storm drainage
systems, installation/repairs of drainage pipe and catch basins/spillways/walls,
and paving drainage ditches. In addition, DPWT estimates a level of $1
million yearly for capital improvements to correct deficiencies in the
existing system. Currently, DPWT is allocated approximately $2.6 million
from the ad valorem storm drain tax.
V. SUMMARY
CHARACTERISTICS OF THE CURRENT SYSTEM
- The quality and type of stormwater management in County varies
widely because of the range of land uses, the evolution of regulatory
requirements and available technology.
- The County system for stormwater conveyance consists of catch
basins 811 miles of storm sewers, over 1,000 miles of open ditches and
thousands of inlet structures and outlets, 7,173 outfalls, 2220 stormwater
facilities, and several thousand miles of free-flowing streams.
- Ad Valorem taxes generated $2.7 million in fiscal year 1999
in storm drain taxes that go to the General Fund. The General Fund provides
some revenue for watershed restoration activities. DEP spends $3 million
per year for stream restoration. No funds are designated for a habitual
and comprehensive facility inspection program. For a number of years,
DPTW has been allocated approximately $2.6 million for storm drain maintenance.
- A one-time appropriation and education grant is funding the
current round of facility inspections. When this funding is exhausted,
there is no identified revenue source for the future inspections required
by local County code and by the Countys NPDES permit.
- There is no funding for routine inspection of storm drain facilities.
DPWT reacts to complaints from citizens and to routine observations
by members of their crews, while they perform normal work responsibilities.
- The County is in the process of field verification for the
inventory of stormwater management structures in terms of ownership,
type and current condition. It is anticipated that this initial inspection
program will be completed in FY 01. This program includes transferring
all existing paper files (design plans, photos, and records) to a digital
format, which can be accessed by laptop computer in the field to expedite
inspections. County inspections completed to date (approximately 700)
suggest a wide range of conditions - from structures that receive little
or no maintenance, to those that have been maintained regularly. The
overwhelming majority of facility inspections, 97%, have identified
maintenance needs. That figure may increase when the inspection process
is completed.
- Of the inspected facilities in need of maintenance, approximately
42% require a major level of repair and/or maintenance. Major repairs
are those that require work costing $10,000 or more, and include such
activities as dredging and structural repair. The remaining facilities
require lower cost, routine maintenance, including tree removal and
grass mowing.
- Within the County, there are instances where parties who benefit
from the stormwater management facilities (beneficial users), do NOT
share in the financial burden of maintaining those facilities. That
responsibility currently falls only on the property owner individual
citizens, homeowners associations, commercial property owners,
or county government.
- The amount a property owner currently pays and how they pay
depends on several factors including: when the property was constructed,
the facility type and location, the adequacy of the HOAs reserve,
the ownership arrangement with the County, and the frequency maintenance
has been performed.
- Maintenance arrangements vary. In some instances, the County
requires private stormwater facility maintenance. Other facilities were
accepted for public maintenance or entered into a participation agreement.
These agreements often call for routine maintenance, such as mowing
and trash removal to, be the responsibility of the property owner, and
preventative and restorative maintenance, such as dredging, to be the
responsibility of the County.
- Homeowners living in Common Ownership Communities (COCs)
responsible for stormwater management structures essentially pay twice
for stormwater management. First, these residents pay fees to fund repairs
to the associations privately-owned facilities. Then, these residents
also pay taxes, assessed at the same rate as paid by other taxpayers
who do not pay association fees.
- Some homeowner associations with responsibility for maintaining
storm drains and/or stormwater management facilities have not set aside
adequate funds over time, and therefore have to impose specially designated
fees or significantly increase association fees to make the structural
repairs required to correct years of poor to non-existing maintenance.
- The County is currently participating in the development of
Total Maximum Daily Loads (TMDLs) with the Maryland Department of Environmental
Protection. These pollutant load limits, authorized by the Federal Clean
Water Act, are being implemented statewide to control nonpoint source
pollution. It is anticipated that TMDLs will require a higher design
standard for Best Management Practices (BMPs) addressing stormwater
runoff. TMDLs will likely increase stormwater management costs and potentially
impact rates of development in the County.
VI. PREVIOUSLY
IDENTIFIED FINANCING OPTIONS
The 1996 "Analysis of Financing Options for Stormwater Management
Programs in Montgomery County" identified three funding sources available
for stormwater management programs - the general fund, user fees, and
ad valorem tax.
General Fund
The County General Fund includes property taxes, income taxes,
fees, fines and other miscellaneous revenue sources. The major advantage
of using the General Fund for the management of stormwater is the
administrative efficiency for revenue collection, it is legally defensible,
and the public accepts use of the General Funds to pay for programs
with a public benefit. The primary disadvantage of the General Fund
is that it is subject to Montgomery Countys Spending Affordability
Guidelines, and therefore would need to compete with other, often
more politically popular programs for limited funds. Other disadvantages
of using General funds for stormwater programs is that government
staff must spend time each year to secure funds.
Stormwater User Fee
A stormwater user fee is a charge paid by property owners
to fund stormwater services. The fee levels are based on an estimate
of the amount of stormwater runoff from each property. The fee typically
relates to the impervious area of the property, although other factors
such as the number of accounts or the size or the pervious area of
the property may also be considered. User fees may pay for operating
costs, capital regional projects to serve a large area, or small capital
projects to serve sub-areas. Three advantages of a fee over funds
generated through property tax revenues are 1) increased stability
and predictability, 2) greater equity, including the ability to capture
fees from properties owned by Federal, State and non-profit entities,
and 3) the opportunity for incorporating incentives for implementing
onsite stormwater management. The disadvantages of a user fee, when
compared to the general fund and a tax are: 1) the higher initial
startup and ongoing administrative costs, 2) the non-deductibility
of the fee on federal and state income taxes: and 3) the greater burden
the fee may place on agricultural properties and other businesses
in the County.
The 1996 OLO Report calculated rates for two types of user fees.
The first option, an impervious area user charge, determines the
impervious coverage of a property based on its tax assessment class. This
calculation multiplies impervious factors by the acreage in a tax class
to determine the impervious acres for each tax class. Next, unit charge
per impervious acre is established based on the total amount of revenue
that needs to be raised.
The second option, an equivalent residential unit (ERU) user charge,
assumes a uniform impervious area of 2,500 square feet for all single
family residential parcels. The amount of impervious area for each tax
class is divided by the ERU factor to determine the total number of ERUs.
Again, a rate per ERU is set based on the total amount of revenue that
needs to be raised.
Tables 4 and 5 show the calculation of sample user charges
for Montgomery County using FY 99 data from the State Department of Assessments
and Taxation. Table 4 presents the calculation of an impervious area user
charge and Table 5 displays the ERU user charge.
The rate base includes improved properties in Montgomery County,
excluding property in the cities of Takoma Park, Gaithersburg, Rockville,
and Chevy Chase Village. Properties in certain municipalities are excluded
because these jurisdictions currently have separately funded stormwater
management programs. Unimproved properties are excluded because they do
not currently contribute to the stormwater problem. They would be added
to the rate base as they developed.
The impervious factors or runoff coefficients represent factors
typically used in national studies with one exception. The impervious
factor for agricultural land has been dropped from 10 percent to 2 percent
to more accurately reflect the impervious area of farms in Montgomery
County. If the County moves forward with a stormwater user fee approach,
the GIS system would be used to develop customized rates which would likely
differ from the assumptions in Tables 4 and 5.
Tables 4 and 5 display sample rates for an impervious area user
charge and an ERU charge. The tables also highlight some differences between
the developed land use profile of the County, the distribution of impervious
areas, and the burden of each user fee charge. For example, single family
residential uses make up 44 percent of the developed acreage in the County
but contain 60 percent of the impervious area countywide. Under Option
1, (Table 4) single family residential uses would contribute 60 percent
of the revenues. Under Option 2, (Table 5) this revenue share would drop
to 40 percent.
Agricultural uses make up 34 percent of the Countys improved
acreage but represent only three percent of the "impervious base."
They would contribute 3 percent of total revenues under Option 1 (in Table
4) and 4.5 percent of all revenues under Option 2.
Commercial and Industrial uses combined comprise 4 percent of
the Countys improved acreage with 11 percent of its impervious base.
Business would contribute 11 percent of all revenues under Option 1 (Table
4), increasing to almost 16 percent in Option 2 (Table 5).
Tax Exempt properties represent 15 percent of the Countys
improved acreage and 17.5 percent of its impervious base. Under Option
1, these properties would contribute 17.5 percent of all revenues. Under
Option 2 (Table 5) their share of total revenues would increase to almost
26 percent.
It is important to keep in mind that the rates in Tables 4 and
5 are those needed to raise $1 million in revenue. While the cost estimate
for a stormwater program will vary widely depending on the scope of the
program, multiplying each rate by a factor of 15 would yield a more realistic
idea of an annual fee for Option #3. The rates vary widely by tax class.
Under Option 1, the impervious area charge, average residential charges
range from $2 to $3. The average fees for commercial and industrial properties
range from $20 to $30 and $42 to $62 respectively. Tax exempt properties,
which would not pay under an ad valorem approach, would pay $46 on average
under Option 1 and $67 under Option 2. Agricultural owners would pay $28
under Option 1 and $41 under Option 2.
TABLE 4. RATES
TO RAISE $1 MILLION UNDER THE "IMPERVIOUS AREA" USER CHARGE
OPTION
|
|
Land Use Category
|
Total
Acres
|
Share of
Improved
Acres
|
Imp.Rate
Factors
|
Impervious Share Acres by
Land Use
|
Share Imp. Base
|
Fee/
Acre (LU)
|
Share of Rev.by LU
|
Annual fee/
Ave.Parcel
|
| Agricultural |
60,741 |
34%
|
0.02
|
1,215
|
3.1% |
$ 0.51
|
3.1%
|
$ 27.64 |
| Commercial |
3,181 |
2%
|
0.90
|
2,863
|
7.3% |
$ 23.06
|
7.3%
|
$ 19.55 |
| Industrial |
2,217 |
1
|
0.60
|
1,330
|
3.4% |
$ 15.37
|
3.4%
|
$ 42.07 |
| Residential (SF) |
77,458 |
44
|
0.30
|
23,237
|
59.5% |
$ 7.69
|
59.5%
|
$ 3.18 |
| Apartments |
3,996 |
2
|
0.75
|
2,997
|
7.7% |
$ 19.21
|
7.7%
|
$ 1.87 |
| Other |
2,295 |
1
|
0.25
|
574
|
1.5% |
$ 6.40
|
1.5%
|
$ 73.13 |
| Exempt |
27,269 |
15
|
0.25
|
6,817
|
17.5% |
$ 6.40
|
17.5%
|
$ 45.85 |
| Total |
177,157 |
|
|
39,033
|
100.0% |
|
100.0%
|
|
|
|
Source: OLO, State Department of Assessments and Taxation, Levy Year
FY99
TABLE 5.
RATES TO RAISE $1 MILLION UNDER THE EQUIVALENT RESIDENTIAL UNIT (ERU)
USER CHARGE OPTION
|
| Land Use Cateorgy |
Total Acres
|
Share of Developed Acres
|
Imp. Rate Factors
|
ERUs (2500SF)
|
Share of ERU
Base |
Fee Rev Acre
(LU) |
Ave ERU Size |
Annual fee
Ave. Parcel |
| Agricultural |
60,741
|
34%
|
0.02
|
21,167
|
5
|
$ 0.75 |
18.80
|
$ 40.68 |
| Commercial |
3,181
|
2%
|
0.90
|
49,883
|
11
|
$ 33.93 |
13.30
|
$ 28.77 |
| Industrial |
2,217
|
1%
|
0.60
|
23,177
|
5
|
$ 22.62 |
28.61
|
$ 61.91 |
| Residential (SF) |
77,458
|
44%
|
0.30
|
186,932
|
40
|
$ 5.22 |
1.00
|
$ 2.16 |
| Apartments |
3,996
|
2%
|
0.75
|
52,220
|
11
|
$ 28.28 |
1.27
|
$ 2.75 |
| Other |
2,295
|
1%
|
0.25
|
9,997
|
2
|
$ 9.43 |
49.74
|
$ 107.62 |
| Exempt |
27,269
|
15%
|
0.25
|
118,784
|
26
|
$ 9.43 |
31.19
|
$ 67.48 |
| Total |
177,157
|
|
|
462160
|
|
|
|
|
|
|
Source: OLO, State Department of Assessments and Taxation, Levy Year
FY99
An Ad Valorem Tax
An Ad Valorem Tax is a tax based on the assessed value of property.
Two separate sections of State law give the County the authority to collect
ad valorem taxes for stormwater management (Section 6-106 and 3-205).
The County currently levies a one-cent storm drain tax on property in
the storm drain district. The revenues are placed in the Countys
General Fund. These funds are not directly allocated to DPWT. This ad
valorem tax generated $2.7 million in FY 99 and DPWT was allocated $2.6
million for storm drain maintenance. Unlike other Special Revenue funds,
the County does not use the Special Revenue Fund to track the relationship
between the amount of revenue the county collects from the tax and the
storm drainage maintenance expenditures.
The advantages of the ad valorem tax authorized under Section
6-106 is that it is already in place and already pays for a portion of
the stormwater management in the County. Also because it is a property
tax, it is deductible on federal and state income taxes. The disadvantage
of the existing tax is that it does not raise enough money to pay for
all facets of the management of stormwater. Moreover, state law limits
the amount of the tax so that the county cannot increase the amount collected.
Also, federal, state and nonprofit properties are exempt from the tax.
The County does not currently collect the ad valorem tax authorized
under Section 3-205 of the State Law. The Section 3-205 law gives the
county the added authority to establish an ad valorem tax at a rate that
would pay for all facets of the countys stormwater management programs.
Under this law the county could set up a program modeled after the funding
structure in place in Prince Georges county.
The 1996 OLO report also calculated sample rates for an ad valorem
tax for stormwater management. Table 6 updates these rates using FY99
data from the State Department of Assessment and Taxation. The rate base
excludes the cities of Rockville, Gaithersburg, Takoma Park and Chevy
Chase Village.
The data show marked differences between the profile of improved
properties and the assessable base profile. For example, single family
residential properties make up 44 percent of the improved property but
represent 74 percent of the assessable base. Commercial and industrial
properties comprise 3 percent of developed property and make up almost
15 percent of the assessable base. Finally, tax exempt properties, which
are not in the assessable base, represent 15 percent of all developed
parcels.
The sample ad valorem tax rates for average parcels vary from
$3.93 for single family residential parcels to $48.42 for industrial properties.
These rates are based on a revenue estimate of $1 million.
TABLE 6. RATES
TO RAISE $1 MILLION UNDER THE AD VALOREM TAX USER CHARGE OPTION
|
| Land Use Cateorgy |
Total Acres
|
Share of Improved
|
Assessed Value |
Share of Assessment Base
|
Total Revenue by Land
Use |
Tax Rev/Acre |
Annual tax/ Ave Parcel |
| Agricultural |
60,741
|
34%
|
$ 119,390,330 |
0.5%
|
$ 4,972 |
$ 0.08 |
$ 4.42 |
| Commercial |
3,181
|
2%
|
$ 2503231710 |
10.4%
|
$ 104,240 |
$ 32.77 |
$ 27.78 |
| Industrial |
2,217
|
1%
|
$ 941,774,750 |
3.9%
|
$ 39,217 |
$ 17.69 |
$ 48.42 |
| Residential (SF) |
77,458
|
44%
|
$ 17,639,604,500 |
73.5%
|
$ 734,550 |
$ 9.48 |
$ 3.93 |
| Apartments |
3,996
|
2%
|
$ 2,703,680,780 |
11.3%
|
$ 112,587 |
$ 28.17 |
$ 2.74 |
| Other |
2,295
|
1%
|
$ 106,473,440 |
0.4%
|
$ 4,434 |
$ 1.93 |
$ 22.06 |
| Exempt |
27,269
|
15%
|
|
0.0%
|
- |
- |
- |
| Total |
177,157
|
|
$ 24,014,155,510 |
100.00%
|
|
|
|
|
|
Source: OLO, State Department of Assessments and Taxation, Levy Year
FY99
Table 7 shows how the burden of who pays varies among the two
user fee options and the ad valorem tax. Single family residential uses
contribute almost 75 percent of all revenues under an ad valorem tax.
The user fee approaches distribute some of this burden among other uses.
Under the impervious area charge, tax exempt properties provide 17.5 percent
of the revenue and the agricultural contribution increases from .5 percent
to 3.1 percent. Under the ERU charge, contributions from tax exempt properties
increase to 26 percent and the single family residential share drops to
40 percent.
TABLE 7. TOTAL
REVENUE SHARES FOR THREE FINANCING OPTIONS
|
| Land Use Category |
Ad Valorem Tax |
"Impervious
Area"
User Charge
|
ERU
User Charge
|
| Agricultural |
0.5% |
3.1% |
4.6% |
| Commercial |
10.4% |
7.3% |
10.8% |
| Industrial |
3.9% |
3.4% |
5.0% |
| Residential (SF) |
73.5% |
59.5% |
40.4% |
| Apartments |
11.3% |
7.7% |
11.3% |
| Others |
0.4% |
1.5% |
2.2% |
| Exempt |
0.0% |
17.5% |
25.7% |
|
|
Table 8 summarizes the key characteristics of the potential sources
of revenue from FY1999 OLO data, two ad valorem taxes, and the user charge/fee.
All are currently authorized under state law.
TABLE 8. A SUMMARY
OF STORMWATER MANAGEMENT FINANCING OPTIONS
|
| |
User
Fee |
Ad
Valorem Tax |
Ad
Valorem Tax |
| Legal Authority |
Environment Article
Section 4-204
|
Article 29 Section 6-106 |
Article 29 Sections
3-205 |
| Date Enacted |
1992 |
1981 |
1987 |
| Current Status |
Not Collected |
Collected |
Not Collected |
| Rate Limits |
Not Limited |
Limited not to
exceed .01/$100 assessed value |
Not limited- may be
set at a rate needed to fund the activity. Not subject to Spending
Affordability Guidelines. |
| Authorized Activities |
Inspection and enforcement,
watershed planning, retrofitting , water quality programs. |
Maintenance of storm
drainage systems in that portion of the sanitary district previously
created. |
Maintenance of storm
drainage systems including management facilities. |
|
|
Reference: 1996 OLO Report
Table 9 highlights the pros and cons of a user fee verse an ad
valorem tax as a revenue option. Developing and updating an accurate database
on land use and impervious area on some 260,000 land parcels, as required
for the rate formula proposed in the 1996 OLO report, would be a complex
undertaking that would be costly to administer. There could be numerous
appeals regarding the applicability or accuracy of assigned user fees
charges. The user fee is also more vulnerable to legal challenges on technical
grounds than an ad valorem tax. Based on input from the County Attorney,
the user fee charge would also have exempted municipalities while the
ad valorem tax would not (except for Takoma Park) thus providing a broader
revenue base.
TABLE 9. PROS AND CONS OF
A USER FEE VERSUS AN AD VALOREM TAX
|
|
OPTION
|
PROS
|
CONS
|
| USER FEE |
Has the potential to capture
federal and nonprofit property
Based on the amount you benefit or contribute to the problem
Cheaper for residential property than a tax
Self adjusts as the amount of impervious surface grows
Provides the public with a link between benefit and cost
Stable and predictable source of revenue
|
More complicated and costly
to set up initially
May be more difficult to administer
Municipalities may opt out
Vulnerable to legal challenges
|
| AD VALOREM TAX(3-205) |
Ease of setup and administration
Tax deductible from State and Federal taxes
|
Revenue fluctuates with property
value
Taxes are politically unpopular
Taxes private property only - federal and nonprofit property are
exempt
|
|
|
VII. OPTIONS
The Stormwater Financing Working Group developed and considered
three alternative models to illustrate the range of solutions that are
available. The management alternatives move from Option 1, which is enforcement
based and requires the property owner to fund maintenance, to Option 3,
which treats the management of stormwater as a public service and spreads
the costs among the county taxpayers and other beneficiaries. These options
are described below and provide a continuum of choice, from very little
change to an entirely new management format. Each option includes an underlying
rationale or definition of the main problem the option addresses, a brief
summary of the key elements, a cost estimate, and a list of the advantages
and disadvantages of the option.
The Stormwater Financing Options Working Group
recommends adoption of Option 3 a comprehensive Stormwater User
Fee be instituted for property owners in Montgomery County set at a level
to adequately fund the inspection and maintenance of all public and private
stormwater and storm drain management facilities in the County.
In developing its recommendations, the group considered a
number of issues, including:
- Will the scope of work to be included in the new management
and finance approach address: a) only existing stormwater management
structures, b) new stormwater management structures plus storm drains
c) retrofit projects or d) all of the above?
- What approach will best provide assurance that permit conditions
will be met and that water quality and quantity control will be adequate?
- Who will be legally responsible for ensuring inspection of
the stormwater management structures occurs with the frequency dictated
in the permit? Who will perform maintenance activities? Is there a clear
distinction between routine preventative maintenance and more expensive
structural work? The NPDES permit states that the County is responsible
for "ensuring" the work is performed but not necessarily performing
the work.
- What will the source(s) of funding be? Will there be a source
of dedicated funds?
- What legislative revisions to Chapter 19 are required to ensure
a successful program?
Option 1. Minimal Changes
to Existing Hybrid Approach - County Inspects/Property Owner Maintains
Underlying Rationale
The current approach for maintaining stormwater management facilities
is a hybrid of public and private responsibility. The County performs
inspections and the property owner conducts and pays for maintenance activities.
Option 1 retains this hybrid approach with minor revisions included to
resolve equity issues, clarify existing county law, provide financial
assistance and establish funds for a sustained inspection program. These
revisions are required to comply with NPDES permit conditions. Option
1 improves on the existing approach by identifying dedicated funds for
the notification, inspection and enforcement program and revising legislation
to allow for stronger enforcement of County code. Furthermore, this approach
corrects the inequity of non-contributing private property owners who
benefit from publicly funded facilities by requiring these private property
owners to contribute to the cost of maintenance.
Key Elements
- Revise existing legislation (Chapter 19) to clarify the roles
and responsibilities entailed in stormwater management. Retain the current
division of responsibilities (County inspects, property owners maintain).
- Establish a dedicated public fund to enable the County to operate
a sustained inspection and enforcement program. Funds may be obtained
through a tax, user fee, or the general fund.
- Develop "set aside" cost guidelines for private property
owners, so they may be aware of the costs involved in maintenance activities.
- Establish a financing/revolving loan program to assist private
property owners who need help with the costs of bringing the facilities
into compliance (i.e. low interest loan). Require reserve funds be available
for long-term capital maintenance costs of private facilities.
- Establish a mechanism, such as a sub-assessment district, to
enable private property owners, who currently benefit from one of the
49 large regional ponds or 40 smaller ponds/facilities which receive
publicly funded maintenance, to contribute to the maintenance costs.
TABLE 10. COST
ESTIMATE FOR OPTION 1
|
| Fully fund County Inspection Program |
$1,040,600 |
| Establish a Stormwater Assistance
Fund
Establish Assessment Districts
|
$1,201,000*
$3,000,000
|
| Total Cost |
$5,241,600 |
|
|
*Estimate assumes one third of the existing facility
owners need assistance.
Advantages of Option 1
- Assists private property owners with insufficient funds to
pay for repairs, and to comply with State and County regulations by
financing the cost of required repairs and maintenance through a low-interest
loan that may be paid back over time. This loan program would allow
Common Ownership Communities to avoid levying a large fee increase or
special assessment that may pose a hardship on households with limited
incomes.
- Assures continuation of the Countys notification, inspection
and enforcement programs by providing a dedicated public funding source.
- Addresses deferred an/or substandard maintenance, which will
improve water quality and public safety.
- Provides the lowest cost alternative of the three options.
- Sustains current level of responsibilities within the County
government.
- Assures a good faith effort is made towards meeting NPDES permit
requirements.
- Corrects some cost inequities by establishing assessment districts
that would require private property owners who benefit from County owned
facilities without payment.
- Helps ensure that private property owners understand the cost
of properly maintaining a stormwater management structure so adequate
funds may be set aside for future maintenance.
Disadvantages of Option 1
- Fails to address the long-term affordability of stormwater
management for private property owners and the suitability of these
property owners to properly maintain this vital infrastructure.
- Fails to address two of the three equity issues discussed in
this report; private property owners potentially supporting facilities
that serve other non-contributing beneficiaries; and private property
owners paying twice; once through taxes for stormwater structures that
benefit both public and private users and again through assessments
to support their own facilities.
- Provides assistance funds for only one third of the existing
facilities. Complex selection criteria will be needed to determine who
is eligible for loans. Additional staff will be required to administer
funds.
- Fails to address maintenance of conveyance systems.
Option 2. A Stormwater Utility with Voluntary
Multiple Subdistricts
Underlying Rationale
Option 2 is similar to Option 1 in that it retains all the features
of the hybrid approach described in Option 1. In addition, private property
owners of stormwater management facilities may petition the County to
assume long-term capital maintenance responsibility for their facilities.
Such maintenance would be financed through a County-administered assessment
district composed of all beneficial users within the facilitys drainage
area. Routine maintenance, such as mowing, trash pickup and tree removal
would remain the responsibility of the private property owner.
This option corrects most of the current inequities by establishing
a system where all those benefiting from a stormwater management facility
whether privately or publicly owned contribute to its upkeep.
Option 2 improves on the existing approach by identifying dedicated funds
for the notification, inspection and enforcement program and revising
legislation to allow for stronger enforcement of county code, also by
providing financial assistance and/or where requested allows the property
owner to relinquish maintenance responsibilities. Option 2 establishes
assessment districts for the 40 large public regional ponds and the 49
structures.
Key Elements
- Revise existing legislation (Chapter 19) to clarify the roles
and responsibilities entailed in stormwater management. Retain the current
division of responsibilities (County inspects, property owners maintain).
- Establish a dedicated public fund to enable the county to operate
a sustained inspection and enforcement program. As described in Section
IV, funds may be obtained through a tax, user fee, or the general fund.
- Develop "set aside" cost guidelines for private property
owners, so they may be aware of the costs involved in maintenance activities.
- Establish a financing/revolving loan program to assist private
property owners who need help with the costs of bringing the facilities
into compliance (i.e. low interest loan). Require reserve funds be available
for long-term capital maintenance costs of private facilities.
- Establish a mechanism (sub-assessment district) so that those
private property owners, within the drainage area of one of the 49 large
regional ponds or 40 smaller ponds/facilities which receive publicly
funded maintenance, will contribute to the maintenance costs.
- Allow private property owners to petition the County to relinquish
long-term capital maintenance responsibilities to the County. The property
owner would retain ownership of the stormwater facility and perform
routine maintenance. This requires that the facility be in good working
order prior to acceptance, or that an in lieu of fee is paid, and that
an assessment district for those within the drainage areas who relinquish
maintenance responsibility to the County is established.
TABLE 11. ANNUAL COST ESTIMATE FOR OPTION
2
|
| Fully Fund County Inspections |
$1,040,600 |
| Establish a stormwater assistance
fund |
$1,000,000 |
| Cost to set up and administer assessment
districts |
$ 500,000 |
| Continue maintenance
on County facilities |
$1,201,000 |
| Providing credits for
SW improvements |
$1,000,000 |
| TOTAL ANNUAL COST |
$4,741,600 |
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Advantages of Option 2
- Assures County notification, inspection and enforcement occurs.
- Assists private property owners with insufficient funds to
pay for repairs and to comply with State and County regulations by financing
the cost of required repairs and maintenance through a low-interest
loan that may be paid back over time. This loan program would allow
Common Ownership Communities to avoid levying a large fee increase or
special assessment that may pose a hardship on households with limited
incomes.
- Provides private property owners who may lack the expertise
to responsibly maintain complex stormwater management facilities with
option of relinquishing that maintenance responsibility to the County,
with capital maintenance costs to be borne by the facilitys beneficial
users. This approach ensures good water quality and increased public
safety by shifting the responsibility for maintenance to knowledgeable
providers while ensuring that those who benefit pay for services.
- Ensures a good faith effort is made towards meeting NPDES permit
requirements.
- Corrects most cost inequities by establishing assessment districts
to include all those who benefit from a stormwater facility, whether
publicly or privately owned, and are not required currently to contribute
to its upkeep.
- As a condition of using the revolving loan program, private
property owners receiving low-interest loans to pay for stormwater facility
repairs would be required to set aside reserve funds for long term capital
maintenance of their stormwater management facilities. This requirement
would move property owners toward financial self-sufficiency and ensure
that private funds are available to pay for future repairs.
- Addresses long-term financing and budgeting for some private
property owners through the low interest loan program or the creation
of an assessment district for owners willing to relinquish responsibility
for capital maintenance to the County.
Disadvantages of Option 2
- Requires establishing a mechanism to administer both the loan
program and creation/operation of assessment districts around the stormwater
management facilities of private owners who apply voluntarily to the
County to assume capital maintenance of their facilities. This will
require additional staffing to establish and implement these new functions.
- Equity issues are not addressed entirely. Private property
owners of some stormwater management facilities still pay twice: once
for on-site maintenance and then again through taxes to support public-funded
retrofit projects that serve both public and private land.
- Requires establishing a mechanism to administer both the loan
program and creation/operation of assessment districts around the stormwater
management facilities of private owners who apply voluntarily to the
County to assume capital maintenance of their facilities. May require
additional staffing to establish and implement these new functions.
- Does nothing to simplify the existing array of financing arrangements
and, through the creation of new programs, will increase administration
costs.
- Municipalities may choose not to participate.
- Fails to address maintenance of conveyance systems
Option 3. RECOMMENDED OPTION:
A Mandatory Countywide Stormwater User Fee/Tax
Comprehensive Approach
Underlying Rationale
Option 3 is the most comprehensive of the three options provided.
Option 3 improves on the existing approach by identifying dedicated funds
for the notification, inspection and maintenance program and revising
legislation to establish a funding mechanism to assure property owners
are capable of meeting their financial maintenance responsibilities.
Option 3 integrates collection, conveyance, storage, treatment
and disposal of stormwater runoff programs, so as to prevent channel erosion
and the reduction of water quality in receiving streams. This Option recognizes
that safe (unflooded) roads and clean streams are broad public benefits
that require broad public funding. It spreads the cost of the programs
needed to bring the County into compliance with its NPDES permit throughout
the County and eliminates the existing inequities in the stormwater management
programs.
Key Elements
- Establishes a mandatory countywide stormwater district and
utility fund. The County should attempt to draw the district boundaries
as broadly as possible. The broadest boundaries would include municipalities,
the agricultural reserve, and federal and non-profit properties.
- Establishes a dedicated public fund to enable the county to
operate a sustained inspection and enforcement program. Funds may be
obtained through a user fee.
- Establishes a stormwater utility fund/ or Non-Departmental
Account to collect assessments to pay for inspection, maintenance and
enforcement program(s). The user fee would replace the existing ad valorem
storm drain tax.
- Provides legislative revisions which authorizes the County
to inspect, maintain and provide structural maintenance and repair of
facilities that serve more than one property, to undertake planning
and design activities to retrofit critical nonfunctioning facilities.
- Provides that the County would only take over maintenance of
facilities that were in proper working order and brought up to current
standards wherever possible and subject to appropriate easements.
TABLE 12. ANNUAL COST ESTIMATE FOR OPTION 3
|
| Fully fund County Inspection program |
$1,040,600 |
| Maintenance costs for all private facilities
that serve more than one lot and all public facilities |
$6,252,300 |
| Cost of maintenance and inspection conveyance
system. |
$6,800,000* |
| Cost estimate for retrofit facilities |
Comes from Capital Budget |
| Credits |
$2,000,000 |
| Cost to set up billing system |
$ 500,000 |
| ANNUAL TOTAL COST |
$16,592,900 |
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|
*DPWT believes a comprehensive program would require $6.8 million/year
for the proactive inspection and maintenance of storm drain conveyance
systems. A detailed breakdown of estimated costs is not available at this
time. Appendix B provides the Agencys current assumptions.
Advantages of Option 3
- Fully funds County's water quality and stormwater management
programs to come into full and timely compliance with NPDES permit requirements.
- Provides implementation engine for the Countywide Stream Protection
Plan.
- Provides increased funding and flexibility to deal with storm
drain problems, homeowners complaints and public safety.
- Addresses deferred maintenance and retrofits of nonfunctioning
structures. These efforts will correct flooding problems and significantly
improve water quality over time.
- Recognizes stormwater management as broad public benefit that
should be broadly funded.
- Achieves economies of scale with routine countywide system
of inspection, maintenance and repairs.
- Addresses long term financing problems for HOAs.
- Ensures expertise for stormwater repairs by shifting responsibility
to qualified providers.
- Addresses inequities where one property owner may be currently
paying for the stormwater maintenance of structures that benefit those
who do not pay.
- A user fee potentially obtains from non-profit and federal
property owners.
- Potentially provides for new funding for construction of facilities
to correct flooding, particularly in older, downcounty communities.
- Addresses maintenance of conveyance systems.
Disadvantages of Option 3
- Imposes additional government levy on a majority of current
taxpayers.
- Imposes a new county fee on traditionally tax-exempt properties.
- A user fee is not a deductible expense for income tax purposes
for an individual homeowner.
- Municipalities and special taxing districts may not want to
participate in a comprehensive, countywide stormwater system.
VIII. Next Steps
The Working Group recognizes that there is still much work left
to be done before real change can be effected. However, the Group also
believes that the next steps need to be taken by the County, with broader
public input and the assistance of consultants that specialize in these
issues. Specifically, the Group identified the following tasks that should
be accomplished as soon as possible in order to address the critical issue
of reforming our financing system for stormwater infrastructure.
- Identify and make the necessary statutory and regulatory
changes to implement the proposal.
The Working Groups recommendations reflect significant changes
in how the County finances and manages the inspection, construction, and
maintenance of all stormwater infrastructures in the County. In order
to implement the changes, there will need to be changes to both County
laws and regulations. The County Attorneys Office should be charged
with identifying the necessary changes and developing proposed legislation
and regulations to implement the proposed changes.
- Develop an organizational structure for implementing the
recommendations.
The Work Group did not resolve how the Countys departments
or agencies should be organized to best implement the proposal. The current
system has the Department of Environmental Protection implementing all
programs and policies related to stormwater storage structures; the Department
of Public Works and Transportation is responsible for stormwater conveyance
structures. The intent of the Groups proposal is to allow the County
to more comprehensively fund and manage all stormwater programs. It would
therefore be logical that the administration of these programs be unified
as well. Consultants may have greater objectivity and experience in this
issue and could provide the County with a recommended organizational structure.
The management of the contract should be at a level to allow for
consideration of inter-departmental issues.
- Develop and implement a billing procedure for the fee.
In order to collect a user fee, a billing procedure needs to be
established within the County. This can be a complex undertaking and may
be another area where consulting firms with prior experience may benefit
the discussion.
- Coordinate the implementation of this program with the Countys
Special Taxing Districts.
The County needs to determine how this program will work in coordination
with the State authorized municipalities and special taxing districts
within the County to determine how the fee will work in these jurisdictions.
- Map all impervious surface in the County on the Geographic
Information System.
Much of the Countys impervious surfaces have already been
mapped on the Geographic Information System. However, several gaps in
this mapping need to be filled before the County can implement this program.
- Develop a public information program to educate the public
on the proposed changes and solicit public input.
The Group recognizes that any legislative and regulatory changes
have an established public hearing process. However, the Group also believes
that given the extensive nature of the proposed changes that there should
be a comprehensive public outreach effort to make others aware of the
proposals. The appendix provides a list of groups that should receive
copies of this report and be asked to provide comments.
Appendices
Montgomery County Stormwater Financing Report
Public Participation
Program
Suggested Community Groups to Receive Final Draft Report
or Presentation
Chambers of Commerce
Water Quality Advisory Board
Commission on Common Ownership Communities
Suburban Maryland Building Industry Association
Upcounty Citizens Advisory Board
Montgomery County Taxpayers League
Citizen Regional Advisory Boards
Washington Metropolitan Chapter Community Associations Institute
Montgomery Village Foundation
Sierra Club
Eyes of the Paint Branch
Audubon Naturalist Society
Maryland National Capitol Building Industry Association
Apartment and Office Building Association
Municipalities
Montgomery County Civic Federation
League of Women Voters
Maryland Homeowners Association, Inc.
Montgomery County Planning Board
The Glen Preservation Foundation
Trout Unlimited
Chesapeake Bay Foundation
Isaac Walton League
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